A lower-density version of the Tidewater Logistics Center multi-warehouse complex proposed for the outskirts of Windsor is projected to generate several hundred fewer jobs and at least $1 million less in local tax revenue than the original concept.

A conceptual plan Isle of Wight County supervisors voted 4-1 last year to reject had called for five warehouses totaling 1.2 million square feet. Isle of Wight’s Economic Development Authority remains under contract to sell an EDA-owned 83-acre parcel fronting the four-lane Route 460 to Meridian Property Purchaser LLC, a subsidiary of the project’s Bethesda, Maryland-based developer, The Meridian Group.

Isle of Wight’s Planning Commission split 4-3 in January to recommend approval of a revised application by Meridian to rezone 154 acres of farmland and forestry for industrial use. The plan shows four warehouses totaling 726,000 square feet and a 17.9-acre public park in place of what would have been the fifth. The acreage includes the EDA-owned land and two non-EDA parcels owned by Hollowell Holdings LLC.

A 2023 study Minneapolis-based Hickey and Associates prepared for Meridian had estimated the five-warehouse version would have generated just under $100 million by 2033, or roughly $9.5 million annually, in property taxes.

The Hickey study had estimated the five-warehouse concept would also generate $21.1 million in state and local sales tax revenue, $111.5 million in state income tax revenue and 5,198 temporary and permanent jobs for a $146 million direct and $2.7 billion indirect 10-year economic impact.

The Hickey study didn’t specify whether the property tax estimate referred to real estate, personal property or machinery and tools taxes – or some combination of the three – but listed the county’s then-current real estate tax rate of 71 cents per $100 in assessed value, and a then-average home price of just under $300,000, among its data sources.

A far more conservative fiscal impact analysis by the Hampton Roads Alliance, a regional economic development organization, had estimated $8.7 million to $9.5 million over 10 years from the three local tax sources based on Meridian’s original concept.

Despite the county having raised its real estate tax rate to 73 cents per $100 last year, a Jan. 22 memorandum from Isle of Wight County Commissioner of the Revenue Gerald Gwaltney to Economic Development Director Kristi Sutphin estimates Meridian’s revised four-warehouse concept will produce a 10-year total of $7.7 million through 2035 from a combination of the three local tax sources.

“Since no specific entity has been selected to be built at the location, this revenue estimate is based on the average warehouse and manufacturing properties in Isle of Wight County,” Gwaltney’s memo states.

That’s a half-million more than the $7.2 million the Alliance estimated based on the current proposal. The Alliance estimates its revised figure breaks down to $3.8 million in real estate tax revenue, $754,000 in personal property or car taxes, and $2.6 million in machinery and tools taxes, or $840,000 annually from all three sources.

“There are two main differences between the original Hickey analysis and the current Hampton Roads Alliance analysis,” Sutphin said. “First, the Hickey analysis is an economic impact analysis, which provides a more holistic view of the proposed project’s impact and not just the property and real estate tax revenue generated from the development itself as in the Alliance fiscal impact analysis. The Hickey analysis makes assumptions about employee wages and property taxes they might pay to the county, assuming they live in the county. It also includes sales tax revenues assuming the development is buying materials locally, which is not likely and impossible to estimate.”

Sutphin said the Hickey analysis had also been based on the incorrect assumption that everything would be constructed, and all positions filled, by 2024.

“The Alliance worked with the developer on a more realistic construction timeline for when buildings would be constructed and occupied and calculated the tax revenues accordingly in its fiscal analysis,” Sutphin said.

Meridian’s four-warehouse concept is now expected to generate between 250 and 500 new jobs, down from the 1,200 permanent full- and part-time positions the Hickey study had estimated.

The Hickey study states it used the U.S. Bureau of Economic Analysis’ Regional Input-Output Modeling System, or RIMS II, to calculate its original job creation estimates, which include direct hires by the tenants of the warehouses and indirect jobs that result from the wages and benefits paid to direct employees, the annual purchase of goods and services, and investment in personal property and facilities.

“In my experience, these models tend to overestimate those numbers,” Sutphin said. “There are many factors to job creation. We don’t know yet what the mix between manufacturing and warehouse/distribution tenants will be. Manufacturers tend to hire more employees than warehouse/distribution uses. It also depends on the type of business and how much automation is used.”

The Alliance fiscal impact analysis “provides a very conservative estimate solely based on real estate and property tax revenue generated by the development only,” Sutphin said.