Agenda - 06-03-2008-5b5c - Laserfiche WebLink

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~~ Overview of IMPLAN and Assumptions This report discusses the results of the economic impact analysis of the Buckhorn Village development project. This analysis used a predictive input-output model in IMPLAN to estimate the effect of an increase of investments in Orange County's economy. IlVIPLAN utilizes economic data to estimate the effect of increased expenditures on goods and services and derives the fiscal impact~that will occur during the impact year. The economic data comes from a system of national accounts that was compiled in 2002. These accounts were based on national and county data from the United States Department of Commerce, U.S. Bureau Labor of Statistics, and other federal agencies. All reported estimates reflect changes that will occur in economic activity in Orange County. All monetary estimates are in real terms, or 2008 dollars. The model is based on a few key assumptions. IMPLAN estimated the percentage of goods and labor that is purchased from industries outside of the regian.lMPLAN estimated that approximately 70 percent of construction labor and 40 percent of materials will be purchased from local businesses in Orange County. The percentage of goods and labor that is purchased is based on the national average of regional trade flow. In addition, the model assumed that the remaining portion of construction budget that is allocated for materials will be spent on "famishing" (i.e. Institutional Furnishing). Lastly, all retailers that will occupy the new development fall under the category of general merchandising. Overview of Construction Project Developers of Buckhorn Village plan to develop 900,000 square feet of mixed-use commercial space in Orange County. Construction of the Anchor Tenant space is set to begin in 2009. The budget for the construction phase of the project totals $13 $ million for five years. Most of the budget is allocated to construction of the commercial space ($74.75 million), and the rest will be appropriated for materials ($40.25 million) and off-site development ($23 million).1 This part of the impact analysis quantified the increase in economic activity that results from the construction of the commercial space. Construction Impacts Based on 1MPLAN projections, the labor market in Orange County will benefit greatly from the construction of the commercial space. Table 1 shows the direct and indirect effects on employment in Orange County and elsewhere given the multi-million dollar budget. Both direct and indirect effects show the change in labor due to the impact of construction project, but the former accounts for the changes in the construction industry and the latter accounts for the impact on other local industries. Table 1 below shows the projected number of jobs created during the construction phase. C i These figures are based on estimates provided by East West Partners; 65 percent of budget is dedicated to labor and 35 percent is dedicated to materials.