Projected Public-Sector Tax Revenues
NOTE: This analysis reflects key tax revenues to the public sector only. Other revenues to fund development impacts and ongoing operations and maintenance costs will be generated.
Annual Public-Sector Revenues
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Property Tax and Property Tax in Lieu of Vehicle License Fee Revenues Estimated annual property tax revenue resulting from development in the Project is presented in Table B-1 in Appendix B. The estimated assessed values for Project land uses are based on assessed values per square foot for similar uses in MAP and the surrounding market area and are assumed to remain static in 2023 dollar values—real growth in assessed value is not estimated. Refer to Table A-3 in Appendix A for more detail regarding the Project assessed values.
The property taxes the City will receive are derived from the total assessed value of the Project, shown in Table A-3, and the post-Educational Revenue Augmentation Fund (ERAF) share of 1 percent ad valorem property tax rate to each applicable taxing entity, shown in Table B-1. This analysis uses a citywide average allocation because the proposed Project is located in the County and does not yet generate property tax revenues to the City’s General Fund, as it will following annexation into the City. The rate used of 22.6 percent is current as of 2018 and represents a reasonable assumption for the purpose of this Analysis.
Actual property tax revenues to the City’s General Fund may vary.
In addition to estimating property tax revenue, the Analysis uses a formula provided by the State Controller’s Office to forecast Property Tax in Lieu of Vehicle License Fee (PTIL VLF) revenue for the City and Sacramento County. PTIL VLF revenue is calculated by taking the percentage increase in the assessed value resulting from the Project and applying that percentage increase to the City and County’s current State allocation of PTIL VLF revenue, as shown in the FY 2022-23 Approved Budget. This calculation is shown in Table B-1 in Appendix B.
Proposed NorthPoint/AKT Properties Project
Based on the property tax assumptions described above, the Proposed NorthPoint/AKT Properties Project portion of the Project will generate approximately $7.1 million in total property tax revenue. Of this amount, approximately $1.6 million is estimated to accrue to the City’s General Fund and $5.5 million is estimated to accrue to the County and other taxing entities.
In addition, the proposed NorthPoint/AKT Properties Project is estimated to generate $615,000 in PTIL VLF revenue to the City’s General Fund and $751,000 PTIL VLF revenue to the County’s General Fund.
Potential Remaining Development
If the Potential Remaining Development develops like anticipated in this Analysis, based on the property tax assumption described above, the Potential Remaining Development will generate approximately $2.3 million total in property tax revenue. Of this amount, approximately $517,000 is estimated to accrue to the City’s General Fund and $1.8 million is estimated to accrue to the County and other taxing entities. In addition, the proposed NorthPoint/AKT Properties Project is estimated to generate $200,000 in PTIL VLF revenue to the City’s General Fund, and $244,000 PTIL VLF revenue to the County’s General Fund.
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Total Project
At full buildout, based on the property tax assumption described above, the Total Project will generate approximately $9.3 million total in property tax revenue.
Of this amount, approximately $2.1 million is estimated to accrue to the City’s General Fund and $7.2 million is estimated to accrue to the County and other taxing entities. In addition, the proposed NorthPoint/AKT Properties Project is estimated to generate $815,000 in PTIL VLF revenue to the City’s General Fund, and $995,000 PTIL VLF revenue to the County’s General Fund.
Sales Tax
Sales tax revenue is based on estimated onsite and offsite taxable sales and current tax rates, as summarized in Table B-2 in Appendix B. Sales tax rates include the 1 percent Bradley-Burns rate for local jurisdictions, Measure U, Measure A, and the 6.25 percent State sales tax rate. Measure U was a supplemental 0.5 percent sales tax rate approved by voters in 2012 as a temporary tax. In November 2018, Sacramento voters approved a new version of the City’s Measure U sales tax, extending it and raising it from a half-cent to a full cent. In addition, sales in the City will be subject to the 0.5 percent Measure A sales tax rate to support transportation and air quality improvements countywide, and the 6.25 percent State sales tax rate.9 Detailed calculations for each Project component are provided in Tables B-3, B-4, and B-5 in Appendix B:
• Onsite Taxable Sales. EPS estimates taxable sales generated by the Project by estimating both onsite and offsite taxable expenditures generated by the Project. Onsite taxable sales include taxable retail and restaurant sales generated by the gas station and restaurant uses. Taxable sales related to the gas station and restaurant spaces included in the Proposed NorthPoint/AKT Properties Project are based on industry data of annual taxable sales per square foot.10
Because the specific types of industrial users are unknown at this time, this Analysis is based on the assumption future tenants of the proposed and potential industrial space will not generate taxable sales onsite. It should be noted that some industrial tenants (e.g., e-commerce tenants) may fulfill sales on behalf of an owner of goods sold or may be a direct seller, both of which would generate onsite taxable sales. EPS’s evaluation of recent taxable sales generated by some warehouse and distribution tenants illustrates 9 Many jurisdictions in the greater Sacramento region have added sales taxes beyond the 1.0 percent Bradley-Burns rate. Revenue from these additional sales tax rates have not been estimated in this Analysis.
10 Sales per square foot for restaurants are based on data from BizMiner and eMarketer (2016$ escalated to 2023$ and rounded). Sales per square foot for gas stations are based on data from the Urban Land Institute Dollars & Cents of Shopping Centers (2008$ escalated to 2023$ and rounded).
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potential taxable sales of $10 to $50 per square foot, depending on the specific tenant and the types of goods sold onsite. In this scenario, the Project has the potential to generate significantly more sales tax revenue to the City and the State than shown in this Analysis. Refer to Table B-6 in Appendix B for more information.
• Offsite Taxable Sales. This Analysis also estimates offsite taxable sales based on estimated household spending by new employees in the Project.
Taxable retail expenditures generated by Project employees are based on the assumption that an employee would spend approximately $10 per workday on taxable goods and services. EPS assumes 75 percent of employee spending will occur in the City and estimates 25 percent of employee expenditures in the City will be captured by the onsite commercial development.11 All taxable sales not estimated to occur in the City are assumed to take place elsewhere in Sacramento County, although some sales will likely occur outside of the County. Refer to Table B-7 in Appendix B for more information.
Proposed NorthPoint/AKT Properties Project
The Proposed NorthPoint/AKT Properties Project is estimated to generate $2.0 million in total sales tax revenue, including $428,000 to the City, $125,000 to the County, and $1.4 million to the State annually.
Potential Remaining Development
If the Potential Remaining Development develops as anticipated in this Analysis, it is estimated to generate $133,000 in total sales tax revenue, including $24,000 to the City, $12,000 to the County, and $98,000 to the State annually.
Total Project
At full buildout, the Total Project is estimated to generate $2.1 million in total sales tax revenue, including $451,000 in sales tax to the City, $137,000 to the County, and $1.5 million to the State annually.
Proposition 172 Public Safety Sales Tax
Public safety sales tax is collected on a countywide basis and allocated principally to the County, with a small portion of revenues allocated to incorporated cities in the County. This revenue source is used to fund police and fire services.
Proposition 172 imposes a half-cent sales tax rate on all taxable transactions throughout the County. The Analysis estimates the portion of this revenue retained by the City using the current FY 2022-23 relation between total sales tax revenue and Proposition 172 public safety sales tax revenue. 11 Capture rate is based on a qualitative appraisal of existing retail outlets in the City.
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Estimated revenues from the half-cent sales tax for public safety are summarized in Table B-2 in Appendix B.
Transient Occupancy Tax
Transient Occupancy Tax (TOT) is estimated based on the anticipated annual visitor spending on travel and lodging and the City TOT rate of 12 percent.
To arrive at the share of visitor travel and lodging spending, an adjustment factor of 50 percent was applied to total visitor travel and lodging spending based on the total spending in each category for all surveyed consumers in the County in the 2016 study of the economic impact of nonprofit arts and cultural organizations.
The City TOT rate of 12 percent is applied to total visitor spending on lodging to arrive at the annual estimated TOT revenues. Estimated TOT revenues are shown in Table B-8.
Economic Impact Modeling Framework
The Analysis uses an I/O modeling framework to quantify the Project’s one-time and ongoing contributions to countywide output, employment, and labor income.
The I/O modeling framework is premised on the concept that industries in a geographic region are interdependent in the sense that they purchase output from and supply input to other industries. This regional economic analysis relies on IMPLAN (Impact Analysis for Planning) software, an I/O model that draws on data collected by the IMPLAN Group, LLC, from several state and federal sources, including the Bureau of Economic Analysis, the Bureau of Labor Statistics, and the Census Bureau. The model is used widely for estimating economic impacts across a wide array of industries and economic settings.
Regional economic impact analyses and I/O models in particular provide a means to estimate total regional effects stemming from a particular industry. Specifically, I/O models produce quantitative estimates of the magnitude of regional economic activity resulting from some initial activity (e.g., business operations or building construction). I/O models rely on economic “multipliers” that mathematically represent the relation between the initial change in one sector of the economy and the effect of that change on economic output, income, or employment in other local industries. These economic data provide a quantitative estimate of the magnitude of shifts in jobs and revenues in the regional economy.
Economic impacts using an I/O model are based on an initial change in output or employment in a specific industry sector. The model then translates the initial change into changes in demand for output from other interdependent sectors, corresponding changes in demand for inputs to those sectors, and so on. These effects commonly are described as direct, indirect, or induced and generally are defined as follows:
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The direct effect represents the change in output or employment attributable to a certain economic activity. In this case, the operations and the entities directly receiving spending related to the building construction Project (e.g., construction contractors, equipment vendors, and consultants). The indirect effect results from industry-to-industry transactions required to satisfy the direct effect. This effect is a measure of the change in the output of suppliers linked to the industry that is directly affected. For example, a restaurant purchases numerous goods from County suppliers, including food, laundry services, equipment, and other services.
The induced effect consists of impacts from employee spending in the local economy. Specifically, the employees of directly and indirectly affected businesses generate this effect by purchasing goods and services in the local economy. For instance, employees of these businesses spend their paychecks on household needs such as groceries, retail purchases, health care, or mortgage or rent payments, all of which are considered to be induced effects.
The total impact is the sum of the direct, indirect, and induced effects. The total effect measures the impact of an activity as it ripples throughout the regional economy. For this Analysis, the regional economy is defined as the County.
IMPLAN generates a model of the industrial structure and household profile for the County economy, which in turn determines the extent to which spending is captured and recirculated in the local economy rather than being allowed to leak outside the County. The regional economic effects described above are reported in three categories:
Annual Output measures the value of goods and services produced in the County as a result of business operations. Projected employment estimates were used to estimate ongoing annual output of the various uses.
Construction hard costs were used to estimate one-time construction impacts. Employment estimates the total number of jobs, both full-time and parttime, created as a result of Project operations. Employment is reported in job years. Construction employment represents total job years over the life of the Project (1 job lasting 2 years would be reported as an employment impact of “2”).
Labor Income reflects the estimated amount of direct, indirect, and induced annual employment income (salaries, wages, and benefits) resulting from the associated employment. It is important to note that labor income is a component of industry output and is not an additive economic impact.
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I/O Modeling Considerations
The current IMPLAN dataset relies on I/O relations derived from 2021 (the latest available data from IMPLAN). As no significant structural changes have occurred in the regional economy since 2021, EPS believes this provides an accurate and reasonable approximation of current conditions.
All economic impacts depicted in this Analysis reflect gross impacts. As such, the economic impacts do not account for potential shifts in resources or shifts in consumer expenditures from other local alternatives. The I/O methodology is based on the assumption that an industry’s demand for goods and services results in a corresponding increase in supply and therefore employment. This implies that key industry suppliers can increase output rather than shift output from one set of consumers or products to another. This assumption may not hold in areas with tight labor or capital markets because companies may find it difficult to obtain these inputs or other resources necessary to expand production. In these cases, accommodating an establishment’s demand for labor and other inputs may come at the expense of other establishments in the same or related sectors or may need to be satisfied by increased imports from outside the study area. This phenomenon often is referred to as “crowding out” because the stimulated sector tends to crowd out other sectors, which can reduce the net economic gain.
APPENDICES:
Appendix A: Project Assumptions
Appendix B: Annual Fiscal
Revenue Analysis
APPENDIX A:
Project Assumptions
Table A-1 Land Use and Employee Assumptions ............... A-1 Table A-2 Estimated Project Construction
Cost Estimates .............................................. A-2 Table A-3 Estimated Assessed Valuation at Buildout ......... A-3 Table A-1
Airport South IndustrialEconomic Impact AnalysisLand Use and Employee Assumptions Total
Project
Land Use Category Employees
Proposed NorthPoint/AKT Project
Nonresidential Land Uses
Estimated Assessed Value 4,428,000 1,750 2,530Industrial - Warehouse [2] 80,800 1,000 81Highway Commercial 5,000 750 7Highway Commercial - Restaurants 13,650 500 27Total Nonresidential Land Uses 4,527,450 1,712 2,645 Potential Remaining Development
Nonresidential Land Uses
Industrial/Warehouse 1,525,858 1,750 872Total Nonresidential Land Uses 1,525,858 1,750 872 Total Project
Nonresidential Land Uses
Industrial/Warehouse 5,953,858 1,750 3,402Highway Commercial - Lodging 80,800 1,000 81Highway Commercial - Gas Stations 5,000 750 7Highway Commercial - Restaurants 13,650 500 27Total Nonresidential Land Uses 6,053,308 1,721 3,517 Sq. Ft. per
Employee [1]
Nonresidential
Building
Square Feet
[1] Employment density assumptions based on a review of typical employment densities and potential land uses.
Source: NorthPoint Development, LLC; EPS.
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Table A-2
Airport South IndustrialEconomic Impact AnalysisEstimated Project Construction Cost Estimates (2023$) Potential
Remaining
Development
Item Industrial
Highway
Commercial
Total
NorthPoint/AKT Industrial
Direct Construction Costs [1]
Site Work
Onsite $79,704,000 $7,122,000 $86,826,000 $27,465,444 $114,300,000Offsite $26,568,000 $0 $26,568,000 $9,155,148 $35,700,000 Total Site Work $106,272,000 $7,122,000 $113,394,000 $36,620,592 $150,000,000 Vertical Construction Costs $194,832,000 $34,031,000 $228,863,000 $67,137,752 $296,000,000Total Direct Construction Costs [2] $301,104,000 $41,153,000 $342,257,000 $103,758,344 $446,000,000 Source: NorthPoint Development, LLC; EPS.[1] Direct construction costs exclude any soft costs. These costs are captured within the indirect output shown on Table 2, Table 3, and Table 4.
Proposed NorthPoint/AKT Project
Total
Estimated
Construction
Costs (2023$)
[2] Total direct construction costs are current as of February 2023 and assume a 5% cost contingency.
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Table A-3
Airport South IndustrialEconomic Impact AnalysisEstimated Assessed Valuation at Buildout (2023$)Item Assumptions Proposed
NorthPoint/AKT
Project
Potential
Remaining
Development Total
Nonresidential Square Feet Table A-1
Industrial - Warehouse 4,428,000 1,525,858 5,953,858Highway Commercial 99,450 - 99,450 Total Nonresidential Square Feet 4,428,000 1,525,858 5,953,858 Estimated Assessed Value [1] [2] per Sq. Ft.
Industrial - Warehouse $150 $664,200,000 $228,878,700 $893,078,700Highway Commercial $410 $41,153,000 - $41,153,000 Total Estimated Assessed Value $705,353,000 $228,878,700 $934,231,700 Source: ParcelQuest; CoStar; EPS.
[1] Assessed values (AV)s are expressed in 2023$ and include no real AV growth.[2] Assessed values are based on an evaluation of current AVs per square foot for similar uses in Metro Air Park and the surrounding market area.
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APPENDIX B:
Annual Fiscal Revenue Analysis
Table B-1 Estimated Annual Property Tax Revenues ......... B-1 Table B-2 Summary of Annual Sales Tax Revenues .......... B-2 Table B-3 Estimated Annual Taxable Sales and
Use Tax Revenue—NorthPoint/AKT .................. B-3
Table B-4 Estimated Annual Taxable Sales and Use Tax
Revenue—Potential Remaining Development ..... B-4
Table B-5 Estimated Annual Taxable Sales and
Use Tax Revenue—Total Project ...................... B-5 Table B-6 Estimated Annual Onsite Taxable Sales ............ B-6 Table B-7 Estimated Annual Offsite Taxable Sales ............ B-7 Table B-8 Estimate of Annual Transient Occupancy
Tax Revenues ............................................... B-8 Table B-1
Airport South IndustrialEconomic Impact AnalysisEstimated Annual Property Tax Revenues (2023$)Item Assumption/
Source Formula
Proposed
NorthPoint/AKT
Project
Potential
Remaining
Development
Total
Project
Property Tax Revenue (1% of Assessed Value)
Assessed Value (2023$) [1] Table A-3 a $705,353,000 $228,878,700 $934,231,700 Property Tax Revenue (1% of Assessed Value) 1.00% b = a * 1.00% $7,053,530 $2,288,787 $9,342,317 Estimated Property Tax Allocation [2]
Public-Sector Revenues
City of Sacramento General Fund 22.60% c = b * 22.60% $1,594,098 $517,266 $2,111,364 Sacramento County General Fund 23.13% d = b * 23.13% $1,631,463 $529,391 $2,160,854Other Agencies/Educational Revenue Augmentation Fund [3] 54.27% f = b * 54.27% $3,827,969 $1,242,131 $5,070,099 Total Public-Sector Property Tax Revenue e = c + d $7,053,530 $2,288,787 $9,342,317 Property Tax In Lieu of Motor Vehicle License Fee Revenue (VLF) City of Sacramento
Total Citywide Assessed Value [4] $66,383,000,188 g
Total Assessed Value of Project a $705,353,000 $228,878,700 $934,231,700 Total Assessed Value h = g + a $67,088,353,188 $66,611,878,888 $67,317,231,888 Percentage Change in AV i = a / g 1.06% 0.34% 1.41%
Property Tax In-Lieu of VLF [5] $57,896,000 j = i * $57,896,000 $615,174 $199,617 $814,791 Sacramento County
Total Countywide Assessed Value [6] $205,263,074,007 g
Total Assessed Value of Project a $705,353,000 $228,878,700 $934,231,700 Total Assessed Value h = g + a $205,968,427,007 $205,491,952,707 $206,197,305,707 Percentage Change in AV i = a / g 0.34% 0.11% 0.46%
Property Tax In-Lieu of VLF [7] $218,548,807 j = i * $218,548,807 $751,007 $243,693 $994,700 Source: Sacramento County Office of the Assessor; City of Sacramento Finance Department; EPS.[1] Assessd Value is assumed to be equal to the hard construstion costs of the Project, see Table A-2.[5] Property tax in lieu of VLF amount of $57.9 million taken from FY 2022-23 Approved City Budget.
Annual Property Tax Revenues
[2] Assumptions and calculation of the preliminary estimated property tax allocation reflects an average Citywide General Fund allocation of the 1% property tax rate in 2018. [4] Reflects Tax Roll Year 2022-23 Assessed Valuation. Includes citywide secured, unsecured, homeowner exemption, and public utility roll.[3] This category includes other taxing entities (e.g., mosquito abatement district; juvenile hall) and the State of California ERAF, a fund that redirects property tax revenue from jurisdictions to fund schools.Because property tax allocations vary by Tax Rate Areas and the proposed project is currently in the County, this analysis uses a citywide average. The rate of 22.6% isa citywide average from 2018 and is a reasonable assumption for this analysis. Actual property tax revenues to the City's General Fund may vary.
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Table B-2
Airport South IndustrialEconomic Impact AnalysisSummary of Annual Sales Tax Revenues (2023$)Item Proposed
NorthPoint/AKT
Project
Potential
Remaining
Development
Total
Project
Source Table B-3 Table B-4 Table B-5
Estimated Annual Sales Tax Revenues [1]
City of Sacramento $427,676 $23,542 $451,218
Sacramento County & Other Local Taxing Entities $124,773 $11,771 $136,544 State of California $1,410,881 $98,091 $1,508,972Total $1,963,331 $133,404 $2,096,734 Prop. 172 Public Safety Sales Tax Revenue [2]
City of Sacramento $14,074 $775 $14,849
Sacramento County & Other Local Taxing Entities $98,796 $7,073 $105,869State of California - - - Total $112,870 $7,847 $120,718
Source: Sacramento County Office of the Assessor; City of Sacramento Finance Department; EPS.[1] Estimated annual sales tax revenues includes revenues generated from both onsite and offsite sales. See source tables for more details.
[2] Total Proposition 172 Public Safety Sales Tax revenue is calculated based on the 0.5% public safety sales tax applied to all taxable expenditures resulting from the Project. The City of Sacramento receivesapproximately $.000658 in Public Safety Sales Tax authorized by Proposition 172 for every $1 in taxableexpenditures in the City. This is estimated by taking the 2022-23 Budget amount for Prop. 172 divided by thetotal estimated taxable sales (Sales Tax Revenue in the City's budget divided by the current City sales taxrate).
Annual Sales Tax Revenues
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Table B-3
Airport South IndustrialEconomic Impact AnalysisEstimated Annual Taxable Sales and Use Tax Revenue - NorthPoint/AKT (2023$)Item Source Taxable Retail Sales/
Proposition 172
Revenues
City of
Sacramento
Sacramento
County
State of
California
Total
Project
Estimated Annual Sales Tax Revenue
Assumptions
Sales Tax Rate [1]
City of Sacramento Tax Rate 2.00% 0.00% 0.00%
Sacramento County Tax Rate 0.50% 1.50% 0.00%State of California Tax Rate 0.00% 0.00% 6.25%Total Sales Tax Rate 2.50% 1.50% 6.25%Percentage of Taxable Retail Sales: Onsite 100% 0% NAPercentage of Taxable Retail Sales: Offsite 75% 25% NA Annual Sales Tax Revenue Total Taxable Retail Sales
Onsite Taxable Sales [2] Table B-6 $17,813,000 $445,325 $0 $1,113,313 $1,558,638Offsite Taxable Sales from Employment Table B-7 $4,761,094 $89,271 $17,854 $297,568 $404,693 Sacramento County Adjustment [3] NA ($106,919) $106,919 $0 $0 Total Estimated Sales Tax Revenue $22,574,094 $427,676 $124,773 $1,410,881 $1,963,331 Total Prop 172 Revenue
Prop. 172 Public Safety Sales Tax Revenue [4] $112,870 $14,074 $98,796 $0 $112,870Source: City of Sacramento; EPS.
Projected Sales Tax Revenue
[1] Estimated local and state sales tax rates as of December 2022. The City of Sacramento tax rate includes the 1% Bradley-Burns Sales Tax Rate, 1% City Measure U supplemental sales tax, and 0.5% County Measure A supplemental sales tax, voter-approvedadditional sales tax measures. Many jurisdictions in the Sacramento Region have added sales taxes beyond the 1.0% Bradley-Burnsrate and the 0.5% Measure A supplemental sales tax. Revenue from these additional sales tax rates have not been estimated inthis analysis. [2] Onsite taxable expenditures include transactions from highway commercial uses. Refer to Table B-6 for details. Although some industrial tenants may generate taxable sales through point-of-sales transactions, this Analysis conservatively does not estimate onsite taxable salesfor this use. [4] Total Prop. 172 Public Safety Sales Tax revenue is calculated based on the 0.5% public safety sales tax applied to all taxable expenditures resulting from the Project. The City of Sacramento receives approximately $.000658 in Public Safety Sales Taxauthorized by Prop. 172 for every $1 in taxable expenditures in the City. This is estimated by taking the 2022-23 Budget amount forProp. 172 divided by the total estimated taxable sales (Sales Tax Revenue in the City's budget divided by the current City sales tax rate).
Annual Sales Tax
NorthPoint/AKT
[3] Measure A sales tax collected in the City of Sacramento benefits the County of Sacramento.
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Table B-4
Airport South IndustrialEconomic Impact AnalysisEstimated Annual Taxable Sales and Use Tax Revenue - Potential Remaining Development (2023$Item Source Taxable Retail Sales/
Proposition 172
Revenues
City of
Sacramento
Sacramento
County &
Other Local
Taxing
Entities
State of
California
Total
Project
Estimated Annual Sales Tax RevenueAssumptions
Sales Tax Rate [1]
City of Sacramento Tax Rate 2.00% 0.00% 0.00%Sacramento County Tax Rate 0.50% 1.50% 0.00%State of California Tax Rate 0.00% 0.00% 6.25%Total Sales Tax Rate 2.50% 1.50% 6.25% Percentage of Taxable Retail Sales: Onsite 100% 0% NAPercentage of Taxable Retail Sales: Offsite 75% 25% NA Annual Sales Tax Revenue Total Taxable Retail Sales
Onsite Taxable Sales [2] Table B-6 $0 $0 $0 $0 $0
Offsite Taxable Sales from Employment Table B-7 $1,569,454 $29,427 $5,885 $98,091 $133,404 Sacramento County Adjustment [3] NA ($5,885) $5,885 $0 $0 Total Estimated Sales Tax Revenue $1,569,454 $23,542 $11,771 $98,091 $133,404 Total Prop 172 Revenue
Prop. 172 Public Safety Sales Tax Revenue [4] $7,847 $775 $7,073 $0 $7,847 Source: City of Sacramento; EPS.
Projected Sales Tax Revenue
[1] Estimated local and state sales tax rates as of December 2022. The City of Sacramento tax rate includes the 1% Bradley-Burns Sales Tax Rate, 1% City Measure U supplemental sales tax, and 0.5% County Measure A supplemental sales tax, voter-approvedadditional sales tax measures. Many jurisdictions in the Sacramento Region have added sales taxes beyond the 1.0% Bradley-Burnsrate and the 0.5% Measure A supplemental sales tax. Revenue from these additional sales tax rates have not been estimated inthis analysis. [2] Although some industrial tenants may generate taxable sales through point-of-sales transactions, this Analysis conservatively does not estimate onsite taxable sales for this use.
[4] Total Prop. 172 Public Safety Sales Tax revenue is calculated based on the 0.5% public safety sales tax applied to all taxable expenditures resulting from the Project. The City of Sacramento receives approximately $.000627 for every $1 generated by thePublic Safety Sales Tax authorized by Prop. 172 in the City. This is estimated by taking the 2022-23 Budget amount for Prop. 172divided by the total Sales Tax.
Annual Sales Tax
Potential Remaining Development
[3] Measure A sales tax collected in the City of Sacramento benefits the County of Sacramento.
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Table B-5
Airport South IndustrialEconomic Impact AnalysisEstimated Annual Taxable Sales and Use Tax Revenue - Total Project (2023$)Item Source Taxable Retail Sales/
Proposition 172
Revenues
City of
Sacramento
Sacramento
County &
Other Local
Taxing
Entities State of California Total
Estimated Annual Sales Tax Revenue
Assumptions
Sales Tax Rate [1]
City of Sacramento Tax Rate 2.00% 0.00% 0.00%Sacramento County Tax Rate 0.50% 1.50% 0.00%State of California Tax Rate 0.00% 0.00% 6.25%Total Sales Tax Rate 2.50% 1.50% 6.25% Percentage of Taxable Retail Sales: Onsite 100% 0% NAPercentage of Taxable Retail Sales: Offsite 75% 25% NA Annual Sales Tax Revenue Total Taxable Retail Sales
Onsite Taxable Sales [2] Table B-6 $17,813,000 $445,325 $0 $1,113,313 $1,558,638Offsite Taxable Sales from Employment Table B-7 $6,330,548 $118,698 $23,740 $395,659 $538,097Sacramento County Adjustment [3] NA ($112,805) $112,805 $0 $0 Total Estimated Sales Tax Revenue $24,143,548 $451,218 $136,544 $1,508,972 $2,096,734 Total Prop 172 Revenue
Prop. 172 Public Safety Sales Tax Revenue [3] $120,718 $14,849 $105,869 $0 $120,718Source: City of Sacramento; EPS.
Projected Sales Tax Revenue
[1] Estimated local and state sales tax rates as of December 2022. The City of Sacramento tax rate includes the 1% Bradley-Burns Sales Tax Rate, 1% City Measure U supplemental sales tax, and 0.5% County Measure A supplemental sales tax, voter-approvedadditional sales tax measures. Many jurisdictions in the Sacramento Region have added sales taxes beyond the 1.0% Bradley-Burnsrate and the 0.5% Measure A supplemental sales tax. Revenue from these additional sales tax rates have not been estimated inthis analysis. [2] Onsite taxable expenditures include transactions from highway commercial uses. Refer to Table B-6 for details. Although some industrial tenants may generate taxable sales through point-of-sales transactions, this Analysis conservatively does not estimate onsite taxable salesfor this use. [4] Total Prop. 172 Public Safety Sales Tax revenue is calculated based on the 0.5% public safety sales tax applied to all taxable expenditures resulting from the Project. The City of Sacramento receives approximately $.000627 for every $1 generated by thePublic Safety Sales Tax authorized by Prop. 172 in the City. This is estimated by taking the 2022-23 Budget amount for Prop. 172divided by the total Sales Tax.
Annual Sales Tax
Total Project
[3] Measure A sales tax collected in the City of Sacramento benefits the County of Sacramento.
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Table B-6
Airport South IndustrialEconomic Impact AnalysisEstimated Annual Onsite Taxable Sales (2023$) Annual
Taxable
Sales/Sq. Ft. Building Total Annual
Item [1] Square Feet [2] Taxable SalesAnnual Onsite Taxable Sales Restaurants $620 13,650 $8,463,000
Gas Stations $1,870 5,000 $9,350,000Total Annual Onsite Taxable Sales 18,650 $17,813,000 [2] See Table A-1.
Annual Taxable Sales
Source: BizMiner 2016; ULI Dollars & Cents 2008; State of California Board of Equalization (BOE) Publication 61; Bureau of Labor Statistics, "CPI-All Urban Consumers (Current Series) - West Urban"; ULI Dollars & Cents of Shopping Centers/The SCORE 2008; California Board of Equalization; NorthPoint Development, LLC; EPS.[1] Sales per square foot for restaurants are based on data from BizMiner and eMarketer (2016$ escalated to 2023$ and rounded). Sales per square foot for gas stations are based on data from the Urban Land Institute Dollars & Centsof Shopping Centers (2008$ escalated to 2023$ and rounded).
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Table B-7
Airport South IndustrialEconomic Impact AnalysisEstimated Annual Offsite Taxable Sales (2023$)ItemAnnual Taxable Sales from New Employees Employees [1] 2,645 872 3,517
Average Daily Taxable Sales per New Employee $10
Work Days per Year 240Total Taxable Sales from New Employees $6,348,126 $2,092,605 $8,440,731 Estimated Spending Captured [2]
Estimated Taxable Sales Inside Project Area (Onsite) [3] 25% $1,587,031 $523,151 $2,110,183 Estimated Taxable Sales Outside Project Area (Offsite) 75% $4,761,094 $1,569,454 $6,330,548 Source: U.S. Department of Labor; Bureau of Labor Statistics; EPS.[2] Capture rate estimated by EPS.[3] Assumed to be inclusive of onsite taxable sales generated by retail outlets, as shown in Table A-8.[1] Reflects stabilized operational employment for the Project. Refer to Table A-1 for details. Employment includes both full-time and part-time workers.
Proposed
NorthPoint/AKT
Assumption Project
Potential
Remaining
Development
Total
Project
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Table B-8
Airport South IndustrialEconomic Impact AnalysisEstimate of Annual Transient Occupancy Tax Revenues (2023$)Item Source [1] Assumption Formula BuildoutEstimated TOT Revenue From New Hotel Rooms Total Rooms AKT Properties 150 a
Annual Rooms Nights Available 365 bTotal Annual Room Nights Available c = a * b 54,750 Occupancy Rate CoStar 68% e
Average Daily Room Rate (ADR) CoStar $140 fEstimated Annual Total Room Revenue g = c * e * f $5,212,200 City of Sacramento TOT Rate 12% h = g * 12% $625,464
Source: CoStar; AKT Properties; EPS.[1] Annual 2022 lodging data obtained from CoStar for upper midscale to upscale hotels along the I-5 corridor in the City of Sacramento.
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Memorandum
To: City of Sacramento
Northpoint Development
From: Economic & Planning Systems
Subject: Airport South Industrial Project Fiscal Impacts Summary; EPS #222006 Date: July 21, 2025
Background
The City of Sacramento (City) is considering an entitlement application from the Airport South Industrial Project (ASI or Project). The Project is an approximately 437-acre nonresidential project south of Interstate 5 and the Metro Airpark Project and north of the existing North Natomas Community Plan.
Economic & Planning Systems, Inc. has been working on the Project under contract to the City to prepare a Public Facilities Finance Plan (Finance Plan). EPS has also prepared an Economic Impact Analysis of the Project, in which EPS estimated potential Project revenues generated for the City. City staff recently requested the Project applicant (Northpoint Development) provide the City with a summary of the estimated fiscal impacts of the Project to the City. As EPS has been working on the Project and has prepared recent fiscal impact analyses for the City, EPS has prepared this memorandum for the Project.
Summary-Level Fiscal Impact Analysis
This summary of estimated fiscal impacts on the City has been prepared in lieu of a more detailed fiscal impact analysis report given the following characteristics regarding the Project and entitlement status:
The Project requires annexation into the City and will be subject to a tax-sharing agreement that has yet to be negotiated between the City and Sacramento County. The Project is entirely nonresidential and will not have any new residential populationserved by the City. The City has not historically required project-specific fiscal impact analyses be prepared for nonresidential projects of this nature.
Airport South Industrial Project Fiscal Impacts Summary; EPS #222006
Description of Project Land Uses
ASI is in an unincorporated area of the County. The ASI site encompasses a total of about 437 undeveloped acres (excluding approximately 38 acres of Caltrans 1-5 Fee Title Right of Way) that are currently used for agricultural purposes.1 The Project is located directly south of Metro Air Park (MAP) and I-5, southwest of the Northlake development in the City, and west of the North Natomas Community Plan in the City.
Surrounding development in the area includes Sacramento International Airport and adjacent commercial development sites; MAP; Amazon SMF-1 Fulfillment Center; Life Storage Facility; Westlake and Northlake subdivisions; West Drainage Canal; Paso Verde School; and other undeveloped agricultural land. The Project was recently annexed into the City’s sphere of influence (SOI). However, before construction activity can begin, the Project will require discretionary approval by the Sacramento Local Agency Formation Commission (LAFCo) to annex the Project into the City.
The proposed Project will encompass development of 311.3 net developable acres.2 Public facilities and internal roads will account for another 125.3 net acres. Applicantsponsored warehouse distribution uses make up most of the developable net acreage (235.6 acres), while future industrial uses owned by non-participating landowners make up 62.3 net acres. Applicant-sponsored highway commercial uses, including restaurant, fueling station, and hotel uses, constitute the remaining 13.4 net acres of developable land.
The total planned development will result in 5.7 million square feet of building area at buildout. For reference, the maximum allowable building area under the California Environmental Quality Act (CEQA) is around 6.7 million square feet. The CEQA maximum square footage is not used for the financial estimates in this summary-level fiscal impact analysis.
Fiscal Impact Analysis Framework
A fiscal impact analysis estimates incremental tax and other operating revenues generated by new development as compared to the estimated costs of public services required to serve new development. The analysis only focuses on fiscal impacts to the City (specifically to the City’s General Fund) and does not consider any other governmental agencies who may provide enterprise or other services to the project, such as sewer conveyance for example. In addition, a fiscal impact analysis does not address activities budgeted in other Governmental Funds or Enterprise Funds (e.g., Water Fund, Sewer Fund, Storm Sewer Fund), nor does it include ongoing operations and maintenance 1 City of Sacramento Community Development Department; “Notice of Preparation of Environmental Impact Report and Scoping Meeting for the Airport South Industrial Project (P21-017); March 4, 2022. 2 The net developable acreage includes developable land, not including public facilities and internal roads.
Economic & Planning Systems, Inc.
proposed to be funded through private sources, such as a Maintenance or Homeowners Association.
Estimated Fiscal Impacts on the City
Estimated General Fund Revenues
The chart below illustrates estimated annual City General Fund revenues of $3.4 million that may be generated at buildout by new Project development. As illustrated, property taxes and property taxes in lieu of vehicle license taxes represent approximately 81 percent of the estimated annual revenues.
These revenue estimates require discussion regarding two key assumptions. The first is that the property tax revenue estimates assume the City receives a property tax share equal to other areas within the City. As described above, this property tax split assumption is subject to change once the tax-sharing agreement is executed. Second, at this stage of the entitlement process, it is difficult to identify end-users who may occupy the nonresidential buildings. Thus, the estimated sales tax revenues do not anticipate the potential for a large “e commerce” user to occupy one or more of the Project’s nonresidential buildings. Should one or more “e commerce” users, who would generate significant point of sale sales tax revenues to the City, occupy the project, estimated sales tax revenues could be at much as 5-to-10 times greater than estimated in this analysis.
Estimated General Fund Expenditures
Project-related annual general fund expenditures have been estimated using the estimated new service population anticipated from the Project (i.e., new employees/new Airport South Industrial Project Fiscal Impacts Summary; EPS #222006
persons-served) and the average City cost per-person-served3 as estimated in a recent fiscal impact analysis prepared for the City. The average City cost of $509 per-personserved is based on information from the City’s annual General Fund budget from fiscal year 2024-25. The Project’s persons-served estimate multiplied by the average cost perperson-served results in an annual cost estimate of $0.8 million.
Estimated Net Fiscal Impacts
The figure below compares estimated annual revenues with estimated annual expenditures anticipated from the Project. Assuming full Project buildout and a City property tax split like other areas within the City, the Project is estimated to generate annual fiscal surpluses of approximately $2.6 million to the City. 3 This amount excludes costs estimated on a per capita basis, such as “Convention and Cultural Services,” Youth, Parks, and Community Enrichment Services,” and “Community Response Services.”