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Independent review finds positive net present value but a funding gap for Boca downtown P3
Summary
PFM's independent fiscal analysis presented to the council showed a projected 99‑year net present value of about $138.2 million and estimated project proceeds of roughly $114 million, while also identifying a preliminary funding gap for public improvements that staff said could be met with a mix of CRA bonds and other city sources.
The council heard an independent fiscal analysis from PFM Group that examined economic and fiscal impacts of the proposed downtown campus public‑private partnership and the related city public improvements.
Jim Zervos, deputy city manager and CFO, said the city contracted PFM to stress‑test developer figures and provide a comprehensive fiscal review beyond prior gross‑revenue estimates. "PFM provided an independent and comprehensive fiscal analysis that meets the requirements under Florida Statute 2 55 pertaining to public private partnerships," Zervos said.
PFM summarized its focus on the "Scenario 4" development program and its key findings: projected full‑build taxable value over 99 years of more than $11.3 billion; an NPV to the city of roughly $138.2 million under PFM’s assumptions; and an estimate that project proceeds available for financing public improvements could amount to about $114 million in the first 30‑year financing window. Kevin Peltzler of PFM stated their work estimated the developer’s internal rate of return at about 20%, which PFM said is within a typical market range for a project of this scale.
PFM also reported it excluded uncertain revenues — such as percentage rent or transfer fees — from its conservative financing assumptions because their timing and amounts are not reliably predictable for bond sizing. Peltzler told the council PFM used a 5% discount rate for the analysis while noting that CBRE had used 4.5% in other work; PFM said its choice reflected a conservative view of risk to city cash flows.
Staff and PFM emphasized that the numbers are preliminary and that the financing plan assumes a mix of project proceeds and other city funding options to close a funding gap staff estimated at the time to be approximately $87 million. Zervos outlined potential sources including CRA bonding capacity, sale proceeds from the golf course and existing CRA cash reserves as illustrative options that would not require an immediate tax increase.
PFM told the council it had corrected a slide typo discovered the previous day and rechecked its workpapers; it said totals were otherwise accurate to its knowledge. Council members pressed PFM and staff on assumptions, including discount rates, inclusion of certain revenues, and the city’s control over public‑improvement costs.
PFM’s presentation and the subsequent council questions framed much of the public debate that followed during a long public‑comment period.
