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The Fitzsimons Redevelopment Authority, in conjunction with the University of Colorado Health Sciences Center, the University of Colorado Hospital, The Childrens Hospital, the City of Aurora, and others, is undertaking a major economic development initiative at the former Fitzsimons Army Medical Center in Aurora. The vision is to create a life sciences city combining the health care, education and bioscience research strengths of the institutional partners with the sites locational advantages and the emergence of bioscience research as an important driver of future economic growth to capitalize on the advantages and opportunities created by the critical massing of clinical care, education, research.
Objectives of this study
The experience of other centers like that envisioned for Fitzsimons
indicates that they become major economic development engines, driving
economic expansion and diversification for entire regions and states.
The phenomenon is illustrated by the Texas Medical Center, the Johns
Hopkins Institutions, the Research Triangle Park, and NASA among others.
Economic impact studies of these and other large institutions seek
to quantify the contributions of these institutions in terms of jobs,
incomes, business output and tax revenues supported. The
objectives for such economic impact studies are varied, but since
many of these institutions are public or quasi-public entities receiving
public funding support, they frequently include a desire to educate
the public regarding the economic and other benefits that are the
return on investment for that support. Often such centers also are
the focal point of major economic development campaigns. Such campaigns
are time and capital intensive and have long lead times before achieving
measurable success. Economic impact studies provide a means of quantifying
the future returns that are being strived for as a means of enlisting
continuing support.

The current analysis is of the latter vein. It examines the economic
contributions of the health care, education, research and related
activities planned for development at Fitzsimons. Those activities
will include public and private sector enterprises. The contributions
include jobs and incomes, investment in human and physical capital,
support for other businesses through various supplier and consumer
linkages, and in some instances, tax receipts for the state and
local governments. The study examines the future impacts from an
aggregate perspective. Impacts are not differentiated by major institution,
nor does the analysis attempt to differentiate between those that
are transfers from other locations, the expansion of existing programs
facilitated by the move and those which represented completely new
additions to the regional and statewide economies.
Data
sources and analysis
Estimates of the economic impacts were derived using a combination
of primary and secondary data to describe each of the major components
of the Fitzsimons redevelopment project. The University of Colorado
Health Sciences Center (UCHSC), the University of Colorado Hospital
(UCH) and The Childrens Hospital (TCH) provided data related
to their current operation, as well as information regarding foreseeable
development and operating plans at Fitzsimons. The Fitzsimons Redevelopment
Authority (FRA) provided information related to private sector development
anticipated at the site. The City of Aurora also provided support
for the study.
The various data were then analyzed and combined to prepare a set
of data inputs for use in the economic analysis. The foundation
of the analysis is the IMPLAN model. IMPLAN (IMpact Analysis for
PLANning) is an input-output based model originally developed by
the U.S. Forest Service to assist in land resource management planning.
It was subsequently privatized and enhanced to address economic
and impact planning issues in a broader context. IMPLAN is widely
recognized and accepted in regional economic and economic impact
assessment circles and has been used in numerous projects over the
years. Results of the analysis include direct and total jobs, income
and output associated with each segment.

Extended
economic contributions of the project
The overall economic contributions of the Fitzsimons redevelopment
project extend beyond the direct effects described above. The added
contributions arise due to the indirect and induced effects stimulated
by the Fitzsimons project. The indirect effect refers to the secondary
impacts on area businesses that supply goods and services to establishments
at Fitzsimons while the induced effect refers to the secondary impacts
related to consumer spending. Local spending by Fitzsimons-based
establishments for services, supplies, and materials initiates the
indirect effect. Major items purchased locally include communications,
electricity, natural gas, water and other utility services, landscaping
and building maintenance, office and laboratory supplies and furniture,
equipment, and professional services such as legal and accounting
expertise. Area businesses that sell goods and services to Fitzsimons
hire workers and purchase needed materials and supplies, with a
portion of the purchases occurring locally. Businesses that sell
materials and supplies to Fitzsimons suppliers also hire workers
and purchase needed inputs.
Local spending by households for goods and services initiates the
induced effect. Payroll expenditures by establishments at Fitzsimons
(direct effect) and by employers that supply inputs to the establishments
(indirect effect) are spent by households for items such as housing,
electricity, natural gas, water and waste water, transportation,
food, clothing, telephone, entertainment, and taxes. Spending for
these goods and services creates revenue for businesses such as
retailers, restaurants, grocery stores, gasoline stations, and movie
theaters. These businesses support their own payrolls, resulting
in household income and household expenditures. The ripple effect
continues, with the impact of each successive round diminishing
because of leakages from the regional economy. (Note: for simplicity,
the terms indirect effects or indirect impacts will be used for
the remainder of this report to refer to the combined indirect and
induced effects.)
The estimated economic impacts associated with the Fitzsimons redevelopment
project are tied to the achievement of future levels of physical
development, expressed in terms of constructed and occupied building
space and the economic activities
conducted by public and private sector entities within that space.
The future economic contributions are estimated for two specific
levels of development, that projected to exist in 2010 and that
associated with full development. The former is known with a reasonable
degree of certainty as it is based in large part on construction
and operating plans that are already in motion. No specific development
schedule or timetable for achieving full development is assumed
as the expansion of the initial facilities beyond 2010 will be predicated
on changing economic, regulatory, social, political, and technology
forces that are beyond the scope of the Fitzsimons development partners
to foresee and integrate into their planning efforts.

The study also examines various benefits of the life sciences
city beyond the quantified economic measures. Such intangible
benefits include contributing to community and individual quality-of-life
through improved health care, the training of additional physicians
and other health care practitioners, and research into disease prevention,
management and treatment. However, such benefits do not lend themselves
to ready quantification, so they are addressed in more qualitative
terms.
Results
reporting
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remainder of this report presents the result of the analysis. Section
II summarizes the physical and operating parameters that characterize
the Fitzsimons redevelopment project. These parameters are the inputs
that drive the economic impacts analysis.
Section III summarizes the economic contributions associated with
construction and development activities at Fitzsimons. Comprised
of numerous relatively short-term activities, many of which are
not individually significant, the cumulative contributions over
time are significant.
As new buildings and other facilities are completed, they will be
occupied and their corresponding health care delivery, research,
education, administrative or other activities initiated. This has
already occurred with the renovation of the former main hospital
building, Building 500, and the newly constructed Bioscience Park
Center, UCH - Anschutz Center for Advanced Medicine and Rocky Mountain
Lions Eye Institute. The ongoing economic contributions associated
with these activities, for instance, operating expenditures and
the consumer expenditures of the employees are described in Section
IV.
Section V examines the Fitzsimons redevelopment project from a broader,
more qualitative perspective. It addresses the role of technology,
bioscience and medical research in economic development and the
important contributions of those factors to issues such as the quality
of life.

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