Preliminary Warehouse Screening Model
Industrial & Logistics Revenue and Economic Opportunity Feasibility Study Staff prepared this model to test the potential scale of a warehouse-related revenue opportunity. This is not a revenue forecast; it does not recommend a tax, fee, rate, or revenue mechanism; and no revenue from this model is included in the City’s budget. The feasibility study will replace these assumptions with verified City information.
I. SCREENING FORMULA
The formula in the model below was developed as follows:
Gross Annual Revenue = Gross Warehouse Square Footage x Qualifying Share x Realization Rate x Illustrative Annual Rate
II. ASSUMPTIONS
Assumption Low Baseline Upper Basis
Gross
warehouse
inventory
27,476,992
SF
27,476,992 SF 27,476,992
SF
2022 regional
warehouse
inventory
(Attachment 3)
Qualifying
share
50% 70% 85% Hypothetical share
of gross space that
could fall within a
future base
Realization
rate
97% 97% 97% Hypothetical
allowance for
closures, appeals,
delinquency, and
administrative timing
Illustrative
annual rates
$0.02,
$0.075, and
$0.105 per
SF
$0.02, $0.075,
and $0.105 per
SF
$0.02,
$0.075, and
$0.105 per
SF
Illustrative range for
testing scale
• Qualifying share: Gross warehouse space will not equal taxable or chargeable space. The three scenarios modeled for this purpose differ only in the assumption that qualifying space will range from 50-85%. Depending on any eventual structure, exclusions would likely apply to:
o Manufacturing space; Office space; Vacant space; Incidental storage; Mixed-use and multi-tenant properties; Government or otherwise exempt uses, etc.
• Realization rate: Not all amounts that could be billed are collected in actual practice. The rate in the model allows for business closures, appeals, delinquent, account changes, and administrative timing. It is held constant within the model because collection performance does not depend on how much space qualifies.
This percentage is an educated assumption for modeling purposes only, not a verified rate within the City.
III. SCREENING RESULTS
Gross annual amounts, rounded:
Scenario Effective
Square Feet
$0.02 per SF $0.075 per SF $0.105 per SF
Low 13.326 million $267,000 $999,000 $1,399,000
Baseline 18.657 million $373,000 $1,399,000 $1,959,000
Upper 22.655 million $453,000 $1,699,000 $2,379,000
The screening range is approximately $267,000 to $2.4 million gross annually.
IV. NOTES FOR PRODUCED MODEL
The model does not include the following:
• Existing Chapter 5.04 business-tax revenue that could be replaced or credited; • Administrative, compliance, implementation or enforcement costs; • Legal classification of any mechanism, or whether voter approval will be required; • Warehouse development occurring after 2022;
• Smaller warehouses or logistics facilities not captured in the 2022 inventory; • Storage, truck parking, or other related activities;
• Economic effects on businesses, leasing, investment, development, or employment.
V. GROSS REVENUE VS. NET NEW REVENUE
All figures in the model are gross. Net new revenue should be calculated as follows:
Net New Revenue = Gross New Revenue – Existing Revenue Replaced or Credited – Ongoing Administration and Compliance Costs – Other Required Adjustments VI. ROLE FOR THE FEASABILITY STUDY
The selected consultant will:
• Replace the 2022 inventory with the City’s validated and reconciled inventory; • Replace the qualifying-share and realization assumptions with documented data where available;
• Account for existing revenue and administrative costs to estimate the net new revenue;
• Present all results in the Revenue Opportunity Matrix deliverable, with a stated confidence level.