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retail surplus of over $640 million in sales, while the City of Santa Ana has a surplus of approximately $1.2 billion in
<br />sales.
<br />Table 2: Retail Leakage/Surplus
<br />2-Mile Radius Retail Leakage/Surplus Anlysis
<br />Demand
<br />Supply
<br />Retail Gap
<br />Leakage/Surplus
<br />Number of
<br />(Retail Potenital)
<br />(Retail Sales)
<br />Factor
<br />Businesses
<br />Retail Trade $1,124,811,711
<br />$1,655,118,799
<br />-$530,307,088
<br />-19.1
<br />895
<br />Food & Drink $124,997,520
<br />$235,536,446
<br />-$110,538,926
<br />-30.7
<br />395
<br />Total $1,249,809,231
<br />$1,890,655,245
<br />-$640,846,014
<br />-20.4
<br />1,290
<br />City of Santa Ana Retail Leakage/Surplus Anlysis
<br />Demand
<br />Supply
<br />Retail Gap Leakage/Surplus
<br />Number of
<br />(Retail Potenital)
<br />(Retail Sales)
<br />Factor
<br />Businesses
<br />Retail Trade $2,311,832,197
<br />$3,452,949,815
<br />-$1,141,117,618 -19.8
<br />1,606
<br />Food & Drink $255,926,740
<br />$405,314,351
<br />-$149,387,611 -22.6
<br />646
<br />Total $2,567,758,937
<br />$3,858,264,166
<br />-$1,290,505,229 -20.1
<br />2,252
<br />Source: ESRI, AECOM
<br />As a final test of supportable retail supply, AECOM prepared a retail demand model that quantifies supportable retail
<br />based on a region's demographics, socio-economic trends, and the current development pipeline. The model
<br />assumes capture rates for residents and employees based on their proximity to the site and data on retail spending
<br />patterns. Based on current demographics and projects in the development pipeline, the model estimates the Project
<br />could support between 10,000 and 21,000 square feet of retail space. This indicates that the 15,200 square feet
<br />currently proposed falls well within the range of supportable retail at the site. The calculation of net supportable
<br />square feet, as shown in Table 3, is based on an estimate of total supportable square feet less the approximately
<br />40,890 square feet of retail space in several mixed -use projects currently proposed or under construction within a half
<br />mile of the Project's site. An extended table showing the model's assumptions is found in Appendix A.
<br />Table 3: Net Supportable Retail Demand Model
<br />Retail Demand Model Net Supportable Retail at 4th and Cabrillo
<br />Total Supportable Current Pipeline Net Supportable
<br />High Scenario ($350/SF) 61,500 40,890 21,000
<br />Low Scenario ($425/SF) 50,600 40,890 10,000
<br />Source: ESRI, BLS, LEHD, Costar, California DOF, ICSC, AECOM
<br />These findings support TCG's analysis in the Report and offer validation that the proposed 15,200 square feet of
<br />retail could be supported under normal market conditions.
<br />Fiscal and Economic Impact Analysis
<br />The Report estimates fiscal impacts on City's General Fund that may result from the Project. Fiscal impacts are
<br />comprised of fiscal revenues and fiscal expenditures. Fiscal revenues considered by the Report include Property Tax,
<br />Property Tax in -Lieu of VLF, Sales Tax (Direct and Indirect), Utility User Tax, and Business Tax, while fiscal
<br />expenditures include Police, Fire, Parks/Recreation/Community Services, Finance & Management Services,
<br />Planning & Building Agency, Personnel Services, and the Clerk of the Council.
<br />Property Tax
<br />Estimated Property Tax revenues are based on an estimate of assessed value of the Development at full buildout.
<br />This approach to property valuation is widely accepted and suitable for the Project in its current stage of
<br />development. The estimate of Property Tax in -lieu of VLF uses a proportional approach, in which estimated Project
<br />assessed value is compared to Citywide assessed value, and the proportional increment of new value is applied to
<br />the previous year's Property Tax in -lieu of VLF payment to estimate the new incremental tax revenue. This is a
<br />common and generally accepted estimation methodology.
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