continuing the way forward · •sxsw •darpa tour •site selector’s guild •world travel...
TRANSCRIPT
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CONTINUING THE WAY FORWARD
ITAC, OCTOBER 26, 2016
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PRESENTATION OVERVIEW
1. Way Forward Strategy Update
• Progress to-date• Notable upcoming initiatives
2. FY16 Key Department Outcomes
3. FY17 Budget Request
• Incentive Fund• TOT Reinstatement
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GOAL:Reduce office vacancy by half and diversify the Arlington economy over the next 60 months
0%
5%
10%
15%
20%
25%
0 12 24 36 48 60 72
% Vacant
21.7%4Q14
20.1%4Q15
Months
GOAL
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$4.5 M
Local tax
revenue
for a
100%
occupied
building
$3.3 M
Local tax
revenue
for a 75%
occupied
building
$2.5 M
Local tax
revenue
for a
50%
occupied
building
$1.1 M
Local tax
revenue for
a 0%
occupied
building
Note: Assumes 100% occupancy = 400,000 SF of RBA in a building in the Crystal City submarket. Based on private sector for-profit tenancy.
Each 1% of Office Occupancy
is Worth $3.4 million in Local Taxes
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Director’s Office
$582K
Business Investment
$3.1M
Real Estate Development
$440K
Convention & Visitors Services
$753K
Strategic Partnerships
$1.1M
Cultural Affairs$2.5M
Administration
$743KCommunications
AED FY16 BUDGET BY DIVISION
3 FTE
4 FTE
12 FTE 16.9 FTE4 FTE5 FTE3 FTE
Budget Included inBusiness Investment2
1. FY 16 Budget shown does not include Artisphere ($2.72m expense)2. Communications budget is shown under Business Investment to illustrate those funds as primarily an extension of resources for BIG.
5.8 FTE
TOTAL EXPENSE BUDGET 1:
$9.2M53.7 FTE
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KEY INVESTMENTS - FY16 BUDGET
• Five new FTEs for business development
• $300,000 in ongoing funding for marketing
• $200,000 in one-time funds for tourism
• Added support for partner organizations
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IMPLEMENTATION: LEAD GENERATION
• Startup Arlington
• Fast Four
• Dong Sheng Startup CompetitionPromotions
• Arlington Premiere
• Executive Luncheon
• Troker VIP Reception
Business Engagement
• CES
• SxSW
• DARPA Tour
• Site Selector’s Guild
• World Travel Market
• Robotics Conf.
Marketing Missions
• Inc. Magazine
• Tech Cocktail
• DC Inno
• Wall St. Journal
• Globe St.
• Area Development
Media Exposure
150+ Applicants10 Media Articles
261,000 Impressions
125 New Businesses30 Arlington Executives
130 VIPs
6 Cities Visited5 Panels Hosted
3 Site Selector Meetings600+ Leads Generated
550 News Clips558M Impressions
$18M in ad equivalency
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42CLOSED and Announced Deals
1,840,000SQ FT of Real Estate9,300
JOBS Newor Retained
34 Deals with BIG Assist
8,400 Jobs with BIG Assist 1,610,000 SQ FT with BIG Assist
Source: AED, CoStarFiscal Year 2016 YTD (July 1, 2015 - Feb. 22, 2016)
3 of 34Received INCENTIVES
FY16 OUTCOMES
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SELECTED ANNOUNCEMENTS
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Source: CoStar, AED.Estimate based on $3.4 million in local taxes recovered for each 1.0% in vacancy rate improvement
10%
15%
20%
25%
1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15
12.6%
21.7%
20.1%
VACANCY RATE: 2012 - 2015
12.6%
ESTIMATED LOCAL TAXES RECOUPED:
$ 5.4 M
= 1.6%
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NOW WHAT?
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SELECTED CY16 MARKETING – U.S. & INTL.
• CES – January (TECH)
• Peru – February (TOURISM)
• SXSW* – March (TECH)
• China – April (TOURISM)
• ICSC –May (RETAIL)
• Canada – June (TOURISM & FDI)
• Select USA* – June (TECH & FDI)
• China – August (TECH & FDI)
• World Travel Market* – November (TOURISM)
*Second engagement
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SELECTED MARKETING HIGHLIGHTS
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SELECTED CY16 PROGRAMS - LOCAL
• Arlington Mill Pop Up Gallery – Ongoing (CULTURAL AFFAIRS & SPI)
• Global Phonic Series – Feb.-March (CULTURAL AFFAIRS)
• Small Business Networking – March (BIZLAUNCH)
• Green Business Showcase – April (BIG)
• Small Business Awards – May (BIZLAUNCH)
• Small Business Summit – May (BIZLAUNCH & REDG)
• Arlington Hotel Summit – September (ACVS)
• Arlington Hospitality College – Jan., Apr., Jul., Nov. (ACVS)
• Education Forum – Fall (BIG & SPI)
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SELECTED LOCAL PROGRAM HIGHLIGHTS
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SMALL BUSINESS FY16 OUTCOMES
Assisted 2,500 business people including:
• 1,900 workshop participants;• 550 individual counseling sessions; and• Among these, 800 conducted in Spanish
Specialized programming including:
• 44 technical assistance workshops• Arlington Small Business Summit • Art on the ART Bus • Lawn Chair Talk Series
In addition the BizTeam helped 50 businesses navigate
regulatory issues
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CULTURAL & COMMUNITY DEVELOPMENT FY16
• 442 public performances, exhibits, events, workshops and temporary installations
• 4,600 Lee Arts Center Studio Visitors
• 357 Artists and Arts Organizations supported
• $3.6 million in leveraged funding
• 50 Creative Economy events drawing a total of 1,000 attendees at locations across Arlington.
Assisted the Crystal City, Rosslyn and Ballston BIDs with pedestrian safety, traffic, lighting, street beautification, signage and events projects.
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BALLSTON QUARTER REDEVELOPMENT
INVESTMENT
• $55M in planned public investments representing Arlington’s largest ever public-private partnership, and first ever use of a Community Development Authority (CDA) public financing tool
OUTCOME
• $150M in net incremental taxes to County over 30 years
• Letter of Intent: Nov 2015
• Development Agreement & CDA Formation: April-May 2016
• Construction Begins: May-June 2016
• Project Delivery: Spring 2018
$325M transformative redevelopment of
cornerstone project
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• 45,000+ group room-night leads
• 22,000+ group room-nights booked, worth $3.6+ million
• 55,000+ StayArlington website visits
• 13,400+ visitors and residents served in-person
• 200+ Arlington-related articles with 60M impressions worth $8M
• 9 major travel trade events with 250+ one-on-one appointments and Arlington exposure to 60,000+ attendees
• 2015 Arlington hotel occupancy: 76.9% (up 1.3% over 2014)
• 2015 Arlington hotel average daily rate: $158.85 (up 4.7% over 2014)
• 2014 Arlington visitor spending: $2.97 billion (up 4.9% over 2013)
• 2014 Arlington tax revenue: $80.7 million (up 3.0% over 2013)
• 2014 State tax revenue of $107.8 million (up 13.8% over 2013)
TOURISM FY16 OUTCOMES
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BUDGET COMPARISON FY16 TO FY17
FY16 TOTAL EXPENSE BUDGET:
$9.2M53.7 FTE
NO INCENTIVE FUND
NO TOT REINSTATEMENT
FY17 TOTAL EXPENSE BUDGET:
$9.1M53.7 FTE
$1.5M INCENTIVE FUND
$1.25M TOT REINSTATEMENT
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INCENTIVE FUND REQUEST OVERVIEW
• A $1.5 million incentive fund to provide upfront cash grants to early stage tech and tech catalyst companies and proof of concept projects.
Startup Companies
High ReturnAccelerators & Incubators
Rapid Growth
Initial outcomes of 600 jobs and 75,000 s.f. of office occupancy
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COMPETITIVE ENVIRONMENT
Jurisdiction Tool Impact
Washington D.C.Qualified High Tech Company
(QHTC)& Council Legislation
Multi-million $ packages (ex. Advisory Board Corp. $60
million)
Prince George’s County
Economic Development Fund $50 million fund
Alexandria Tax Abatements$23 million for NSF and other federal
project packages
Loudoun County Economic Development Fund $1.0 million fund
Prince William County Economic Development Fund$1.6 million fund
($3 million additional proposed FY17)
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HEADWINDS
1. National Science Foundation Relocation
• Scheduled to move to Alexandria 2017• Vacancy of 665,000 s.f. in Ballston
2. Federal Lease Expirations & Uncertainties
• Transportation Security Administration 550,000 s.f.in Pentagon City (on limited-term lease extension)
• Drug Enforcement Agency 500,000 s.f. in Pentagon City (lease expiration 2018)
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Personnel
• Addition of two Limited Term FTEs (second Destination Sales Manager and new Content Manager) to expand sales and marketing reach
Non-Personnel
• Industry research and two-year strategic plan
• Content resources: photography, web, video, editorial, etc.
• Advertising, events, missions (media and sales), and online marketing
• 70% focus on domestic audiences: meeting/group planners, couples, families, friends, LGBT, seniors, journalists
• 30% focus on international audiences: tour/receptive operators and journalists (UK, Germany, France, China, Brazil, Canada, Mexico, Peru, Argentina, Chile)
TOURISM FY17 ADDED FUNDS
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$0.0
$0.5
$1.0
$1.5
$2.0
TOT sur.
One-time
General Fund
ACVS TOTAL BUDGET HISTORICAL CONTEXT
FTE 10.8 10.8 10.8 4.8 4.8 4.8 4.8 5.0 7.0
mill
ions
TOT Rev. $21.9 $22.9 $21.8 $22.3 $20.8 $23.3 $22.8 $25.0 $25.0