Marina Highlights 2007 0410 - Laserfiche WebLink

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City of San Leandro Marina Lodging Development Page 2 statements reflect potential revenues and expenses associated with ongoing operations; and, 8. Developed an estimate of the cost to construct the recommended developments. Based on this cost estimate, together with our cash flow forecasts, we have assessed the economic feasibility of the recommended developments, including any public participation which may be required to attract private investment. Presented in the following paragraphs is a brief summary of our findings and conclusions. B. CURRENT ECONOMIC CONDITIONS AND THE LODGING INDUSTRY The economic conditions of the San Francisco Bay Area have declined since mid~ 2001, in tandem with the decline in the national economy overall. This drop has had a substantial impact on the economy of the San Francisco Bay Area as technology and tourism, two of the Bay Area's most prominent industries, suffered significant setbacks. In particular in the Bay Area, Silicon Valley companies have been negatively impacted by the continued downturn in technology stock prices and the drop in venture capital funding. This resulted in significant employment reductions, a slowdown in business travel, tighter fiscal policies, and the bankruptcy of more than 530 Internet companies in 2001 alone. The tourism industry was also negatively impacted by the downturn in the economy, but more dramatically by the terrorist attacks on September 11, 2001. This is reflected, for example, in decreased passenger counts at the San Francisco International Airport; the year-to~date June 2002 total passenger count for airport is down 16.7 percent from the same period in 2001. The drop in tourism is also reflected in decreased occupancy levels at hotels throughout the Bay Area. It is expected that the slowdown of the overall economy has reached a level of stabilization at this point in 2002, with some slight growth forecasted to start in late 2003. In the San Francisco Bay Area, recovery and commercial growth is projected to occur from late 2003 throughout 2004, and forward. The San Francisco Bay Area continues to be headquarters to 26 of the nation's leading Fortune 500 companies and continues to be acclaimed for its wealth of high~tech companies, world~c1ass universities (Stanford and Berkeley), and cultural and recreational attractions. In the long~term, the San Francisco Bay Area will remain an intemational business center and a desirable tourist destination. As will be further described in the following text, the developments which we recommend in this report would be open or nearing completion at the point when market recovery is expected to have occurred.