1




         A Financing Model for the
         Camden Special Ser vices
                  District
                Mila...
2




        AGENDA
     o Over view of CSSD
          Jen Trepinski
     o Attributes of Financially Stable Special
    ...
3




        AGENDA
     o Over view of CSSD
          Jen Trepinski
     o Attributes of Financially Stable Special
    ...
4


         Greater Camden
     Partnership’s Goal for the
              CSSD:
     1. To develop a sustainable financing...
Greater Camden
                                                     5




          Partnership Has Strong
             Co...
6




        History of CSSD Formation




Milano The New School for Management and Urban
Policy
7



                                 CSSD Today
                                                 • Began in 2005
        ...
8

           Current CSSD Financial Model
        Challenges Growth and Sustainability




Milano The New School for Mana...
9




        AGENDA
     o Over view of CSSD
          Jen Trepinski
     o Attributes of Financially Stable Special
    ...
10


                 Special Improvement
                       District:

      quot;A SID is a system by which the owne...
11

       Key Components of Financially Stable
                    Models




Milano The New School for Management and Ur...
Contractual Agreements                      12




             Also Key to Financial
                   Stability
     • ...
13


       Formalizing the BID by Municipal
                  Ordinance

     • District Management Corporation (DMC)
   ...
14


          New Jersey’s SID-Friendly
                    Law

        “Municipalities should be given the
      broade...
15


    New Jersey Statute Title 40 Chapter
                  56-65:
           Adoption of Ordinance
   Governing body o...
16


           Assessment Mechanism:
            Effectively Facilitates
           Benefits Received Model
     • Create...
17

        Assessments Utilize Variables that
       Relate to Degree or Types of Benefits
                     Received
...
18
              Basic Formula to Determine
                      Assessment
         Step 1: Find Price per Square Foot o...
19
              Basic Formula to Determine
                      Assessment

     Step 2: Use Price per SF or dollar of a...
Example 1:                                                    20



                 Using Square Feet to
                ...
21



                         Example 2:
                    Using Assessed Value
   Step One: CSSD Budget÷ District AV=P...
22




                  National Average:
                 Price Per Square Foot
                                        ...
23



                Adding Variables for
                  Precision Pricing
     • Benefit Zones: Percentage of assessm...
24


           Downtown Denver BID:
        Location-Related Assessment

                                                ...
25


      Map of Downtown Denver Benefit
                  Zones
                                                 2009 Pr...
New Brunswick City Market:                             26




           Proportional Benefits
                       Form...
New Brunswick City Market                                  27




            Proportional Benefit
                       ...
28


               Review of Assessment
                      Method




Milano The New School for Management and Urban
P...
29


          Revenue Diversification:
            Beyond Assessment
                Financing
     “Enterprise Revenue”:...
30




        AGENDA
     o Over view of CSSD
          Jen Trepinski
     o Attributes of Financially Stable Special
   ...
Applying Benefits Received                                 31




      Cost Sharing Model to the
                        ...
32




          Proposed Financing Model

Milano The New School for Management and Urban
Policy
33


                      Potential CSSD Members




Milano The New School for Management and Urban
Policy
34


                         Current CSSD Pledges



                                                  Potential CSSD Me...
35



                               Assumptions
     • Agreement is voluntary, but assessments
       are compulsory upon...
36


                Key Criteria for Model
                        Design
     • Equity
           Ensure   that all pro...
37




          Proposed Financing Model

Milano The New School for Management and Urban
Policy
38

                     Assessment Model
                       Components




Milano The New School for Management and U...
39


     Benefits Received Scoring
              Process
                                                                ...
40



                               Scoring Tiers




Milano The New School for Management and Urban
Policy
41




          Proposed Financing Model

Milano The New School for Management and Urban
Policy
42




     Baseline Formula Process
                            2a. Determine
                          TOTAL ASSESSED
  ...
43




                                       Results
                    BUDGET GOAL:                 $750,000

         ...
44




        AGENDA
     o Over view of CSSD
          Jen Trepinski
     o Attributes of Financially Stable Special
   ...
45




        Strategies to Meet CSSD Budget




Milano The New School for Management and Urban
Policy
46


       Key Marketing and Evaluation
           Components for CSSD
              Sustainability
     • Marketing the ...
47




             Community Development Finance Lab



                  For more information, visit
                htt...
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Camden Presentation (as of 15 May 2009)

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  • <number>
  • Need another title<number>
  • Need last bullet or just talk about it?Talk about the impetus of the Waterfront development for the original SID <number>
  • Do I need to go into detail about the budget, contractor, how the Clean & Safe program operates?<number>
  • <number>
  • Thank you, Kate.I will now explain how our team designed and tested the proposed financing model for the CSSD.[NEXT SLIDE]<number>
  • [CLICK]After examining existing assessment models used by BIDs throughout the United States[CLICK]and analyzing the current environment of the proposed District, [CLICK]our team came to the conclusion that, due to Camden’s special needs, a new, unique model would need to be created in order to properly finance the district.[CLICK]The new financing model would calculate assessments in a standardized manner. Assessments would be treated as contributions to the District rather than direct payments for service.[NEXT SLIDE]<number>
  • Within the current boundaries of the CSSD there are approximately 480 tax parcels. These parcels are owned by approximately 244 different entities. Each parcel (and therefore each entity) should be considered a potential member of the District.By basing potential membership on location rather than use the District can increase its potential membership base, thus increasing its potential revenue.[NEXT SLIDE]<number>
  • Of the 244 entities represented in the potential membership base, only 4.7% are current contributors to the CSSD. (Several of the District’s current contributors are located outside of the proposed District’s boundaries.)Current contributors represent some of the largest entities in Camden, both in terms of economic value added to the city and physical presence.[NEXT SLIDE]34
  • Several key assumptions were involved in designing the model.[CLICK]Agreement to participate in receiving the District’s direct benefits is voluntary; however, once the agreement has been solidified, an entity will be required to pay on a regular basis.[CLICK]Any financing model must account for the direct and indirect benefits of the Clean & Safe program.[CLICK]Non-payment within the district will be fairly high, based on past attempts and current attitudes towards the formation of a SID.[CLICK]The bulk of the financial burden should rest on the larger institutions within the District, as they are the ones with the most at stake.[NEXT SLIDE]<number>
  • In addition to these assumptions, several additional criteria were included in the model design. These criteria are based on aspects of the baseline formula applied by most BIDs in their assessment calculations.These criteria are:[CLICK]Equity(To ensure that properties are assessed proportional to their physical and intangible impact on the District)[CLICK]Transparency(Increase public buy-in by using publicly available data and methodologies)[CLICK]and Scalability(Model can later be applied to other corridors within Camden.)[NEXT SLIDE]<number>
  • [CLICK]After examining existing assessment models used by BIDs throughout the United States[CLICK]and analyzing the current environment of the proposed District, [CLICK]our team came to the conclusion that, due to Camden’s special needs, a new, unique model would need to be created in order to properly finance the district.[CLICK]The new financing model would calculate assessments in a standardized manner. Assessments would be treated as contributions to the District rather than direct payments for service.[NEXT SLIDE]<number>
  • The measurement units used in calculating assessments are based on three variables commonly found in BID assessment formulas:[CLICK]Physical presence in the district, measured by a property’s footprint (in sf)[CLICK]The social and economic use of the land, measured by property class[CLICK}And the assessed value of the property.These measurement units correlate with publicly available tax assessment data from the New Jersey Association of County Tax Boards.[NEXT SLIDE]<number>
  • The assessment formula is comprised of six components.[CLICK]Using the public data, values for the three variables are determined for all eligible parcels within the district.[CLICK]The values for these variables are statistically divided into quartiles. Higher values are in the 4th quartile, and lower values are in the 1st quartile. Median values are equally divided between the 2nd and 3rd quartiles.Quartiles are determined separately for each variable. Within each variable, quartiles are assigned a specific point value of either 0, 1, 2, or 3, with 3 being the highest score. Points correlate to a property’s overall value within and contribution to the District.[CLICK]The points from each of the three variables are added together.[CLICK]At this time any bonus points can be added to a property’s score. In our assessment we did not include any bonus points. Suggestions for possible uses of bonus points include as a blight penalty (additional points) or specific public use discount (subtraction of points.) [CLICK]Points are summed again, first to include any bonus points, and then to determine a total score per tax paying entity.[CLICK]Once all the entities within the district have been scored, they are ranked by score from highest to lowest. This ranking is then used to create a “contribution pyramid” for assessments.[NEXT SLIDE]<number>
  • Upon ordering the 244 unique entities within the CSSD based on their scores it became clear that there was a wide point spread within the district. 14% of the entities (“Group 1”) had a score between 11-175 points. The remainder of the district (86%; “Group 2”) had less than 10 points. In order to reflect this diversity each group was further subdivided into tiers so that entities of similar scores (and therefore similar impact within the CSSD) would be evaluated against one another. [CLICK]Group 2, which represents the majority of the properties within the district, has contribution levels ranging from $100 to $5000. These levels are the minimum required contribution for participation.The top three tiers—while representing a small share of properties within the district—has the greatest financial stake in the success of the CSSD and therefore shoulders the majority of the financial burden.[CLICK][CLICK][CLICK][NEXT SLIDE]<number>
  • [CLICK]After examining existing assessment models used by BIDs throughout the United States[CLICK]and analyzing the current environment of the proposed District, [CLICK]our team came to the conclusion that, due to Camden’s special needs, a new, unique model would need to be created in order to properly finance the district.[CLICK]The new financing model would calculate assessments in a standardized manner. Assessments would be treated as contributions to the District rather than direct payments for service.[NEXT SLIDE]<number>
  • <number>
  • 43
  • Need to make this slide cleaner<number>
  • Camden Presentation (as of 15 May 2009)

    1. 1. 1 A Financing Model for the Camden Special Ser vices District Milano Community Development Finance Lab Team: Kate Maher Jennifer Trepinski Sabrina Wilensky Milano The New School for Management and Urban Policy
    2. 2. 2 AGENDA o Over view of CSSD Jen Trepinski o Attributes of Financially Stable Special Improvement Districts Kate Maher o Proposed Financing Model Sabrina Wilensky o Conclusion: Next Steps Kate Maher, Jen Trepinski, and Sabrina Wilensky Milano The New School for Management and Urban Policy
    3. 3. 3 AGENDA o Over view of CSSD Jen Trepinski o Attributes of Financially Stable Special Improvement Districts Kate Maher o Proposed Financing Model Sabrina Wilensky o Conclusion: Next Steps Kate Maher, Jen Trepinski, and Sabrina Wilensky Milano The New School for Management and Urban Policy
    4. 4. 4 Greater Camden Partnership’s Goal for the CSSD: 1. To develop a sustainable financing model for Camden’s Special Services District (CSSD) 2. Support the capacity of the Clean and Safe Program and potential expansion of services Milano The New School for Management and Urban Policy
    5. 5. Greater Camden 5 Partnership Has Strong Community Ties • A public/private partnership formed in 2001 • Mission to improve the social and economic conditions of the City of Camden • 33 Board Members representing 29 organizations Milano The New School for Management and Urban Policy
    6. 6. 6 History of CSSD Formation Milano The New School for Management and Urban Policy
    7. 7. 7 CSSD Today • Began in 2005 • 14 Board Members, 12 organizations • $500,000 budget for Clean & Safe Program • Funded by voluntary contributions • Urban Enterprise Zone funded Clean and Safe expansion in commercial corridors:  River Avenue, Cramer Hill  Federal Street  Haddon Ave  Broadway South of MLK  Yorkship Square, Fairview Milano The New School for Management and Urban Policy
    8. 8. 8 Current CSSD Financial Model Challenges Growth and Sustainability Milano The New School for Management and Urban Policy
    9. 9. 9 AGENDA o Over view of CSSD Jen Trepinski o Attributes of Financially Stable Special Improvement Districts Kate Maher o Proposed Financing Model Sabrina Wilensky o Conclusion: Next Steps Kate Maher, Jen Trepinski, and Sabrina Wilensky Milano The New School for Management and Urban Policy
    10. 10. 10 Special Improvement District: quot;A SID is a system by which the owners of two or more private properties or businesses cooperate to share the costs of solving common problems or realizing economic opportunities associated with their place.” --LAWRENCE O. HOUSTOUN, JR. Business Improvement Districts Second Addition Milano The New School for Management and Urban Policy
    11. 11. 11 Key Components of Financially Stable Models Milano The New School for Management and Urban Policy
    12. 12. Contractual Agreements 12 Also Key to Financial Stability • Formalizes the financial relationship between beneficiaries and the SID • Allows for sufficient time to make significant and recognizable Improvements in the District • Improvements need to be perceived by beneficiaries to maintain commitment and support for the SID Milano The New School for Management and Urban Policy
    13. 13. 13 Formalizing the BID by Municipal Ordinance • District Management Corporation (DMC) needed to administer the SID • Passage of municipal ordinance  Support of property owners through affirmative vote or petition  Lack of sufficient objections must be demonstrated  Need for SID must be found and recognized by municipality Milano The New School for Management and Urban Policy
    14. 14. 14 New Jersey’s SID-Friendly Law “Municipalities should be given the broadest possible discretion in establishing by local ordinance the self-help programs most consistent with their local needs, goals and objectives.” Milano The New School for Management and Urban Policy
    15. 15. 15 New Jersey Statute Title 40 Chapter 56-65: Adoption of Ordinance Governing body of the municipality must find : 1. Area would benefit from being designated as a special improvement district 2. District Management Corporation has been established for the provision of administrative services 3. Special assessment shall be imposed on District beneficiaries 4. SID is in best interests of District, municipality, and the public Milano The New School for Management and Urban Policy
    16. 16. 16 Assessment Mechanism: Effectively Facilitates Benefits Received Model • Creates a standardized mechanism in which to determine each beneficiary’s contribution amount • Driven by relevant characteristics of a benefiting property • Promotes Equity Milano The New School for Management and Urban Policy
    17. 17. 17 Assessments Utilize Variables that Relate to Degree or Types of Benefits Received Milano The New School for Management and Urban Policy
    18. 18. 18 Basic Formula to Determine Assessment Step 1: Find Price per Square Foot or Per Dollar of Assessed Value Milano The New School for Management and Urban Policy
    19. 19. 19 Basic Formula to Determine Assessment Step 2: Use Price per SF or dollar of assessed value to find individual SID Assessment Milano The New School for Management and Urban Policy
    20. 20. Example 1: 20 Using Square Feet to Determine Individual Assessment Step One: CSSD Budget÷ Total SF of District=Price Per SF $500,000÷9,892,824=$.05 Step Two: Price per SF× Individual Property SF=Annual Assessment$0.05×1,215,812=$61,449 Square Individual CSSD Property Projected Total SF in Price per Square Annual Budget District Square Foot Footage Assessment $500,000 9,892,824 $0.05 1,215,812 $61,449 Milano The New School for Management and Urban Policy
    21. 21. 21 Example 2: Using Assessed Value Step One: CSSD Budget÷ District AV=Price per Dollar of AV $500,000÷$502,332,699=$0.0010 Step Two: Price per Dollar of AV ×Individual AV=Annual Assessment $0.0010×$88,243,900=$87,834 Assessme nt per Dollar of Individual Annual Price SID Assessed Property AV Assessme per Budget District AV Value (example) nt SF $500,000 $502,332,6 $0.0010 $88,243,900 $87,834 $0.07 99 Milano The New School for Management and Urban Policy
    22. 22. 22 National Average: Price Per Square Foot Annual Annual Square Price per Assessme Feet SF nt 1,215,812 $0.10 $121,581 1,215,812 $0.15 $182,372 Milano The New School for Management and Urban Policy
    23. 23. 23 Adding Variables for Precision Pricing • Benefit Zones: Percentage of assessment rate  Location from most concentrated service area  Levels of service  Types of service • Property Classification (Tiers)  Commercial  Office  Tax exempt Milano The New School for Management and Urban Policy
    24. 24. 24 Downtown Denver BID: Location-Related Assessment Variables: LSF= Land square footage BSF= Building Square Footage SZD= Special Zoning Discount PPSF= Price Per Accessible Square Foot FORMULA: [(LSF+15*BSF) x SZD] x PPSF=BID Assessment Milano The New School for Management and Urban Policy
    25. 25. 25 Map of Downtown Denver Benefit Zones 2009 Prices per Assessable Square Foot Zone 1 $0.440528 Zone 2 $0.339815 Zone 3 $0.284783 Zone 4 $0.255277 Zone 5 $0.206843 Zone 6 $0.357562 Zone 7 $0.323589 Zone 8 $0.288534 Zone 9 $0.242145 Zone 10 $0.206014 Zone 11 $0.170270 Zone 12 $0.169273 Milano The New School for Management and Urban Policy
    26. 26. New Brunswick City Market: 26 Proportional Benefits FormulaTypes of Benefits Step 1: Identification of Three Provided by the SID  Attractspeople and thus strengthens the market for businesses  Improves image of the CBD and thus strengthening the position of property owners  Improved attractiveness of the CDB improves the position of office and other employers to attract and retain employees Milano The New School for Management and Urban Policy
    27. 27. New Brunswick City Market 27 Proportional Benefit Formula Step 2: Identification of four classes of property: Ø Class A (6% of property taxes): First floor enterprises dependent on walking trade, including banks and restaurants Ø Class B (4% of property taxes): Rental office properties Ø Class C (3% of property taxes): Hotels Ø Class D (2% of property taxes): Owner occupied office property Milano The New School for Management and Urban Policy
    28. 28. 28 Review of Assessment Method Milano The New School for Management and Urban Policy
    29. 29. 29 Revenue Diversification: Beyond Assessment Financing “Enterprise Revenue”: Leverages marketing services to bring additional revenue to the district for special projects  Event Sponsorship  Manayunk Development Corporation in Philadelphia: $400,000  Corporate Sponsorships  Ocean City Maryland BID Brings in $1 Million by making Pepsi the district’s official drink Milano The New School for Management and Urban Policy
    30. 30. 30 AGENDA o Over view of CSSD Jen Trepinski o Attributes of Financially Stable Special Improvement Districts Kate Maher o Proposed Financing Model Sabrina Wilensky o Conclusion: Next Steps Kate Maher, Jen Trepinski, and Sabrina Wilensky Milano The New School for Management and Urban Policy
    31. 31. Applying Benefits Received 31 Cost Sharing Model to the CSSD Consideration of unique Characteristics of CSSD  High number of tax exempt properties  Proportionately high number of anchor institutions  Corporations that recognize the benefit of the district but are not physically located within its boundaries Milano The New School for Management and Urban Policy
    32. 32. 32 Proposed Financing Model Milano The New School for Management and Urban Policy
    33. 33. 33 Potential CSSD Members Milano The New School for Management and Urban Policy
    34. 34. 34 Current CSSD Pledges  Potential CSSD Member  FY09 Contributor (Pledged) 4.7% of potential CSSD members have pledged contributions for FY09 Milano The New School for Management and Urban Policy
    35. 35. 35 Assumptions • Agreement is voluntary, but assessments are compulsory upon signing of contract • Small property owners should not shoulder large financial burden Milano The New School for Management and Urban Policy
    36. 36. 36 Key Criteria for Model Design • Equity  Ensure that all properties within CSSD are assessed based on benefits received • Transparency  Use public data as basis for minimum contribution levels • Scalability  Design a model that can be adapted to other corridors Milano The New School for Management and Urban Policy
    37. 37. 37 Proposed Financing Model Milano The New School for Management and Urban Policy
    38. 38. 38 Assessment Model Components Milano The New School for Management and Urban Policy
    39. 39. 39 Benefits Received Scoring Process Add Footprint Convert to bonus pts (per point value (if any) parcel) (using quartiles) Property Total Pts. Convert to Class per Tax point value Sum points (per Paying (using quartiles) parcel) Entity Tax DETERMINE Assessme Convert to CONTRIBUTION nt point value TIERS (per (using quartiles) parcel) (5 LAYERS) Milano The New School for Management and Urban Policy
    40. 40. 40 Scoring Tiers Milano The New School for Management and Urban Policy
    41. 41. 41 Proposed Financing Model Milano The New School for Management and Urban Policy
    42. 42. 42 Baseline Formula Process 2a. Determine TOTAL ASSESSED VALUE (AV) per tier 1. Establish 3. Calculate a Price per SF BUDGET per Tier GOAL 2b. Determine TOTAL SF per tier 4. Apply Price per SF to Individual Entities Milano The New School for Management and Urban Policy
    43. 43. 43 Results BUDGET GOAL: $750,000 Price per Total SF Assessment SF per Tier Tier A $0.08 $407,157 Tier B $0.08 $331,653 Tier C $0.01 $6,621 Tier D $0.03 $4,294 Tier E $0.03 $276 TOTAL: $750,000 Milano The New School for Management and Urban Policy
    44. 44. 44 AGENDA o Over view of CSSD Jen Trepinski o Attributes of Financially Stable Special Improvement Districts Kate Maher o Proposed Financing Model Sabrina Wilensky o Conclusion: Next Steps Kate Maher, Jen Trepinski, and Sabrina Wilensky Milano The New School for Management and Urban Policy
    45. 45. 45 Strategies to Meet CSSD Budget Milano The New School for Management and Urban Policy
    46. 46. 46 Key Marketing and Evaluation Components for CSSD Sustainability • Marketing the benefits of the CSSD creates buy-in from members and community  Website  Report card  Newsletter • Evaluation of program outcomes and helps make benefits visual • Survey of CSSD members helps gauge satisfaction and opportunities for improvement Milano The New School for Management and Urban Policy
    47. 47. 47 Community Development Finance Lab For more information, visit http://www.newschool.edu/mi lano Milano The New School for Management and Urban Policy

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