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 Children’s 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
|The 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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