Sacramento City Council
December 9, 2025

City of Sacramento
City Council - 5PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2025-01939 12/9/2025
Airport South Industrial Tax Exchange Agreement (P21-017) [Two-Thirds Vote Required] File ID: 2025- 01939
Location: Natomas Basin, District 1
Recommendation: 1) Adopt a Resolution by two-thirds vote approving the attached Tax Exchange Agreement for the Airport South Industrial Annexation (P21-07) and authorizing the Interim City Manager or designee to execute the Tax Exchange Agreement; and 2) Pass a Motion authorizing the Interim City Manager or designee to negotiate and execute the following amendments and agreements with the County of Sacramento and the Sacramento County Water Agency, subject to approval as to form by the Interim City Attorney or designee: a) an amendment to the Agreement between the City of Sacramento, the County of Sacramento, and the Sacramento County Water Agency for Wholesale and/or Wheeling Water Service for Sacramento International Airport and Metro Air Park dated October 12, 2004 (Airport Wholesale Agreement) to: 1) provide for wholesale water to the Sacramento County WattEV project; and 2) provide for redundant water service to Metro Air Park through a new tie-in at the terminal end of the City distribution system along Meister Way; and b) an agreement executed on or before December 31, 2026 for the development of new wholesale water interties to the Sacramento County Water Agency’s Northgate and Arden water service areas generally consistent with the terms and conditions of previously approved wholesale agreements between the City of Sacramento, the County of Sacramento, and the Sacramento County Water Agency.

Contact: Cheryle Hodge, New Growth Manager, (916) 808-5971, [email protected], Community Development Department
Presenter: None
Attachments:
1-Description/Analysis
2-Resolution Adopting Tax Exchange Agreement
3-Tax-Exchange Agreement
4-EPS Fiscal Summary Analysis and Economic Impact Analysis for Airport South Industrial 5-City/County 2002 MOU for Natomas Joint Vision Area

File ID: 2025-01939 12/9/2025
The Airport South Industrial (ASI) Project is a request to allow the annexation of approximately 447.19 acres into the City of Sacramento and the future development of a light industrial and highway commercial project (ASI Project or Project). The Project site consists of approximately 447 acres of undeveloped vacant land within the unincorporated Sacramento County (Natomas Basin), located southeast of the intersection of Powerline Road and Interstate 5 (as shown in the map and legal description attached to the Tax Exchange Agreement). The Project development consists of primarily light industrial and highway commercial development, allowing for construction of up to 5,204,500 square feet of industrial uses and approximately 98,200 square feet of retail/highway commercial uses. On October 21, 2025, the City Council approved an intent motion for a series of entitlements for the Project. On November 18, 2025, and December 2, 2025, the City Council held hearings on the Project. The Council approved the Project on December 2, 2025.

Per California Revenue and Taxation Code section 99, the City and County must agree on an exchange of tax revenue before the Sacramento Local Agency Formation Commission (LAFCO) will issue a Certificate of Filing for the annexation. The attached proposed tax exchange agreement specifies a 50/50 post-annexation sharing of municipal property tax revenue and 1% Bradley-Burns sales tax revenue. The tax exchange agreement specifies the City retains all transient occupancy tax (TOT) revenues within the Annexation Area (as that term is defined in the attached Tax Exchange Agreement).

The City will be responsible for the provision of municipal services within the Annexation Area after the annexation is approved and effective. An operating budget analysis of the costs and services and the area’s generation of City revenue prepared by Economic & Planning Systems (EPS) indicated that the projected costs and services and revenue generation will result in a positive fiscal impact, with an estimated annual net fiscal surplus to the City’s General Fund at full buildout.

Policy Considerations: The Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000 establishes procedures for local government boundary changes, including annexations to a city and detachment from affected special districts. LAFCO has adopted Local Standards, Policies and Procedures that also guide reorganization proceedings. An executed property tax exchange agreement between the City and County is required for completion of an annexation. The 2002 Memorandum of Agreement (MOU) between the City and County for the Natomas Joint Vision Area provides a revenue sharing framework for Natomas Basin. The proposed Tax Exchange Agreement is consistent with the 2002 MOU providing that the City and County have a 50/50 split of property tax and sales tax as described in the Tax Exchange Agreement (Attachment 3).

Environmental Considerations: The Airport South Industrial Project Environmental Impact Report was certified by the City Council on December 2, 2025. The current action (approval of a tax exchange agreement) is a component of the previously approved project. The City must determine whether a subsequent or supplemental EIR is required based on approval of the tax exchange agreement. The California Environmental Quality Act (CEQA) Guidelines Section 15162 requires an

Description/Analysis
File ID: 2025-01939 12/9/2025
examination of whether, since the certification of the EIR and approval of the project, changes in the project or conditions have been made to such an extent that the proposal may result in substantial changes in physical conditions that are considered significant under CEQA. None of the circumstances set forth in CEQA Guidelines Section 15162 are present here. No further environmental review is required.

Rationale for Recommendation: Adoption of a tax exchange agreement by the City and County is a necessary requirement per California Revenue and Taxation Code section 99 for LAFCO’s hearing of the proposed annexation of the ±447 acres which the Council approved for the ASI project on December 2, 2025.

Financial Considerations: The proposed Tax Exchange Agreement calls for 50/50 sharing by the City and County of the property tax revenue generated within the ASI Annexation Area. The agreement states that the City will retain all transient occupancy tax (TOT) from hotel/motel projects within the Annexation Area. The Tax Exchange Agreement would commence on the annexation date and would continue into perpetuity.

EPS has prepared a summary-level fiscal impact analysis (Attachment 4) which evaluates the Project’s anticipated revenues and expenditures to the City’s General Fund. At full buildout, the Project is estimated to generate approximately $3.4 million in annual General Fund revenues, with property taxes comprising approximately 81% of total revenues. Against these revenues, project- related annual General Fund expenditures are estimated at $0.8 million, calculated using the City’s average cost per person served ($509) multiplied by the anticipated new service population generated by project employment. This results in a projected annual net fiscal surplus of approximately $2.6 million to the City’s General Fund. These fiscal estimates are considered because the sales tax revenue estimates do not anticipate potential e-commerce users occupying the facilities. Should one or more e-commerce operators locate at the project site, sales tax revenues could increase by five to ten times the current estimates.

Background
Section 99 of the Revenue and Taxation Code (R&T Code) requires that the governing body of all agencies whose service area and service responsibilities will be altered by a jurisdictional change negotiate a re-allocation of property tax revenue between the affected agencies and approve and accept such re-allocation by resolution. Approval of the Tax Exchange Agreement by the County and City will allow LAFCO to proceed with scheduling the required public hearings on the proposed annexation. LAFCO will subsequently take action to approve, approve with changes, or disapprove the proposal for annexation.

The split of tax revenue in the attached Tax Exchange Revenue is consistent with prior tax sharing agreements between the County and City and various agreements with other local cities for

File ID: 2025-01939 12/9/2025
annexations with similarly proposed land uses. It is also consistent with the 50/50 tax sharing provisions in the attached 2002 Natomas Joint Vision Memorandum of Understanding (MOU) which the City has recently emphasized the importance of compliance with. The Tax Exchange Agreement for the ASI Project is unique though given the County’s Enhanced Financing Infrastructure District (EFID) investment, location of the annexation site within Natomas Basin, and desire to honor the City/County 2002 MOU revenue sharing framework.

The 2024-25 property valuation of the current undeveloped Annexation Area was $17,846,935.00, resulting in overall property tax revenues of $178,469.00. The total post-ERAF (educational revenue augmentation fund) percentage of property tax revenue subject to the tax exchange agreement is approximately 35.92109% (17.96054% with 50/50 split).

Special Districts Considered in the Tax Exchange Agreement The Annexation Area is currently located within the service boundaries of the Natomas Fire Protection District through a contract with the City of Sacramento, the Sacramento Area Flood Control District, the Natomas Basin Local Assessment District, Sacramento Area Flood Control Agency (SAFCA) Consolidated CAP ASMT #2, and Reclamation District 1000 (“RD 1000”). The property tax revenue collected for the Annexation Area is thus currently allocated to the County General Fund, Library Fund, and County Road Fund.

City Water Supply to Sacramento County
City Staff will work with Sacramento County staff to continue providing wholesale water to the County through an amendment to the City/County agreement No. 2004-159 adopted by the City Council on October 19, 2004, for the Sacramento International Airport, thereby aligning Agreement No. 2004-159 with prior County CEQA/NEPA findings and for the County approved WATT EV project to be located on County airport owned land. The goal is to complete the amendment by the end of this year. No additional capacity will be conveyed beyond the existing water agreement with the amendment.

City staff will also work with Sacramento County staff to provide a redundant water service to the existing Metro Air Park (MAP) through a new second tie-in at the terminal end of the City distribution system along Meister Way. The City understands there to be mutual agreement that this tie-in could be designed to meet County objectives to enhance water supply reliability without creating any adverse level of service conditions for City customers. The City also understands this is not a request for additional capacity and therefore no additional impact fee charges would apply.

Finally, City staff will work in good faith with Sacramento County staff to find mutually acceptable terms for water agreements for the Northgate and Arden Services areas, which comport with the objectives of the Water Forum Agreement. The goal is to execute services agreements for both areas by December 31, 2026.

Staff will make good faith efforts to work with Sacramento County staff to find mutually acceptable

File ID: 2025-01939 12/9/2025
solutions which comport with the Water Forum Agreement, regarding the provision of City wholesale water supply on a case-by-case basis in the future.

RESOLUTION NO.

Adopted by the Sacramento City Council

APPROVING THE TAX EXCHANGE AGREEMENT

FOR THE
AIRPORT SOUTH INDUSTRIAL ANNEXATION (P21-017)

BACKGROUND

A. The City and Landowners have proposed to annex approximately 447.19-acre, unincorporated area (“Airport South Industrial Annexation”) to the City.

B. The annexation of the Airport South Industrial Area must be approved by the Sacramento Local Agency Formation Commission. Before the Commission may act on the proposed annexation, the City and County of Sacramento must adopt a tax exchange agreement.

C. The County and City have negotiated a tax exchange agreement specifying how property tax, sales tax and a portion of the transient occupancy tax revenues will be allocated if the annexation is approved. This tax-exchange agreement was negotiated with respect only to the subject territory.

BASED ON THE FACTS SET FORTH IN THE BACKGROUND, THE CITY COUNCIL RESOLVES AS FOLLOWS:

Section 1. The City Council hereby approves the Tax Exchange Agreement between the City of Sacramento and the County of Sacramento, attached to this Resolution as Exhibit A. The City Council also authorizes the City Manager to execute the Agreement and take whatever steps necessary to carry out the purpose of the Agreement.

Section 2. Exhibit A, and its exhibits, A.1 and A.2, are part of this Resolution.

Table of Contents:

Exhibit A –Tax-Exchange Agreement Between the County of Sacramento and the City of Sacramento, Relating to the Airport South Industrial Annexation Exhibit A.1 – Map of Annexation Area
Exhibit A.2 – Legal Description of Airport South Industrial Annexation Area

Adopted by the City of Sacramento City Council on December 9, 2025 by the following vote:

Ayes:

Noes:

Abstain:

Absent:

Attest:

Mindy Cuppy, City Clerk

P
age 1 of 7
TAX

REVENUE EXCHANGE AGREEMENT

BETWEEN COUNTY OF SACRAMENTO AND CITY OF SACRAMENTO

REGARDING AIRPORT SOUTH INDUSTRIAL ANNEXATION
APN 225-0020-010, 016, 017, 021, 022, 023, 024, 026, 027, 030, 032, 033, 034, 035, and APN 225-0030-023, 024, 045, 048
This TAX REVENUE EXCHANGE AGREEMENT (“Agreement”) is made and executed in duplicate on ____________, 2025 by and between the COUNTY OF SACRAMENTO, a political subdivision of the State of California (“COUNTY”), and the CITY OF SACRAMENTO, a municipal corporation (“CITY”). COUNTY and CITY may be referred to individually as “Party” and collectively as “Parties.”

RECITALS
a) On June 6, 1978, Article XIIIA (commonly called Proposition 13) was added to the California Constitution. Article XIIIA, Section 1 limited the total amount of property taxes which could be lev ied on property, by local taxing agencies having such property within their territorial jurisdiction, to one percent (1%) of the property’s full cash value. b) Subsequentl y, the Cal ifornia Legislature added Section 99 to the California Revenue and Taxation Code. Section 99(b)(4) requires a city seeking to annex property to its incorporated territory, and a county affected by such annexation, to agree upon an exchange of property taxes derived from such property to be annexed. This Agreement reflects such exchange of P roperty Tax Revenue (as defined below) between COUNTY and CITY.
c) T he “Annexation Area” (defined below) is currently located within an unincorporated portion of the COUNTY and within the CITY’s existing Sphere of Influence.

The application process has been initiated with the Sacramento Local Agency Formation Commission (“LAFCO”) requesting LAFCO’s approval for the C ITY’s annex ation of the Annexation Area into the CITY’s limits. CITY will provide its services to the Annexation Area following Annexation (defined below).
d) COUNTY and CITY wish to work together to develop a fair and equitable approach to the sharing of Property Tax Revenue collected to encourage sound urban development and economic growth.
e) Close cooperation between COUNTY and C ITY is necessary to deliver needed or desirable serv ices in a timel y and cost -efficient manner to residents and businesses in the CIT Y and COUNTY. COUNTY recognizes the need for orderly growth within and adjacent to the CITY, and for supporting appropriate annexations by CITY. f) After negotiations, COUNTY and CITY have reached an understanding as to a rate of ex change of Property Tax Revenue to be made, pursuant to Section 99 of the California Revenue and Taxation Code, in c onnection w ith the A nnexation of the Annexation Area into the CITY.
g) I
n addition to the exchange of Property Tax Revenue, COUNTY and CITY also desire to set out the parameters for the exchange of Sales Tax Revenue (as defined below) and Transient Occupancy Tax Revenue (as defined below) collected within the Annexation Area.

Exhibit A

h) The provisions of Article XIII, Section 29(b) of the California Constitution authorize a city and county to enter into an agreement to apportion between them the revenue derived from any sales or use tax imposed by them pursuant to the Bradley-Burns Uniform Local Sales and Use Tax Law, provided that the ordinance or resolution approving the agreement is approved by a two- thirds (2/3) vote of both the City Council and the County Board of Supervisors. Revenue imposed pursuant to the Bradley -Burns Uniform Local Sale and Use Tax Law is collected by the State of California and then dispersed to the appropriate local agency.

i) COUNTY and CITY desire to execute this Agreement to address the exchange of Property Tax Revenue, Sales Tax Revenue, and Transient Occupancy Tax Revenue collected for the Annexation Area, as specified below. This Agreement constitutes an enforceable prope rty tax exchange agreement under Section 99 of the California Revenue and Taxation Code.

j) Pursuant to California Revenue and Taxation Code section 99(b)(5), if an annexation will affect the service area or service responsibility of a special district, the COUNTY shall negotiate any exchange of property tax revenue on behalf of the special districts.

k) The Annexation Area is currently located within the service boundaries of the following special districts: Natomas Fire Protection District (“Fire District”) through a contract with the CITY , Sylvan Cemetery District (“Cemetery District”), Sacramento Area Flood Control District, Natomas Basin Local Assessment District, Sacramento Area Flood Control Agency ( “SAFCA”) Consolidated CAP ASMT #2, Reclamation District 1000 (“RD 1000”), County Service Area (“CSA”) 1, and the Sacramento County Water Agency (Zone 13) (“Water Agency”). Section 5 describes the detachment of the Annexation Area from certain service boundaries following Annexation.

l) The Property Tax Revenue collected for the Annexation Area is currently allocated to the COUNTY General Fund, COUNTY Library Fund, COUNTY Road Fund, and Fire District. COUNTY has negotiated on behalf of applicable special districts regarding their allocations of Property Tax Revenue following Annexation.

In consideration of the exchange of tax revenue, as provided for in this Agreement, and for other good and valuable consideration, the sufficiency of which is acknowledged by the Parties, the COUNTY and CITY agree as follows:

TERMS

Section 1. Definitions. Fo r purposes of this Agreement, the following terms shall have the meanings set forth below:

(a) “Annexation Area” means the ±447 acres of unimproved real property in the unincorporated area of the COUNTY, south of Metro Air Parkway (and the new Metro Air Parkway/I-5 interchange), southwest of the Greenbriar development in the CITY (now known as Northlake), west of the existing Westlake development in the CITY, and adjacent to the current CITY boundary, referred to as APNs 225-0020-010, 016, 017, 021, 022, 023, 024, 026, 027, 030, 032, 033, 034, 035, and APN s 225-0030-023, 024, 045, 048, as depicted on Exhibit “A.1” ( Annexation Area map) and described in Exhibit “A.2” (Annexation Area legal description) attached to this Agreement.

(b) “Annexation Date” means the date specified by LAFCO, consistent with the Cortese-Knox-Hertzberg Local Governmental Reorganization Act of 2000 (California Government Code § 56000 et seq.), as the effective date of the Annexation.

(c) “Annexation” means the approved and completed annexation of the Annexation Area into the CITY’s limits, as authorized by LAFCO in accordance with the Cortese-Knox-Hertzberg Local Governmental Reorganization Act of 2000 (California Government Code § 56000 et seq.).

(d) “Property Tax Revenue” means revenue from “ad valorem real property taxes on real propert y,” as that term i s used in Se ction 1 of Article XIIIA of the California Constitution and more particularly defined in Section 95(c) of the California Revenue and Taxation Code, that is collected from the Annexation Area, that is available for allocation to CITY and COUNTY, and that is currently allocated to the COUNT Y General Fund, COUNTY Library Fund, COUNTY Road Fund, and Fire District.

(e) “Sales Tax Revenue” means revenue from the s ales, transaction, and use taxes received by the CITY pursuant to the Bradley -Burns Uniform Local Sales and Use Tax Law, or any successor statutory provision, that is collected by the State of California from activities within the Annexation Area.

(f) “Transient Occupancy Tax Revenue” means the CITY general fund share of revenue from any transient occupancy tax levied and received by the CITY pursuant to Revenue and Taxation Code Section 7280 and the Sacramento City Code, or any successor statutory provision, that is collected within the Annexation Area.

Section 2. Property Tax Revenue.

(a) Allocation to COUNTY and CITY. On and after the Annexation Date, Property Tax Revenue applicable to the Annexation Area will be allocated to the respective COUNTY General Fund and CITY General Fund, as follows:

Tax Rate Area
(TRA)
Annexation Shares
Available
Before ERAF*
ERAF
Shift
Annexation
Shares
County Library 2.26304 2.26304
County Roads 0.10976 0.10976
County General 48.72805 -0.525648733661808 23.11421
Fire District 11.48631 -0.0916072139590857 10.43408

Total 62.58716 35.92109

County Share 50% 17.960545%
City Share 50% 17.960545%
*ERAF means the Educational Revenue Augmentation Fund controlled by the State of California.

(b) Exchange by County Auditor. All exchanges of Property Tax Revenue required by this Agreement to be made to COUNTY and CITY shall be made by the COUNTY Auditor on an annual basis.

Section 3. Sales Tax Revenue and Transient Occupancy Tax Revenue. On or after the Annexation Date, CITY shall retain all Transient Occupancy Tax Revenue applicable to the Annexation Area. On or after the Annexation Date, C ITY will distribute to COUNTY a share of CITY’s Sales Tax Revenue as follows:

(a) CITY shall receive all Sales Tax Revenue for the Annexation Area and will then remit to COUNTY 50% of Sales Tax Revenue within 30 calendar days of receipt by CITY of the Sales Tax Revenue owed to COUNTY. In addition to any remedies COUNTY may have at law or in equity in the event of CITY's default on its obligation to remit such revenue as required by this Agreement, COUNTY may withhold from property tax payments otherwise due to the CITY an amount equal to the amount of Sales Tax Revenue which CITY has failed to pay COUNTY in a timely manner, provided that COUNTY may not exercise such right of offset until it has first given CITY 30 days prior written notice of COUNTY’s intent to offset.

The COUNTY shall have the right, upon reasonable notice, to audit, examine, and make copies of the books, records, accounts, and supporting documentation of the CITY that relate to the calculation, collection, and remittance of sales tax revenue under this Agreement. COUNTY may withhold from property tax payments otherwise due to CITY an amount equal to the amount of Sales Tax Revenue determined by the audit to be owed to COUNTY. This right shall continue for a period of three (3) years following the termination or expiration of this Agreement.

Section 4. Notice of Rezone or Subdivi sion Required. If any property within the Annexation Area is proposed to be rezoned or subdivided, the CITY shall provide written notice of such proposed rezone/subdivision to the COUNTY prior to the date the proposed rezone/subdivision is to be heard by the CITY Planning Commission. The CITY shall also provide the COUNTY with notice of approval of any rezone /subdivision in the Annexation Area within 30 days of the effective date.

Section 5. Detachment of Annexation Area from Certain Services After Annexation. The Annexation Area shall be detached from the County Services Area (“CSA”) 1, Water Agency, and Fire District upon the Annexation Date.

Section 6. Non-Opposition to Annexation . In further consideration of this Agreement, COUNTY agrees not to oppose CITY’s Annexation of the Annexation Area.

Section 7. Dispute Resolution.

(a) Inadmissibility. Should any disputes arise as to the performance of this Agreement, COUNTY and CITY agree to the dispute resolution process as set forth below.

All conduct, testimony, statements or other evidence made or presented during the meeting described in subsection (b) below shall be confidential and inadmissible in any subsequent arbitration proceedings brought to prove liability for any claimed breach or damages which are the subject of the dispute resolution process.

(b) Initiation of Process. COUNTY or CITY may initiate the dispute resolution process by submitting written notification to the other of a potential dispute concerning the performance of this Agreement. This written notification shall include all supporting documentation, shall state what is in dispute, and shall request a meeting between the County Executive and the City Manager or their respective designees. The purpose of this

meeting shall be to ascertain whether a resolution of the disagreement is possible without third party intervention. This meeting shall be scheduled to take place within 30 working days of receipt of the written notification of the dispute. At the meeting, the respective representatives of the COUNTY and the CITY shall attempt to reach an equitable settlement of the disputed issue(s).

(c) Binding Arbitration. If the meeting provided for in subsection (b) of this Section fails to fully resolve the disagreement, the matter shall then be submitted by either party to the American Arbitration Association (“Arbitrator”) to appoint a single, neutral arbitrator for a decision. The arbitration shall be conducted pursuant to the procedures set forth in Chapter 3 (commencing with Section 1282) of Title 9 of the California Code of Civil Procedure. The decision of the Arbitrator shall be controlling between the CITY and the COUNTY and shall be final. Except as provided in Code of Civil Procedures Sections 1286.2 and 1286.4, neither party shall be entitled to judicial review of the Arbitrator’s decision. The party against whom the award is rendered shall pay any monetary award and/or comply with any other order of the Arbitrator within 60) days of the entry of judgment on the award.

(d) Costs. The parties shall share equally in the costs and fees associated with the Arbitrator’s fees and expenses. At the conclusion of the arbitration, the prevailing party, as determined by the Arbitrator, shall be entitled to reimbursement by the other party f or the Arbitrator’s fees and the Arbitrator’s expenses incurred in connection with the arbitration.

The awarded arbitrator’s fees and expenses shall be remitted to the party whose petition is upheld within 30 days of the Arbitrator’s decision. Eac h party shall bear its own costs, expenses and attorney’s fees and no party shall be awarded its costs, expenses, or attorney’s fees incurred in the dispute resolution process.

Section 8. Mutual Defense of Agreement. If the validity of this Agreement is challenged in any legal action by a party other than COUNTY or CITY, then COUNTY and CITY agree to defend jointly against the legal challenge and to share equally any award of costs, including attorney’s fees, against COUNTY, CITY, or both.

Section 9. Waiver of Retroacti ve Recovery. If the v alidity of this Agreement i s challenged in any legal action brought by either CITY, COUNTY or any third-party, CITY hereby waives any right to the retroactive recovery of any CITY Property Tax Revenue and COUNTY hereby waives any right to the retroactive recovery of any Sales Tax Revenue exchanged pursuant to this Agreement prior to the date on which such legal action is filed in a court of competent jurisdiction. The remedy available in any such legal action brought as described in this paragraph shall be limited to a prospective invalidation of the Agreement.

Section 10. Third Party Beneficiary . There are no third- party beneficiaries to this Agreement, and no third- party will have any right to enforce any provision of this Agreement.

Section 11. Modification. The provisions of this Agreement and all of the covenants and conditions set forth herein may be modified or amended only by a writing duly authorized and executed by both the COUNTY and CITY.

Section 12. Reformation. COUN TY and CITY understand and agree that this Agreement is based upon existing law, and that such law may be substantially amended in the future. In the e vent of an amendment of state law which renders this Agreement invalid or inoperable or which denies any Party thereto the full benefit of this Agreement

as set forth herein, in whole or in part, then COUNTY and CITY ag ree to renegotiate the Agreement in good faith.

Section 13. Enforcement of Agreement. This Agreement shall be governed, construed, and enforced in accordance with the laws of the State of California. Venue of any litigation arising out of or connected with this Agreement shall lie exclusively in the state trial court or federal district court located in Sacramento County, California.

Section 14. Effect of Tax Exchange Agreement . This Agreement shall be applicable solely to the Annexation and does not constitute either a master tax sharing agreement or an agreement on propert y tax exchanges which may be required for any other annexation to the CITY.

Section 15. Entire Agreement. With respect to the subject matter contained in this Agreement, this Agreement supersedes any and all previous negotiations, proposals, commitments, writings, and understandings of any nature whatsoever between COUNTY and CITY except as otherwise provided herein.

Section 16. Notices. All notices, requests, certifications or other correspondence required to be prov ided by the Parties to thi s Agreement shall be in writing and shall be personally delivered or delivered by first class mail to the respective Parties at the following addresses:

COUNTY CITY

County Executive City Manager
County of Sacramento City of Sacramento
700 H Street, Room 7650 915 I Street, 5th Floor
Sacramento, CA 95814 Sacramento, CA 95814

Notice by personal delivery shall be effective immediately upon delivery. Notice by mail shall be effective upon receipt or three days after mailing, whichever is earlier.

Section 17. Approval, Consent , and Agreement . Wherever this Agreement requires a Party’s approval, consent, or agreement, the P arty shall make its decision to give or withhold such approval, consent or agreement in good faith, and shall not withhold such approval, consent or agreement unreasonably or without good cause.

Section 18. Construction of Headings. Headings of the sections of this Agreement are for convenience and reference onl y. The w ords in the headings in no w ay explain, modify, amplify, or interpret this Agreement.

Section 19. Incorporation by Reference. Exhibits A .1 and A.2, attached hereto, are incorporated into this Agreement by this reference.

Section 20. Counterparts. The Parties may execute this Agreement in counterparts, each of which will be considered an original, but all of which will constitute the same agreement. The Parties agree that this document may be executed with electronic signatures.

Section 21. Approval by Governing Bodies. The Parties acknowledge that this Agreement shall not become effective unless the ordinance or resolution approving this Agreement is approved by a two-thirds (2/3) vote of both the City Council and the County Board of Supervisors.

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement in the County of Sacramento, State of California, on the date set forth above.

Attachments:

Exhibit A.1 – Map of Annexation Area
Exhibit A.2 – Legal Description of Annexation Area

CITY OF SACRAMENTO, a municipal
corporation

By: ____________________________
Michael Jasso
Assistant City Manager

ATTEST: ____________________
Assistant City Clerk

Approved as to form:

____________________________
Deputy City Attorney

COUNTY OF SACRAMENTO, a political
Subdivision of the State of California

By: _______________________________
County Executive

(SEAL)

ATTEST: ________________________
Clerk of the Board of
Supervisors

Approved as to form:

__________________________
County Counsel

ANNEXATION LIMITS
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NOTES

1. THE TOTAL AREA IS 447.197 ACRES, MORE OR LESS.

LEGEND
- - ANNEXATION LIMITS

PROPERTY LINE

LOT LINE

RIGHT -OF -WAY LINE

CITY LIMIT LINE

ANNEXATION EXHIBIT FOR THE

AIRPORT INDUSTRIAL SOUTH
AIL OF LOTS 1 - 8 PER MAP OF NATOMAS ELKHORN
SUBDMSION, 15 BM 42 AND LOTS 90 - 92 PER MAP OF NATOMAS CENTRAL SUBDMSION, 16 B.M. 3

SACRAMENTO COUNTY RECORDS,
SITUATE WITHIN SECTION 4 AND 5, T. 9 N., R. 4 E., M.D.B. & M.

COUNTY OF SACRAMENTO STATE OF CALIFORNIA
LaJOOO -ROOOE:R:S
ENGINEERING • MAPPING • PLANNING • SURVEYING
3301 C St., Bldg. 100-B
Sacramento, CA 95816
Tel 916.341.7760
Fax 916.341.7787
DECEMBER 2022
SHEET 1 OF 1
3909004
EXHIBIT A.1
3909.004
ASI-Annexation.doc Page 1 of 2

EXHIBIT 'A'

LEGAL DESCRIPTION

FOR THE

AIRPORT

INDUSTRIAL SOUTH
(ANNEXATION)
A portion of Sections 4 & 5, Township 9 North, Range 4 East, Mount Diablo Baseline and Meridian, also being all of Lots 1 though 8, as shown on the Map entitled “Natomas Elkhorn Subdivision” recorded in Book 15 of Maps, at Page 42, and all of Lots 90 through 92, as shown on the Map entitled “ Na tomas Central Subdivision” recorded in Book 16 of Maps, at Page 3, Sacramento County Records, located in the County of Sacramento, State of California, more particularly described as follows:

BEGINNING at a point which is the northwest cor ner of said Section 4, also being the southwest corner of the City of Limits of the City of Sacramento as described in the Greenbriar Annexation (Reorganization) Resolution No. 2008-055;

1. THENCE North 89°39’24” East, a distance of 2224.34 feet, along the north line of said Section 4, also being on the south lin e of said City Limits, to the northeast corner of said Lot 92, also being on the City Limits line of the City of Sacramento described in an Ordinance entitled “Natom as Annexation Area No. 1”, filed as Sacramento City Ordinance No. 2295 – Fourth Series;

2. THENCE South 00°34’02” East, a dist ance of 2289.10 feet, leaving said City Limits of Greenbriar, along a portion of the east line of said City Limits of Natomas Annexation Area No. 1, also being the ea st line of said Lots 92, 91, and 90, respectively to the southeast corner of said Lot 90;

3. THENCE South 62°36’58” West, a dist ance of 641.78 feet, along the boundary line of said Lot 90;

4. THENCE South 89°42’45” West, a dist ance of 805.34 feet, along the boundary line of said Lot 90;

5. THENCE South 00°18’15” East, a distance of 25.00 feet, along the boundary line of said Lot 90;

6. THENCE South 89°42’45” West, a distance of 853.54 feet to the southwest corner of said Lot 90, also being the southeast corner of said Lot 1;

7. THENCE South 89°45’45” West, a dist ance of 5297.25 feet, along the south line of said Lots 1 through 8, res pectively, to the southwest co rner of said Lot 8, also being on the centerline of Power Line Road;

8. THENCE North 00°22’19” West, a distance of 2604.23 feet, along the west line of said Lot 8, also being said centerline, to the northwest corner of said Section 5;

9. THENCE North 89°45’45” East, a distance of 5295.78 feet, along the north line of said Section 5 to the POINT OF BEGINNING.

Containing 447.197 acres, more or less.

EXHIBIT A.2
3909.004
ASI-Annexation.doc Page 2 of 2
Basis of Bearings for this description is th e north line of Section 5, as shown on that certain Subdivision Map No. 96-0447, entitled “Metro Air Park Unit ‘A’”, Book 328 of Maps, at Page 3, in said County. Said line is taken to bear North 89°45’45” East.

December 5, 2022

END OF DESCRIPTION
PREPARED BY WOOD RODGERS, INC.

SACRAMENTO, CALIFORNIA

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 population- served 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. Applicant- sponsored 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-person- served 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 per- person-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.”

M EMORANDUM
To: Geoff Griffin, NorthPoint Development
Mark Enes, AKT Properties
From: Amy Lapin and Jes Stevens
Subject: Airport South Indu strial Project Economic
Impact Analysis; EPS #222161
Date: April 6, 2023
Introduction
NorthPoint Development, LLC (NorthPoint) retained
Economic & Planning Systems, Inc. (EPS) to prepare an
economic impact analysis (Analysis) of proposed and potential land uses in the Sacramento Airport South Industrial project (Project). The Project is located in unincorporated Sacramento County (County), northwest of the City of Sacramento (City) and south of the existing Interstate 5 (I-5) Metro Air Park Parkway Interchange. While currently in the unincorporated County, the Project is proposed to be annexed into the City as part of Project entitlements.

The stimulus generated by the proposed and potential land uses in the Project will have a multiplying effect throughout the economy as local businesses, consumers, and employees
associated with the Project make expenditures locally. The purpose of this Analysis is to estimate the quantifiable one- time construction and ongoing annual operational
impacts of the Project on the regional economy with respect to jobs, income, and total economic output.
1 1 Total economic output refers to the value of goods and services produced in a county as a result of a project’s operations.

Airport South Industrial Project Economic Impact Analysis April 6, 2023
Economic & Planning Systems, Inc. (EPS) 2
Project Overview
At full buildout, the 475-acre Project is envisioned to contain almost 6 million building square feet of industrial uses and nearly 100,000 building square feet of highway commercial uses (Total Project), accommodating over 3,500 ongoing jobs onsite (direct jobs). See Table A-1 in Appendix A for a summary of the Project land uses and employment.

The Total Project comprises two components described below, both of which are presented individually and in aggregate throughout this Analysis:
• Proposed NorthPoint/AKT Properties Project includes land uses proposed by NorthPoint and AKT Properties consisting of about 4.4 million building square feet of industrial and 100,000 building square feet of highway commercial uses across 353 developable acres (Proposed NorthPoint/AKT Properties Project). Development of the Proposed NorthPoint/AKT Properties Project is anticipated to begin in 2024 and build out over a period of 7 years. • Potential Remaining Development includes 83 developable acres controlled by non-participating property owners. The land use plan and development timing for the remaining acres is unknown at this time. This Analysis is based on the assumption that the Potential Remaining Development will encompass approximately 1.5 million building square feet of future industrial development (Potential Remaining Development), given site characteristics, adjacent land uses in the Project, and a typical Floor Area Ratio (FAR) assumption for industrial development.

Summary of Economic Impacts
The total economic impact of the proposed Project measures the impact of an activity as it “ripples” throughout the regional economy. These effects consist of direct, indirect, and induced impacts and are described in more detail later in this memorandum (refer to the “Economic Impact Modeling Framework” section).

In this Analysis, the regional economy is defined as the County. However, as the Project is anticipated to annex into the City before development, all direct impacts, and a portion of indirect and induced impacts, are estimated to occur in the City. Figure 1 summarizes the estimated economic impacts of the Project in the regional economy, while Table 1 presents the estimated economic impacts in a tabular format.

Airport South Industrial Project Economic Impact Analysis April 6, 2023
Economic & Planning Systems, Inc. (EPS) 3
Figure 1. Economic Impacts of Airport South Industrial (Total Project)

Table 1
Airport South Industrial
Economic Impact Analysis
Summary of One-Time and Annual Ongoing Impacts (Rounded 2023$) Item
One-Time Construction Impacts [1] $415.2 M $125.8 M $541.0 M One-Time Construction Jobs (Job Years) [2] 2,656 805 3,461 Annual Ongoing Operational Impacts [3] $536.6 M $176.2 M $712.8 M Annual Ongoing Operational Jobs (Annual Average) [4] 3,971 1,311 5,282 Total Annual Public-Sector Tax Revenue [5] $11.1 M $2.9 M $14.0 M Economic Impacts of Airport South Project
Proposed
NorthPoint/AKT
Project
Total
Project
Potential
Remaining
Development
Source: IMPLAN, 2021 Dataset; NorthPoint Development, LLC; EPS.

One-Time Economic Impacts
Annual Ongoing Economic Impacts
Annual Ongoing Public-Sector Tax Revenues
[1] Includes direct and indirect impacts.
[2] Employment includes both full-time and part-time workers. Job years refer to the number of jobs in each year summed over the entire construction period of the Project. [3] Includes direct, indirect, and induced Impacts of the anticipated land uses within the Project. [4] Reflects stabilized operational employment for the Project. Refer to Table A-1 for details. Employment includes both full-time and part-time workers.
[5] Reflects estimated tax revenue generated for the City of Sacramento, jurisdictions and taxing entities in Sacramento County, and the State of California. Estimated public sector tax revenue is a component of annual ongoing economic activity from stabilized operations and not additive to the economic impacts reflected above.

Prepared by EPS 4/6/2023 Z:\Shared\Projects\SAC\222000\222161 Sacramento Aiport South EIA\Models\222161 EIA m01 03-29-23 4 Airport South Industrial Project Economic Impact Analysis April 6, 2023
Economic & Planning Systems, Inc. (EPS) 5
Proposed NorthPoint/AKT Properties Project
• One-Time Construction Impacts. Construction is anticipated to generate $415.2 million in one-time economic impacts and support 2,656 job years.2 • Annual Ongoing Impacts. Once the Proposed NorthPoint/AKT P roperties Project has reached stabilized operations, it is estimated to generate $536.6 million annually in total economic impacts, supporting an annual average of 3,
971 jobs in the County, inclusive of direct jobs onsite and all indirect and induced jobs supported by the development. • Annual Public-Sector Tax Revenues. The Project is anticipated to generate $11.1 million annually in tax revenue to support public-sector operations, including $3.3 million
generated for the City. An additional $6.4 million and
$1.4 million is estimated to accrue to Sacramento County (and other taxing entities in the County) and the State, respectively. Public-sector revenues are included in ongoing economic impacts as estimated.

Potential Remaining Development
The following impacts are estimated if the Potential Remaining Development builds out as identified in this Analysis:
• One-Time Construction Impacts. Construction is anticipated to generate $125.8 million in one-time economic impacts and support 805 job years.3 • Annual Ongoing Impacts. Once the Potential Remaining Development has reached stabilized operations, it is estimated to generate $176.2 million annually in total economic impacts, supporting an annual average of 1,311 jobs in the County, inclusive of direct jobs onsite and all indirect and induced jobs supported by the development.
• Annual Public-Sector Tax Revenues. The Potential Remaining Development is anticipated to generate $2.9 million annually in tax revenue to support public-sector operations, including $741,000 generated for the City. An additional $2.0 million and $98,000 is estimated to accrue to Sacramento County (and other taxing entities in the County) and the State, respectively.

Public-sector revenues are included in ongoing economic impacts as estimated. 2 Employment includes both full-time and part-time workers. Job years refer to the number of jobs in each year summed over the entire construction period of the Project. For example, a single worker employed for 2 years would equate to 2 job years. 3 Ibid.

Airport South Industrial Project Economic Impact Analysis April 6, 2023
Economic & Planning Systems, Inc. (EPS) 6
Total Project
In aggregate, development of the Proposed NorthPoint/AKT Properties Project and Potential Remaining Development components will generate the following impacts:
• One-Time Construction Impacts. Construction at full buildout is anticipated to generate $541.0 million in one-time economic impacts and support 3,461 job years.4
• Annual Ongoing Impacts. Once the Total Project has reached stabilized operations, it is estimated to generate $712.8 million annually in total economic impacts, supporting an annual average of 5,282 jobs in the County, inclusive of direct jobs onsite and all indirect and induced jobs. • Annual Public-Sector Tax Revenues. The Total Project is anticipated to generate $14.0 million annually in tax revenue to support public-sector operations, including $4.0 million generated for the City. An additional $8.5 million and $1.5 million is estimated to accrue to Sacramento County (and other taxing entities in the County) and the State, respectively. Public-sector re
venues are included in ongoing economic impacts as estimated.

Detailed Projec t Description
The proposed 475-acre Project is in the unincorporated County and is located along Bayou Road, south of I-5 and southeast of the Sacramento International Airport (SMF). See Map 1. Metro Air Park (MAP), an 1,892-acre Industrial Business Park, and the Northlake development (formerly Greenbriar) are located directly to the north of the Project site. Undeveloped agricultural and mitigation lands lie south of the Project. Other surrounding existing uses include the Life Storage Facility and Westlake subdivision, the West Drainage Canal, the Paso Verde School, and undeveloped SMF Master Plan Commercial land.

The Project is easily accessible from one of Sacramento’s primary transportation corridors, I-5, via the recently constructed Phase 1 configuration of the MAP Interchange. Future interchange improvements will increase the 2-lane overcrossing of I-5 by 2 additional lanes, creating a 4-lane overcrossing accompanied by on- and off-ramp capacity improvements.
4 Ibid.

Airport South Industrial Project Economic Impact Analysis April 6, 2023
Economic & Planning Systems, Inc. (EPS) 7
The Project proposes the abandonment of South Bayou Way and replacement with a new internal roadway system (Airport South Industrial Drive), which will be designed and constructed to the City’s local industrial standards. If South Bayou Way is left in its current onsite alignment, the roadway would not meet the City’s local industrial standards. Roadway improvements would also include a round- about
to guide truck traffic directly to I-5 and will prohibit off-site truck traffic from Airport
South Industrial Drive.

Across approximately 350 acres, the Proposed NorthPoint/AKT Properties Project includes 5 buildings of industrial development, retention basins and buffer lots, and an internal roadway system. In addition, the proposed Project includes approximately
100,000 building square feet of highway commercial development.

See
Figure 2. This commercial development will serve local, regional, and interstate travelers with the inclusion of multiple restaurants, a gas station and carwash, and a 3- to 4-story hotel.

The Potential Remaining Development includes approximately 80 acres owned by non-participating property owners. For the purpose of this Analysis, this component of the Project is estimated to accommodate 1.5 million building square feet of industrial space, based on a FAR of 0.42.

Map 1
Project Location
Note: Project Site boundaries are approximate.

Project Site
Figure 2. Project Site Plan
Airport South Industrial Project Economic Impact Analysis April 6, 2023
Economic & Planning Systems, Inc. (EPS) 10
Economic Impact Analysis Results
This Analysis quantifies these impacts using an input/output (I/O) economic modeling system, which measures the change in regional economic activity resulting from a specific economic stimulus. 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.

The effects stemming from the change in regional economic activity are commonly described as direct, indirect, or induced impacts. In addition, this Analysis includes an estimate of revenues generated by the Project to the public sector, including the City and the State of California (State), and provides a qualitative description of other benefits conferred by the Project. Figure 3 illustrates the ongoing, annual activities captured by this Analysis.

Figure 3. Ongoing Annual Economic Impact Analysis Components

DIRECT IMPACTS

INDIRECT IMPACTS

INDUCED IMPACTS
Operating revenues and
employment

Example: Annual sales
revenues from onsite
businesses and restaurants.

Business-to-business
transactions

Example: Users purchase
goods, such as office supplies
and equipment, generating
sales for other local
businesses.

Spending of employee income

Example: An employee
spends their salary on
groceries and household
expenses, generating sales for
other local businesses.

Total Economic Impacts
Source: EPS.

Airport South Industrial Project Economic Impact Analysis April 6, 2023
Economic & Planning Systems, Inc. (EPS) 11
One-Time Construction Economic Impact Results
One-time economic impacts are generated by Project construction activity and are limited to the Project construction development period. To the extent that construction activity is short term and construction labor markets are tight, construction impacts may represent a shift of resources from other construction projects in the County. This Analysis therefore reports gross economic impacts, not accounting for potential shifts in resources. In addition, to the extent that construction labor is used temporarily, and laborers may live outside of the County, this Analysis is based on the assumption that construction activities exclude induced impacts (e.g., household income spent on goods and services in the County). The following sections outline the one-time construction impacts for each component of the Project.

Proposed NorthPoint/AKT Properties Project
Construction impacts are based on the estimated hard construction costs for the Proposed NorthPoint/AKT Properties Project of $342.3 million, as shown on Table A-2 in Appendix A. One-time economic impacts stemming from construction are estimated to generate total output of $415.2 million (measured in 2023 dollars). It is anticipated that construction will generate 2,656 job years over the anticipated construction timeline, including 2,338 direct and 318 indirect job years.
5 Potential Remaining Development
If the Potential Remaining Development develops as anticipated in this Analysis, one-time economic impacts stemming from construction are estimated to generate total output of $125.9 million (measured in 2023 dollars). It is anticipated that construction will generate 805 job years over the anticipated construction timeline, including 709 direct and 96 indirect job years.6 The construction impacts of the Potential Remaining Development are based on the estimated hard construction costs of $103.8 million, as shown on Table A-2 in Appendix A.

Total Project
At full buildout of the Total Project as envisioned in this Analysis, one-time economic impacts stemming from construction are based on the estimated hard construction costs as shown on Table A-2 in Appendix A and are estimated to generate total output of $541.0 million (measured in 2023 dollars).

5 Note that the employment figures reported for construction impacts represent total job years lasting the duration of the Project and could reflect the same job that extends over multiple years. For instance, a general laborer employed for 2 years during construction activity would represent 2 job years.
6 Ibid.

Airport South Industrial Project Economic Impact Analysis April 6, 2023
Economic & Planning Systems, Inc. (EPS) 12
It is anticipated that construction will generate 3,461 job years over the anticipated construction timeline, including 3,046 direct and 415 indirect job years.7
Annual Ongoing Economic Impact Results
Ongoing economic impacts are measured on a gross annual impact basis, not accounting for shifts in consumer expenditures from other local alternatives.

Total economic activity is based on the anticipated stabilized operational employment at buildout for each component of the Project and is estimated to be generated in the County annually, inclusive of employee compensation.8 This level of annual, ongoing economic output represents direct, indirect, and induced impacts.

Proposed NorthPoint/AKT Properties Project
The Proposed NorthPoint/AKT Properties Project is estimated to generate $536.6 million in total economic output annually and result in approximately 3,971 full- and part-time jobs in the County. As a result of ongoing, annual operations, the estimated full- and part-time jobs include 2,645 direct (on-site) jobs, 751 indirect, and 575 induced jobs. These full- and part-time jobs are estimated to generate approximately $227.8 million in earned employee compensation (wages and benefits) annually.

Potential Remaining Development
If the Potential Remaining Development develops as anticipated in this Analysis, it is estimated to generate $176.2 million in total economic output annually and result in approximately 1,311 full- and part-time jobs in the County.

As a result of ongoing, annual operations, the estimated full- and part-time jobs include 872 direct (on-site) jobs, 248 indirect, and 191 induced jobs. These full- and part-time jobs are estimated to generate approximately $75.6 million in earned employee compensation (wages and benefits) annually.

Total Project
At full buildout as envisioned in this Analysis, the Total Project is estimated to generate $712.8 million in total economic output annually and result in approximately 5,282 full- and part-time jobs in the County. As a result of ongoing, annual operations, the estimated full- and part-time jobs include 3,517 direct (on-site) jobs, 999 indirect, and 766 induced jobs. These full- and part-time jobs are estimated to generate approximately $303.4 million in earned employee compensation (wages and benefits) annually.

7 Ibid.
8 Stabilized operational employment includes both full-time and part-time workers.

Airport South Industrial Project Economic Impact Analysis April 6, 2023
Economic & Planning Systems, Inc. (EPS) 13
Annual Public-Sector Tax Revenues
The Project will generate annual tax revenues that will flow to the City, jurisdictions and taxing entities in the County, and the State. This Analysis focuses on major sources of tax revenue for the City and the State only, including property tax (including property tax in lieu of vehicle license fee revenues), sales tax and public safety sales tax, and transient occupancy tax revenues. Estimated public-sector tax revenue is a component of annual ongoing economic activity from stabilized operations and is not additive to the total economic output described above.

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 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.

Proposed NorthPoint/AKT Properties Project
It is estimated that the Proposed NorthPoint/AKT Properties Project will generate approximately $11.1 million in public-sector tax revenues annually (measured in 2023 dollars). Of the revenue generated, $3.3 million is estimated to be retained by the City, $6.4 million is estimated to accrue to other taxing entities, and $1.4 million is estimated to accrue to the State.

Potential Remaining Development
If the Potential Remaining Development develops like this Analysis anticipates, it is estimated to generate approximately $2.9 million in public-sector tax revenues annually (measured in 2023 dollars). Of the revenue generated, $741,000 is estimated to be retained
by the City, $2.0 million is estimated to
accrue to other taxing entities, and $98,000 is estimated to accrue to the State.

Total Project
At full buildout as envisioned in this Analysis, it is estimated that the Total Project will generate approximately $14.0 million in public-sector tax revenues annually (measured in 2023 dollars). Of the revenue generated, $4.0 million is estimated to be retained by the City, $8.5 million is estimated to accrue to other taxing entities, and $1.5 million is estimated to accrue to the State.

Airport South Industrial Project Economic Impact Analysis April 6, 2023
Economic & Planning Systems, Inc. (EPS) 14
Detailed Analysis Find ings and Assumptions
The following section provides the detailed results of the Analysis, as well as the assumptions used to calculate each impact.

One-Time Construction Impacts
Impacts associated with construction of the Project through buildout are measured on a one-time basis. Construction activity generates a short-term burst of economic activity that dissipates once construction is complete. One-time impacts include the value of new construction, improvements to existing infrastructure, employment created, and income earned during construction.

Duration of one-time impacts is limited to the development period of the Project.

One-time economic impacts are calculated based on the anticipated hard construction costs, excluding soft costs, which are excluded because these costs are considered to be indirect costs and as such are included in the indirect one- time impacts of the Project. Based on information provided by NorthPoint and AKT Properties, it is estimated that construction of the Project will incur approximately $446 million in hard construction costs. Refer to Table A-2 in Appendix A for a detailed allocation of construction costs by land use type.

The section below details the results of the one-time economic impacts for construction of the Project.

One-Time Proposed NorthPoint/AKT Properties Project Construction Table 2 details the estimated one-time economic impacts associated with construction of Proposed NorthPoint/AKT Properties Project. The resulting impacts are described below:
 Annual Output. Construction operations are estimated to generate approximately $342.3 million in direct one-time industry output. Local spending will result in $72.9 million in indirect one-time impacts for a total one-time industry output impact of $415.2 million.
 Employee Compensation. Of the $342.3 million in direct industry output reported above, approximately $187.7 million will be received by construction employees in the form of salary, wages, and benefits. Indirect employee compensation impacts total approximately $24.1 million for a total annual employee compensation impact of approximately $211.8 million.  Annual Employment. The 2,338 direct job years support approximately 318 indirect job years for a total employment impact of approximately 2,656 job years.

Airport South Industrial Project Economic Impact Analysis April 6, 2023
Economic & Planning Systems, Inc. (EPS) 15
One-Time Potential Remaining Development Construction
Table 3 details the estimated one-time economic impacts associated with construction of the Potential Remaining Development if it develops as anticipated in this Analysis. The resulting impacts are described below:
 Annual Output. Construction operations are estimated to generate approximately $103.8 million in direct one-time industry output. Local spending will result in $22.1 million in indirect one-time impacts for a total one-time industry output impact of $125.9 million.
 Employee Compensation. Of the $103.8 million in direct industry output reported above, approximately $56.9 million will be received by construction employees in the form of salary, wages, and benefits. Indirect employee compensation impacts total approximately $7.3 million for a total annual employee compensation impact of approximately $64.2 million.  Annual Employment. The 709 direct job years support approximately 96 indirect job years for a total employment impact of approximately 805 job years.

One-Time Total Project Construction
Table 4 details the estimated one-time economic impacts associated with construction of the Total Project at full buildout as envisioned in this Analysis.

The resulting impacts are described below:
 Annual Output. Construction operations are estimated to generate approximately $446.0 million in direct one-time industry output. Local spending will result in $95.0 million in indirect one-time impacts for a total one-time industry output impact of $541.0 million.
 Employee Compensation. Of the $446.0 million in direct industry output reported above, approximately $244.5 million will be received by construction employees in the form of salary, wages, and benefits. Indirect employee compensation impacts total approximately $31.4 million for a total annual employee compensation impact of approximately $275.9 million.  Annual Employment. The 3,046 direct job years support approximately 415 indirect job years for a total employment impact of approximately 3,461 job years.

Table 2
Airport South Industrial
Economic Impact Analysis
One-Time Impacts of Project Construction - NorthPoint/AKT (Rounded 2023$) Direct Indirect Induced [1]
Activity/Impact Categories Source
(Project
Construction)
(Construction
Suppliers)
NA
Key Input
Project Construction Costs (Rounded) Table A-2 $342,300,000 One-Time Construction Impacts
Economic Output in Sacramento County [2]
Industry Output (excl. Income) $154,600,000 $48,790,000 - $203,390,000 Income [3] $187,700,000 $24,080,000 - $211,780,000
Total Output $342,300,000 $72,870,000 - $415,170,000
Construction Employment in Sacramento
County (Job years) [4] 2,338 318 - 2,656
[3] Includes employee compensation, proprietors income, and other income (industry profits, rents, and royalties). [4] Employment includes both full-time and part-time workers. Job years refer to the number of jobs in each year summed over the entire construction period of the Project. For example, a single worker employed for 2 years would equate to 2 job years.

One-Time Construction Impacts
NorthPoint/AKT
Impact Type
[2] Analysis based on Sacramento County data. Output is the amount of business expenditures on goods and services retained within the local economy.
[1] Note that total construction Impacts include direct and indirect impacts only; induced impacts were not estimated because construction activities are temporary and thus are not anticipated to generate net new household expenditures in the local economy.

Source: IMPLAN, 2021 Dataset; NorthPoint Development, LLC; EPS Total
One-Time
Construction
Impacts
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Airport South Industrial
Economic Impact Analysis
One-Time Impacts of Project Construction - Potential Remaining Development (Rounded 2023$) Direct Indirect Induced [1]
Activity/Impact Categories Source
(Project
Construction)
(Construction
Suppliers)
NA
Key Input
Project Construction Costs Table A-2 $103,758,344
One-Time Construction Impacts
Economic Output in Sacramento County [2]
Industry Output (excl. Income) $46,860,000 $14,790,000 - $61,650,000 Income [3] $56,900,000 $7,300,000 - $64,200,000
Total Output $103,760,000 $22,090,000 - $125,850,000
Construction Employment in Sacramento
County (Job years) [4] 709 96 - 805
[3] Includes employee compensation, proprietors income, and other income (industry profits, rents, and royalties). [2] Analysis based on Sacramento County data. Output is the amount of business expenditures on goods and services retained within the local economy.
[4] Employment includes both full-time and part-time workers. Job years refer to the number of jobs in each year summed over the entire construction period of the Project. For example, a single worker employed for 2 years would equate to 2 job years.

One-Time Construction Impacts
Potential Remaining
Development
[1] Note that total construction impacts include direct and indirect impacts only; induced impacts were not estimated because construction activities are temporary and thus are not anticipated to generate net new household expenditures in the local economy.

Impact Type Total
One-Time
Construction
Impacts
Source: IMPLAN, 2021 Dataset; NorthPoint Development, LLC; EPS Prepared by EPS 4/6/2023 Z:\Shared\Projects\SAC\222000\222161 Sacramento Aiport South EIA\Models\222161 EIA m01 03-29-23 17 Table 4
Airport South Industrial
Economic Impact Analysis
One-Time Impacts of Project Construction - Total Project (Rounded 2023$) Direct Indirect Induced [1]
Activity/Impact Categories Source
(Project
Construction)
(Construction
Suppliers)
NA
Key Input
Project Construction Costs Table A-2 $446,000,000
One-Time Construction Impacts
Economic Output in Sacramento County [2]
Industry Output (excl. Income) $201,440,000 $63,570,000 - $265,010,000 Income [3] $244,560,000 $31,380,000 - $275,940,000
Total Output $446,000,000 $94,950,000 - $540,950,000
Construction Employment in Sacramento
County (Job years) [4] 3,046 415 - 3,461
[3] Includes employee compensation, proprietors income, and other income (industry profits, rents, and royalties). [2] Analysis based on Sacramento County data. Output is the amount of business expenditures on goods and services retained within the local economy.
[4] Employment includes both full-time and part-time workers. Job years refer to the number of jobs in each year summed over the entire estimated 7-year construction period of the Project. For example, a single worker employed for 2 years would equate to 2 job years.

One-Time Construction Impacts
Total Project
[1] Note that total construction impacts include direct and indirect impacts only; induced impacts were not estimated because construction activities are temporary and thus are not anticipated to generate net new household expenditures in the local economy.

Impact Type Total
One-Time
Construction
Impacts
Source: IMPLAN, 2021 Dataset; NorthPoint Development, LLC; EPS.

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Economic & Planning Systems, Inc. (EPS) 19
Ongoing Operations
This report estimates the ongoing economic impacts occurring annually as a result of stabilized Project operations. Ongoing economic impacts capture the direct, indirect, and induced impacts generated by the combination of businesses located in the Project. Impacts associated with these economic activities are estimated based on estimates of standardized operational employment.

Total employment estimates are based on an assumed employment density for each of the land uses of the Project: industrial, lodging, gas stations, and restaurants. At full buildout, the Total Project is estimated to have 3,517 onsite employees. See Table A-1 in Appendix A. Industrial warehouse uses can have a wide range of employment densities (anywhere from 1,000 to 10,000+ square feet per employee). This Analysis uses an employment density of 1,750 building square feet per employee for industrial land uses. For lodging, gas stations, and restaurants, an average of 1,000, 750, and 500 building square feet per employee, respectively, was used to estimate onsite employment.

Proposed NorthPoint/AKT Properties Project
Of the 3,517 onsite employees at full buildout, EPS estimates 2,645 employees will be generated from the Proposed NorthPoint/AKT Properties Project. When broken down by land uses, 2,530 employees are estimated to be employed in industrial spaces, 81 employees are estimated to be employed in lodging, 7 in gas stations, and 27 at restaurants. The precise division of jobs by full- or part-time employment is unknown at this time.

Potential Remaining Development
If the Potential Remaining Development develops consistent with the assumptions in this Analysis, then an additional 872 employees are estimated to be employed in the additional industrial businesses.

Total Project
Upon full buildout of the Total Project as envisioned in this Analysis, 3,402 onsite industrial employees are estimated to be employed by the Project, 81 employees are estimated to be employed in lodging, 7 in gas stations, and 27 at restaurants.

The precise division of jobs by full- or part-time employment is unknown at this time.

Airport South Industrial Project Economic Impact Analysis April 6, 2023
Economic & Planning Systems, Inc. (EPS) 20
Ongoing Proposed NorthPoint/AKT Properties Project Operations Table 5 summarizes the total estimated annual ongoing impacts associated with the Proposed NorthPoint/AKT Properties Project operations. The resulting impacts are described below:
 Annual Output. Operations are estimated to generate approximately $288.8 million in direct industry output annually. Local spending will result in approximately $142.4 million in indirect industry output impacts and $105.5 million in induced impacts annually for a total industry output impact of $536.6 million on an annual basis.
 Employee Compensation. Of the $288.8 million in direct industry output reported above, approximately $144.1 million will be received by employees in the form of salary, wages, and benefits. Indirect and induced employee compensation impacts total approximately $83.7 million for a total annual employee compensation impact of approximately $227.8 million.  Annual Employment. The 2,645 direct employees will generate approximately 751 indirect and 575 induced jobs annually for a total employment impact of approximately 3,971 jobs on an annual basis.

Ongoing economic impacts are based on the onsite operations of the Proposed NorthPoint/AKT Properties Project.

Ongoing Potential Remaining Development Operations
Table 6 summarizes the total estimated annual ongoing impacts associated with Potential Remaining Development operations as anticipated in this Analysis. The resulting impacts are described below:
 Annual Output. Operations are estimated to generate approximately $94.2 million in direct industry output annually. Local spending will result in approximately $47.0 million in indirect industry output impacts and $35.0 million in induced impacts annually for a total industry output impact of $176.2 million on an annual basis.
 Employee Compensation. Of the $94.2 million in direct industry output reported above, approximately $47.9 million will be received by employees in the form of salary, wages, and benefits. Indirect and induced employee compensation impacts total approximately $27.7 million for a total annual employee compensation impact of approximately $75.6 million.  Annual Employment. The 872 direct employees will generate approximately 248 indirect and 191 induced jobs annually for a total employment impact of approximately 1,311 jobs on an annual basis.

Ongoing economic impacts are based on the onsite operations of the Potential Remaining Development.

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Economic & Planning Systems, Inc. (EPS) 21
Ongoing Total Project Operations
Table 7 summarizes the total estimated annual ongoing impacts associated with Total Project operations upon full buildout as anticipated in this Analysis. The resulting impacts are described below:
 Annual Output. Total Project operations are estimated to generate approximately $383.0 million in direct industry output annually. Local spending will result in approximately $189.4 million in indirect industry output impacts and $140.4 million in induced impacts annually for a total industry output impact of $712.8 million on an annual basis.
 Employee Compensation. Of the $383.0 million in direct industry output reported above, approximately $192.0 million will be received by employees in the form of salary, wages, and benefits. Indirect and induced employee compensation impacts total approximately $111.3 million for a total annual employee compensation impact of approximately $303.4 million.  Annual Employment. The 3,517 direct employees will generate approximately 999 indirect and 766 induced jobs annually for a total employment impact of approximately 5,282 jobs on an annual basis.

Ongoing economic impacts are based on onsite operations of the Total Project.

Public-Sector Revenues
The Total Project will generate revenues to the City, to the County and other taxing entities in the County, and to the State. This Analysis focuses on major sources of tax revenues, including property tax and sales tax revenues, as shown in Table 8. In total, the Project is anticipated to generate $14.0 million in public- sector tax revenue. Of the revenue generated, $4.0 million will be retained by the City, $8.5 million will accrue to Sacramento County (and other taxing entities in the County), and another $1.5 million benefitting the State.

The Analysis estimates additional public-sector revenues using a marginal- revenue case-study approach, which simulates actual revenue generation resulting from new development. The estimated annual ongoing economic impacts include an estimate of some local tax revenues. The public-sector revenue calculated in the Analysis provides a more detailed and complete picture of local/ regional public-sector revenues generated by the Project. The following sections detail the additional public-sector tax revenues generated by the Project and the case-study methodologies used to calculate each revenue source.

Table 5
Airport South Industrial
Economic Impact Analysis
Annual Impacts of the Ongoing Project Operations - NorthPoint/AKT (Rounded 2023$) Direct Indirect Induced
Activity/Impact Categories Source
(Project
Operations)
(Business to
Business Activity to
Support Project
Operations)
(Household Spending
from Project
Employment)
Key Input
Ongoing Project Employees Table A-1 2,645
Annual Ongoing Operating Impacts
Economic Output in Sacramento County [1]
Industry Output (excl. Income) $144,690,000 $94,500,000 $69,690,000 $308,880,000 Income [2] $144,110,000 $47,890,000 $35,760,000 $227,760,000 Total Sacramento County Output $288,800,000 $142,390,000 $105,450,000 $536,640,000 Employment in Sacramento County
(Annual Average) [3] 2,645 751 575 3,971
Ongoing Economic Impacts
NorthPoint/AKT
Impact Type
[1] Analysis based on Sacramento County data. Output is the amount of business expenditures on goods and services retained within the local economy. [2] Includes employee compensation, proprietors income, and other income (profits, rents, and royalties). [3] Reflects stabilized operational employment in the Project. Employment includes both full-time and part-time workers.

Total
Annual
Ongoing
Impacts
Source: IMPLAN, 2021 Dataset; NorthPoint Development, LLC; EPS.

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Airport South Industrial
Economic Impact Analysis
Annual Impacts of the Ongoing Project Operations - Potential Remaining Development (Rounded 2023$) Direct Indirect Induced
Activity/Impact Categories Source
(Project
Operations)
(Business to
Business Activity to
Support Project
Operations)
(Household Spending
from Project
Employment)
Key Input
Ongoing Project Employees Table A-1 872
Annual Ongoing Operating Impacts
Economic Output in Sacramento County [1]
Industry Output (excl. Income) $46,290,000 $31,150,000 $23,120,000 $100,560,000 Income [2] $47,920,000 $15,830,000 $11,860,000 $75,610,000 Total Sacramento County Output $94,210,000 $46,980,000 $34,980,000 $176,170,000 Employment in Sacramento County
(Annual Average) [3] 872 248 191 1,311
Ongoing Economic Impacts
Potential Remaining
Development
Impact Type
[1] Analysis based on Sacramento County data. Output is the amount of business expenditures on goods and services retained within the local economy. [2] Includes employee compensation, proprietors income, and other income (profits, rents, and royalties). [3] Reflects stabilized operational employment in the Project. Employment includes both full-time and part-time workers.

Total
Annual
Ongoing
Impacts
Source: IMPLAN, 2021 Dataset; NorthPoint Development, LLC; EPS.

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Airport South Industrial
Economic Impact Analysis
Annual Impacts of the Ongoing Project Operations - Total Project (Rounded 2023$) Direct Indirect Induced
Activity/Impact Categories Source
(Project
Operations)
(Business to
Business Activity to
Support Project
Operations)
(Household Spending
from Project
Employment)
Key Input
Ongoing Project Employees Table A-1 3,517
Annual Ongoing Operating Impacts
Economic Output in Sacramento County [1]
Industry Output (excl. Income) $190,980,000 $125,650,000 $92,810,000 $409,440,000 Income [2] $192,030,000 $63,720,000 $47,620,000 $303,370,000 Total Sacramento County Output $383,010,000 $189,370,000 $140,430,000 $712,810,000 Employment in Sacramento County
(Annual Average) [3] 3,517 999 766 5,282
Ongoing Economic Impacts
Total Project
Impact Type
Total
Annual
Ongoing
Impacts
Source: IMPLAN, 2021 Dataset; NorthPoint Development, LLC; EPS. [1] Analysis based on Sacramento County data. Output is the amount of business expenditures on goods and services retained within the local economy. [2] Includes employee compensation, proprietors income, and other income (profits, rents, and royalties). [3] Reflects stabilized operational employment in the Project. Employment includes both full-time and part-time workers.

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Airport South Industrial
Economic Impact Analysis
Detailed Summary of Annual Public-Sector Revenues (Rounded 2023$) Revenue Category Source
City of
Sacramento
Sacramento
County & Other
Local Taxing
Entities
State of
California Total
Annual Public-Sector Tax Revenues
Proposed NorthPoint/AKT Project
Property Tax Table B-1 $1,594,100 $5,459,400 - $7,053,500 Property Tax In Lieu of Motor Vehicle License Fee Revenue Table B-1 $615,200 $751,000 - $1,366,200 Sales Tax [1] Table B-3 $427,700 $124,800 $1,410,900 $1,963,400 Prop. 172 Public Safety Sales Tax Table B-3 $14,100 $98,800 - $112,900 Transient Occupancy Tax (TOT) Table B-8 $625,500 - - $625,500 Total Annual Tax Revenues Generated by the Project $3,276,600 $6,434,000 $1,410,900 $11,121,500 Potential Remaining Development
Property Tax Table B-1 $517,300 $1,771,500 - $2,288,800 Property Tax In Lieu of Motor Vehicle License Fee Revenue Table B-1 $199,600 $243,700 - $443,300 Sales Tax [1] Table B-4 $23,500 $11,800 $98,100 $133,400 Prop. 172 Public Safety Sales Tax Table B-4 $800 $7,100 - $7,900 Transient Occupancy Tax (TOT) Table B-8 - - - -
Total Annual Tax Revenues Generated by the Project $741,200 $2,034,100 $98,100 $2,873,400 Total Project
Property Tax Table B-1 $2,111,400 $7,231,000 - $9,342,400 Property Tax In Lieu of Motor Vehicle License Fee Revenue Table B-1 $814,800 $994,700 - $1,809,500 Sales Tax [1] Table B-5 $451,200 $136,500 $1,509,000 $2,096,700 Prop. 172 Public Safety Sales Tax Table B-5 $14,800 $105,900 - $120,700 Transient Occupancy Tax (TOT) Table B-8 $625,500 - - $625,500 Total Annual Tax Revenues Generated by the Project $4,017,700 $8,468,100 $1,509,000 $13,994,800 Source: NorthPoint Development, LLC; EPS.
[1] Includes sales tax revenues generated through the Bradley-Burns local 1% Uniform Local Sales Tax rate, the City's Measure U 1% rate approved by voters in 2018, and the statewide sales tax rate.

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 v alue 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 ap
plying 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 p
roposed 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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Economic & Planning Systems, Inc. (EPS) 27
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 sp
ending 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 outp ut 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:

Airport South Industrial Project Economic Impact Analysis April 6, 2023
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 The direct effect represents the change in output or employment attributable to a cer
tain 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 sati
sfy the direct effect. This effect is a measure of the change in the output of s
uppliers linked to the industry that is directly affected. For example, a res
taurant 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. Spec
ifically, the employees of directly and indirectly affected bus
inesses generate this effect by purchasing goods and services in the local economy
. For instance, employees of these businesses spend their paychecks on househ
old needs such as groceries, retail purchases, health care, or mortgage or rent payments, all of which a
re 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 th e
County as a
result of business operations. Projected employment estimates wer
e used to estimate ongoing annual output of the various uses.

Cons
truction hard costs were used to estimate one-time construction impacts.  Employment estimates the total number of jobs, both full-time and part- time, created as a result of Project operations. Employment is reported in job years. Construction employment represents total job years over the life of the P
roject (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 em
ployment income (salaries, wages, and benefits) resulting from the asso
ciated employment. It is important to note that labor income is a c
omponent of industry output and is not an additive economic impact.

Airport South Industrial Project Economic Impact Analysis April 6, 2023
Economic & Planning Systems, Inc. (EPS) 31
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 Industrial
Economic Impact Analysis
Land Use and Employee Assumptions
Total
Project
Land Use Categor
y Employees
Proposed NorthPoint/AKT Project
Nonresidential Land Uses
Estimated Assessed Value 4,428,000 1,750 2,530
Industrial - Warehouse [2] 80,800 1,000 81
Highway Commercial 5,000 750 7
Highway Commercial - Restaurants 13,650 500 27
Total Nonresidential Land Uses 4,527,450 1,712 2,645
Potential Remaining Development
Nonresidential Land Uses
Industrial/Warehouse 1,525,858 1,750 872
Total Nonresidential Land Uses 1,525,858 1,750 872
Total Project
Nonresidential Land Uses
Industrial/Warehouse 5,953,858 1,750 3,402
Highway Commercial - Lodging 80,800 1,000 81
Highway Commercial - Gas Stations 5,000 750 7
Highway Commercial - Restaurants 13,650 500 27
Total 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 Industrial
Economic Impact Analysi
s
Estimated 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 $114,300,000 Offsite $26,568,000 $0 $26,568,000 $9,155,148 $35,700,000 $106,272,000 $7,122,000 $113,394,000 $36,620,592 $150,000,000Total Site Work $194,832,000 $34,031,000 $228,863,000 $67,137,752 $296,000,000Vertical Construction Costs Total 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 Industrial
Economic Impact Analysis
Estimated 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 5,953,858
Highway 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 $893,078,700 Highway 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 surro unding
market area.

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APPENDIX B:

Annual Fiscal Revenue Analysis

Table B-1 Estimated Annual Pr operty 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 Remain ing Development ..... B-4
Table B-5 Estimated Annual Taxable Sales and
Use Tax Revenue—Total Project ...................... B-5 Table B-6 Estimated Annual On site Taxable Sales ............ B-6 Table B-7 Estimated Annual O ffsite Taxable Sales ............ B-7 Table B-8 Estimate of Annual Transient Occupancy
Tax Revenues ............................................... B-8

Table B-1
Airport South Industrial
Economic Impact Analysis
Estimated 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 $2,160,854 Other 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% is a 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 Industrial
Economic Impact Analysis
Summary 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 $1,508,972
Total $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 $105,869 State 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 receives approximately $.000658 in Public Safety Sales Tax authorized by Proposition 172 for every $1 in taxable expenditures in the City. This is estimated by taking the 2022-23 Budget amount for Prop. 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 Revenues
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Table B-3
Airport South Industrial
Economic Impact Analysis
Estimated 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% NA
Percentage of Taxable Retail Sales: Offsite 75% 25% NA
Annual Sales Tax Revenu
e Total Taxable Retail Sales
Onsite Taxable Sales [2] Table B-6 $17,813,000 $445,325 $0 $1,113,313 $1,558,638 Offsite 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) $106,91 9 $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 $112,870 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-approved additional sales tax measures. Many jurisdictions in the Sacramento Region have added sales taxes beyond the 1.0% Bradley-Burns rate and the 0.5% Measure A supplemental sales tax. Revenue from these additional sales tax rates have not been estimated in this analysis.
[2] Onsite taxable expenditures include transactions from highway commercial uses. Refer to Table B-6 for details. Although so me 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 tax able
expenditures resulting from the Project. The City of Sacramento receives approximately $.000658 in Public Safety Sales Tax authorized by Prop. 172 for every $1 in taxable expenditures in the City. This is estimated by taking the 2022-23 Budget amount for Prop. 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 Industrial
Economic Impact Analysis
Estimated 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 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 Rat
e 2.50% 1.50% 6.25%
Percentage of Taxable Retail Sales: Onsite 100% 0% NA
Percentage 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 $133,40 4 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-approved additional sales tax measures. Many jurisdictions in the Sacramento Region have added sales taxes beyond the 1.0% Bradley-Burns rate and the 0.5% Measure A supplemental sales tax. Revenue from these additional sales tax rates have not been estimated in this analysis.
[2] Although some industrial tenants may generate taxable sales through point-of-sales transactions, this Analysis conservativ ely 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 tax able
expenditures resulting from the Project. The City of Sacramento receives approximately $.000627 for every $1 generated by the Public Safety Sales Tax authorized by Prop. 172 in the City. This is estimated by taking the 2022-23 Budget amount for Prop. 172 divided 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 Industrial
Economic Impact Analysis
Estimated 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 Rat
e 2.50% 1.50% 6.25%
Percentage of Taxable Retail Sales: Onsite 100% 0% NA
Percentage 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 $1,113,31 3 $1,558,638 Offsite Taxable Sales from Employment Table B-7 $6,330,548 $118,698 $23,740 $395,659 $538,097 Sacramento 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 $120,71 8 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-approved additional sales tax measures. Many jurisdictions in the Sacramento Region have added sales taxes beyond the 1.0% Bradley-Burns rate and the 0.5% Measure A supplemental sales tax. Revenue from these additional sales tax rates have not been estimated in this analysis.
[2] Onsite taxable expenditures include transactions from highway commercial uses. Refer to Table B-6 for details. Although s ome 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 tax able
expenditures resulting from the Project. The City of Sacramento receives approximately $.000627 for every $1 generated by the Public Safety Sales Tax authorized by Prop. 172 in the City. This is estimated by taking the 2022-23 Budget amount for Prop. 172 divided 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 Industrial
Economic Impact Analysis
Estimated Annual Onsite Taxable Sales (2023$)
Annual
Taxable
Sales/Sq. Ft. Building Total Annual
Item [1] Square Feet [2] Taxable Sales
Annual Onsite Taxable Sales
Restaurants $620 13,650 $8,463,000
Gas Stations $1,870 5,000 $9,350,000
Total 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 & Cents of Shopping Centers (2008$ escalated to 2023$ and rounded).

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Table B-7
Airport South Industrial
Economic Impact Analysi
s
Estimated Annual Offsite Taxable Sales (2023$)
Item
Annual Taxable Sales from New Employees
Employees [1] 2,645 872 3,517
Average Daily Taxable Sales per New Employee $10
Work Days per Year 240
Total 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
ProjectAssumption
Potential
Remaining
Development
Total
Project
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Table B-8
Airport South Industrial
Economic Impact Analysis
Estimate of Annual Transient Occupancy Tax Revenues (2023$) Item Source [1] Assumption Formula Buildout
Estimated TOT Revenue From New Hotel Rooms
Total Rooms AKT Properties 150 a
Annual Rooms Nights Available 365 b
Total Annual Room Nights Available c = a * b 54,750
Occupancy Rate CoStar 68% e
Average Daily Room Rate (ADR) CoStar $140 f
Estimated 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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