New York Avenue Corridor Strategy Adopted Report New York Avenue Corridor Strategy Adopted Report | Page 81

NEW YORK AVENUE CORRIDOR STRATEGY
ECONOMIC GAPS
For urban infill projects, it is not unusual to have
economic “gaps” (project costs are higher than
project value) of between 20% and 50%. These
gaps typically represent the higher cost of prop-
erty acquisition in an infill environment, as well
as the difference between prevailing market
conditions and desired real estate products. In
quantifying the economic gaps associated with
the Opportunity Sites, the following steps were
completed:
• estimated development value that
could be created from each potential
product type, based on current and fu-
ture market conditions in Arlington and
the North Texas;
• prepared build-out economic analyses
for each project; and
• estimated project costs.
This analysis resulted in project “gaps” for each
of the Opportunity Sites. The largest gap was
for Opportunity Site B, which includes the library/
recreation center concept. Because these public
uses do not typically generate revenue in excess
of operating expenses, they only contribute to
the cost side of the equation. If the City were to
construct the library/recreation center facilities, it
would significantly contribute to Opportunity Site
B’s economic “gap” reducing it to approximately
15%. Opportunity Site A and C resulted in gaps
of 18% and 24%, respectively (See Fig. 5.22).
Several variables affect economic feasibility
(both negatively and positively): land cost; build-
ing density; rehab vs. new construction costs;
parking requirements; premiums on rents and
sale prices; and “place-making” potential (ame-
nities, connections, public spaces). The goal in
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redevelopment is to balance variables in an aes-
thetically and economically responsible manner.
POTENTIAL CONTRIBUTIONS TO GAPS
Once the project “gaps” were quantified, esti-
mated potential “contributions to gap” were iden-
tified. “Gap filling” measures considered includ-
ed:
• Land Acquisition/Writedown
• Site Improvements Contribution (infra-
structure, parking)
• Property Tax TIRZ (25 years)
• Sales Tax Sharing (380 Loan)
• Public Improvement District (20 Years)
• Property Tax Abatement (10 Years)
• Development Fee Waivers (Roadway,
Water)
• Federal/State/Local Grants
• Streamlined Development Approval
Process
• Tax Credit Equity (LIHTC, Historic,
New Market)
As shown in Figure 5.22, economic gaps could
be filled with a combination of measures outlined
above. These measures shown in Figure 5.23
are illustrated only to provide examples of po-
tential funding contributions to gaps and are not
the recommended funding contributions for each
Opportunity Site. Potential contributions could