Featured

Economic and Social Impacts of University of North Carolina System Athletics

by

ESI quantified the economic impact of the 15 University of North Carolina System Division of Intercollegiate Athletics Programs on the State of North Carolina. Collegiate athletics are an immense source of pride for these institutions and for the state as a whole. The aim of ESI’s research was to make sure it is understood that these athletics programs are also major generators of economic activity in communities throughout the state, and that these programs also contribute meaningful social impacts at a community, regional, and statewide level.

ESI estimated that direct and spillover impacts from UNC System Athletics produce $807 million in annual economic impact in North Carolina, supporting 6,340 jobs and $298 million in employee earnings. ESI also found the counties with the highest economic impact were Chatham, Durham and Orange counties and Wake County, all located in the northeast central region of North Carolina, generating $186 million and $169 million of impact, respectively. Pitt, Mecklenburg, Guildford, and Watauga were the following counties that produced a high economic impact well above $50 million each year.

Beyond the economic footprint described above, UNC System’s Athletics Programs also generate additional economic and social well-being for the state and communities throughout the state. Licensed merchandise, advertisement sales, increased alumni giving, and the growing number of student-athletes receiving “name, image, and likeness” payments all have positive implications for the state economy and local economies in the state. Furthermore, these athletics programs have a significant social influence, through community service, strong social cohesion among alumni, and the enhanced reputation of the state and its educational institutions. This too is part of the impact narrative for UNC System’s Athletics Programs.

In all these ways, UNC System Athletics delivers a substantial return on investment in the form of economic activity, jobs, and tax revenues generated within the local and state economy. It is also a flagship brand, ambassador, and community service provider within the state it represents, both on and off the field.

How Can We Convince the Public that a College Degree is Still Worth it?

by

The Wall Street Journal and The Economist recently treated us to dueling perspectives on the value of higher education. The Wall Street Journal reported on a recent poll (in conjunction with NORC) revealing that 56% of Americans think a 4-year college degree is a bad bet—as recently as 2013, 53% had positive perceptions. The Economist retorted that this is not true for the average college graduate citing two perspectives which suggest that the return on the 4-year college degree remains strong. Who’s right? I suspect they both are. The key, like the devil, is in the details.

The Wall Street Journal is talking about perceptions, and it is hard to discount perceptions. Their survey says that the public perceives that higher education has lost its value. That perception is real and has consequences for institutions. This is especially important since the survey found that the most negative opinions of higher education were among 18–34-year-olds, the primary market for higher education. The Journal posits that the combination of rising tuitions, high student debt, and the pandemic are to blame. The last decade has seen a 15% decline in undergraduate enrollment. While enrollments rebounded ever so slightly this spring, there was a first-time in recent years decline in graduate enrollments. The customers of higher education perceive that there is a problem, and perceptions can lead to reality—lower enrollments.

The Economist counters that the return on investment for an undergraduate degree remains high, just slightly down from its all-time high in the early 2000’s (14% vs 16%). Nonetheless, they point out that where and what a student studies makes a difference (public university graduates outperform those from private institutions and STEM majors outperform those from the humanities). So, if the return on investment remains positive but public perceptions have turned negative, what are institutions to do?

First, colleges and universities need to take a hard look at both their communication strategies and their programming. Currently, universities are losing the public perception battle with ideological groups who argue that higher education is shaping American youth for the worse. Individual institutions can respond to this challenge, but it will take collective action from the Academy in general to win against a well-organized and well-funded movement.

Second, there is a reality to the investment perception. Too many students graduate (or fail to graduate!) with degrees in areas that will not help them succeed in the workplace. Most institutions need to analyze and revise their academic portfolios. They need to invest more in those disciplines whose majors are graduating and successful. This is not to suggest that we should eliminate all majors in the humanities. On the other hand, it is reasonable to ask all disciplines to assess the workplace outcomes of their academic programs. I am familiar with a prominent university that eliminated its computer science program when it realized that the program was not producing graduates comparable to its other programs. Furthermore, small colleges may need to partner with each other to expand their abilities to offer innovative and workplace relevant programming. The Low-Cost Model Consortium’s shared courses and programs is a good example of such a strategy.  Ultimately, mergers of individually unsustainable institutions or acquisitions of such institutions by larger institutions may be required. Arizona State University’s purchase of Thunderbird School of Global Management is an exemplar.

Similarly, I am not suggesting that private colleges should close because public institution graduates outperform theirs. Obviously, a large percentage of our prestigious and effective institutions are private.  There are, however, many small privates whose students struggle to graduate and to find a path to success in the workplace. To reiterate, small institutions need to take a hard look at their program portfolios. They should develop opportunities to ensure that their students can major in areas that lead to good workplace outcomes. The number of STEM majors at even the highly selective liberal arts colleges are increasing dramatically, and many of these schools are also developing programs that integrate the humanities and computer science, for example, yielding humanities graduates who compete quite well in the workplace. There are many other program integration strategies that can increase the workplace success of graduates.

These are challenging times in higher education. Attacks are coming from all fronts. Enrollment declines are serious and, because of demographic declines, are likely to continue. Despite Americans losing faith in college education, a college degree is definitely worth it. It is up to colleges and universities to tell the story loudly and convincingly and to make sure that a degree retains its value in the workplace. These are not easy tasks or easy decisions. We need to undertake them, nonetheless.

Dr. Elmore Alexander, Senior Advisor | Alexander@econsultsolutions.com

Elmore Alexander

Dr. Alexander is Dean Emeritus of the Louis Ricciardi College of Business at Bridgewater State University in Bridgewater, MA. This follows Dr. Alexander’s service to the University as Dean and Professor of management. Dr. Alexander has had an illustrious career in higher education focused in business and organizational management. Prior to joining Bridgewater State University, he served in high-level posts as well as being a professor for the business schools of Marist College (for which he also served as Acting Dean for the School of Science), Philadelphia University, Johns Hopkins University, American University, and University of Memphis.

10 for 10: Universities and Hospitals

by

As part of ESI’s ten-year anniversary, we are looking back on some of our projects over the years. This month, we are highlighting 10 projects from our universities and hospitals practice, which encompasses public and private institutions, academics, innovation and technology hubs, and athletics.

  1. Economic Impact of the Wisconsin-Madison Athletics Department

Colleges and universities are institutions of higher learning and research, but they also serve as economic engines in athletics and entertainment. In 2019, ESI was hired to calculate the economic impact of the University of Wisconsin-Madison’s athletics department. ESI found the total economic impact of UW-Madison’s athletics was $395 million in Madison, and $610 million in Wisconsin, with $1.7 million and $12 million in tax revenue, respectively.

Read the report here.

  1. Eds and Meds as an Economic Engine for the City of Camden and New Jersey

What is the impact of colleges and universities and their associated medical institutions on their local and state economies? This series of reports, commissioned by Rowan University/Rutgers – Camden Board of Governors (RURCBOG), and both quantitative and qualitative in nature, answers that question. These reports, compiled in 2016 and 2017, found that by 2024, health care and social assistance would be the industry with the largest share of US employment. By 2020, this report predicted that Education and Health services would be the industry with the largest share of New Jersey employment. ESI calculated the economic and fiscal impacts of developing an “eds and meds” corridor in Camden, finding that the direct, indirect, and induced output of the construction would total $72 million in the City of Camden, and $122 million in New Jersey. Additionally, the construction would generate $3 million in taxes for New Jersey.

Read the first, second, and third reports here.

  1. Regional Impacts of the University of Pennsylvania

In 2015, ESI updated its economic impact report from 2010 with data from the current fiscal year. This update found that UPenn activities contributed over $14 billion to Pennsylvania’s economy, with over $10 billion of that going directly to Philadelphia’s economy. The University of Pennsylvania is Philadelphia’s largest private employer, creating 1 in 9 jobs in the city in 2015.  ESI also produced an updated report for UPenn in 2020.

Read more here.

  1. The Economic and Catalytic Impact of the University of the District of Columbia

The University of the District of Columbia retained ESI to conduct an economic and catalytic impact study in 2019. As a public school, UDC is funded by the District of Columbia, and quantifying its impact can help increase its funding. ESI found that for every dollar D.C. invests in UDC, UDC activities will create $4 of economic impact. In aggregate, UDC generates an annual economic impact of $406 million within Washington, D.C., supporting about 2,770 jobs and $185 million in employee compensation. In addition, it generates nearly $26 million in tax revenue for the city’s government. Not only is UDC an economic engine, but it is creating a more equitable educational community.

Read more here.

  1. Economic and Social Impact of Tulane University

In 2019, ESI was commissioned to conduct an annual economic and social impact study for Tulane University. ESI found that Tulane generated $3.14 billion and 19,535 jobs in Louisiana. Additionally, over the ten prior years, Tulane students, faculty, and staff performed over 2 million service hours.

Read the report here.

  1. Prentice Women’s Hospital Rehabilitation

In 2012, when Northwestern University was planning to demolish Prentice Women’s Hospital and replace it with a research space, the National Trust for Historic Preservation wanted to calculate the economic impact of keeping the building standing and converting it into office and retail space, while constructing the research site on an adjacent parcel also owned by Northwestern.

ESI (formerly Econsult Corporation) found that the rehabilitation would generate $100 million in one-time expenditures, $400,000 in local and county governments, and support 600 temporary jobs. Ongoing operations at Prentice, and the spillover economic activity that results from them, will generate about $150 million in annual expenditures, support about 1,000 permanent jobs and generating about $1 million in tax revenues to local and county governments.

Read the report here.

  1. Council for Christian Colleges and Universities Economic Impact Study

In 2018, ESI was hired to analyze the economic impact of Christian higher education in the United States. The Council for Christian Colleges and Universities (CCCU) consists of 142 institutions, totaling 445,000 students, 72,000 faculty and staff, and has 3.5 million alumni worldwide. ESI found that the collective annual economic impact was more than $60 billion. Overall, this economic activity generates $9.7 billion in federal tax revenue.

Read more here.

  1. Boston College’s Economic and Social Impact

After conducting an economic and social impact analysis for Boston College in 2021, ESI found that the College has a $3.3B total economic impact in Massachusetts, contributing $172 million in tax revenues to the Commonwealth, generates $1.3 billion impact in the region from its Alumni Wage premium, and is responsible for $78 million in annual spending by students, visitors, and event attendees. Additionally, in fiscal years 2019 and 2020, Boston College provided $16.2 million to schools, and $446,000 to other community organizations.

Learn more here.

  1. Impact from Innovation: Carnegie Mellon University’s Role as a Local and Global Economic Engine

In 2017, Carnegie Mellon University hired ESI to produce an economic impact study demonstrating the importance of the university as a regional and global economic engine. ESI found that CMU generated as estimated $2.7 billion, $1.5 billion of which stays in the City of Pittsburgh. The direct and indirect economic activity generating this impact also supports 18,000 jobs in Pennsylvania, more than half of which are in Pittsburgh.

Read more here.

  1. The Economic, Social, and Community Impact of University of Notre Dame

In 2018, the University of Notre Dame commissioned ESI to conduct an economic impact study. This report found that Notre Dame’s annual economic impact amounts to $2.46 billion within the surrounding 3-county region. It also supported 16,700 jobs and generated $52 million in state tax revenue. Included in these numbers are breakdowns by category. Within just the town of South Bend, Notre Dame’s event spectator spending had an annual economic impact of $153 million.

Read the report here.

 

Hospitals and universities are often large parts of the communities in which they reside. Quantifying their impact is an effective public or private fundraising tool and can show their investment in the local community and economy. If you are interested in conducting a study like these, ESI can help. Please do not hesitate to reach out.

 

Lee Huang, President & Principal | Huang@econsultsolutions.com 

Lee Huang brings over 20 years of experience in economic development experience to ESI public, private, institutional, and not-for-profit clients. He leads consulting engagements in a wide range of fields, including higher education, economic inclusion, environmental sustainability, historic preservation, real estate, neighborhood economic development, non-profits, retail, state and local government, strategic planning, tax policy, and tourism/hospitality, and is a sought-after speaker on these and other topics.

Parking Wars

by

We can no longer stay neutral; reasonable solutions must start to drive our decision making

A woman walks into a restaurant to meet a group of friends. She proceeds to apologize for being late but explains she was looking for parking for the past 20 minutes. This sparked a vibrant discussion that opened their evening. Parking wars is a hot topic in urban environments, with some believing that the world should go to zero car dependency (or somewhere close), others believing owning a car is a right and privilege and have no intention of giving it up, and a lot of opinions and concerns in between.

It’s important to acknowledge the history and complexity of this topic. Owning a car has been built into the fabric of society in America. To the point where if someone tells you they just bought a car, the typical response is “congratulations.” A nod to achieving a piece of the “American Dream,” that includes car ownership. However, vehicle traffic has also contributed to quality-of-life issues including climate change that has a variety of health impacts, traffic congestion and pollution.

To further complicate the matter, parking has become a sufficient source of revenue for cities. Parking provides jobs and tax income that if reduced or eliminated, without thoughtful replacement, could place a strain on City budgets. In Philadelphia, the Philadelphia Parking Authority in 2022 had $275 M in revenue of which $73 M (26%) went to the city of Philadelphia, $18 M (7%) to the Philadelphia School District, and $36 M (13%) went to the PA Department of Transportation. If the City was to wave a magic wand today and grant all the wishes of those advocating to rid the city of cars, the city’s budget would be in peril. It is crucial to account for the lost revenue of important items such as education and the mass transportation infrastructure when considering alternate solutions.

Parking has also become synonymous with terms such as gentrification. Over the past 15 plus years, we have seen a return of urban living that has resulted in residential and commercial development changing the look and feel of neighborhoods. In Philadelphia, one of the most notable projects is the potential building of 76ers arena in Center City. One of the more public backlashes from the stadium is, “Where will I park? Parking and access to the venue will be an absolute nightmare.” However, layered in that is a divisiveness between communities who are opposed to or in favor of the stadium. Complaints about parking has become a way for communities to voice their discontent with changes occurring in neighborhoods.

Approach to Solutions

Reasonable solutions to this complex problem cannot stem from forcing one side to heed to other’s demands. We have to take a more innovative approach that looks at the long-term goals that are implemented in phases, even if the implementation happens over decades.

New Thinking About Parking

Due to the built environment and the long road towards change, vehicles are here to stay for the foreseeable future. MIT professor Eran Ben-Joseph estimates there are 800 million surface parking spaces in the US. This translates into eight available parking spaces for every passenger car. It is projected that by the year 2060, 460 million people will live in the US. (Long, 2014). Following our current trajectory, an increase in population translates into an increase in car ownership. However, this should further incentivize cities to design and manage parking infrastructure in much more efficient ways.

One solution is to help people “rethink” how they think about parking. This can happen through mass transit organizations creating marketing campaigns for people to “Give Us a Try,” persuading current drivers to try mass transit. Another option is motivating people to park once in cities if they are going to multiple locations, incentivizing them with reduced fares for short transit and shared mobility trips to move through various locations.

Emphasize Shared Mobility

Shared mobility, including traditional public transportation, rental, and taxi services is here to stay. But also includes new modes, such as ridesharing with strangers, peer-to-peer car sharing, and shared electric scooters and bikes, pointing to a sizable potential market in the mobility space. In 2019, shared mobility revenues reached 130 billion. By 2030, total revenues are expected to reach between $450 and $860 billion for shared mobility industries. (Heinke, Kloss, Moller, & and Wiemuth, 2023).

The next big innovations in shared mobility include autonomous taxis (robo-taxis) and airborne variants, which have seen a huge acceleration in investment and traction in recent months. There is a range of public and private partnership investments that can help scale accessibility to current and future modalities, helping to ease congestion of parking while providing options for more sustainable living.

Next Steps

As long as people own cars, there will be discussions and arguments on where to store them. While some people will focus on the far ends of each debate. The actual solution will likely end up somewhere in the middle, with more incentives to use shared mobility and public transportation, without completely eliminating the use of cars. Cities are denser areas, where space is a hot commodity, and there are more communities’ interests to balance. The use of cars, parking, and the topic of mobility in cities will continue to evolve as society shifts to the needs of the population.

 

Frank RobinsonFrank Robinson | Robinson@econsultsolutions.com 

Frank Robinson is a vice president with Econsult Solutions, Inc. Mr. Robinson has been a leader in the economic development and sustainable development industries for over 20 years, working with corporate, government and nonprofit clients, banks and credit unions, as well as community development financial institutions (CDFI) and small businesses.

Can your Downtown Benefit from Office Conversions?

by

Many cities across the United States are faced with two enduring impacts of the COVID-19 pandemic: vacant office space in their central business districts and a high demand for housing. Many cities across the country, including New York City, San Francisco, Boston, and Atlanta, have adopted or are considering policies to encourage the conversion of offices to residential buildings in their commercial districts.

ESI recently supported New York City’s Office Adaptive Reuse Task Force in developing a report that included a set of recommendations tailored to New York’s unique situation. Here are four lessons we learned from that work that may help you consider whether or not your city should adopt a policy to encourage office conversions.

Know your regulations

There are dozens of hurdles that will prevent an office building from being converted to a residential property—physical design, financing, risk, market conditions, future expectations—but none of them matter if existing land use regulations or building codes don’t allow conversions. Municipal zoning regulations are most likely to affect conversions, but state-level building, health, or safety regulations may also limit the ability of property owners to convert their buildings.

In New York City, there are large sections of Manhattan in which office conversions are either illegal or must meet a series of requirements that make conversions all but impossible. In other parts of Manhattan, office buildings built before 1979 may convert under a set of more lenient regulations than buildings in other areas. The Office Conversion Task Force made several recommendations to harmonize and loosen regulations governing conversions.

Vacancy rates will not dictate conversions

Owners will. When we first started looking at the New York City office market and talking with industry experts, it became clear that there was a subset of buildings in the office market that stood little to no chance of attracting new tenants in a post-COVID landscape. We heard over and over about a sustained “flight to quality,” in which tenants were signing leases for smaller floor area in more amenity rich buildings closer to major transportation hubs.

Landlords with high quality space in desirable locations were happy to oblige the shift, leaving landlords with lower-quality space in secondary locations with excess space. We saw buildings that were 30, 40 and sometimes more than 50 percent vacant with little immediate hope of attracting new tenants. What perfect conversion candidates!

However, most of these buildings are unlikely to convert. Why? Most property owners don’t have the experience to convert a building from one use to another. The risks of trying were too great. Many property owners aren’t willing to sell the building at a loss and would rather wait and see if the market returns. Or they had such favorable terms on loans signed before the pandemic that selling and buying back into the market at higher interest rates made little long-term sense.

Some buildings are more suitable to conversion than others, but most physical constraints can be overcome if someone is willing to pay

The office stock in any given city is a historical record of building materials, techniques, styles, preferences, and space requirements. In New York City, most successful office-to-residential conversions had three common characteristics: they were built before 1940 and had comparatively small floor plates and operable windows. In the 1950s and 60s, businesses demanded open floor plans and innovations in building technologies allowed for ever larger floorplates that continued to expand in subsequent decades.

Modern buildings do present a series of physical design challenges than older buildings, but architects are clever. In conversations with several designers with experience converting offices to residential buildings in New York City, it was clear that there is a design solution to nearly every physical challenge an office building can present. Curtain walls can be replaced to create windows that can open and close. Elevator banks can be moved or removed. Stairs can be installed. Cores can be cut out of the center of a building with large floorplates to allow air and light to reach the interior. Additional floors can be built on top of a building with structural reinforcement. But with every major shift in a building’s design, the costs of conversion goes up, and as those costs go up, property owners and developers will be looking to city governments for incentives.

Office-to-residential conversion is a niche practice, which means financing can be a challenge

Developers in the real estate industry tend to specialize in one building type, for example, high end commercial, low-income housing, large-format retail, or entertainment complexes. This specialization allows developers to deliver buildings with greater efficiency and lower costs. However, most practitioners don’t have experience converting one building type to another, and without a strong track record of success in a given market, lenders may be unwilling to finance conversions.

Office to residential conversions make good urban planning sense. With the right zoning regulations, tax incentives, and financing options, office-to-residential conversions can help meet the demand for housing, help remove excess vacancy from office markets, and bring more foot traffic to neighborhoods that have been struggling since the pandemic began three years ago. However, unless heavily incentivized, office conversions are likely to remain relatively uncommon.

If you are interested in learning more about commercial to residential adaptive reuse, you can contact us here, or read the New York City Adaptive Reuse Task Force Report here.

 

David Stanek | Stanek@econsultsolutions.com

David Stanek, Ph.D., a director at ESI, is an urban planner who specializes in combining data science techniques, geographic information systems, and qualitative research methods to evaluate the role and influence of land use and preservation interventions on residents, places, and municipal budgets. Prior to joining the firm, he was a land use and zoning researcher at the Penn Institute for Urban Research. He has taught land use, urban policy, and public finance at Rutgers University and Hunter College and has consulted on projects for a variety of clients including the World Monuments Fund, Arup, the William Penn Foundation, Ford Foundation, USAID, the Urban Institute, and WSP as well as several municipal governments.

 

The Philly Tree Plan: Sowing the Seeds of a Greener, More Sustainable City

by

As cities around the world grapple with the challenges of urbanization, many are turning to nature-based solutions to create more livable, sustainable communities. Here in Philadelphia, the city has taken an ambitious step forward with the Philly Tree Plan, an initiative aimed at increasing the city’s tree canopy cover and enhancing the benefits that trees provide to residents and the environment.

Launched in 2020, the Philly Tree Plan sets out to increase tree canopy in the city to 30% by 2030. This increase in tree coverage is expected to bring a wide range of benefits, including improved air and water quality, reduced stormwater runoff, and a reduction in the urban heat island effect. ESI quantified these benefits and here is what we found:

 

Achieving the desired tree canopy goal is no small feat. It requires a coordinated effort from city officials, community organizations, and residents to plant, care for, and maintain the forestry that will form the backbone of a more sustainable city. To this end, the Philly Tree Plan includes a range of strategies to make tree planting and maintenance a citywide priority. One approach is to work with community organizations and volunteers to plant and care for trees in public spaces, such as parks, streets, and sidewalks. By engaging with local residents and community groups, the city can tap into the expertise and passion of those who are most invested in the health and well-being of their neighborhoods.

In addition, the Philly Tree Plan offers incentives for property owners to plant and care for trees on their land. This not only helps to expand the city’s tree canopy coverage but empowers residents to take an active role in creating a more environmentally-focused, livable city. Finally, the Philly Tree Plan seeks to integrate tree planting and maintenance into city planning and development projects. By prioritizing trees as a key component of urban infrastructure, the city can ensure that they are a central part of the city’s growth and development, not an afterthought.

The tens of thousands of jobs created by the Philly Tree Plan would include numerous potential employment opportunities for workers with less than a bachelor’s degree. These workers would be eligible for various direct employment opportunities related to the Plan, including numerous public-sector tree care and customer service positions. In addition, contracting work associated with the Plan could be used to support new or existing Minority, Woman, or Disabled-Owned Business Enterprises (MWDSBEs) in Philadelphia. This is a critically important opportunity in a majority-minority city where diversity, equity, and inclusion in the private sector is a core concern.

The Philly Tree Plan represents a bold, forward-thinking approach to urban sustainability that puts nature at the center of city planning and development. By sowing the seeds of a greener, more sustainable city, Philadelphia is creating a brighter future for all of its residents.

 

Melissa Wright, Associate Director

Melissa is a former director at ESI. Prior to her time at the firm, she worked for Teach for America as the Director of Performance Measurement and Evaluation. Ms. Wright currently serves as Senior Director for Data and Policy with The City of Philadelphia Commerce Department’s Office of Economic Opportunity.