Developer: Eagle could get $4 million from project
Eagle River Station could generate $4 million in sales tax revenue for the town of Eagle ” assuming the developers’ financial plan holds.
Tuesday night the Eagle Planning and Zoning Commission took on the topic of the proposed 555,000-square-foot shopping center’s financial impact. Tom Pippin, managing director of Denver-based BBC Research and Consulting, presented his fiscal analysis for the project.
Pippin examined different market conditions for Eagle River Station and his analysis projects Eagle River Station would generate $3.8 to $4.1 million annually for the town, depending on how many of the storefronts are occupied. The study details nine potential revenue-producing scenarios.
Pippin’s study figures Eagle will net a 2-percent sales tax for the project. Overall, Eagle River Station assumes a 5-percent sales tax, but a proposed cost-share arrangement would allow part of that revenue to go back to the project to pay off infrastructure costs.
His study also projects Eagle River Station could generate $296 in revenue per square. That figure comes from the bonding company working with the center’s developers.
“Even after stress-testing the model … we still believe all nine scenarios are positive,” said Pippin.
Commission Chairman Scott Turnipseed asked if the study considered how well Eagle can absorb such an increase of retail shops. He noted Eagle’s current total retail square footage is 840,000 square feet.
“Do you think that town of this size can absorb a 60-percent increase of its current product?” asked Turnipseed.
Pippin said those questions will be addressed in a market study, not a fiscal analysis.
Members of the public questioned some of the underlying assumptions of the fiscal study.
Resident Dave Eckardt noted cost-share discussions with Eagle River Station could result in the town only capturing 1 percent of the sales tax revenues. If that happens, Eckardt noted the development would generate only $1.8 million in additional revenue. A downturn in the economy could mean the center will not be the financial boon forecasted, he said.
“The revenues could be considerably less. It could be a lot closer to break even,” Eckardt said.
Resident Lori Russell questioned the assumption that Eagle River Stations could generate $296 per square foot. She added that Pippin’s analysis figures profitability at build out; but full occupancy could take years. “And, that’s only a benefit if the businesses have staying power,” she said.
Paul Witt, representative for Eagle River Station developers Trinity/RED, said the build-out assumptions were based on the fact that the retail component will be in the first construction phase.
Markus Mueller wondered aloud where employees for the stores would come from.
“Without workers, there won’t be the shops there,” he said.
This story first appeared in the Eagle Valley Enterprise.
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