Economic Impact Analysis
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ECONOMIC AND REVENUE IMPACTS
OF PROJECT JAGUAR
GLENDALE, ARIZONA
MARCH 2022
PREPARED BY:
APPLIED ECONOMICS
11209 N. TATUM BLVD, SUITE 225
PHOENIX, AZ 85028
2
INTRODUCTION
Applied Economics has been contracted by the City of Glendale to perform a third party
economic and revenue analysis of Project Jaguar. This analysis is intended to provide a
framework for understanding the economic and revenue impacts that the company’s
operations could create, and the potential impacts of a Foreign Trade Zone (FTZ) incentive.
Project Jaguar is considering constructing a new distribution and administrative facility in
Glendale. The approximately 74-acre site being considered for this facility is located south of
the SEC of Northern Avenue and Reems Road. The company’s capital investment is estimated
at $177 million and includes $69 for shell building construction and tenant improvements, and
$108 million for equipment. It is anticipated that this capital investment would take place over
four years. The company could create 2,465 jobs by the sixth year of operations at an average
wage of $46,000.
The economic and revenue impacts presented here are based on information about Project Jaguar
provided by the city and the company. Actual results could vary significantly. However, even if the
assumptions outlined in this report were to occur, there will usually be differences between the
projections and the actual results because events and circumstances frequently do not occur as expected.
This analysis is based on the best available information and is intended to aid the City of Glendale in
evaluating this potential economic development opportunity. All dollar estimates should be interpreted
as order of magnitude estimates only. In no way will Applied Economics LLC be held responsible or have
any liability or be subject to damages as a result of this analysis. This report may be used only for the
purposes that it was intended.
3
PROJECT JAGUAR IMPACT SUMMARY
Jobs, Payroll and Capital Investment
New Jobs
2,465
Estimated Annual Payroll
$113.8 M
Capital Investment (buildings and equipment)
$177.0 M
10-Year Economic Impacts
Economic Impact of Operations
$3.4 B
Total Job Impacts
2,465 Direct/970 Indirect
Economic Impact of Construction
$104.1 M
Total Job Impacts
575 Direct/215 Indirect
10-Year Revenue Impacts
Direct Revenues to City*
$7.5 M
Employee Revenues to City (based on 2,465 jobs)
$7.0 M
*Assumes company qualifies for FTZ property tax reduction.
4
IMPACT SUMMARY
The operations of Project Jaguar’s new distribution and administrative facility in Glendale could
provide a variety of economic benefits to the city. These include economic impacts, which
measure the effects of economic stimuli or expenditures in the local economy in terms of direct
and indirect jobs, labor income, and output that could be generated by the company’s
operations. The project could also generate revenue impacts, defined here as tax revenues to
the city, including property, sales and utility franchise taxes from the company’s operations, as
well as taxes generated by direct employees living in Glendale. A summary of potential impacts
on the city is detailed below.
Economic Impacts
• Overall Operations Impacts. In total, Project Jaguar could create an economic
impact of $3.4 billion in the City of Glendale over the next ten years. The company’s
operations could directly and indirectly support an estimated 3,435 jobs (including
2,465 direct jobs) and generate $1.3 billion in total labor income over ten years.
• Jobs and Income. The facility could directly employ 2,465 people at full operating
levels with an annual payroll of $113.8 million. Through the multiplier effect, an
additional 970 indirect and induced jobs and $49.4 million in annual payroll could be
supported at other businesses in Glendale. The additional jobs and payroll at other
local businesses stem from indirect and induced impacts of supplier demand created
by the company and consumer demand created by its employees.
Construction Impacts. About 575 direct construction jobs and 215 additional
indirect jobs could be created in Glendale over a two-year period through the $68.7
million in estimated new construction activity. This would result in a one-time
economic impact of $104.1 million to the city. An estimated total of $3.7 million in
one-time city construction and equipment sales taxes and permit/planning fees
could also be generated during the construction phase.
Supported Population. The 2,465 direct jobs and approximately 970 indirect and
induced jobs associated with Project Jaguar’s new operations could support a
population (including families) of about 2,100 people in the City of Glendale. This
estimate assumes that approximately 29 percent of the workforce would live in the
city based on regional commuting patterns.
Revenue Impacts
• Direct Revenue Impacts. The company’s new distribution and administrative
facilities could generate new one-time and on-going tax revenues to the city, in
addition to the economic impacts described above. This includes, one-time
construction sales tax and permit-related fees, property taxes on the new facilities
5
and equipment and on-going sales and utility franchise tax revenues with new
revenues to the city totaling $7.5 million over the first ten years of operations. This
estimate assumes that the company would qualify for FTZ benefits.
• Employee Revenue Impacts. In addition to revenues generated by the company,
direct employees living in Glendale could generate property, sales and utility
franchise taxes as well as state shared revenues. Employee revenues are estimated
at $7.0 million over ten years.
Foreign Trade Zone. Assuming that the company is able to qualify for a Foreign
Trade Zone designation under U.S. Customs and Border Protection guidelines, they
could also qualify for a 5 percent assessment ratio on real and personal property
taxes. This reduction from the normal commercial and industrial assessment ratio
would result in an estimated tax savings of $2.1 million over ten years in city
property taxes, based on the specified level of capital investment.1 The site that the
company is considering is vacant and will generate approximately $14,000 in
property taxes to the city in 2022.
Project Jaguar could be a significant contributor to the region’s economy, providing export jobs
that bring new wealth to the region. The 2,465 new jobs associated with the project would be
net new jobs to the state, thereby growing the economy both locally and regionally. The
location of this company in Glendale would not only create a large number of new jobs in the
community, but also support a significant amount of additional economic activity at related
local supplier and consumer businesses, as well as generating new tax revenues.
1 The 2023 assessment ratio on commercial and industrial property will be 17 percent. This ratio is being reduced
by 0.5 percent per year through 2025 to 16 percent.
6
ECONOMIC IMPACT ANALYSIS
The potential economic benefits resulting from the location of the Project Jaguar in Glendale
can be measured in terms of both the one-time construction impacts and on-going operations
impacts. These impacts would include direct and indirect jobs, labor income and output that
would be generated by the project. Indirect impacts are the result of the multiplier effect and
capture supported supplier and consumer businesses and employees in the city that would
benefit from this company.
Construction Impacts
Project Jaguar is anticipated to support investment of $68.7 million in Glendale for the
construction of a new shell building and tenant improvements. The multiplier effect of this
spending could result in a total increase in economic activity of about $104.1 million during the
two-year construction period. The approximately 790 direct and indirect jobs created in
Glendale by the construction project could also generate more than $47.5 million in labor
income over the construction period. Total labor income, or earnings, and the total increase in
economic activity from construction are shown in Figure 1.
FIGURE 1
PROJECTED CONSTRUCTION IMPACTS OF PROJECT JAGUAR
Year
Construction
Expenditures
Jobs
Labor Income
Output
Jobs
Labor Income
2022
$52,500,000
440
$27,587,029
$79,541,983
604
$36,328,875
2023
$16,201,890
134
$8,513,562
$24,547,247
186
$11,211,361
Total
$68,701,890
575
$36,100,591
$104,089,230
790
$47,540,235
Direct
Total
Operations Impacts
The projected economic impacts from the Project Jaguar’s distribution and administrative
activities in Glendale are shown in Figure 2. The company is anticipated to create 2,158 new
light manufacturing and distribution jobs with an estimated annual payroll of $89.2 million, and
an additional 307 management and administrative jobs with an annual payroll of $24.6 million
by the sixth year of operations. Through local supplier purchases, as well as employee
spending, Project Jaguar could create an annual economic impact of $427.7 million in Glendale
at stabilized operating levels (Figure 2). The multiplier effect of the company’s operations on
the city could result in a total economic impact of $3.4 billion over the next ten years,
supporting an estimated 3,435 direct and indirect jobs and $1.3 billion in total labor income.
7
FIGURE 2
PROJECTED ANNUAL OPERATIONS IMPACT OF PROJECT JAGUAR
Labor
Labor
Year
Output
Jobs
Income
Output
Jobs
Income
2023
$3,909,393
42
$1,883,207
$6,312,028
56
$2,604,191
2024
$181,852,845 1,716
$78,522,924
$292,732,170
2,381
$112,303,209
2025
$194,398,215 1,819
$83,747,182
$312,869,521
2,530
$119,873,527
2026
$207,154,988 1,923
$89,059,054
$333,343,472
2,680
$127,571,743
2027
$220,216,244 2,029
$94,458,236
$354,304,311
2,834
$135,414,717
2028
$265,768,992 2,465
$113,758,098
$427,654,366
3,435
$163,170,007
2029
$265,768,992 2,465
$113,758,098
$427,654,366
3,435
$163,170,007
2030
$265,768,992 2,465
$113,758,098
$427,654,366
3,435
$163,170,007
2031
$265,768,992 2,465
$113,758,098
$427,654,366
3,435
$163,170,007
2032
$265,768,992 2,465
$113,758,098
$427,654,366
3,435
$163,170,007
10 Year Total
$2,136,376,646 2,465
$916,461,091
$3,437,833,330
3,435
$1,313,617,425
Direct
Total
The new jobs generated directly and indirectly by Project Jaguar could support a resident base
of about 2,100 people in Glendale. This includes families of direct employees, as well as families
of employees at related supplier and consumer businesses, and assumes that about 29 percent
of the employees will work and live in the city.2
The secondary or indirect/induced impacts described here are called multiplier effects.
Multiplier effects are a way of representing the larger economic effects on the local economy.
The multiplier effects translate an increase in output (defined as labor cost, plus cost of inputs
plus profits) into a corresponding increase in jobs and labor income. In essence, the multiplier
effect represents the recycling of local spending. This recycling process creates new business
opportunities.
The multipliers used in this analysis are from IMPLAN, a national vendor of economic impact
software, and are specific to the economic base of Glendale. Industry specific multipliers for
warehousing, management and industrial construction were used in the analysis. The output
multiplier for this project is 1.61. This means that for every $1 million of output created by the
company, an additional $610,000 in economic activity is generated in the local economy, along
with about 4 jobs and about $186,000 in payroll at other local businesses.
2 Based on data from the Maricopa County Rideshare Survey, 29 percent of people who work in Glendale also live
in Glendale.
8
REVENUE IMPACTS
In addition to supporting jobs and output at related businesses in the city, Project Jaguar could
also result in new tax revenues. In total, the company could generate an estimated $7.5 million
in direct revenues and $7.0 million in employee tax revenues in Glendale over the next ten
years, based on the assumptions used in this analysis. There would be additional revenues to
the school district, county and state. Details on local property taxes by jurisdiction, with and
without FTZ benefits, are included in Appendix A.
Company Impacts
Direct revenues generated by the company over ten years, based on the pro-forma
assumptions provided by the company, are estimated at $7.5 million, assuming they qualify for
FTZ property tax reductions. Direct property tax revenues to the city with the FTZ could total
$941,000 over the first ten years of operations, including both real and personal property
(Figure 3). Note that the proposed site is currently vacant and is will generate approximately
$14,000 in annual property taxes to the city in 2022.
Property taxes are based on the estimated limited property value of the new building and the
annual depreciated value of new equipment. For purposes of this analysis, all equipment is
depreciated based on a 10-year life. Accelerated depreciation is also applied in the first five
years following equipment purchase, per state statute. It is assumed that real property value
would increase by 5 percent per year, based on recent increases in LPV for the other
manufacturing and warehouse properties in the city and statutory guidelines.
In addition to property taxes, there would be one-time sales taxes, planning/permit fees and
development impact fees from facility construction estimated at $3.7 million to the city during
the four-year construction and equipment investment period. Permit-related fees are roughly
estimated at $2.0 million, and the remaining $1.7 million would be made up of construction
sales tax and use taxes on non-manufacturing equipment.
There could be on-going sales tax revenues associated with the company’s utility usage and real
and personal property leases estimated at $255,000 per year, plus utility franchise fees of
$30,000 per year. Total sales and franchise taxes are estimated at $3.3 million over ten years,
excluding construction sales tax.
9
FIGURE 3
ESTIMATED DIRECT REVENUE IMPACT OF PROJECT JAGUAR
Property
Plan/Permit
Utility
Total City
Year
Sales Tax1
Tax2
Fees3
Franchise
Revenues
2022 (Const.)
$1,379,982
$0
$1,960,377
$0
$3,340,359
2023
$611,009
$63,884
$0
$9,812
$684,705
2024
$238,645
$79,727
$0
$26,778
$345,151
2025
$300,975
$91,110
$0
$26,658
$418,743
2026
$250,270
$102,063
$0
$26,672
$379,005
2027
$254,805
$109,198
$0
$29,542
$393,546
2028
$254,805
$110,050
$0
$29,542
$394,398
2029
$254,805
$105,884
$0
$29,542
$390,232
2030
$254,805
$99,770
$0
$29,542
$384,118
2031
$254,805
$92,697
$0
$29,542
$377,045
2032
$254,805
$86,801
$0
$29,542
$371,149
10 Year Total
$4,309,715
$941,185
$1,960,377
$267,174
$7,478,451
1 Includes nonrecurring construction and equipment sales tax in first four years.
2 Includes building value and depreciated equipment value at 5% assessment ratio.
3 Includes permit fees, plan review fees and development impact fees.
Employee Revenues
In addition to the direct taxes paid by the company, there could also be taxes generated by
employees living in Glendale estimated at $7.0 million over the ten year period, based on 2,465
new jobs (Figure 4). Using the results from the economic impact analysis, it is possible to
estimate employee tax impacts.
Employee sales taxes are estimated at $2.5 million over ten years. Employee sales tax revenues
represent sales taxes on household spending by direct employees living in Glendale. Sales taxes
to the city are estimated by multiplying direct labor income from the economic impact by 33
percent (share of taxable expenditures), multiplied by a residency ratio of 29 percent and the
city sales tax rate of 2.9 percent.3 There could be an additional 2 percent franchise tax on
residential utility expenditures resulting in an estimated $240,000 in utility franchise taxes over
the next ten years from employees, assuming an average monthly utility bill of $192.4
Direct employees could also generate an estimated $867,000 in property tax revenues to the
city over ten years. Employee property tax revenues were based on average residential
assessed value per capita in Glendale multiplied by the annual supported population, times the
current city property tax rate of 1.73 percent.
3 According to the Census Bureau Consumer Expenditure Survey, persons in the median income range spend about
33 percent of their income on taxable goods.
4 Council for Community and Economic Research, Cost of Living Index, Q3 2021.
10
FIGURE 4
ESTIMATED EMPLOYEE REVENUE IMPACT OF PROJECT JAGUAR
Property
Utility State-Shared
Total City
Year
Sales Tax1
Tax2
Franchise
Revenues1
Revenues
2023
$5,226
$1,835
$507
$7,126
$14,694
2024
$217,925
$74,963
$20,717
$291,128
$604,734
2025
$232,424
$79,463
$21,961
$308,603
$642,450
2026
$247,166
$84,006
$23,216
$326,247
$680,635
2027
$262,150
$88,637
$24,496
$344,231
$719,513
2028
$315,713
$107,683
$29,760
$418,200
$871,356
2029
$315,713
$107,683
$29,760
$418,200
$871,356
2030
$315,713
$107,683
$29,760
$418,200
$871,356
2031
$315,713
$107,683
$29,760
$418,200
$871,356
2032
$315,713
$107,683
$29,760
$418,200
$871,356
10 Year Total
$2,543,454
$867,321
$239,696
$3,368,336
$7,018,807
1 Includes Urban Revenue Sharing, State Sales Tax and Auto Lieu Tax.
Note: All figures are in constant 2022 dollars. Analysis assumes 29% of employees live in the City of
Glendale for the calculation of employee revenues.
New employees living in Glendale could also result in increased state shared revenues. State
shared revenues include state sales tax, urban revenue sharing and auto lieu tax, all of which
are distributed to the city based on population. Applying the current amount the city is
receiving per capita to the projected new residents associated with this project, the city could
receive an estimated $3.4 million in new state shared revenues over the next ten years,
assuming 29 percent of the new employees live in Glendale. All total, revenues from the direct
employees of Project Jaguar to the city are estimated at $7.0 million over ten years.
Summary
The operations of the Project Jaguar in Glendale, as described in this analysis, could create
significant economic benefits for the city. The company would not only create a large number
of new light manufacturing, warehouse and management jobs, but would also create additional
demand for other local businesses based on supplier purchases and employee spending. Along
with supporting economic activity in the private sector, the company’s operations could
generate new tax revenues to the city, as well as to other local taxing entities, in the form of
increased sales, utility franchise and property taxes.
11
APPENDIX A
This Appendix details the potential impacts of FTZ tax reductions to the city, county, school
districts and other taxing districts associated with Project Jaguar. These are rough estimates
based on initial capital investment information provided by the company and could vary
significantly depending on the actual assessed value of real and personal property.
Using current mill rates at the proposed site and estimated limited property value of the
building plus the depreciated value of personal property investments by the company, Figure A-
1 shows the amount of new property taxes by year that would be paid to the city, school
districts, county and other local taxing jurisdictions if an FTZ application for property
reclassification is approved. The FTZ property tax benefits reduce the assessment ratio on real
and personal property to 5 percent, down from the normal 17 percent ratio for commercial and
industrial property.5 This could result in $7.4 million in new tax revenues to the city, county,
schools and other special districts over the next ten years, assuming a 5 percent annual
increase in the value of real property.
FIGURE A-1
PROPERTY TAX IMPACT OF PROJECT JAGUAR CAPITAL INVESTMENT
WITH FTZ PROPERTY TAX BENEFITS
Year
New
Investment
Annual Taxable
Value*
City of
Glendale
Agua Fria
High School
Litchfield
Elementary
Maricopa
County
Maricopa
Community
Colleges
Other
Special
Districts
Total
2022
$120,333,170
$0
$0
$0
$0
$0
$0
$0
$0
2023
$44,936,808
$74,037,813
$63,884 122154.987
$129,381
$49,824
$45,374
$89,116
$499,733
2024
$0
$92,400,063
$79,727
$152,451
$161,469
$62,181
$56,627
$111,217
$623,673
2025
$11,730,676
$105,591,742
$91,110
$174,216
$184,522
$71,058
$64,712
$127,095
$712,713
2026
$0
$118,286,137
$102,063
$195,160
$206,705
$79,601
$72,492
$142,375
$798,396
2027
$0
$126,554,774
$109,198
$208,803
$221,154
$85,165
$77,559
$152,328
$854,207
2028
$0
$127,542,999
$110,050
$210,433
$222,881
$85,830
$78,165
$153,517
$860,877
2029
$0
$122,714,602
$105,884
$202,467
$214,444
$82,581
$75,206
$147,705
$828,287
2030
$0
$115,628,282
$99,770
$190,775
$202,060
$77,812
$70,863
$139,176
$780,456
2031
$0
$107,431,428
$92,697
$177,251
$187,736
$72,296
$65,839
$129,310
$725,130
2032
$0
$100,598,048
$86,801
$165,977
$175,795
$67,697
$61,652
$121,085
$679,007
10 Yr Total
$177,000,654
$1,090,785,888
$941,185
$1,799,688
$1,906,148
$734,044
$668,488
$1,312,924
$7,362,478
Property Tax by Jurisdiction with FTZ
*Includes additional and regular depreciation and 5 percent assessment ratio. Real property value is increased by 5 percent per year.
In order to clearly show the impacts of the FTZ property reclassification to local taxing
jurisdictions, Figure A-2 details the amount of new property taxes by jurisdiction over the next
ten years at a normal 16 to 17 percent assessment ratio. Under these conditions, the new
capital investment by Project Jaguar could generate $23.7 million in tax revenues to the city,
county, schools and other local taxing jurisdictions over the next ten years.
5 The 2023 assessment ratio on commercial and industrial property will be 17 percent. This ratio is being reduced
by 0.5 percent per year through 2025 to 16 percent.
12
FIGURE A-2
PROPERTY TAX IMPACT OF PROJECT JAGUAR CAPITAL INVESTMENT
WITHOUT FTZ PROPERTY TAX BENEFITS
Year
New
Investment
Annual Taxable
Value*
City of
Glendale
Agua Fria
High School
Litchfield
Elementary
Maricopa
County
Maricopa
Community
Colleges
Other
Special
Districts
Total
2022
$120,333,170
$0
$0
$0
$0
$0
$0
$0
$0
2023
$44,936,808
$74,037,813
$217,204
$415,327
$439,896
$169,401
$154,272
$302,993
$1,699,092
2024
$0
$92,400,063
$263,100
$503,088
$532,848
$205,196
$186,870
$367,017
$2,058,120
2025
$11,730,676
$105,591,742
$291,551
$557,491
$590,469
$227,385
$207,078
$406,706
$2,280,680
2026
$0
$118,286,137
$326,602
$624,513
$661,456
$254,722
$231,973
$455,600
$2,554,867
2027
$0
$126,554,774
$349,433
$668,169
$707,694
$272,528
$248,189
$487,448
$2,733,462
2028
$0
$127,542,999
$352,162
$673,386
$713,220
$274,656
$250,127
$491,255
$2,754,806
2029
$0
$122,714,602
$338,830
$647,894
$686,220
$264,259
$240,658
$472,657
$2,650,518
2030
$0
$115,628,282
$319,264
$610,480
$646,593
$248,999
$226,761
$445,363
$2,497,460
2031
$0
$107,431,428
$296,631
$567,204
$600,757
$231,347
$210,686
$413,791
$2,320,416
2032
$0
$100,598,048
$277,763
$531,126
$562,544
$216,632
$197,285
$387,471
$2,172,821
10 Yr Total
$177,000,654
$1,090,785,888
$3,032,540
$5,798,677
$6,141,698
$2,365,125
$2,153,900
$4,230,303 $23,722,242
Property Tax by Jurisdiction without FTZ
*Includes additional and regular depreciation and graduated assessment ratio from 17% in 2023 to 16% in 2025 and beyond. Real property
value is increased by 5 percent per year.
The final figure shows the projected amount of property taxes that could be generated by the
property based on its current limited property value, assuming no new development (Figure A-
3). This vacant parcel is will generate about $109,000 in total annual property taxes in 2022, or
about $1.4 million over 10 years assuming a 5 percent annual increase in property value.
FIGURE A-3
PROPERTY TAX IMPACT WITH NO NEW DEVELOPMENT
Year
New
Investment
Annual Taxable
Value*
City of
Glendale
Agua Fria
High School
Litchfield
Elementary
Maricopa
County
Maricopa
Community
Colleges
Other
Special
Districts
Total
2022
$0
$5,373,115
$13,909
$26,595
$28,169
$10,848
$9,879
$19,402
$108,801
2023
$0
$5,641,771
$14,604
$27,925
$29,577
$11,390
$10,373
$20,372
$114,241
2024
$0
$5,923,860
$15,334
$29,321
$31,056
$11,959
$10,891
$21,391
$119,953
2025
$0
$6,220,053
$16,101
$30,787
$32,609
$12,557
$11,436
$22,460
$125,950
2026
$0
$6,531,055
$16,906
$32,327
$34,239
$13,185
$12,008
$23,583
$132,248
2027
$0
$6,857,608
$17,751
$33,943
$35,951
$13,844
$12,608
$24,762
$138,860
2028
$0
$7,200,488
$18,639
$35,640
$37,749
$14,537
$13,238
$26,001
$145,803
2029
$0
$7,560,513
$19,571
$37,422
$39,636
$15,264
$13,900
$27,301
$153,094
2030
$0
$7,938,538
$20,549
$39,293
$41,618
$16,027
$14,595
$28,666
$160,748
2031
$0
$8,335,465
$21,577
$41,258
$43,699
$16,828
$15,325
$30,099
$168,786
10 Yr Total
$0
$67,582,466
$174,941
$334,513
$354,301
$136,439
$124,254
$244,037
$1,368,484
Property Tax by Jurisdiction
*Parcel 501-50-002G