10.03 - Proposal from Jon Commers - Economic Impact Study of Hwy 371

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Proposal to City of Pequot Lakes,Minnesota,Alternate Route Study Group April 13,2007 Page 2 of 6 Broadly,these questions concern two related but distinct questions about the impact that realignment or expansion may have on property values and the net tax capacity of parcels within City limits, and the impact that a realignment or expansion may have on the customer base and operations of businesses in the City. These questions can be addressed comprehensively,should the City choose to commission a significant amount of additional market research potentially including surveys of drivers,retailers,property owners and stakeholders. Instead, based on conversations with Chuck Marohn, President of the Community Growth Institute, my understanding is that the City is seeking a more targeted approach including a use of data already collected either in the process of the Highway 371 planning process or in the course of City, county, and state agency governmental activities. With this data, I can conduct economic modeling to gauge impacts on property values for each development scenario (expansion in current alignment versus realignment). The primary sources of data for this purpose appear to be: City of Pequot Lakes •2003 Comprehensive Plan •Downtown Master Plan •Data gathered by City Roads and Streets Department • City Engineer's estimates of costs including site preparation,land takings,materials,labor Crow Wing County •County Assessor's and Auditor's Offices property data •County Highway Department data and plans) Minnesota Department of Transportation/SEH •Draft and Final EIS,traffic analysis Other Sources •Pequot Lakes Chamber of Commerce(Retail data) • Other sources as identified during the inquiry. It is critical to note that the process described below represents a targeted approach rather than an exhaustive study. If the City does desire a full economic impact study- to evaluate impacts beyond property values and net tax capacity-I would be happy to work with the City or Community Growth Institute to structure a request for proposals and to develop a list of interested vendors. Of course,I remain interested in providing an analysis for the City specific to property value and net tax capacity whether in conjunction with a market research consultant or otherwise, and the remainder of this letter considers the details of such a focused approach. Establishing a framework for each of the two scenarios in this analysis (titled"existing alignment with a Pequot Lakes bypass"versus "capacity expansion on existing