Growth Monitor for Economic Development

Tracking the issues, programs, incentives, tax matters, and "lessons learned" affecting local economic development.

Senior Housing Occupancy Increases - Feasibility and Due Diligence Consultants - Rendering of Marina Plaza senior housing facility

Senior Housing Occupancy Increased in 4th Quarter

Senior housing occupancy increased in the U.S., in the 4th Quarter of 2022, according to data from the National Investment Center for Seniors Housing & Care. The national occupancy rate for 4th quarter 2022 for private-pay seniors housing reached 83.0%, from 82.1% percent in the third quarter.

Since the second quarter of 2021, the occupancy rate has recovered from a post-Pandemic low of 77.8%. The seniors housing occupancy rate increased for the sixth consecutive quarter due to continued strong demand that has exceeded new senior inventory growth. Because new inventory has been added during the pandemic, however, the occupancy rate has not yet reached pre-pandemic levels, according to the NIC.

Industry observers, developers and senior living & care consultants have experienced increased challenges with new project feasibility, in the post-Pandemic period. The senior housing asset class was significantly impacted by the Pandemic, but the industry was already suffering prior to Covid-19’s impacts. But the continued recovery has many real estate investors looking to add private-pay senior housing to their portfolios in coming years. According to JLL, Primary and Sun Belt markets are experiencing the highest concentration of new senior construction.

The NIC senior housing occupancy data is for private-pay seniors housing, and includes independent living, assisted living and memory care facilities for seniors. The NIC refers to this data as their NIC MAP Vision data product. The National Investment Center for Seniors Housing & Care (NIC) is an Annapolis-based nonprofit firm that tracks industry data from 31 U.S. metropolitan markets.

For more information about nationwide senior housing occupancies at private-pay facilities, visit the NIC here.

11.01.2023

happy holidays from The Adventure Entertainment Cos.

Adventure Entertainment Cos. has new website.

The Adventure Entertainment Cos., an affiliate of StoneCreek Partners (“SCP”), has launched a new website at AEC Creative – in Beta form. Some of the client experience and specific projects that have been listed here along with SCP experience will be moved over to AEC Creative.

The Adventure Entertainment Cos. (AEC) is a conceptual design and project implementation company, focused on themed attractions, location-based entertainment, and outdoor recreation. AEC regularly collaborates with StoneCreek Partners during the project feasibility and conceptual design stages of client assignments, providing early “previsualization” of potential site organization, project massing and relative scale, and exploration of guest scripting and experience.

AEC has also established ventures with 3rd-party organizations for the operation of niche destination facilities in outdoor recreation (GoBOLD Adventures), creative campuses (Monumental Studios), and living stories (StagePlex). These new ventures are led by highly-experienced professionals in these industries, including Paul Bierman-Lytle, Justin Zoladz, and Robert “Bob” Johnson, among others. The purpose of Adventure Entertainment Cos. having a new website, is to prepare for more direct-to-consumer communications about these coming destination facilities. The Adventure Entertainment Cos. is committed to the creation of destination experiences for major project as well as smaller intra-regional locations, that combine the outdoor recreation, extreme sport, themed, and location-based entertainment industries.

28.12.2022

The EB-5 Program is Reauthorized

President Biden signed legislation today with the effect that the EB-5 program is reauthorized, in particular its Regional Center component, effective now through September 30, 2027. The program is part of the EB-5 Reform and Integrity Act of 2022 (the “Act”), which itself is part of the Omnibus spending bill signed by the President.

The reauthorization of the Regional Center program follows an almost 9 month lapse, when prior efforts failed to extend the program beyond July 1, 2021. The Regional Centers aspect of EB-5 have allowed foreign investors a special opportunity to invest in high-profile developments that they likely would not otherwise find accessible. The EB-5 program had its controversies and numerous parties had worked to place safeguards to prevent fraud and encourage investment in areas that followed from the original intent of the program.

The EB-5 program allows foreign investors to invest a specified amount of capital into a U.S. enterprise that creates American jobs, in return for permanent residency. With passage of the EB-5 Reform and Integrity Act of 2022, changes were made to the program to presumably improve its implementation. The new legislation emphasizes compliance with EB-5’s intent along with enforcement procedures. Program sponsors under EB-5 will face greater scrutiny in recordkeeping, investment types, audits, and investor communications. The minimum EB-5 investment amount now increases to $800,000 from the current $500,000 for Targeted Employment Areas and Rural Areas, and, changes to $1.05 million from the current $1.0 million for Non-Targeted Employment Areas. These changed minimum investments apply to both regional center and direct EB-5 investments.

With the news that the EB-5 Program is reauthorized, a backload of foreign investors who were in the midst of processing last June, will hopefully soon see progress in the processing of their investment / visa applications.

The EB-5 Immigrant Investor Visa Program was created in 1990 by the Immigration Act of 1990.

11.03.2022

The 15-Minute City concept gains tracking.

The 15-Minute City Concept Gains Traction

The-15-Minute City concept is gaining traction around the world as a placemaking tactic and means to enhance quality of life. Although “city” is used in this coined term, this planning concept is more about a focus on livable neighborhoods and districts.

The “15-minute city” is a term for urban design and master planning wherein it is possible to meet the basic “needs of living” within a 15-minute walk or bike ride from a person’s home. The needs of living include such services and amenities as:

Places of work, or, at least a coworking venue;
Grocers;
Pharmacies;
Schools for children, youth;
Health care or medical facilities, or simply, doctor and dentist offices;
Recreation, leisure and/or green spaces; at least a pocket or linear park;
Cultural venues;
Mass transit accessibility;
Affordable housing is assumed;
Flexible zoning to allow places with different day-part uses, such as local school facility that can be a community gathering place at night or on weekends; and
Places of worship are seldom mentioned as part of the 15-Minute City concept, but such places may be among the most successful community-building forces that have existed.

The planning term was first coined by by Prof. Carlos Moreno, a professor at Sorbonne University (Paris, France). Prof. Moreno is the director of entrepreneurship and innovation at The Sorbonne. Though popularized by the professor, the 15-Minute City concept itself has been explored in major cities throughout the world from Melbourne to Portland, prior to its burgeoning popularity as an planning concept.

During 2020, the 15-Minute City concept has surged in interest as a sturdy planning concept alongside the increasing acceptance of coworking facilities and communities. Coworking venues situated in close proximity to homes simply adds an additional destination within a 15-minute “neighborhood” that is vital within a 15-minute radii.

Another aspect of making the 15-Minute City concept workable is the presence of affordable housing within each 15-Minute City cluster. Many neighborhoods and districts around the world may work well for most required services and work places, but do not have the array of housing choices necessary.

Integrating the 15-Minute City concept with allied planning concepts is particularly interesting to local governments charged with numerous quality of life objectives and economic development initiatives. A 15-Minute City imperative, as an example, is also deemed helpful in reducing the use of fossil fuels (vehicles), fighting carbon emissions, and thereby fighting climate change. Also, applying the 15-Minute City thresholds of accessibility also advances the objectives for some groups in reversing local zoning codes to allow increased affordable housing options and thereby, more diversity, inclusion, and social justice.

The 15-Minute City concept has created such interest that purpose-built apps have been created to evaluate any particular location for 15-Minute City thresholds. Here Technologies (Eindhoven, Netherlands) is one such company that has created this kind of threshold’s map to answer the question – Do You Live in a 15-Minute City? We expect that the 15-Minute City parameters and software applications that track such notions, will join similar concepts as a niche investment asset class among those pursuing environmental, social, and governmental investments (so-called ESG Investing).

26.12.2020

North America’s Borders Remain Closed

North America’s borders remain closed through January 21, 2021, limiting border crossings to “essential trade only” between the U.S., Canada, and Mexico. The mutually-agreed extension has been made on a month by month basis during 2020, and has been in place since March of this year.

The border closure is due to Covid-19 cases on both sides of each border, and the interest of each country in protecting their citizens. The national health agencies and ministries, and health officers, for each country are part of the decision-making for these restrictions. Each country is looking to relevant data and protective health measures that seem to be working.

So-called border crossing due to “essential trade” activity is allowed under the provisions of the agreed restrictions, between the U.S. and Canada, and between Mexico and the U.S. While essential economic development and various business activities continue, cross-border tourist activities to any number of visitor destinations have been decimated.

Presumptive President-elect Joe Biden’s administration will be part of the next consideration of these border restrictions. Biden is set to take office on January 20, and the current border restrictions come due for consideration on January 21st.

A full article in Travel Pulse from December 11, 2020 indicating that North America’s borders remain closed, is available at this link:

US, Canada and Mexico Land Border Restrictions Extended

12.12.2020

Economic Development Consultants for Tribes

Our work as economic development consultants for tribes and other indigenous nations has expanded with additional services and new regions covered.

StoneCreek Partners’ client work with Native American tribes and pueblos, as well as Native Hawaiians, now includes Canadian First Nation tribes and organizations. Over the years, StoneCreek Partners has also worked with indigenous nations in addition to those in North America, including those sovereign nations in the MENA region and the Pacific Rim.

The Covid-19 pandemic of 2020 has increased the interest in economic development plans that can reliably produce economic results – increased jobs, new investment, and enhanced quality of life. And sooner than later. Our economic sector analytics have an increasingly granular focus on real estate investment asset classes. This is due to some types of investment now being in question, and relatively new asset classes commanding investor attention.

Our consulting focus is on projects that can be made to happen, and less on broad programmatic objectives.

Another focus is on the feasibility of specific projects. As we act as economic development consultants for tribes we explore how development might occur in a particular region, focusing more on projects that can be made to happen, and less on broad programmatic objectives. With specific projects identified, strategic partners can be identified and pursued.

Today’s economic development strategies can include all manner of visitor destination strategies, location-based entertainment, sports mega-complexes, life sciences projects, and other development can prosper within specific locations and markets. Our experience with design management, development, facilities management, and with overall dealmaking and transactions allows us to take economic strategies through implementation.

StoneCreek Partners is a business planning and development firm, with expertise that includes commercial real estate, hospitality, location-based entertainment, and direct-to-consumer technologies. StoneCreek Partners has provided economic development planning and program implementation support to Native American tribes and their sovereign development companies, as well as to similar city, county, and state organizations.

Our firm’s essential value to clients is our hands-on experience in designing, developing, and operating projects and businesses. StoneCreek Partners is led by co-founder Donald Bredberg and his substantial experience as an executive with The Irvine Company, NBCUniversal, and the Riyadh-based family office of Newfield Enterprises International.

The firm was first established in 1984 in Los Angeles, and is now headquartered in Nevada. Our economic development consulting for tribal nations and other indigenous nations got started shortly after the firm’s founding.

Additional information about our economic development consulting practice is available at this link:

StoneCreek Partners – Economic Development Consultants

22.11.2020

Comparing the Pfizer and Moderna Vaccines

We found this interesting, an article comparing the Pfizer-BioNTech and Moderna vaccines by Mike Terry writing for BioSpace, the life sciences digital hub. All of us are of course keen to know what may be coming with these Covid-19 vaccines. The economic recovery and economic development we all hope for, depends upon the actual and perceived protections and treatments that are coming.

The best early news is the so-called “efficacy rate” … both vaccines are reporting 90%+ efficacy rates. the CDC states that “vaccine efficacy/effectiveness (“VE”) is measured by calculating the risk of disease among vaccinated and unvaccinated persons and determining the percentage reduction in risk of disease among vaccinated persons relative to unvaccinated persons.

One big similarity in comparing the Pfizer and Moderna vaccines is that each use new messenger RNA technology. RNA therapies that use mRNAs have been in the works prior to the Covid-19 outbreak, for possible use in personalized cancer vaccines and as vaccines for infectious diseases such as Zika virus. However, as Mike Terry notes in his article, to-date, no therapeutic or vaccine using mRNA has been approved for use by the U.S. Food and Drug Administration (FDA).

to-date, no therapeutic or vaccine using mRNA has been approved for use by the U.S. Food and Drug Administration (FDA).

Both of these vaccine candidates require two doses about 28 days apart. The Pfizer-BioNTech requires specialized refrigeration although the drug researcher and manufacturer Pfizer has designed its own packaging using dry ice that can be stored for weeks without the specialized freezers.

Pfizer and BioNTech have no development funding from the U.S. government, but do have a $1.95 billion agreement with the government to supply 100 million doses of the vaccine, with an option for another 500 million. The Moderna vaccine trials were developed with financial and logistical support from the U.S. National institute of Allergy and Infectious Diseases (NIAID) and Operation Warp Speed, and could receive up to $2.45 billion in federal government funding. And Moderna has a $1.5 billion deal to supply 100 million doses to the U.S. government.

The rapid progress from virus detection, sequencing information availability, and these vaccines being in their current state of testing, is a testament to the role of the burgeoning life sciences research and development industry in today’s connected global community.

The full article at BioSpace comparing the Pfizer and Moderna vaccines can be reviewed here:

Pfizer-BioNTech and Moderna’s Vaccines Are Leading the COVID-19 Race. How Do They Compare?

17.11.2020

05.11.2020

— Retailing Has its “Black Swan” Event

29.10.2020

— The Value of Regional Visitor Destinations – for Local Economic Development

29.10.2020

— Covid-19’s Lasting Impacts on Real Estate

California’s Proposition 15 will be a Major Disrupter

SCP’s Economic Growth Monitor

California’s Proposition 15 will be a major disrupter to commercial and industrial real estate owners in California, if approved by the state’s voters on November 3. Prop. 15 comes as other California and city initiatives for increasing taxes, are also up for voter approval in November. A couple of these additional initiatives includes San Francisco’s Proposition I and the state’s AB 2088 that would establish 0.4% tax on wealth.

The ballot initiative is a major challenge to California’s historic Prop. 13 property tax measure approved by voters in 1978, which was later upheld on challenge in the U.S. Supreme Court.

The ballot proposition title reads: “increases funding sources for public schools, community colleges, and local government services by changing tax assessment of commercial and industrial property.” On the state’s voter guide website, the initiative is summarized in this way: “Taxes such properties based on current market value, instead of purchase price. Fiscal Impact: Increased property taxes on commercial properties worth more than $3 million providing $6.5 billion to $11.5 billion in new funding to local governments and schools.”

As with other California ballot measures that would increase funding and spending, there is no safeguard that such increased taxes on commercial real estate owners would find its way to local government or local schools.

California’s proposition 15 will be a major disrupter in several ways. First, commercial (shopping centers, office buildings, etc.) and industrial real estate owners would see a decrease in the cash flow and value of their properties. This would mean a direct deleterious impact on the resale value of their properties. Conceivably, some property owners with long-held properties may need to sell if their new property tax assessments prove to be onerous.

Second, for any commercial real estate held on a NNN (so-called triple net) basis, typically retail and restaurant tenants, this property tax increase would be directly passed along to such tenants as their responsibility. Presumably, these retailers and restaurants would then attempt to increase their prices to consumers, an unintended consequence and example for how California’s proposition 15 will be a major disrupter.