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JDEDZ PROJECT REVIEW <br /> SEPTEMBER 2017 <br /> CONCLUSION <br /> Civic Economics was asked to conduct an expedited review of materials produced by and for <br /> the City of Pleasanton analyzing the impacts of the proposed JDEDZ. Our work focused on the <br /> inclusion of a Costco store because (a) it is the primary driver of sales in the project, (b) its sales <br /> is the source of revenues to repay a portion of the infrastructure investment, and (c) its <br /> presence is the reason for most of that infrastructure need. <br /> We focused our review on three documents: an economic impact analysis prepared by ALH, a <br /> staff memo entitled City Council Agenda Report dated August 29 and prepared by the <br /> Community Development Planning Division, and a PDF of a PowerPoint presentation from that <br /> same meeting. We also referred to Costco annual reports from 2014 and 2016 and data from <br /> the Census Bureau and the Bureau of Economic Analysis. <br /> Much to our surprise, we identified a number of problematic analyses in these reports, which <br /> together lead to a substantial overstatement of the benefits and understatement of the costs of <br /> the JDEDZ project. <br /> I: Costco Sales Forecasts <br /> Both city consultants, Century Urban and ALH, overestimate likely Costco sales based <br /> on a mix of outdated data and optimistic forecasting. <br /> II: Sales Tax Revenue Sharing Repayment <br /> As a result, the city's anticipated ability to make planned Sales Tax Sharing payments is <br /> in doubt, and its expectation of surplus sales tax revenues is inflated. <br /> III: Other Funding Sources for JDEDZ <br /> Of the other public funding sources for JDEDZ development, at least $6.4 million and as <br /> much as $10.1 million in TIF funding is diverted from other city transportation needs. <br /> IV: Impact on Pleasanton Retail Market <br /> ALH understates the impact of the JDEDZ on the Pleasanton retail market by (a) <br /> overestimating the size and growth of that retail market and (b) ignoring real trends in <br /> the retail industry. <br /> In short, the current JDEDZ proposal asks the City of Pleasanton to invest substantial public <br /> funds in a costly, long-term, speculative venture in a rapidly changing industry, and to do so <br /> based on erroneously optimistic forecasts of costs and benefits. City Council and the citizens of <br /> Pleasanton must demand better information before making such a momentous investment. <br /> Civic Economics 17 <br />