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PROJECTED FISCAL IMPACTS OF THE PROPOSED REDEVELOPMENT OF THE

HONEYWELL MORRIS TOWNSHIP HEADQUARTERS CAMPUS

Prepared by

Biggins Lacy Shapiro & Company

Princeton, New Jersey

Revised August 29, 2012

Projected Revenues & CostsCURRENT PLANNED

Assessed Valuation: $64,900,000 $228,000,000

Annual Tax Revenues Municipal Property Tax Revenues

School District Property Tax RevenuesTotal Tax Revenues

$400,000$915,000

$1,315,000

$1,407,000$3,213,000$4,620,000

Incremental Annual Tax RevenuesIncremental Municipal Revenues

Incremental School District RevenuesTotal Incremental Tax Revenues

NA $1,007,000$2,298,000$3,305,000

Incremental Annual CostsIncremental Municipal Costs

Incremental School District CostsTotal Incremental Costs

NA $271,000$1,166,000$1,437,000

Incremental Annual Net BenefitTo Morris Township

To Morris School DistrictTotal Incremental Annual Net Benefit

NA $735,000$1,132,000$1,867,000

Non-recurring Permit & Fee Revenues Permit/Development Fees: NA $1,634,000

Projections are rounded

1

Derivation of Municipal Revenues

Assessed Valuation by Product Type

User Type No.

Units Size (SF) Market Value (SF/Unit )

Total Market Value

Equalization Rate Assessed Value Municipal Tax

Rate/100Municipal

Taxes

Honeywell NA 558,156 $176.80/SF $98,682,884 68.09% $67,193,176 $0.617 $414,582

Service Retail NA 12,500 $175.00/SF $2,187,500 68.09% $1,489,469 $0.617 $9,190

New Office NA 322,500 $325.00/SF $104,812,500 68.09% $71,366,831 $0.617 $440,333

Townhomes 235 512,600 $550,000/unit $129,250,000 68.09% $88,006,325 $0.617 $542,999

TOTAL 1,405,756 $334,932,884 $228,055,801 $1,407,104

2

Derivation of Municipal Costs (Excluding Schools)

3

Derivation of School Revenues and Costs

Property Use Increase in Ratable Base

Increase in School Apportionment

Formula (%)

Additional Tax Levy (annual)

Incremental Tax Revenues to the School District

(annual)

Net Benefit (annual)

Development Plan $163.2 million 0.94% $1.17 million $2.30 million $1.13 million

Taxpayer Perspective

Property Use Number of New Units

Additional Public School

Children *

Cost per Student**

Total Additional

Cost (annual)***

Incremental Tax Revenues to the School District

(annual)

Net Benefit (annual)

Development Plan 235 38 $15,775 $602,408 $2.30 million $1.69 million

Board of Ed Perspective

* Per Rutgers University Center for Urban Policy Research Study. Listokin, D. (2006). “Who Lives in New Jersey Housing? A Quick Guide to New Jersey Residential Demographic Multipliers.”

** Per pupil expenditure estimate based on NJ Department of Education report: Comparative Pupil Expenditures 2011. *** Rounded per Rutgers multipliers .

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Other Revenue and Cost Key Assumptions

(1) Estimated capital investment of $99.6 million to complete demolition, abatement and site work, renovate building and furnish space, etc.(2) Based on Rutgers University Center for Urban Policy Research Study. Listokin, D. (2006). “Who Lives in New Jersey Housing? A Quick Guide t o New Jersey

Residential Demographic Multipliers. “ Multipliers are as follows: 1.914 for 2BR units and 2.444 for 3BR units.(3) The number of jobs is based on the proposed square footage as compiled by the NJ Department of Community Affairs Standards - Exhibit B, as follows: a

2.8 ratio for Class A Office and 1.7 ratio for other categories including Retail establishments.(4) See next page. Per Rutgers University Center for Urban Policy Research Study. Listokin, D. (2006). “Who Lives in New Jersey Housing? A Quick Guide t o New

Jersey Residential Demographic Multipliers. “ Projections are rounded. (5) Per pupil expenditure estimate based on NJ Department of Education report: Comparative Pupil Expenditures 2011Report.

CURRENT PLANNED

Development PlanHoneywell Retained Space (SF)

Office (SF)Retail (SF)

Residential (SF)Total SF

Amount of Honeywell Space to be Demolished (SF)

Dwelling Units

1,156,182NANANA

1,156,182

NA

NA

558,156 (1)322,500 12,500512,600

1,405,756

500,000

235 (50% 3BR/50 % 2BR)

Impact on Municipal Services Number of New Residents (2)

Number of New Workers (3) NANA

512924

Impact on School District Finances (Taxpayer Perspective)Increase in Ratable Base

Increase in Apportionment FormulaNANA

$163,155,8010.94%

Impact on School District Finances (Board of Education Perspective)Additional Public School Children (4)

Cost per Student (5)NANA

38$15,775

5

Public School Children Generation (From Rutgers CUPR study)

Townhouse Type No. Of Homes

Average Price

Elementary: K-6 Middle School: 7-9 High School: 10-12TOTALChildren per

Unit*No. of

ChildrenChildren per

Unit*No. of

ChildrenChildren per Unit*

No. of Children

2-Bedrooms 117 $550,000 0.05 6 0.015 2 0.016 2 103-Bedrooms 118 $550,000 0.13 15 0.048 5 0.066 8 28

Sub Total 235 21 7 10 38

6

* Based on 2006 Rutgers CUPR Study