PREPARED FOR

Riverdale Southeast LLC

1/17/2023

Economic &
Fiscal Impact
Riverdale Redevelopment in the City
of Roanoke, Virginia
 ECONOMIC IMPACT OF RIVERDALE REDEVELOPMENT
RIVERDALE SOUTHEAST LLC

Contents 1. Executive Summary

1. EXECUTIVE SUMMARY ................................ 1
2. BACKGROUND .............................................. 3
3. ECONOMIC IMPACT OF RIVERDALE ........... 4
3.1. ECONOMIC IMPACT OF CONSTRUCTION
SPENDING ....................................................... 4
3.2. ONGOING ECONOMIC IMPACT OF
COMMERCIAL OPERATIONS ............................... 5
3.3. ONGOING ECONOMIC IMPACT OF HOUSEHOLD
SPENDING ELSEWHERE IN THE CITY .................. 5
3.4. ECONOMIC IMPACT SUMMARY .................... 6
4. FISCAL IMPACT OF RIVERDALE .................. 7
4.1. TAX AND FEE REVENUE FROM
CONSTRUCTION ............................................... 7
4.2. TAX REVENUE FROM COMMERCIAL
OPERATIONS ................................................... 7
4.3. TAX REVENUE FROM HOUSEHOLD SPENDING
....................................................................... 8
4.4. FISCAL IMPACT SUMMARY .......................... 8
APPENDIX: IMPACT ANALYSIS GLOSSARY .. 10
Riverdale is a long-term, multi-year, planned series of redevelopment projects in
the City of Roanoke, Virginia located in what is currently known as the Roanoke
Industrial Center. Chmura Economics & Analytics (Chmura) analyzed the eco-
nomic and fiscal impact of only the first Initial Development Plan (IDP), which is
only the first set of anticipated projects at Riverdale. 1 Others are expected to
follow as the redevelopment progresses in coming years.
The IDP for Riverdale includes 375 apartment units and at least one 3,000 square
foot commercial space, which is assumed to be a foodservice business. The es-
timated total project cost for the IDP is $79.7 million with an expected maximum
seven-year construction period from 2023 to 2029.
While Riverdale is expected to have numerous, additional, high-impact develop-
ment projects in the coming years, the IDP's total economic impact (direct, indi-
rect, and induced) is estimated to average $18.1 million per year and is associ-
ated with an annual average of 114 jobs in the city from 2023 to 2040. The cu-
mulative impact in the city is estimated to be $326.4 million with 2,053 cumulative
jobs supported from 2023 to 2040. From 2030 to 2040, the annual recurring im-
pact is estimated to be $16.5 million per year, supporting 119 jobs in the city per
year.

Table 1.1: Impact Summary of Riverdale in the City of Roanoke

Direct Impact Total Impact

One-Time Impact from Redevelopment and Construction

Total Spending (Million) $56.3 $73.7

(2023-2029) Employment 170 238

Annual Average Spending (Million) $8.0 $10.5

(2023-2029) Employment 38 53
Ongoing Operations & Household Spending
Spending (Million) $12.5 $16.5
Annual 2030
Employment 93 119

Note: Impacts are measured in the year when they occur. Numbers may not sum due to rounding.
Source: JobsEQ by Chmura, and Chmura

Table 1.1 provides the economic impact summary of Riverdale in the City of Ro-
anoke. Redevelopment and construction of the project is expected to inject $10.5
million of annual economic impact (direct, indirect, and induced) into the city’s

1 Chmura provides economic software, consulting, and data so clients can make informed decisions that benefit their communities. Chmura’s PhD econ-
omists, data scientists, and strategic planners guide clients through their local labor market. Over the past 24 years, Chmura has served hundreds of
clients nationwide with thoroughness, accuracy, and objectivity

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 ECONOMIC IMPACT OF RIVERDALE REDEVELOPMENT
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economy, supporting 53 jobs per year from 2023 to 2029.2 Once complete, ongoing operations of businesses located in the
development plus household spending will provide an estimated economic impact of $16.5 million (direct, indirect, and
induced). This will support 119 jobs in the city per year from 2030 onward.

2
Direct impact is defined as the economic activity generated by the project under consideration. Indirect impact is secondary economic activity gener-
ated by the project due to suppliers to the development, construction, or ongoing operations. Induced impact is economic activity generated when work-
ers and their suppliers spend their income at retail stores, restaurants, and professional offices.

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 ECONOMIC IMPACT OF RIVERDALE REDEVELOPMENT
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2. Background
Riverdale Southeast LLC is proposing to redevelop a 75-plus acre site—the Riverdale project—in the City of Roanoke. The
site is currently operating as The Roanoke Industrial Center, with some industrial and commercial tenants, but conditions
of the facility are poor. The preliminary redevelopment plan includes both residential units and commercial space. An eco-
nomic and fiscal impact analysis is needed to demonstrate the benefits of the project to the City of Roanoke.

For residential or commercial developments such as Riverdale, the economic impact on the local economy occurs in two
phases. The first takes place during the development and construction period of the project. The initial phase of Riverdale
is expected to last for seven years, from 2023 to 2029. The second phase involves the ongoing economic impact of the
project. The operations of businesses in Riverdale will generate significant impact in the city. The additional ongoing impact
will result from household spending activities by individuals living in this development. The impact of operations and house-
hold spending will commence as different components of the project are complete. The first year of full impact will be 2030
at the latest, after all construction is finished. For both phases, the direct, indirect, and induced impacts on spending and
job creation are estimated through Chmura’s proprietary JobsEQ® economic impact model. Furthermore, Chmura estimated
city tax and fee revenue generated by the project.

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 ECONOMIC IMPACT OF RIVERDALE REDEVELOPMENT
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3. Economic Impact of Riverdale

3.1. Economic Impact of Construction Spending
Riverdale’s initial development plan (IDP) is a proposed mixed-use project including both residential and commercial com-
ponents (Table 3.1). The residential plan for 375 apartments includes 200 newly constructed units and 175 renovated units,
which will utilize the current space. In addition, 3,000 square feet will be remodeled into commercial space, which will be for
foodservice businesses.

The redevelopment of Riverdale will cre- Table 3.1: Riverdale Redevelopment Plan
ate jobs in construction and related indus- Units Square Feet Estimated Cost
tries in the City of Roanoke. The cost esti- New Apartments 200 $53,000,000
mate of the IDP is $79.7 million in 2022
Renovated Apartments 175 175,000 $26,250,000
dollars. It is assumed that construction will
last seven years from 2023 through 2029, Remodeled Commercial Space 3,000 $450,000

and the first full year of operations will be Total 375 $79,700,000
2030. Source: Riverdale Southeast LLC

Not every product and service needed for the redevelopment project will be available in the City of Roanoke; therefore,
some products and services will be purchased from firms located outside the city. Chmura used information from the JobsEQ
impact model to estimate the percentage of project spending that is expected to go to firms within the city.

Table 3.2 presents the estimated one-time economic impact from construction activities of Riverdale’s IDP in the City of
Roanoke. From 2023 to 2029, renovation and new construction will generate a cumulative $56.3 million in direct economic
impact in the city.3 During the construction period of IDP, 265 cumulative jobs will be created—mostly in the construction
industry.4 The cumulative indirect impact in the city is estimated to be $9.2 million and will support 33 cumulative jobs during
the initial phase. Beneficiaries will be
firms supplying construction materials, or Table 3.2: Economic Impact of Riverdale Redevelopment in the City of Roanoke
those providing services such as site Direct Indirect Induced Total Impact
preparation and truck transportation. The
Spending (Million) $56.3 $9.2 $8.2 $73.7
cumulative induced impact is estimated to Cumulative
(2023-2029) Employment 265 33 75 373
produce $8.2 million in spending that will
support 75 cumulative jobs in the city. The Annual Average Spending (Million) $8.0 $1.3 $1.2 $10.5
induced jobs will be concentrated in con- (2023-2029) Employment 38 5 11 53
sumer service-related industries such as
Note: Numbers may not sum due to rounding.
restaurants, healthcare, and retail stores.
Source: JobsEQ by Chmura
On an annual average basis, the redevel-
opment of Riverdale is expected to inject
$10.5 million (direct, indirect, and induced) into the city economy and support 53 annual jobs in the city from 2023 to 2029.

3
This number is smaller than the total project cost, because some spending occurs at firms outside the city. All monetary values in this report are nomi-
nal, unless specified otherwise. Accordingly, all amounts represent the dollar value in the year they occur.
4
The number of cumulative jobs refers to the number of workers multiplied by the number of years they will be employed. For example, one person
employed for two years is equal to two cumulative jobs. Two individuals employed for one year also equals two cumulative jobs. The number of jobs
estimated in this report includes both full-time and part-time jobs.

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 ECONOMIC IMPACT OF RIVERDALE REDEVELOPMENT
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3.2. Ongoing Economic Impact of Commercial Operations

One part of the sustained economic impact of Riverdale will come from its commercial operations. This section analyzes
the impact of food and beverage services operations. To be conservative, the impact from apartment rentals operations is
not included5.

The direct impact from commercial operations is the ex- Table 3.3: Economic Impact of Riverdale Commercial Operations
in the City of Roanoke (2030)
pected total revenue (or sales) from foodservice busi-
Direct Indirect Induced Total Impact
nesses, whose revenues are assumed to be $1.0 mil-
Spending (Million) $1.2 $0.3 $0.2 $1.7
lion in 2022 dollars. When construction is complete in
in 2030, total revenues will be $1.2 million in 2030 dol- Employment 15 1 2 18
lars. Note: Numbers may not sum due to rounding.
Source: JobsEQ by Chmura
Table 3.3 summarizes the ongoing economic impact of
commercial operations of Riverdale in the City of Roanoke. The direct impact is measured as the annual operational revenue
(or sales) of food services businesses in the development, which in 2030 is estimated to be $1.2 million, supporting 15
workers. An additional indirect impact of $0.3 million and one job will benefit other Roanoke businesses that support the
ongoing operations of the development. Examples are local contractors in landscaping, repair and maintenance, and other
services. The induced impact is estimated to be $0.2 million that will support two jobs in the city. The total economic impact
of operations is estimated to be $1.7 million that will support 18 jobs in the city in 2030. For each one million dollars in
revenue from the Riverdale food service business, the total impact in the city will be multiplied by 1.4 times.

3.3. Ongoing Economic Impact of Household Spending Elsewhere in the City

Riverdale will have 375 apartment units. Household spending can generate sizable economic impact in the City of Roanoke.
Household income levels customarily predict the magnitude of household spending impact.6 The median household income
in the city was $45,664 in 2020.7 The average rent in Roanoke is $856 for a one-bedroom apartment, and $1,030 for a two-
bedroom apartment. Since the expected apartment rental rate in Riverdale is higher, Chmura assumes that the average
household income in Riverdale is also higher than the city’s average.8 Finally, Chmura estimates the impact of household
spending in 2030, assuming the residential units are fully occupied.9

To calculate direct household spending in the City of Roanoke, the average household income is first adjusted to remove
savings and investments. This results in an average household spending amount of approximately 76.5% of household
income.10 Also, not all household spending by residents occurs within the city; the percentage spent outside the city is
considered leakage. It is estimated that the average consumer spending leakage is 45.8% for residents in the city. As a
result, for an average household in Riverdale, the estimated spending in the city is $38,101 in 2030 dollars. Chmura utilized
the latest Consumer Expenditure Survey11 to allocate total household spending into different categories such as food, hous-
ing, transportation, healthcare, and other services.

To avoid double counting, Chmura removed overlap between household spending and commercial operations of busi-
nesses in Riverdale. The primary overlap is rent payments for those living in Riverdale apartments, which is captured as

5
This is per the request by Riverdale Southeast LLC.
6
This analysis does not consider whether the residents of Riverdale will be existing city residents or individuals moving from outside the city.
7
JobsEQ by Chmura, “Demographic Profile,” based on the U.S. Census American Community Survey 2016-2020, accessed December 20, 2022.
8
“Rental market trends in Roanoke, VA", accessed December 20, 2022, https://www.rent.com/virginia/roanoke-apartments/rent-trends.
9
Since this analysis focuses on the high-level impact of Riverdale household spending, Chmura did not incorporate vacancy rates in the analysis.
10
The latest Consumer Expenditure Survey indicates a difference of 23.5% between annual expenditure and after-tax income.
11
U.S. Bureau of Labor Statistics, “Consumer Expenditure Surveys, 2021”, accessed December 20, 2022, https://www.bls.gov/cex/.

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 ECONOMIC IMPACT OF RIVERDALE REDEVELOPMENT
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rental revenue in Section 3.2. There is also minor overlap with foodservice sales revenue. This overlap was excluded from
the analysis of economic impact of household spending in the city.

Table 3.4 presents the economic impact from Table 3.4: Economic Impact of Riverdale Household Spending
in the City of Roanoke (2030)
Riverdale household spending. In 2030, the esti-
mated direct household spending in the City of Roa- Direct Indirect Induced Total Impact
noke will be $11.2 million (in 2030 dollars). This Spending (Million) $11.2 $1.7 $1.8 $14.8
spending can generate direct employment of 79 in Employment 79 9 14 102
the city. Most of those jobs will be in various con-
Note: Numbers may not sum due to rounding.
sumer businesses in the city. The indirect impact is
Source: JobsEQ by Chmura
estimated to be $1.7 million, supporting nine jobs in
the city in 2030. The induced impact is estimated to be $1.8 million in 2030, which can support 14 jobs in the city.

3.4. Economic Impact Summary

Combining the economic impact from construction, commercial operations, and household spending, Figure 3.1
summarizes the impact of Riverdale’s IDP in the City of Roanoke from 2023 through 2040.12 This includes the first seven-
year redevelopment and construction phase and 11 years of full operations. The total economic impact (direct, indirect, and
induced) is estimated to average $18.1 million per year and is associated with an annual average 114 jobs in the city. The
cumulative impact in the city is estimated to be $326.4 million with 2,053 cumulative jobs supported. From 2030 to 2040,
the annual recurring impact is estimated to be $16.5 million per year, supporting 119 jobs in the city per year.

Figure 3.1: Riverdale Economic Impact Summary 2023-2040

Spending (Million) Jobs

$30 180

160
$25
140
Spending (Million)

$20 120

Employment
100
$15
80

$10 60

40
$5
20

$0 0
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040

Source: Chmura Economics & Analytics

12 2040 was chosen because Riverdale Southeast LLC has certain arrangement with the city from 2023 to 2040.

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4. Fiscal Impact of Riverdale

The redevelopment and operations of Riverdale’s IDP will produce significant revenue for the city government. During the
initial phase, the city will receive one-time revenue from a building permit fee, and business, professional and occupational
license (BPOL) tax. After renovation and construction is complete, major recurring city revenue stems from the following:
tangible (personal) property, sales, and meals taxes from businesses and households located in Riverdale. Additional re-
curring tax revenue comes from household spending in the city, such as sales and meals taxes. In order to be conservative,
only tax revenue from the direct impact is estimated in this section. 13

4.1. Tax and Fee Revenue from Construction

During the initial phase, the City of Roanoke will collect a one-time building permit fee and BPOL tax from the Riverdale
project.

The City of Roanoke imposes a one-time building permit fee based on Table 4.1: One-time Tax and Fee Revenue from
the construction cost of the project. The fee is $3.00 per $1,000 of con- Construction (2023-2029)
struction cost.14 Based on the estimated cost of Riverdale, the one-time Tax/Fee Total
building permit fee is estimated to be $239,100 from 2023 to 2029 (Table Building Permit Fee $239,100
4.1).
BPOL $90,125

Construction spending will be subject to the City of Roanoke’s BPOL tax. Total $329,225
The current BPOL tax rate for contractors is $0.16 per $100 of gross re- Note: Numbers may not sum due to rounding.
ceipts.15 Based on the project cost, the cumulative BPOL tax for the city
Source: Chmura
is estimated to be $90,125 from 2023 through 2029.

Combined, the one-time tax and fee revenue from the redevelopment of Riverdale is estimated to be $329,225 from 2023
to 2029.

4.2. Tax Revenue from Commercial Operations

Riverdale will provide recurring tax revenue for the City of Roanoke from business operations. Table 4.2 presents the esti-
mated annual recurring tax revenue from Riverdale in 2030, when the development is fully occupied.

Per an arrangement between the City of Roanoke and Riverdale Southeast, LLC, the development will not pay real estate
tax from 2023 through 2040. In 2041, the real estate tax is assumed to be $1.4 million, increasing by 5.0% per year there-
after.16 Between 2023 and 2040, the City of Roanoke real estate tax base will increase by the amount of any real estate
transactions that occur during the period.

13
This approach is recommended by Burchell and Listokin in The Fiscal Impact Handbook.
14
City of Roanoke, “Fees”, accessed December 20, 2022, https://www.roanokeva.gov/2073/Fees.
15
City of Roanoke, “Business License Tax Rates”, accessed December 20, 2022, https://www.roanokeva.gov/635/Business-License-Tax-.
16
Riverdale Southeast, LLC.

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Personal property tax is another source of revenue for the city; this rate Table 4.2: Revenue from Commercial Operations
is $3.45 per $100 of assessed property value.17 Considering both city (2030)
average and household size, Chmura assumed that each household in Tax Category Amount

Riverdale will have 0.9 vehicles. 18 Based on the latest city budget, BPOL $2,462
Chmura estimated that the average assessed value is $9,123 per vehi- Sales $12,309
cle in 2022.19 After adding business personal property taxes, the annual
Meals $67,699
personal property tax is estimated to be $107,419 in 2030.
Personal Property $107,419
Virginia charges a 5.3% total sales tax, with 1.0% allocated to local gov- Total $189,889
ernments. This tax will be applied to food and beverage sales in
Note: Numbers may not sum due to rounding.
Riverdale. The city’s sales tax revenue is estimated to be $12,309 in
2030. Source: Chmura

Food and beverage sales in Riverdale is subject to the city’s meals tax of 5.5%.20 This revenue for the city is estimated to
be $67,699 in 2030.

In addition, business revenue from Riverdale is subject to the city’s BPOL tax. The rates vary considering the type of busi-
ness. In 2030, the city is estimated to receive $2,462 in BPOL revenue.

Combined, the commercial operations of Riverdale are estimated to generate $189,889 annual tax revenue in 2030.

4.3. Tax Revenue from Household Spending

Household spending by Riverdale residents can also generate various
Table 4.3: Tax Revenue from Household Spending
taxes for the city, as residents spend money in the city’s retail shops, (2030)
restaurants, and other businesses. Tax Category Amount

Sales $52,126
Local sales tax will be applied to the retail and foodservice portion of
household spending. The county’s sales tax revenue is estimated to be Meals $35,945
$52,126 in 2030. BPOL $28,581

Spending in local restaurants will be subject to the city’s meals tax of Total $116,651
5.5%, resulting in revenue of $35,945 in 2030. In addition, household
Note: Numbers may not sum due to rounding.
spending in retail and service businesses is subject to the city’s BPOL
Source: Chmura
tax. BPOL revenue for the city is estimated to be $28,581 in 2030.

Combined, household spending from Riverdale residents is estimated to generate $116,651 tax revenue for the city in 2030.

4.4. Fiscal Impact Summary

Combining city tax revenue from capital expenditure, commercial operations, and household spending, Figure 4.1
summarizes the tax revenue impact of Riverdale from 2023 to 2040. Over this period, the cumulative tax revenue for the
City of Roanoke is estimated to total $4.9 million, averaging $271,750 per year. In 2030, the annual tax from operations and

17
City of Roanoke, “Personal Property Tax”, accessed December 22, 2022, https://www.roanokeva.gov/648/Personal-Property-Tax.
18
United States Census, "American Community Survey”, accessed September 2022, https://www.census.gov/acs/www/data/data-tables-and-tools/data-
profiles/.
19 City of Roanoke, “Fiscal Year 2022 Adopted Budget”, accessed December 22, 2022, https://www.roanokeva.gov/2690/FY-2022-Adopted-Budget-
Document.
20
City of Roanoke, “Prepared Food and Beverage (Meals) Tax Sales and Excise Taxes”, accessed December 22, 2022, https://www.roa-
nokeva.gov/224/Prepared-Food-Beverage-Meals-Tax

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household spending is estimated to be $306,530. For the first 11 years of full operations from 2030 to 2040, the annual tax
revenue is estimated to average $334,697 per year, totaling $3.7 million. The estimated tax revenue may change due to
possible future changes in tax rates and inflation.

Figure 4.1: Fiscal Impact Summary of Riverdale (2023-2040)

$400,000

$350,000

$300,000

$250,000

$200,000

$150,000

$100,000

$50,000

$0
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040

Source: Chmura Economics & Analytics

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Appendix: Impact Analysis Glossary

Input-Output Analysis—an examination of business-business and business-consumer economic relationships capturing all
monetary transactions in a given period, allowing one to calculate the effects of a change in an economic activity on the
entire economy (impact analysis).

Direct Impact—economic activity generated by a project or operation. For construction, this represents activity of the
contractor; for operations, this represents activity by tenants of the property.

Overhead—construction inputs not provided by the contractor.

Indirect Impact—secondary economic activity that is generated by a project or operation. An example might be a new
office building generating demand for parking garages.

Induced (Household) Impact—economic activity generated by household income resulting from direct and indirect
impacts.

Ripple Effect—the sum of induced and indirect impacts. In some projects, it is more appropriate to report ripple effects
than indirect and induced impacts separately.

Multiplier—the cumulative impacts of a unit change in economic activity on the entire economy.

Direct Impact Indirect Impact Induced Impact Total

• Economic activity • Secondary • Economic activity
generated by economic activity generated when
ongoing operations generated by workers and
of a business business business suppliers
(typically operations. spend their income Direct
measured by total at retail stores,
revenue or total restaurants, and +
• Example:
operational ex- Landscaping professional Indirect
penditure). companies, office offices. +
supply companies, Induced
• Example: Business etc. • Example: Workers
revenue. spending money at
a gas station.

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