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02. Affidavit and Resume of Thomas MullerI_1 RINN�11 The undersigned Thomas Muller, as shown in the attached resume of his background, has extensive professional experience on economic issues related to land use and on the subject of the economic consequences associated with commercial development. On the basis of reviewing various material related to the Special Lease Proposal for Section 36, a state-owned site located in Kalispell, Montana, it is my professional opinion that the site is likely to have several economic consequences for Kalispell and Flathead County. Specifically, one of the adverse economic impacts that should concern Kalispell is the relocation of retail businesses from downtown Kalispell to this site. This would be encouraged by the extremely low lease rates (specified in a letter dated September 8, 2000 to Ms. Jeanne Fairbanks from Hampstead Partners Inc) shown to be 10 cents per square foot, or about $12,000 for a 60 acre site. This low rent, if indicative of the 250 or so acres developable site could encourage businesses, particularly "big box" stores owned nationally, that are currently located downtown to relocate. For example, Wal-Mart is expanding many of its stores by adding supermarkets. Potential relocations of this type could severely damage the long-term economic viability of the downtown area. In addition, new "Big Box" stores not currently in the market could have an additional incentive to be attracted to the site. Because the Flathead County population, and more important, personal income (adjusted for inflation) had shown only limited growth in recent. years, the opportunities for "Big Box" stores already in the market to relocate and expand without damaging the viability of existing retail stores is minimal. This, in my view, is an important issue, since most new retail typically only shifts the location of where people shop and work without increasing net jobs or income in a community. This differs from industry such as high tech that export its products and increases the net number of jobs that pay considerably more than those in retail business. The fact that this property is owned by the State of Montana that is financed by all its taxpayers places an obligation on the State not to implicitly subsidize, by below market leases, one site at a potential cost to existing businesses. Given the potential for adverse economic impacts and alternative economic uses for the site, it would appear prudent and appropriate to have an independent economic analysis. Such an analysis, commonly undertaken would consider existing local market conditions, market rents, and the economic effects of alternative land uses (such as high tech, office retail) on the City of Kalispell. THOMAS MULLER THOMAS MULLER Professional Background Logistics Management Institute, Mc Lean, Virginia In- House Consultant (1986 to present) Principal Research Associate, The Urban Institute, Washington, D.C. (June 1982 - January 1986) Director, Land Use Evaluation, Land use Center, The Urban Institute (1975-1982) Senior Research Associate, The Urban Institute (1970-1975) Head, Urban Systems Projects, System Development Corporation, Falls Church, Virginia - 1968-1970 Research Staff, System Development Corporation, Santa Monica, California - 1959-1968 Teaching Background 1986-1989 - Economics Department, George Mason University (part-time faculty teaching Urban and Regional Economics) Summer 1977 - Economics Department, George Mason University 1970-1971 - Visiting Professor, Industrial College of the Armed Forces (teaching economics and Operations research for the George Washington University) 1968-1970 - Professorial Lecturer, The American University, Washington, D.C. Educational Background 1969 - Ph.D. Managerial Economics, American University, Washington, D.C. 1961-1963 Ph.D. Program, University of California at Los Angeles 1961 MBA Anderson School, University of California at Los Angeles 1960 - M.S. Operations Research Stevens Institute of Technology 1957 - B.A. (Economics), Pennsylvania State University Editorial Functions Co -Editor, Government and Policy (with Robert Bennett, London School of Economics, University of London). Professional journal published quarterly by the Pyon Press, London, Focuses on public sector economic policy issues in the U.S. and other nations (1984-1988). Editorial Board, Planning (Journal of the American Planning Association) - 1980-1983 Thomas Muller has directed or been the author or principal investigator of several books and over one hundred and fifty studies dealing with a wide array of economic and public finance issues. These include research on the economic/fiscal impacts of land development at the project and community level, the economic and fiscal effects of large retail enterprises, the economic and fiscal consequence of immigration and internal migration, regulation, as well as public finance issues, at the national, and local levels. These analyses include jurisdictions in the States of California, Georgia, New York, Vermont, Virginia and Washington. He has published several books and numerous articles in the United States as well as other nations on these and related topics. Dr. Muller's publications are widely cited in leading professional journals and university texts. In addition to his research efforts, he had worked closely with local governments in developing land use strategies, boundary expansion, annexation and consolidation, utility rate structures, revenue sharing, and service provision. He frequently appears as an expert witness in the U.S. Congress and courts on these subjects and his studies have been cited by the U.S. Supreme Court. Dr. Muller is currently a consultant to several State and local governments and to the Logistics Management Institute in Mc Lean, Virginia. He was previously a Principal Research Associate and Co - Director of the Land Use Center at the Urban Institute in Washington DC. Prior to this work, he was head of Urban Research Projects at the Systems Development Corporation in Santa Monica, CA and Falls Church VA. He holds a BA in Economics from Penn State University, An MBA from The Anderson School at UCLA and Ph.D from American University. He has been on the part-time faculty of American and George Mason Universities and co-editor of a professional journal. INTERNATIONAL EXPERIENCE Assignments and Tasks o Financial and economic feasibility analysis of infrastructure projects in Argentina and Brazil (for Inter -American Bank - work performed in Buenos Aires, 1967). o Analyses of education, finance, and taxation structures/mechanisms in Botswana, Lesotho, and Swaziland. Work under contract to A.I.D., with work performed in southern Africa, 1970. o Development of econometric model to project revenues and outlays for the Office of Management and Budget, U.S. Virgin Island (work performed by GFDA, 1991-1992, in Washington, D.C. and St. Thomas, V.I.). o Economic growth plan and analysis for Vieques Island, Commonwealth of Puerto Rico, 1992 (under contract with Office of Economic Adjustment). Lecture Series at Foreign Universities: o Cambridge University, England Augsburg University, Germany IMMIGRATION AND INTERNAL MIGRATION o "The Immigrant Challenge", The Wilson Quarterly, Autumn 1994 o "The Demand for Hispanic Workers in Urban Areas of the United States" in Labor Market Interdependence, Jorge A. Bustamonte, Clark W. Reynolds, and Raul A. Hinojosa Ojeda eds., Stanford University Press, Stanford, CA, 1992. o "Immigration Policy and Economic Growth." Yale Law and Policy Review, Volume 7, 1989. o The Fourth Wave, The Urban Institute Press, 1985. o "The Economic Effects of Recent Immigration" in Clamor at the Gates, Nathan Glazer, ed., ICS Press, San Francisco, 1985. o "Linkages Between Immigration and Internal Migration," Western Regional Science Conference, San Diego, February 1985. o "The Impact of Immigration: Politics and Economic Reality," The American Political Sciences Association Meetings, Washington, D.C., August 1984. o "Urban and Regional Change," Joint Economic Committee, United States Congress, July 19, 1982. o "The Economic and Fiscal Effects of Population Change" in Population Redistribution and Public Policy, Brian J. L. Berry and Lester P. Silverman, eds., National Academy of Sciences. Washington, D.C. 1980. o Immigrants in the American City New York Univerity Press , 1993 "The Urban Household in the 1980s - A Demographic and Economic Perspective," The Urban Institute and the Department of Housing and Urban Development, 1980 o "Effects of Population Redistribution on Public Services and Housing," Hearings of the Joint Economic Committee on Economic Change, May 31, 1978. EXPERT TESTIMONY o Fiscal/Economic Issues--U.S. Congress Dr. Muller frequently testifies on fiscal and economic issues to committees of the United States Senate and House of Representatives. Topics of his testimonies include the causes of urban growth and decline, migration, the cost of public services, and growth in rural areas, as well as effects of various federal policies, regulations, and revenues on cities and regions. The list of committees include the following: Senate Committee on Intergovernmental Relations Joint Economic Committee Committee on Banking, Finance and Urban Affairs Senate Committee on Housing and Urban Affairs Senate Committee on the District of Columbia Select Committee on Population Change Committee on Small Business Expert Witness on Fiscal Issues --Administrative Hearing and the Courts As an expert witness on economic and fiscal issues, Dr. Muller has testified at administrative hearings and federal and lower courts.. Dr. Muller has also testified to the Virginia Commission on Local Government and Virginia courts on annexation, consolidation and taxation issues. BOOKS PROFESSIONAL JOURNALS ARTICLES AND OTHER PUBLICATIONS BY T. MULLER Note: This is a partial listing that includes about one fourth of published material FISCAL ISSUES o "Loudoun County, Virginia, Fiscal Impact Model", prepared for Loudoun County, Virginia, The Government Finance Research Center and META, March 1990. o The Fiscal Impacts of Development and Strategies for Financing Capital Requirements, American Society of Civil Engineers Proceedings, March 1990. o "Developing Defensible Transportation Impact Fees," META Consulting Group, April 1989. o Fiscal Issues of Growth -Issues and Approaches, February 1989 (for Montgomery County, Maryland, Office Planning Policy). o "The Fiscal Impact of Consolidation in Virginia - The Waynesboro Perspective," June 1987. o "Fort Drum, New York, Fiscal Impact Analysis," President's Economic Adjustment Committee (co-author), Washington, D.C., April 1986. o "Stapleton, New York, Homeport Fiscal and Economic Impact Analysis," President's Economic Adjustment Committee, Washington, April 1986. o The Impact of Rapid Growth on Service Costs - An Evaluation in Fairfax County, Virginia, The Urban Institute, 1982. o "Changing Expenditure and Service Demand Patterns of Stressed Cities," in Cities Under Distress, Robert Burchell and David Listokin, eds., Rutgers University Press, 1981. o The Provision and Cost of Public Services in the Appalachian Communities, The Appalachian Regional Commission, December 1981. o "The Urban Household in the 1980s--A Demographic and Economic Perspective," The Urban Institute, February 1970. o "Regional Impact of Federal Tax and Spending Policies (with George Peterson) in Alternatives to Confrontation, Victor L. Arnold, ed., Lexington Books, 1980. o "Federal Solicitude, Local Costs" (with Michael Fix), Regulation, July -August 1980. o "The State Role in Revenue Sharing - The Local Perspective," Hearings of the House Committee on Banking, Finance and Urban Affairs, Subcommittee on the City,may 1979. o "Private Provision of Public Services; An Overview," Co-author, The Urban Institute Paper; May 1978. o "Fiscal Issues in Smaller Growing and Declining Cities," in Problems of Small Cities, Herrington J. Bryce, Ed., Ballinger Publishing Company, 1977. o "Service Costs in the Declining City," in How Cities Can Grow Old Gracefully, Committee on Banking, Finance, and Urban Affairs, Subcommittee on the City, 95th Congress, First Session, December 1977. o America: Metropolitan Decline and Interregional Job Shifts, George Sternlieb, ed., Rutgers University Press, 1976. o "Methods to Determine the Federal Payment to the District of Columbia," Hearings of the House District Subcommittee on Government Operations on H.R. 10217, March 1976. o "Fiscal Issues of Local Growth," Public Management, May 1975. o "Expenditures and Service Demand in the District of Columbia", Hearings of the United States Senate Subcommittee on the District of Columbia, December 1975. o "Fiscal Issues in Metropolitan Growth," The Washington Metropolitan Council of Governments, August 1973. EDUCATION ISSUES o "The Demand for Local and State Services in the 1980s," in The Public Sector, Trudy Miller, ed. John Hopkins University Press, 1982. o "Financing Education and Police Services," in Revitalizing Cities, Herring J. Bryce, ed., Lexington Books, 1979. o Public School Financing: Present Disparities and Fiscal Alternative, The Urban Institute, 1974. o The Financing of School in Minnesota, The Urban Institute, 1974. o The High Cost of Education in Cities, The Urban Institute, 1973. o "Income Redistribution Impact of State Grants to Public Schools - A Case Study," in Transfers in an Urbanizing Economy, Kenneth Boulding, ed., Wadsworth Publishing Co., 1973. o School and Taxes in North Carolina, The Urban Institute, 1973. o Paving for Public Schools, The Urban Institute, 1972. STUDIES RELATED TO GROWTH AND/OR DEVELOPMENT o "A Method for Estimating Local Impacts of Cuts in Defense Spending" Logistics Management Institute February 1993 o "Fiscal Responses to Rapid Growth: Alternative and Limitations," The Urban Institute, April 1981. o "Allocation of Development Costs Between Home Buyers and Taxpayers," presented at the HUD National Conference on Housing Costs, February 1979. o Tax -Exempt Financing in Housing --Who Benefits?" Co-author, presented at the Allied Social Science Association Meeting, December 1979. o "Economic and Fiscal Effects of Rapid Growth," Hearings of the U.S. House of Representatives, Select Committee on Population, June 7, 1978. o "Long -Term Effects of Population Redistribution on Public Services and Housing," Hearings of the Joint Economic on Economic Change, May 31, 1978. o "Environmental Impact Evaluation, Land use Planning, and the Housing Consumer," Co- author, Journal of the American Real Estate and Urban Economics Association, Fall 1977. o "Economic Impacts of Land Development: Employment, Housing and Property Values," The Urban Institute, 1976. o "Issues in Land Use Policies and Housing," in Housing Costs and Housing Needs, A. Greendale, ed., Praeger Publisher, 1976. o The Economic Effects of Annexation: A Second Case Study in Richmond Virginia, The Urban Institute, February 1976. o "Fiscal Impact of Land Development: A critique of Methods and Review of Issues," The Urban Institute, May 1975. o "Environmental Impact Evaluation and Housing Costs," The Urban Institute, November 1975. o "Land Development - Measuring the Impacts," in Management and Control of Growth, Volume III, The Urban Land Institute, 1975. o "Public Resists Private Development Due to High Costs," Mortgage Banker, September 1974. o "Measuring Impacts of Land Development: An Initial Approach," Co-author, The Urban Institute, November 1974. o "Land Use and Fiscal Impacts of the Energy Crisis," Hearings of the United States Senate Subcommittee on Intergovernmental Relations, February 1974. o The Impact of Annexation of City Finances: A Case Study in Richmond Virginia, The Urban Institute, May 1973. o The Fiscal Impact of Residential and Commercial Development A Case Study, in Albermarle County, Virginia, The Urban Institute, December 1972. o Fiscal and Land Use Analysis of Prince George's and Montgomery Countries Urban Systems, Inc., June 1970. GENERAL ECONOMIC STUDIES o The Impact of Reagan Administration Policies on Regional Income and Employment, The Urban Institute, May 1986. o "Costs of Intergovernmental Regulation," Committee on Governmental Affairs, United States Senate, May 14, 1985. o Regional Impacts in The Reagan Experiment, John Palmer and Isabel Sawhill, eds., The Urban Institute Press, 1982. o "Deregulation and Transfer Policy: The Recent USA Experience," Augsburg, 1980, Dunckes and Humblot (Berlin), 1981. o "Regional Malls and Central City Regional Sales, An Overview," in Shopping Centers U.S.A., James W. Hughes and George Sternlieb, eds., Center for Urban Policy Research, Rutgers University, 1981. o "The Impact of Selected Federal Actions on Municipal Outlays" (co-author), Joint Economic Committee, Congress of the United States, July 1979. (Reissued in Special Study on Economic Change, Volume 5, JEC, December 1980.) o "Shopping Malls and CBD Activity --A Survey of Studies and Their Urban Policy Implications," Co-author, The Urban Institute, June 1979. o "Is the Urban Crisis Over?" Hearings of the Subcommittee on Fiscal and Intergovernmental Policy of the Joint Economic Committee, March 1979. o "Estimating the Impact of Regulations on Housing Costs: Study Design," Co-author, The Urban Institute, February 1979. o "The Fiscal Impact of Regional Malls on Central Business Districts in Small Cities," The Urban Institute, December 1979. o "Industrial Innovation: The State and Local Role," Co-author, The Urban Institute, December 1978. o "Central City Business Retention: Jobs, Taxes and Investment Trends," U.S. Department of Commerce Urban Roundtable, June 1978. o "Estimating Induced Employment --An Income Approach, Co-author, Urban Institute Working Paper, February 1978. o The Impact of Beltways on Central Business Districts, The Urban Institute, April 1978. o "Anticipatory Research: A Researcher's Perspective." Human Services Management: Priorities for Research, International City Management Association, 1978. o "Venture Capital and Central City Job Decline, U.S. Department of Commerce Urban Roundtable, October 1977. o "Regional Economic Patterns--Northeast-South Differentials in the United States," International Symposium on Regional Growth and Decline, University of Augsburg, West Germany, June 1976 (German National Science Foundation). o "Regional Shifts Affecting the Fiscal Posture of Cities and States," Hearings of the Joint Economic Committee on the Fiscal Outlook of State and Local Governments, January 22, 1976. o "Urban Growth and Decline," Challenge, May/June 1976. o "Growing and Declining Urban Areas: A Fiscal Comparison," The Urban Institute, November 1975.