Greater Cleveland Partnership Opportunity Corridormedia.cleveland.com/plain_dealer_metro/other/Allegro... · 2016-11-08 · Project Objectives • Evaluate the potential economic

Allegro Realty Advisors, Ltd.

Final Deliverable

September 30, 2011(including Steering Committee Presentation Tables)

Greater Cleveland PartnershipOpportunity CorridorHigh-level Land Use Analysis &Economic Impact Analysis

Introduction

Project Objectives

• Evaluate the potential economic benefits of the planned Opportunity Corridor in support of GCP’s cost-benefit analysis to be conducted for the Ohio Department of Transportation and the Federal Convenience Administration.

• Collect information to understand and make projections about three Sites (i.e., potential land supply) that correlate with the three sections (Eastern, Central and Western) of the Opportunity Corridor identified by ODOT, HNTB and GCP.

• The project was organized in two phases as follows:

– Phase 1: High-level Land Use Analysis – gather and apply existing information about the physical, economic and social elements of the Opportunity Corridor Study Area and the three potential areas of land supply.

– Phase 2: Economic Impact Analysis – based on land use analysis findings, develop and apply input assumptions into economic impact analysis to derive economic impact projections.

1

Introduction

Scope of Services

• Phase 1: High-level Land Use Analysis

– Asset Assessment

– Market Assessment

– Community Assessment

• Phase 1 output was converted into Phase 2 input: – land supply, absorption rates, building supply, employee counts

• Phase 2: Economic Impact Analysis

– Employment (Permanent and Temporary Jobs)

– Payroll (Labor Income)

– Production Output (Value of Goods and Services Produced)

– Spillover Economic Impact (Multiplier Effect)

– Tax Revenues

2

IntroductionProject Study Area & Socioeconomic Analysis Area

3

Executive Summary

Phase 1: High-level Land Use Analysis

• Allegro worked in collaboration with HNTB (civil/traffic engineering firm engaged by ODOT) and City Architecture (architectural/planning firm engaged by GCP and the City of Cleveland) to share information about the planned infrastructure and real estate development opportunities spurred by the Opportunity Corridor initiative

• Based on varying degrees of available information for different land uses, Allegro applied methodologies to analyze historical absorption and project future demand for industrial space, office / laboratory / support retail space, and convenience retail along the boulevard

– Industrial absorption projections – Allegro identified historical regional absorption trends, projected future trends and applied a “fair share” to the Socioeconomic Analysis Area

– Office / Lab / Support Retail projections – Allegro conducted case studies and interviews and projected future trends for: 1) multi-tenant/speculative office space in the Socioeconomic Analysis Area, and 2) multi-tenant lab buildings in the broader Greater Cleveland market

– Convenience retail projections – Allegro projected convenience retail trends based on the inherent demand for services at major intersections of the boulevard

• Land use and absorption/demand findings were applied as core assumptions for the Phase 2 economic impact analysis 4

Executive Summary

Phase 2: Economic Impact Analysis

• Allegro utilized IMPLAN, an industry recognized economic impact model, to conduct Input-Output Analysis, resulting in projections of economic and fiscal impact of potential land development and business attraction spurred by the proposed Opportunity Corridor

• After projecting land uses, absorption rates and space/employee ratios and applying these assumptions to IMPLAN, Allegro generated direct, indirect and induced effects, including employment, payroll, production output and tax revenues

– Total figures (direct, indirect and induced effects) for the Cleveland-Akron CSA through 2029 include:

• Permanent Jobs: 2,339

• Temporary Jobs: 3,368

• Payroll: $1.1 billion

• Production Output: $3.8 billion

• While this analysis evaluates the economic impact of commercial/industrial development along the boulevard, it does not address the economic impact of: the road construction, expansion of existing institutions, intraregional synergies, health care or cultural visits, etc.

5

Phase 1:High-level Land Use Analysis


Highest and “Most Appropriate” Use

• Allegro distinguishes the Highest and “Most Appropriate” Use from the conventional concept of Highest and Best Use

– Highest and best use primarily considers market economics with a focus on the maximization of investor returns

– In contrast, highest and most appropriate use considers market-based investor returns, but also incorporates public sector objectives, such as economic impact, quality of life and social implications

• Allegro’s land use analysis methodology recognizes that any development project requires the coordination of the following three elements:

– Physical (site characteristics, constraints and environment)

– Financial (real estate economics, economic/fiscal impact and private/public financial sources)

– Social (governmental objectives and community relations)

• Accordingly, Phase 1 of this study is organized in three components: Asset Assessment, Market Assessment and Community Assessment, with each assessment respectively evaluating the three development elements described above

• The results of this phase include identification of physical land capacity along the Opportunity Corridor, indication of the most appropriate land uses, and determination of projected absorption rates to be used as core assumptions in Phase 2

7


Asset Assessment

• Land supply estimates primarily based on City Architecture’s planning work suggest three areas of potential commercial/industrial land supply as follows:

– Western Section

• 80 to 90 acres – limited environmental concerns*

– Central Section

• 15 to 75 acres – varying degrees of environmental concerns*

– Eastern Section

• 30 to 40 acres – limited environmental concerns*

• Assumptions based on “shovel ready” sites being available in phases from 2015 through 2039, aligned with ODOT and HNTB’s traffic planning timeline, to meet the supply assumptions and absorption findings

• Land assemblage will be a separate initiative, occurring prior to or simultaneous with right-of-way acquisition

• Planning is required to determine land assemblage strategy, ownership entity/acquisition vehicle, timing and public communications

8*Based on Brownfields Study being conducted by the City of Cleveland and City Architecture


Market Assessment

• Land Uses in Western and Central Sections

– Distribution/Warehousing (e.g., medical supplies and equipment, food products)

– Light Manufacturing/Food Production (e.g., may include wide variety of industries including biomedical, medical devices, medical supplies, food processing and traditional Northeast Ohio manufacturing sectors)

• Land Uses in Eastern Section

– Research & Development Laboratories (e.g., stage two business accelerator facilities to mature biomedical company facilities)

– General Office Uses (e.g., creative class professionals, medical/pharma sales offices, juvenile criminal legal practices, non-profit entities)

– Support Retail Uses based on establishment of critical mass of office and R&D uses

• Convenience Retail Land Uses at major intersections throughout the corridor

Sources: City of Cleveland plans, CDC plans, stakeholder interviews 9


Community Assessment

• CDC Community Plan Review and Interviews

– Largely focused on residential and retail development to support the neighborhoods

– Opportunity Corridor related development should be focused on job creation, but not retail that would compete with neighborhood retail

– Provided insights into neighborhood institutions that could be leveraged for development

– Suggested that road infrastructure should be built with the least negative impact on neighborhood connectivity to avoid creating “flyover” territory

• Desired Employment Types

– Broad spectrum of jobs from GED to PhD

– Job opportunities linked to local neighborhoods

– Retain and support expansion of local employers

Sources: CDC stakeholder interviews 10

Phase 1: Cleveland Market Area

11

Greater Cleveland Office and Industrial Market Boundaries

Source: CoStar

Includes all or portions of:• Cuyahoga County• Lake County• Geauga County• Portage County• Summit County• Medina County• Lorain County

Economic and Demographic Conditions

Economic Conditions

• National, State and Local Comparisons

• Economic Cycles & Real Estate Markets

Sources: U.S. Census Bureau (population and income) and Bureau of Labor Statistics (unemployment rates)12

Geography Population 2010

Population Change2000 - 2010

Median Household Income 2010

Unemployment Rates June 2011

U.S. 308,745,539 9.7% $50,221 9.2%

Ohio 11,536,504 1.6% $45,467 8.8%

CLE/AKR CSA 2,881,937 (2.2%) n/a 8.8%

CLE MSA 2,077,240 (3.3%) n/a 8.3%

Cuyahoga County 1,280,122 (8.2%) $40,254 8.8%

City of Cleveland 396,815 (17.1%) $24,687 9.6%

Office Market Conditions

U.S. – 2011 Q2

• Office vacancy rate between 17.7% and 18.1%

• Vacancy above the equilibrium level of 12-14%; provides an advantage to tenants

• Leasing activity increasing with East Coast markets leading recovery

• Less sublease space in this real estate downturn which keeps vacancy rates from reaching record highs; however, “slack” exists in the market where companies have unused space

Cleveland – 2011 Q2

• Office vacancy rate approximately 23.5%

• Large blocks projected to hit the market in the next few years due to tenants relocating to newer product

• Negative absorption (-475,702 SF first half of 2011), vacancy increased to 12.9% (2011 Q2)

Sources: Combination of market data providers and commercial real estate brokerages, 2011 Q213

Industrial Market Conditions

U.S. – 2011 Q2

• Industrial vacancy rate declined to 10.1%

• Minimal new construction and tenant-favorable rents will drive the vacancy rate lower through the end of the year

• Larger, modern warehouses will enter the market and benefit from companies increasing centralization and supply chain consolidation

• Transportation modes are shifting to new geographic areas

• Companies reduced inventory levels when the recession hit, now inventory levels are increasing

• Historically low levels of construction will help ease the vacancy and increase demand on existing product

Cleveland – 2011 Q2

• Industrial vacancy rate of 9.7%

• Build-to-suit activity is projected to increase since newer product (built since 1990) is just over one percent of the overall vacancy

• Manufacturing is the leading sector in the economy

• Positive absorption (220,834 SF first half of 2011)

Sources: Combination of market data providers and commercial real estate brokerages, 2011 Q214

15

Industrial Office

Industrial & Office Vacancy Rates

16

Cleveland Market

Industrial

Industrial & Office Construction TrendsCleveland Market

Office

Industrial & Office Absorption TrendsCleveland Market

Industrial

Cleveland Market

Office

17


Opportunity Corridor “Fair Share” Analysis – Industrial Uses

• Cleveland Industrial Market (as defined by CoStar)

– Total Industrial Supply – 414M to 420M SF

– City of Cleveland Supply – 90M to 99MM SF (22% to 24% Share)

– Study Area Supply – 9 to 9.5M SF (2% to 2.25% Share of Total Market, ~10% of City)

• Fair Share Adjustments

– Location Advantages

• Proximity to Interstate Convenience Hub

• Limited Shovel Ready Sites available in the City over the past half century

• Proximity to CBD Corporations and University Circle Institutions

• Central to available labor force

• Strong public transit accessibility

– Location Disadvantages

• Employer/Employee Commutes and Neighborhood Perceptions

• Brownfield stigma, where relevant

• 10,000 to 25,000 vacant and abandoned properties in the City of Cleveland and 1,030 acres of vacant industrial properties without buildings which is 3% of the City’s functional land (Source: National Vacant Properties Campaign, June 2005)

• Adjusted Fair Share:

– 15% of City of Cleveland supply

– 3.65% of Cleveland Market Industrial Supply 18


Opportunity Corridor “Fair Share” Analysis – Office/Laboratory Uses

• General Cleveland office market supply, absorption rates and conditions considered

• Case study approach utilized due to a lack of publicly available information on multi-tenant/speculative office space in the Study Area and multi-tenant lab buildings in the broader Greater Cleveland market

• Over the past 25 years (looking backwards from 2015), approximately 250,000 to 300,000 SF of multi-tenant office and laboratory space will have been absorbed in the University Circle and Midtown Cleveland areas (most relevant to the Eastern Section)

• Interviews conducted and five projects analyzed: Global Cardiovascular Innovation Center, BioEnterprise, Baker Electric Building, Midtown Innovation Center and Midtown Technology Park (which include: Stage 1 Incubators, Stage 2 Accelerators, Stage 3+ Maturing Company Facilities)

• Additional interviews conducted with City of Cleveland, Case Western Reserve University, University Hospitals, Cleveland Clinic and HealthTech Corridor to understand economic development initiatives, research and development demand projections, current and past space inquiries

• Additional input, such as office space inquiries, gleaned from meetings with Community Development Corporations, e.g., Fairfax Renaissance Development Corporation and Burton Bell Carr Development Corporation

19


Office/Laboratory Case Studies

• Global Cardiovascular Innovation Center - 10000 Cedar Avenue– Size: 50,000 SF (30,000 SF Total Lab Space), built 2010

– Project Cost: $19,000,000 (approx. $400/SF)

– Rent: Priced per unit, not per SF

– Amenities: Shared conference rooms, free secured parking (93 spaces), unique equipment and rooms, shared employee break/coffee areas, shared office equipment and receptionist/administrative support

– Occupants: Approx. 24 tenants, approx. 150 total employees, all R&D lab tenants, have rejected traditional office inquiries, including medical/pharmaceutical sales offices

– Absorption Rate: < 2 years, vacancy 0% by end of 2011

• BioEnterprise – 11000 Cedar Avenue– Size: 44,000 SF (floors 1 and 2 of building, 2/3 lab, 1/3 office)

– Project Cost: N/A

– Rent: N/A

– Amenities: Shared conference rooms, free parking (110 parking passes), shared office equipment and receptionist/administrative support

– Occupants: 12 tenants, 80 total employees, R&D lab tenants, typical tenure of 3 to 4 years

– Absorption Rate: not applicable, vacancy 0%

20



• Baker Electric Building – 7100 Euclid Avenue– Size: 52,000 Gross SF / 40,000 Usable SF

– Project Cost: $8,000,000 (approx. $200/Usable SF), built 1910, renovated 2008

– Rent: $14/SF NNN, plus $7/SF CAM + $2/SF utilities

– Amenities: Shared conference rooms, free parking (approx. 90 cars), back-up power generator, no shared copier or receptionist/administrative support

– Occupants: 12 tenants, 90 total employees, R&D lab tenants, traditional office tenants, church tenant

– Absorption Rate: 4 years (through recession cycle), vacancy 0% by end of 2011

• Midtown Innovation Center – 4415 Euclid Avenue (and 3 other buildings)– Size: 60,000 SF (plus basement), 12,000 SF lab, additional 90,000 SF in 3 other conventional office

buildings in Midtown area also discussed

– Project Cost: Last sold for $1,926,500 ($26.62/SF) on 12/18/02 (built in 1917, renovated in 2004)

– Rent: $12.75/SF plus utilities

– Amenities: Free parking (approx. 200 cars)

– Occupants: Broad mix, many small start-up tenants, traditional office tenants, non-profits, existing lab space limited to 12k SF on one floor, 150 SF to 12,000 SF units, >15 tenants, >50 employees (per CoStar)

– Absorption Rate: 0% vacancy (per CoStar), but lost a lot of small business tenants in master leased space during recession

21



• Midtown Technology Park – 6700 Euclid Avenue– Size: 128,000 SF

– Project Cost: $21,000,000 (approx. $165/SF), built 2011

– Rent: $14/SF NNN

– Amenities: 4,000 SF of shared meeting space, free parking (approx. 400 cars), no shared copier or receptionist/administrative support

– Occupants: JumpStart (9.5k SF, 40 FTEs), Cleveland HeartLab (27k SF, 80 FTEs, $48.8k avg. salary), units 4,000 to 23,000 SF, features biomedical, research & development and lab space

– Absorption Rate: Listing broker publicly quoted that he estimates less than 1 year to fully absorb supply

• Case Study Conclusions:– Over the period of 1990 through 2015, it is estimated that 250,000 to 300,000 SF of R&D lab and multi-

tenant office space will have been absorbed in five speculative office/industrial buildings (new and renovated product) and biomedical/technology incubators in the market area relevant to the Study Area

– Building from this momentum, a conservative estimate is that an additional 250,000 SF can be reasonably projected to be absorbed over the 25 year period from 2015 through 2040

– Interviewees generally agreed that the potential future supply of office/lab buildings would not be a competitive threat, rather they would build the critical mass reinforcing current activity and providing the next generation of this type of space (however, closer proximity to University Circle preferred)

– For the purposes of this study, 50,000 SF of additional space (with a 2:1 lab-to-office space ratio) will be absorbed every 5 years of the study period

– Additionally, these uses will demand support retail of 5,000 SF for the first 150,000 SF, with an additional 20,000 SF required once this market segment reaches 250,000 SF

22


Preliminary Land Use Findings

• Absorption projections recognize that real estate expansion cycles tend to be 5 to 7 years in length each decade, with new construction receiving more than half of the absorption during expansion cycles and reflecting a smaller share of the negative absorption during recession cycles

• Projected Absorption

– Western and Central Sections

• Industrial Uses (60% light manufacturing / 40% distribution)

• 510,000 to 550,000 SF (2020 through 2029)

– 15.2 to 15.3 million SF in Greater Cleveland Market applying 3.55% fair share to study area

– 60% to 85% of absorption received by new deliveries

• 400,000 to 440,000 SF (2030 through 2039)

• Demand forecasts based on historical absorption rates from the broader “Cleveland Market Area” (defined by CoStar) applied to “fair share” of study area

23


Preliminary Land Use Findings

• Projected Absorption

– Eastern Section

• Lab and Office Uses (67% lab / 33% general office)

• 100,000 to 150,000 SF per decade (50,000 SF pre-2020, 100,000 SF each successive decade)

• Demand forecasts primarily based on five case studies of third party lab space projects built over the past two decades, but grounded in Greater Cleveland Market trends

– Support Retail – Eastern Section

• Restaurant , banking, business services uses

• 25,000 SF of retail to support Lab/Office Buildings

• Absorption over 20 years (none pre-2020, 10,000 SF 2020-2029, 15,000 SF 2030-2039)

– Convenience Retail – potentially 4 intersections (E.55th, Kinsman, Buckeye, Quincy)

• Convenience retail, including fuel stations, fast food, and necessity retail

• 75,000 to 125,000 SF of retail absorption primarily occurs in 2020 decade

24


25

Capacity Analysis

Eastern Western

Gross Land (Acres)1 - near term* 36.6 15.0 * 87.9

Net Developable Area (Acres) 33.5 13.3 75.7

Building Area (Acres)1

13.4 4.7 22.8

Building Area (SF) / Capacity 583,704 203,480 993,168

Aborption (SF)2 / Land Uses Office/Lab

2015-2019 50,000 371,000 see Central

2020-2024 50,000 see Western 265,000

2025-2029 55,000 see Western 265,000

2030-2034 50,000 see Western 210,000

2035-2039 50,000 see Western 210,000

Total Absorption 25 years 255,000 371,000 950,000

Post-Brownfield Remediation3 - long term* --- 1,460,000 * ---

Remaining Building Capacity (SF) 328,704 1,089,000 43,168

Multiple of first 25 years 1.3

Projected Time to Absorb Remaining Capacity (Yrs) 32

Sources:1 City Architecture capacity analysis conducted for Greater Cleveland Partnership2 Allegro Realty Advisors absorption analysis conducted for Greater Cleveland Partnership3 City Architecture area-wide brownfield plan conducted for City of Cleveland

0.9

21

Study

Period

Real Estate Capacity Assumptions

Opportunity Corridor Sections

Central

Industrial Uses


Summary of Phase 1 Findings

• Allegro worked in collaboration with HNTB (civil/traffic engineering firm engaged by ODOT) and City Architecture (architectural/planning firm engaged by GCP and the City of Cleveland) to share information about the planned infrastructure and real estate development opportunities spurred by the Opportunity Corridor initiative

• Based on varying degrees of available information for different land uses, Allegro applied methodologies to analyze historical absorption and project future demand for industrial space, office / laboratory / support retail space, and convenience retail along the boulevard

– Industrial absorption projections – Allegro utilized CoStar data to identify historical regional absorption trends, project future trends and apply a “fair share” to the Study Area

– Office / Lab / Support Retail projections – Allegro conducted case studies and interviews due to the lack of publicly available information on: 1) multi-tenant/speculative office space in the Study Area, and 2) multi-tenant lab buildings in the broader Greater Cleveland market

– Convenience retail projections were based on the inherent demand for services at major intersections of the boulevard

• Land use and absorption/demand findings were applied as core assumptions for the Phase 2 economic impact analysis 26

Phase 2:Economic Impact Analysis


Approach

• Scope of Analysis

– Economic Development spurred by the Opportunity Corridor Project

• Industrial, Office, Research and Retail Uses

– Does not include the direct impact from the road construction project

• Types of Effects Measured:

– Direct Effects: the economic activities (employment, payroll, production value) specifically generated by a project

– Indirect Effects: the employment, income and production occurring in other businesses/industries within the study area that supply the direct project industries (e.g., B2B transactions)

– Induced Effects: the effects of spending by the households within the study area as the result of direct and indirect effects from direct projects. The induced effects result from employees working for the project who spend household income in the community.

– Multiplier Effect: relationship between one form of economic activity and the resulting spillover economic activity

28


Approach

• Geographic Scope

– Cuyahoga County – location of all direct impacts

– Cleveland-Elyria-Mentor MSA (5 counties) – to measure multiplier effect on region

– Cleveland-Akron-Elyria CSA (8 counties) – to measure multiplier effect on region

• Analysis Time Frame (in 2011 dollars)

– Pre-2020 (2015 through 2019) – to forecast impacts prior to road completion

– 2020-2029 – to forecast first full decade of impact (assumes one complete economic expansion cycle)

– 2030-2039 – to forecast second decade of impact (consistent with ODOT and HNTB time frame) - the IMPLAN analysis does not address this decade

• Short term economic benefits are straightforward projections with inherent margins of error

• Long term benefits are difficult to forecast, resulting in less reliability due to compounded margins of error

• Identified Acreage – Industrial, Office/Lab, Retail (Support and Convenience)

– Land and Building Capacity projected by City Architecture

– Development assumptions based on absorption, not capacity, per Allegro’s Phase 1 High-level Land Use Analysis

– Timing and process assume the assemblage of “shovel ready” sites29


Approach

• Building development and space absorption assumptions

– Permanent Employment Assumptions

• Office: 250 SF/FTE

• Lab: 500 SF/FTE

• Industrial: 900 SF/FTE

• Distribution: 5,000 SF/FTE

• Retail: 250 to 450 SF/FTE

– Construction Employment Assumptions

• Construction 10 FTEs/$1M project cost

– Outputs - IMPLAN generated:

• Payroll Figures

• Production Output

• Multiplier Effect

• Tax Analysis

30

Approach


31

ECONOMIC IMPACT ASSUMPTIONS

Total Estimated Jobs resulting from Commercial Activity on the Opportunity Corridor

PERMANENT JOBS

Job Counts SF/FTE SF FTEs SF FTEs SF FTEs

Light Assembly 900 61,000 68 330,000 366 391,000 434

Distribution 5,000 310,000 68 220,000 44 530,000 112

Total Industrial Uses 371,000 136 550,000 410 921,000 546

Lab 500 33,890 68 67,750 135 101,640 203

Office 250 16,110 64 32,250 128 48,360 192

Total Lab/Office Uses 50,000 132 100,000 263 150,000 395

Highway Retai l 450 25,000 55 50,000 110 75,000 165

Office/Lab Support Retai l 250 - - 5,000 20 5,000 20

Total Retail Uses 25,000 55 55,000 130 80,000 185

Permanent FTEs added each decade/expansion cycle 323 803 1,126

(includes expansion of existing businesses)

TEMPORARY JOBS (18 MONTHS EACH)

Project Costs (incl land & finishes) $/SF SF Construction Costs FTEs SF Construction Costs FTEs SF Construction Costs

Industrial 50$ 371,000 18,550,000$ 186 550,000 27,500,000$ 275 921,000 46,050,000$

Lab 400$ 33,890 13,556,000$ 136 67,750 27,100,000$ 271 101,640 40,656,000$

Office 200$ 16,110 3,222,000$ 32 32,250 6,450,000$ 65 48,360 9,672,000$

Highway Retai l 100$ 25,000 2,500,000$ 25 50,000 5,000,000$ 50 75,000 7,500,000$

Office/Lab Support Retai l 200$ - -$ - 5,000 1,000,000$ 15 5,000 1,000,000$

Total 446,000 37,828,000$ 378 705,000 67,050,000$ 671 1,151,000 104,878,000$

Construction FTEs per decade 1.48 years each 560 1.51 years each 1,012 N/A

(estimated 10 FTEs per $1M construction cost)

PRE-2020

2020 THROUGH 2029PRE-2020 CUMULATIVE

CUMULATIVE2020 THROUGH 2029

Note 1: Temporary Employment relates to commercial/industrial construction activities and does not include road construction jobs

Note 2: Environmental remediation work may be required to provide “shovel ready” sites in certain parts of the Study Area;however, the temporary employment related to these activities are not included in the projected temporary employment


Definitions

• Measures of Impact:

– Employment: the annual average of monthly jobs in the projected industry (e.g., 1 job lasts 12 months).

– Payroll: all forms of employment/labor income, including employee compensation (salaries, wages and benefits) and proprietor income.

• Permanent Jobs – employees of new employers locating to the subject area

• Temporary Jobs – employment generated during the construction phase of projected buildings

– Production Output: the value of goods and services produced by the projected industry. For manufacturers, production output is gross sales plus/minus change in inventory. For service firms, production output is gross sales. For retail and wholesale trade, output is gross margin (i.e., not gross sales).

– Tax Revenues: includes sales and excise taxes, customs duties, property taxes, motor vehicle licenses, severance taxes, other taxes, and special assessments. It excludes most nontax payments, and subsidies are netted out.

32

Phase 2: Economic Impact AnalysisDevelopment Timeline in Sq. Ft. (2015 through 2039)

33

-

50,000

100,000

150,000

200,000

250,000

300,000

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039

Industrial Development Office/Lab Development Convenience Retail Development Support Retail Development

Please note: Input-Output Analysis ends 2029


Employment Generated - 2015 through 2029Direct Permanent Employment Generated = 1,126 (Pre-2020: 323 / 2020-2029: 803)

Direct Temporary Construction Employment Generated = 1,571 (Pre-2020: 560 / 2020-2029: 1,012)

34Note: Temporary Employment relates to commercial/industrial construction activities and does not include road construction

jobs

-

200

400

600

800

1,000

1,200

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

Total Jobs

Construction Jobs Permanent Jobs

Phase 2: Economic Impact AnalysisPayroll Generated - 2015 through 2029

35

2015 through 2029 Direct Payroll Total Payroll

Cuyahoga County $548 million $1.057 billion

MSA $548 million $1.064 billion

CSA $548 million $1.065 billion

$-

$200,000,000

$400,000,000

$600,000,000

$800,000,000

$1,000,000,000

$1,200,000,000

Cumulative Payroll Impact - CSA

Payroll Direct Payroll Indirect Payroll Induced

$213million

$305million

$548million

Phase 2: Economic Impact AnalysisProduction Output Generated - 2015 through 2029

36

2015 through 2029 Direct Output Total Output

Cuyahoga County $2.2 billion $3.756 billion

MSA $2.2 billion $3.780 billion

CSA $2.2 billion $3.783 billion

$-

$500,000,000

$1,000,000,000

$1,500,000,000

$2,000,000,000

$2,500,000,000

$3,000,000,000

$3,500,000,000

$4,000,000,000

Cumulative Production Output Value - CSA

Output Direct Output Indirect Output Induced

$625million

$912million

$2.2billion


Tax Impact - 2015 through 2029

37

• $1.5 million in additional local/state and $1.5 million in additional federal tax revenue in the MSA (compared to Cuyahoga County in the above table)

• $1.7 million in additional local/state and $1.7 million in additional federal tax revenue in the CSA (compared to Cuyahoga County in the above table)

Cuyahoga County Local/State Tax Cuyahoga County Federal Tax

Dividends $19,655,565 Social Ins Tax $108,322,623

Social Ins Tax $2,846,248 Misc Business Tax $16,250,180

Business Tax: Sales Tax $36,751,272 Corporate Profits Tax $20,872,818

Business Tax: Property Tax $37,257,407 Personal Tax: Income Tax $40,034,999

Misc Business Tax $11,447,937

Corporate Profits Tax $2,554,941

Personal Tax: Income Tax $18,103,001

Misc Personal Tax $4,607,075

Total $133,223,446 Total $185,480,620



38

Cleveland/Cuyahoga County

Direct ImpactsPre-2020 2020 through 2029 Total

Permanent Jobs 323 803 1,126

Temporary Jobs 35 1,012 1,047

Payroll $ 87,053,297 $ 461,206,903 $ 548,260,200

Production Output $ 445,653,131 $ 1,800,143,516 $ 2,245,796,647

Cleveland-Akron CSA

Indirect/Induced ImpactsPre-2020 2020 through 2029 Total

Permanent Jobs 429 784 1,213

Temporary Jobs 1,118 1,203 2,321

Payroll $ 104,487,061 $ 413,129,899 $ 517,616,960


Total Direct/Indirect/

Induced Impacts CSAPre-2020 2020 through 2029 Total

Permanent Jobs 752 1,587 2,339

Temporary Jobs 1,153 2,215 3,368

Payroll $ 191,540,358 $ 874,336,802 $ 1,065,877,160


Tax Impacts Pre-2020 2020 through 2029 Total

State/Local Taxes $ 24,429,233 $ 110,500,482 $ 134,929,715

Federal Taxes $ 33,467,131 $ 153,725,134 $ 187,192,265

Total Taxes $ 57,896,364 $ 264,225,616 $ 322,121,980



• Allegro utilized IMPLAN, an industry recognized economic impact model, to conduct Input-Output Analysis, resulting in projections of economic and fiscal impact of potential land development and business attraction spurred by the proposed Opportunity Corridor

• After projecting land uses, absorption rates and space/employee ratios and applying these assumptions to IMPLAN, Allegro generated direct, indirect and induced effects, including employment, payroll, production output and tax revenues

– Total figures (direct, indirect and induced effects) for the Cleveland-Akron CSA through 2029 include:

• Permanent Jobs: 2,339

• Temporary Jobs: 3,368

• Payroll: $1.1 billion

• Production Output: $3.8 billion

– A more detailed breakdown is on the following page

• While this analysis evaluates the economic impact of commercial/industrial development along the boulevard, it does not address the economic impact of: the road construction, expansion of existing institutions, intraregional synergies, health care or cultural visits, etc.

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Greater Cleveland Partnership Opportunity Corridormedia.cleveland.com/plain_dealer_metro/other/Allegro... · 2016-11-08 · Project Objectives • Evaluate the potential economic

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