BBP Financial Model Update
BBP Financial Model Update Board of Directors August 6, 2014
BBP required to be financially self-sustaining Park’s maintenance and operations expenses…
…must be fully offset by revenue generated on-site
2
REVENUE UPDATE: Four revenue sites awarded to date One-time revenue
Recurring revenue (at stabilization) Status
Rev. per year ($M)
OBBP
Awarded
$2.5
OBBP
Awarded
$4
Pier 1
Awarded
$3.3
Pier 1
Awarded
$27
John St.
Awarded
$0.9
John St.
Awarded
$25
Empire Stores
Awarded
$2.8
Empire Stores
Awarded
$31
Other1
Awarded
$1.7
Other1
Awarded
-
$11.2
SUBTOTAL
SUBTOTAL
Status
One-time rev. ($M)
$87
1. “Other” includes concessions, permits, marina, and parking
3
REVENUE UPDATE: Five year revenue forecast Projected recurring revenues ($M)
$12
10.8
11.2
$10 Other
$8
6.8 John St
$6 $4
5.2 Empire Stores
4.2
Pier 1
$2
OBBP
$0 FY14
FY15
FY16
FY17
FY18
$11M in recurring revenue at build-out
$45 $40 $35 $30 $25 $20 $15 $10 $5 $0
Projected one-time revenues ($M) 39
28
John St Empire Stores 11
Pier 1 9
OBBP 0
FY14
FY15
FY16
FY17
FY18
$85M to $90M of one-time revenue
NOTE: “Other” includes concessions, permits, marina, and parking; in “Projected one-time revenues” chart, FY14 represents revenues received from FY10 through FY14
4
EXPENSE UPDATE: BBP has strong track-record of meeting budget Budgeted
Actual
FY11
$3.7M
$3.3M
FY12
$4.3M
$4.4M
FY13
$5.0M
$4.5M
FY14
$6.4M
$6.4M
NOTE: Actual expense figures are derived from BBP audited financial statements. FY14 actual expense figure is in draft as the audit has not yet been completed.
5
EXPENSE UPDATE: Operating expenses largely in line with projections Five year projected opex ($M) $14 $12
10.9
$10
11.6
12.4 Cap reserve
9.3 Maint & ops
$8 $6
6.4
Mgmt & admin
$4 $2 $0 FY14
FY15
FY16
FY17
FY18
- Future park
6
EXPENSE UPDATE: Maritime repair – reactive vs. preventative $100 $90 $80 $70 $60 $50 $40 $30 $20 $10 $0
Preventative approach: Projected expenses ($M)
FY2016 FY2019 FY2022 FY2025 FY2028 FY2031 FY2034 FY2037 FY2040 FY2043 FY2046 FY2049 FY2052 FY2055 FY2058 FY2061 FY2064 FY2067
FY2016 FY2019 FY2022 FY2025 FY2028 FY2031 FY2034 FY2037 FY2040 FY2043 FY2046 FY2049 FY2052 FY2055 FY2058 FY2061 FY2064 FY2067
$100 $90 $80 $70 $60 $50 $40 $30 $20 $10 $0
Reactive approach: Projected expenses ($M)
Total expense of $250M
Total expense of $210M
NOTE: Assumes no inflation; with inflation, traditional approach to cost ~$480M and preventative approach to cost ~$290M
7
Creation of reserve funds to save for future expenses Purpose
Fund level
Maritime reserve
Provide funds for maritime repair work
Target bal. based on maritime lifecycle assessment; min. bal. of $10M
Capital reserve
Provide funds for life-cycle replacement of capital assets
Target bal. based on asset replacement schedule; min. bal. of $1M
Operating reserve
Provide funds for unexpected increases in opex, one-time unbudgeted expenses, and unanticipated loss of funds
Target bal. of 12 to 24 months of operating budget
8
Pier 6 sites projected to fill remaining holes One-time revenue
Recurring revenue (at stabilization) Status
Rev. per year ($M)
OBBP
Awarded
$2.5
OBBP
Awarded
$4
Pier 1
Awarded
$3.3
Pier 1
Awarded
$27
John St.
Awarded
$0.9
John St.
Awarded
$25
Empire Stores
Awarded
$2.8
Empire Stores
Awarded
$31
Other1
Awarded
$1.7
Other1
Awarded
-
$11.2
SUBTOTAL
SUBTOTAL
vs. $12M in opex
90%+ of recurring revenue secured
One-time rev. ($M)
Status
$87 vs. $210M in maritime repair
40%+ of one-time revenue secured
1. “Other” includes concessions, permits, marina, and parking
9
Summary • Without revenue from Pier 6 dev. sites, BBP will fail to meet its financial obligations in 10 to 15 years • Current financial projections are in line with originally conceived financial plan; however, uncertainty exists associated with: o
Future M&O expenses associated with unopened park sections
o
PILOT revenues from development sites
o
Maritime repair expenses over life of the Park
10
Appendix
11
COMPARISION TO APPROVED BUDGETS: One Brooklyn Bridge Park Residential
Recurring
One-time
FY14 budget
FY15 budget
Projected at build-out
$2.8M
$2.2M
$2.5M
Received through FY14
FY15 budget
Projected total
$3.5M
$0M
$3.5M
12
COMPARISION TO APPROVED BUDGETS: Pier 1 Hotel and Residential
Recurring
One-time
FY14 budget
FY15 budget
Projected at build-out
$0.9M
$0.9M
$3.3M
Received through FY14
FY15 budget
Projected total
$6M
$7M
$27M
13
COMPARISION TO APPROVED BUDGETS: John Street Residential
Recurring
One-time
FY14 budget
FY15 budget
Projected at build-out
NA
$10K
$0.9M
Received through FY14
FY15 budget
Projected total
$2M
$18M
$25M
14
COMPARISION TO APPROVED BUDGETS: Empire Stores
Recurring
One-time
FY14 budget
FY15 budget
Projected at build-out
NA
$0.5K
$2.6M
Received through FY14
FY15 budget
Projected total
$29M
$1.5M
$31M
15
BBP required to be financially self-sustaining Park’s maintenance and operations expenses…
…must be fully offset by revenue generated on-site
2
REVENUE UPDATE: Four revenue sites awarded to date One-time revenue
Recurring revenue (at stabilization) Status
Rev. per year ($M)
OBBP
Awarded
$2.5
OBBP
Awarded
$4
Pier 1
Awarded
$3.3
Pier 1
Awarded
$27
John St.
Awarded
$0.9
John St.
Awarded
$25
Empire Stores
Awarded
$2.8
Empire Stores
Awarded
$31
Other1
Awarded
$1.7
Other1
Awarded
-
$11.2
SUBTOTAL
SUBTOTAL
Status
One-time rev. ($M)
$87
1. “Other” includes concessions, permits, marina, and parking
3
REVENUE UPDATE: Five year revenue forecast Projected recurring revenues ($M)
$12
10.8
11.2
$10 Other
$8
6.8 John St
$6 $4
5.2 Empire Stores
4.2
Pier 1
$2
OBBP
$0 FY14
FY15
FY16
FY17
FY18
$11M in recurring revenue at build-out
$45 $40 $35 $30 $25 $20 $15 $10 $5 $0
Projected one-time revenues ($M) 39
28
John St Empire Stores 11
Pier 1 9
OBBP 0
FY14
FY15
FY16
FY17
FY18
$85M to $90M of one-time revenue
NOTE: “Other” includes concessions, permits, marina, and parking; in “Projected one-time revenues” chart, FY14 represents revenues received from FY10 through FY14
4
EXPENSE UPDATE: BBP has strong track-record of meeting budget Budgeted
Actual
FY11
$3.7M
$3.3M
FY12
$4.3M
$4.4M
FY13
$5.0M
$4.5M
FY14
$6.4M
$6.4M
NOTE: Actual expense figures are derived from BBP audited financial statements. FY14 actual expense figure is in draft as the audit has not yet been completed.
5
EXPENSE UPDATE: Operating expenses largely in line with projections Five year projected opex ($M) $14 $12
10.9
$10
11.6
12.4 Cap reserve
9.3 Maint & ops
$8 $6
6.4
Mgmt & admin
$4 $2 $0 FY14
FY15
FY16
FY17
FY18
- Future park
6
EXPENSE UPDATE: Maritime repair – reactive vs. preventative $100 $90 $80 $70 $60 $50 $40 $30 $20 $10 $0
Preventative approach: Projected expenses ($M)
FY2016 FY2019 FY2022 FY2025 FY2028 FY2031 FY2034 FY2037 FY2040 FY2043 FY2046 FY2049 FY2052 FY2055 FY2058 FY2061 FY2064 FY2067
FY2016 FY2019 FY2022 FY2025 FY2028 FY2031 FY2034 FY2037 FY2040 FY2043 FY2046 FY2049 FY2052 FY2055 FY2058 FY2061 FY2064 FY2067
$100 $90 $80 $70 $60 $50 $40 $30 $20 $10 $0
Reactive approach: Projected expenses ($M)
Total expense of $250M
Total expense of $210M
NOTE: Assumes no inflation; with inflation, traditional approach to cost ~$480M and preventative approach to cost ~$290M
7
Creation of reserve funds to save for future expenses Purpose
Fund level
Maritime reserve
Provide funds for maritime repair work
Target bal. based on maritime lifecycle assessment; min. bal. of $10M
Capital reserve
Provide funds for life-cycle replacement of capital assets
Target bal. based on asset replacement schedule; min. bal. of $1M
Operating reserve
Provide funds for unexpected increases in opex, one-time unbudgeted expenses, and unanticipated loss of funds
Target bal. of 12 to 24 months of operating budget
8
Pier 6 sites projected to fill remaining holes One-time revenue
Recurring revenue (at stabilization) Status
Rev. per year ($M)
OBBP
Awarded
$2.5
OBBP
Awarded
$4
Pier 1
Awarded
$3.3
Pier 1
Awarded
$27
John St.
Awarded
$0.9
John St.
Awarded
$25
Empire Stores
Awarded
$2.8
Empire Stores
Awarded
$31
Other1
Awarded
$1.7
Other1
Awarded
-
$11.2
SUBTOTAL
SUBTOTAL
vs. $12M in opex
90%+ of recurring revenue secured
One-time rev. ($M)
Status
$87 vs. $210M in maritime repair
40%+ of one-time revenue secured
1. “Other” includes concessions, permits, marina, and parking
9
Summary • Without revenue from Pier 6 dev. sites, BBP will fail to meet its financial obligations in 10 to 15 years • Current financial projections are in line with originally conceived financial plan; however, uncertainty exists associated with: o
Future M&O expenses associated with unopened park sections
o
PILOT revenues from development sites
o
Maritime repair expenses over life of the Park
10
Appendix
11
COMPARISION TO APPROVED BUDGETS: One Brooklyn Bridge Park Residential
Recurring
One-time
FY14 budget
FY15 budget
Projected at build-out
$2.8M
$2.2M
$2.5M
Received through FY14
FY15 budget
Projected total
$3.5M
$0M
$3.5M
12
COMPARISION TO APPROVED BUDGETS: Pier 1 Hotel and Residential
Recurring
One-time
FY14 budget
FY15 budget
Projected at build-out
$0.9M
$0.9M
$3.3M
Received through FY14
FY15 budget
Projected total
$6M
$7M
$27M
13
COMPARISION TO APPROVED BUDGETS: John Street Residential
Recurring
One-time
FY14 budget
FY15 budget
Projected at build-out
NA
$10K
$0.9M
Received through FY14
FY15 budget
Projected total
$2M
$18M
$25M
14
COMPARISION TO APPROVED BUDGETS: Empire Stores
Recurring
One-time
FY14 budget
FY15 budget
Projected at build-out
NA
$0.5K
$2.6M
Received through FY14
FY15 budget
Projected total
$29M
$1.5M
$31M
15
