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JDEDZ PROJECT REVIEW SEPTEMBER 2017 CONCLUSION Civic Economics was asked to conduct an expedited review of materials produced by and for the City of Pleasanton analyzing the impacts of the proposed JDEDZ. Our work focused on the inclusion of a Costco store because (a) it is the primary driver of sales in the project, (b) its sales is the source of revenues to repay a portion of the infrastructure investment, and (c) its presence is the reason for most of that infrastructure need. We focused our review on three documents: an economic impact analysis prepared by ALH, a staff memo entitled City Council Agenda Report dated August 29 and prepared by the Community Development Planning Division, and a PDF of a PowerPoint presentation from that same meeting. We also referred to Costco annual reports from 2014 and 2016 and data from the Census Bureau and the Bureau of Economic Analysis. Much to our surprise, we identified a number of problematic analyses in these reports, which together lead to a substantial overstatement of the benefits and understatement of the costs of the JDEDZ project. I: Costco Sales Forecasts Both city consultants, Century Urban and ALH, overestimate likely Costco sales based on a mix of outdated data and optimistic forecasting. II: Sales Tax Revenue Sharing Repayment As a result, the city's anticipated ability to make planned Sales Tax Sharing payments is in doubt, and its expectation of surplus sales tax revenues is inflated. III: Other Funding Sources for JDEDZ Of the other public funding sources for JDEDZ development, at least $6.4 million and as much as $10.1 million in TIF funding is diverted from other city transportation needs. IV: Impact on Pleasanton Retail Market ALH understates the impact of the JDEDZ on the Pleasanton retail market by (a) overestimating the size and growth of that retail market and (b) ignoring real trends in the retail industry. In short, the current JDEDZ proposal asks the City of Pleasanton to invest substantial public funds in a costly, long-term, speculative venture in a rapidly changing industry, and to do so based on erroneously optimistic forecasts of costs and benefits. City Council and the citizens of Pleasanton must demand better information before making such a momentous investment. Civic Economics 17 P14-0852 and PUD -105, JDEDZ - Public Comments Provided for October 11, 2017 Planning Commission Meeting 55