Business Case MARCH 9, 2017 FINAL BUSINESS CASE Table of Contents EXECUTIVE SUMMARY .................................................................................................................... I 1.1 RECOMMENDATIONS ....................................................................................................... II ABBREVIATIONS ............................................................................................................................ III GLOSSARY ......................................................................................................................................V 1.0 INTRODUCTION .................................................................................................................. 1 1.1 PROJECT SCOPE................................................................................................................ 1 1.1.1 Subsequent Considerations ...........................................................................2 1.2 GOALS AND OBJECTIVES ................................................................................................. 2 1.3 STAKEHOLDER CONSULTATI ON........................................................................................ 3 2.0 PROJECT PROCESS ............................................................................................................ 4 2.1 ANALYSIS FRAMEWORK .................................................................................................... 4 2.2 DEVELOPMENT POTENTIAL STUDY.................................................................................... 4 3.0 ALTERNATIVES .................................................................................................................... 5 3.1 GROWTH SCENARIOS ....................................................................................................... 6 3.1.1 Scenario 1–Low ................................................................................................6 3.1.2 Scenario 2–Medium.........................................................................................6 3.1.3 Scenario 3–High ...............................................................................................6 3.1.4 Summary of Options ........................................................................................7 4.0 ANALYSIS OF GROWTH SCENARIOS ................................................................................ 8 4.1 EVALUATION METHODOLOGY ........................................................................................ 8 4.1.1 Triple Bottom Line Analysis ..............................................................................8 4.1.2 PairWise Comparison ......................................................................................8 4.2 EVALUATION CRITERI A ...................................................................................................... 9 4.2.1 Social Criteria ...................................................................................................9 4.2.2 Environmental Criteria...................................................................................10 4.2.3 Economic Criteria ..........................................................................................10 5.0 QUANTITATIVE AND QUALITATIVE EVALUATION........................................................... 11 5.1 PAIRWISE CRITERIA WEIGHTING ..................................................................................... 11 5.1.1 PairWise Results–Social Criteria ....................................................................11 5.1.2 PairWise Results – Environmental Criteria ...................................................12 5.1.3 PairWise Results – Economic Criteria ...........................................................13 5.2 OPTION SCORING ........................................................................................................... 13 5.2.1 Social Scoring .................................................................................................14 5.2.2 Environment Scoring .....................................................................................14 5.2.3 Economic Scoring..........................................................................................15 5.3 EVALUATION SUMMARY ................................................................................................. 15 BUSINESS CASE 6.0 TRIPLE BOTTOM LINE SUMMARY ..................................................................................... 16 7.0 FINANCIAL ANALYSIS...................................................................................................... 17 7.1 METHODOLOGY .............................................................................................................. 17 7.2 ASSUMPTIONS .................................................................................................................. 17 7.3 ANALYSIS .......................................................................................................................... 18 8.0 RISKS ................................................................................................................................. 19 8.1 PRELIMINARY RISK ANALYSIS .......................................................................................... 19 8.2 RI SKS I N FU TU RE KEATING AREA DEVELOPMENT .......................................................... 19 9.0 CONCLUSION .................................................................................................................. 20 9.1 INTERCHANGE DEVELOPMENT ...................................................................................... 20 9.2 OTHER CONSIDERATIONS ............................................................................................... 21 9.3 RECOMMENDATIONS ..................................................................................................... 22 LIST OF TABLES Table 2-1 Development Potential Summary ................................................................ 5 Table 3-1 Summary of Scenarios.................................................................................... 7 Table 7-1 Summary Financial Analysis ........................................................................ 18 Table 8-1 Scale of Risks.................................................................................................. 19 Table 8-2 Risks ................................................................................................................. 19 LIST OF FIGURES Figure 1–1 Project Context ............................................................................................... 1 LIST OF APPENDICES APPENDIX A SITE ECONOMIC LTD. KEATING BUSINESS CORRIDOR ANALYSIS DISTRICT OF CENTRAL SAANICH, APRIL 2016 ............................................A.1 APPENDIX B DEVELOPMENT POTENTIAL ANALYSIS KBD ................................................. B.1 APPENDIX C TRIPLE BOTTOM LINE EVALUATION ............................................................. C.1 APPENDIX D DETAILED FINANCIAL ANALYSIS..................................................................D.1 BUSINESS CASE Executive Summary Building on community and business input and outcomes of the analysis prepared by Stantec Consulting Ltd. (Stantec), it can be concluded that there is an opportunity to take advantage of the near and long term demands of industrial land needs on Vancouver Island and from the mainland. However, fiscal and economic analysis indicates that there is a clear limit on what can be financially invested to stimulate growth and still maintain a positive return on the investment over the next thirty years. While the construction of an interchange would most likely address traffic, safety, and logistical challenges that face the Keating Business District (KBD) today, it is likely that the Ministry of Transportation and Infrastructure (MOTI) will continue to work with the District of Central Saanich (DCS)to identify intermediate traffic and transportation solutions for the existing network. This business case is intended to lay the foundation for both the DCS and MOTI to continue to work on intermediate solutions, that are aligned with the objective of maintaining the industrial employment lands and working within an economic window of opportunities that are present from dwindling industrial land supplies on Vancouver Island and the mainland. This business case is a supporting document for a Keating Business District Implementation Plan, which identifies near and long term strategies and recommended actions that are recommended. Several key issues affecting both Vancouver Island and the Mainland illustrate the need to develop and maintain Industrial employment land: • A shortage of zoned and serviced industrial land. There is an acute lack of well-located industrial lands within the entire region. Given their land-intensive nature, industrial activities will play an imperative role in the development of employment lands. • The increase in demand for lower intensity, storage and distribution warehousing. The goods handling industry has seen significant growth while most other heavy industry employment sectors have seen low growth. This use is not an ideal employment generator as it offers relatively few jobs per acre; to address this, the KBD absorption scenarios contemplate a balance of warehouse and flex/light industrial uses, taking advantage of market trends and allowing diversity in the development area. • There’s been