Economic Impact

San Carlos Breaks Ground on a Landmark Hotel

 

The City of San Carlos recently broke ground on a new four-story, upscale, extended-stay Landmark Hotel. The hotel will include 204 guest rooms with individual kitchens, outdoor patio areas with a pool and sport court, fitness and laundry center, and a meeting room.

 

 

The hotel will be located near the City’s gateway entrance off the 101 freeway. It will provide much needed transient occupancy tax revenue to diversify the city’s tax base and increase revenues to fund services for the community. All buildings previously on the site have been demolished, and the entire project is expected to be completed in August 2017

RSG was involved in every step along the way from site assembly and acquisition, drafting purchase and sale agreements, relocating existing businesses, developer negotiations and agreements, and obtaining approval from local agencies. Call us to find out how we can facilitate your next project.

Written by Suzy Kim, a Senior Associate at RSG

Economic Development for People and Places

Aaron Renn recently wrote a thoughtful, balanced opinion piece about the dilemma between people-based and place-based economic development. People-based economic development is theoretically more effective. Place-based economic development, which is sometimes the only available approach for local governments because of their territorial nature, generally is structurally incentivized and provides quicker gratification.

At RSG, we are very familiar with this dilemma. Our clients are usually cities. We recognize that they need to generate property and sales taxes now to fund core services. Investments in education that pay off 20 years later (and possibly somewhere else) are needed, but difficult to justify. At the same time, with our focus on people and relationships, we know that people-based investments are more sound in the grand scheme of things.

Renn provides solid advice for state and federal governments to change the incentive structure to make it easier for local governments to pursue people-based economic development. Keeping in mind the glacial pace of state and federal policy change, we’re here to help cities balance economic development for both people and places.

Written by Dima Galkin, an Associate at RSG

Gauging Real Economic Impact

How can economic impact be measured most effectively?  Perhaps economic impact analyses could use an alternatives approach rather than a cost-benefit approach to determine the actual scale and longevity of the benefits of development projects.

Most current economic impact analyses focus on the amount of investment or subsidy vs. the amount of economic activity created as a result.  Of course, a new football stadium will provide jobs for construction and operation, sales tax revenue, and indirect economic activity related to merchandising, tailgating and other fan-driven fun. The question is about the scale of these benefits.

Just as private investors do not limit themselves to considering one investment option, so too cities should compare different investment options.  Instead of spending $400 million on a single stadium, how many business parks serving biotech or advanced manufacturing, street and sidewalk improvements to encourage newer and more successful retail development, or enhancements to public schools and libraries could be funded by that same amount.  What would be the short- and long-term benefit?  In some cases, the stadium investment could be the best option.

In the long-term, those other investments could pay greater dividends for the local economy and thereby create the market in which a football team would want to locate anyway, possibly leading to a win-win situation where the city gets both of its goals.  All of the alternatives need to be considered.

RSG’s economic impact models are adaptable to allow us to customize our analysis for the client’s needs and situation.  We also provide economic development strategies that take into account the qualitative goals and benefits of different investments and real estate advising to assist with strategy implementation.

Written by Dima Galkin who is an Analyst at RSG