Bloomington Center for the Performing Arts

In May of 2015 the Bloomington City Council appointed a budget task force “to address its long-term structural deficit.” One of the ideas the task force put forward was the sale of the Bloomington Center for the Performing Arts (BCPA). Built in 1920 by the Masons, the City bought the historic building in 2000 and re-opened it in 2006 after an extensive remodeling effort to serve as the anchor of Bloomington’s cultural district. For the 2016 fiscal year the BCPA has a budget of $3.5 million.

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According to IMPLAN, the BCPA’s implicit economic multiplier is 1.34 so that its $3.5 million budget for operations results in $4.7 million in total economic activity. In other words, the BCPA currently generates $1.2 million of additional economic activity to the County. This contribution is discussed in the study of the combined local economic impact of Arts & Culture completed las summer. A brief GLT news segment on these estimates is available here. A short video piece from WEEK-HOI 19 is available here. A longer GLT piece discussing the same estimates, in the context of balancing the budget, with the Mayor of the City of Bloomington is available here.

Planning Routes and Stops for the Bookmobile

Alex Cardona, member of the Bloomington Public Library Board of Trustees, wants to examine the process used to determine the routes and stops assigned to the Library’s Bookmobile. This is a straightforward problem of allocating scarce resources (i.e. time) among competing uses (i.e. stops). An ad hoc task force is studying the issue. Here is a short WJBC piece.

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Should the Bookmobile routes and stops be planned as to minimize the average driving time of a library patron, or to maximize the potential number of patrons accessing library resources? This map of library cardholders shows that 58 percent of registered patrons live within 2.5 miles of the library, yet for the 42 percent of registered patrons living more than 2.5 miles away access to the library is greatly limited. Bookmobile usage data and its mission statement should guide the answer to the question of how to allocate scarce resources.

The Economic Impact of Arts & Culture

Arts Alliance Illinois has estimated the State-wide monetary impact of the nonprofits Arts & Culture industry to be $2.75 billion. In Bloomington-Normal the 16 largest Arts & Culture organizations (the McLean County Museum of History, the Illinois Shakespeare Festival, the Illinois Symphony Orchestra, among others) have an estimated $8.5 million annual economic impact.

Associate Professor of Economics Diego Mendez-Carbajo and Eckley Scholar student Michelle Riechers '16. Photo by Robert Frank III

Associate Professor of Economics Diego Mendez-Carbajo and Eckley Scholar student Michelle Riechers ’16. Photo by Robert Frank III

According to IMPLAN, the implicit regional output multiplier of Arts & Culture in McLean County is 1.38, meaning that for each $1.00 of economic activity generated by an Arts & Culture organization the region receives an additional $0.38 in indirect and induced economic activity. In terms of employment opportunities, the $8.5 million in economic activity supports 221 full-time-equivalent jobs. The complete report is available here. A brief GLT news segment on these estimates is available here.

The Economic Impact of Social Assistance

Habitat for Humanity of McLean County (HFHMC) is celebrating its 30 years of service in the community. Even though it is a nonprofit organization its focus on eliminating substandard housing yields a substantial economic impact. The Center for Housing Policy has reviewed the literature studying how affordable housing promotes local economic development by boosting spending, decreasing foreclosures, increasing the local tax base, and strengthening labor markets.

hfh_il_mclean_logoSince 2005 HFHMC has built 66 homes. When first appraised the average market value of each new home was $124,000. According to IMPLAN, the $9.9 million in new residential construction completed by HFHMC since 2005 resulted in $14.6 million in total economic activity and supported, on average, 24.7 jobs in the County each year. We also estimate that HFHMC volunteers contributed time worth, on average, $26,488 to the construction of each new home and that each new HFHMC home generates $1,800 in additional local tax revenue per year. The complete report is available here and the slides from a presentation to the HFHMC Board of Directors are accessible here.

 

Policy Responses to a Factory Closure

On July 24th different local media outlets confirmed that Mitsubishi Motors will end production in its Normal facility by November. The economic impact of this 1,200 job loss to manufacturing was discussed on two earlier postings (here and here) and was referenced on several occasions when discussing the economic development outlook for McLean County during a GLT interview with the County Board Chair, Matt Sorenson. That piece is a thorough review of all the main issues driving our local economy and thus worth listening in its entirety.

Economic Impact of Nonprofit Organizations

This summer I will work with two junior students on estimating the economic impact of two different sets of local nonprofit organizations. Michelle Riechers, double degree in Music and Economics, was awarded an Eckley Scholars and Artists Program fellowship for the project “The Economic Impact of Cultural Enterprises in Bloomington-Normal”. Landon Hoffman, Economics, was selected to participate in the Action Research Center’s Community Partnership Program and will work on “The Economic Impact of Habitat for Humanity in McLean County”. Data collection is under way. Yay!

Temporary and Permanent Impacts

Signet Development recently announced the construction of a new $35 million Center for Integrated Wellness healthcare facility in Bloomington. The Center will house about 100 professionals currently working in four different facilities. How can we compare the economic impact of new non-residential construction to the economic impact of the healthcare service industry?

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IMPLAN allows us to separate the non-recurring impact of building a $35 million healthcare facility from the recurring impact of employing 100 healthcare professionals. According to IMPLAN, the new construction will increase aggregate regional economic output by $45 million once and the healthcare professionals’ work will generate an aggregate regional economic output of $22.6 million every year.

The impact of healthcare jobs on the regional economy is remarkable. In approximately two years the direct economic impact of the labor force housed in this new facility will match its construction expense. A brief report is available here.

Comparing Losses to Manufacturing Labor

Up until 2011 Bloomington used to be the headquarters of the Home Care Products division of Electrolux. The Pantagraph.com reports that more than a decade before moving their corporate offices for the vacuum cleaner business to Charlotte, N.C., the company closed their Normal manufacturing plant. This plant employed 360 workers. How would that labor loss to small appliance manufacturing in 2000 compare to the loss of 1,200 jobs to car manufacturing at Mitsubishi in 2004?

electrolux_4581The up-to-date version of IMPLAN that we are using cannot explicitly model the small appliance manufacturing industry in McLean county because it no longer exists in our region. Thus, we turn to the RIMS II multipliers to compare the economic impact of these two losses to manufacturing labor.

Labor losses to electrical equipment and appliance manufacturing have a 6.77% larger impact on the size of the regional labor force than labor losses to motor vehicle, body, trailer, and parts manufacturing. At the same time, the impact on regional earnings from the relocation of Electrolux was, dollar for dollar, -6.44% smaller than the impact on regional earnings from the scaling-down of Mitsubishi operations. A discussion of those figures is posted here.

Benchmarking Labor Force Losses

State Farm Insurance Companies is the single largest employer in McLean County. It recently announced the relocation of part of its roughly 15,000-strong labor force to new facilities in the U.S. South and Southwest. Although no precise figures have been disclosed The Pantagraph.com reports that the unit affected, the Illinois Claims Operations Center employs 1,600 people in Bloomington. What would be the economic impact of such as loss to the local labor force?

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In order to benchmark that impact we could compare it to the loss of 1,200 jobs at the Mitsubishi Motors North America plant that occurred in 2004 when a whole production shift was eliminated. At that time Mitsubishi was the third largest local employer.

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According to IMPLAN, although the direct loss to local labor from a potential relocation of 1,600 State Farm jobs is 33% larger than the direct loss to local labor from the elimination of 1,200 Mitsubishi jobs the total impact to the regional labor force is 4% smaller.

That is so because the indirect and induced effects of a labor loss to the financial services industry are much smaller than the indirect and induced effects of a labor loss to manufacturing. Also, the sectoral composition of the impact is different. The IWU student Dominique Castle has written an economic letter about these scenarios. A brief GLT news segment on these estimates is available here.

Visitor Center at the McLean County Museum of History

The McLean County Museum of History expects 20,000 visitors a year to its soon-to-be-open Visitor Center. According to the Bloomington-Normal Area Convention and Visitors Bureau the average out-of-town tourist spends $41 a day in food and recreation. Other estimates, like this one from the Department of Community, Agriculture, Recreation and Resource Studies at Michigan State University, place even higher values on out-of-town visitor spending.

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According to IMPLAN the $820,000 in food and recreation spending would generate a direct regional impact of $241,000, plus an additional $86,000 in indirect and induced activity. That would translate into 4.5 new jobs and $38,000 in additional state and local tax revenue. A brief GLT radio segment on this estimate is available here.