Nov 5 2009
Revenue Generation, Job Creation and Increased Visitor Spending Would Create Positive Regional Economic Ripple Effect
The proposed Menlo Gateway project will provide a significant economic boost not only to the City of Menlo Park but also to the local regional economy, according to a new economic study released today by Bohannon Development Company. Immediate economic activity from the construction of the project plus longer term benefits from new job creation and spending by employees and visitors are expected to create an economic ripple effect that will deliver on average an additional $0.55 to the local regional economy for every direct dollar spent.
The project’s direct economic benefits include $265 million to be spent on construction, $13.2 million in one-time impact fees to the City of Menlo Park, plus $436 million annually in gross business activity on-site, and $12.3 million per year in new employee and visitor spending in Menlo Park. In addition, another .68 jobs would be created on average throughout the region for every direct job created by the project.
In the short term, the study found that the project’s direct $265 million construction budget is expected to generate an additional $142 million in economic activity across Santa Clara and San Mateo counties. Beyond that, annual business operations – the activities of the on-site businesses and tenants – would generate $256 million in additional economic stimulus for the local San Mateo and Santa Clara counties’ regional economies.
Menlo Gateway will also have a significant impact on employment and job creation in the region. It will increase the number of permanent jobs associated with the site from approximately 500 today to about 2,300. There also would be from 1,650 to 1,900 temporary construction jobs created. For every two on-site construction jobs, one other construction-related job will be created. Menlo Gateway would indirectly create 1,560 new jobs across the local region from project operations, as well as 150 jobs from city impact fees.
“In addition to a significant revenue increase for the City of Menlo Park, the Menlo Gateway project will deliver region-wide financial benefits as well,” said Joanne Brion of Brion Associates, the Bay Area urban planning consulting firm that conducted the fiscal study. “New jobs, construction and increased retail spending resulting from the Menlo Gateway project will have a positive ripple effect to the economies of both San Mateo and Santa Clara counties.”
According to a fiscal analysis conducted recently for the project, the City of Menlo Park would receive a total of $2.2 million per year in revenue from Menlo Gateway. Of that total, approximately $1.5 million or 68 percent, would be generated by the hotel tax. An additional $400,000 would come from property taxes, and the remainder from business license and other fees. With new city services expected to cost $500,000 per year, the result is a net benefit is $1.6 million per year to the Menlo Park General Fund, which funds the majority of city services, such as public safety, parks, recreation and infrastructure. A separate, independent study commissioned by the City of Menlo Park arrived at conclusions that closely aligned with the Bohannon fiscal study.
Menlo Park will also benefit from some $13.2 million in impact fees for improvements such as affordable housing, sewer and water, transportation and parks.
“The Menlo Gateway project would be a welcome boost to city services and the local economy,” said David Bohannon, senior vice president, Bohannon Development Company. “It is critical that we quickly rebuild our economy on a long-lasting foundation, and Menlo Gateway would represent a huge step in that direction.”
Source: http://www.bohannondevelopment.com/