The capital investments that finance the renovation of existing buildings, the development of new infrastructure, and the design and construction of new buildings, including those which have already occurred, will be responsible for an initial series of economic and fiscal impacts. Such impacts arise from the purchases of services, materials and supplies associated with the construction activity, as well as the subsequent iterations of business and consumer purchases of goods and services by construction workers, suppliers, and others affected by the infusion of capital.

Presently and continuing over the next four to five years, significant levels of construction and development activities at Fitzsimons will be readily apparent as UCHSC’s new educational and research facilities and UCH and TCH hospital facilities are built. New development will continue beyond that time, but on a more intermittent and slower scale.

The economic and fiscal impacts associated with any specific construction activity are of relatively short duration. The jobs, payrolls and tax impacts can only be sustained by a continuing level of new construction. When construction activity slows down, the effects ripple quickly and widely through the local, regional and national economies. This is one reason why much attention in national economic reports is focused on residential housing starts and commercial building activity.

Although many specific construction activities at Fitzsimons will be short-lived, e.g., pouring concrete curbs and sidewalks on a given block, the cumulative effects on employment, payroll, output and taxes summed over time are significant. Estimates of these impacts, based on the development parameters outlined in Tables 1, 2 and 3 in the previous section, are presented in the remainder of this section. Impact estimates are presented for two time periods, thru the year 2010, including the major construction projects already completed or underway, and from 2010 to the achievement of full development of the 13.6 million square feet. No date is associated with that later milestone, though it is generally recognized that it could be 25 years or longer, as it depends on market conditions and other factors that can not be foreseen with any degree of certainty.


Employment, output and income
Over $1.8 billion ($2002) in new capital investment is projected to occur at Fitzsimons thru the year 2010, with another $2.11 billion anticipated after 2010. That investment will directly and indirectly support the equivalent of nearly 65,400 job-years of employment, $7.24 billion in output and $2.76 billion in personal income, in Colorado. For every 1.0 job-year directly engaged in construction, another 1.08 job-years will be supported in other parts of the economy. [Note: for the remainder of this section, equivalent job-years of employment will be referred to simply as jobs.]

Mirroring the timing of the anticipated capital investments, nearly half of the total construction-related economic stimulus will occur by the end of 2010. Development in the University Campus area and the I-225 parcel will be the driving forces behind this pattern. Beyond 2010, the level of construction-related impact will fluctuate over time in response to the level of new capital investment being made.

The bulk of the 31,370 direct construction jobs will be on-site at Fitzsimons, as will some of the secondary, indirect jobs. However, the economic benefits tied to the construction will extend across the metropolitan area and state due to the broad geographic distributions of contractors and suppliers, construction worker residency patterns, and the dispersed locations of consumer and business retail and service establishments.


Tax revenues
The economic activity associated with Fitzsimons redevelopment has significant implications for public sector tax revenues as well. The IMPLAN model derives estimates of selected revenues using coefficients derived from federal, state and local government census data. Those coefficients reflect statewide averages; therefore, it was necessary to supplement the local sales tax estimates to reflect the local sales and use tax provisions pertaining to future private sector development on-site. Only the state sales, income and motor vehicle registration taxes and local sales and use taxes are reported here. As with the construction jobs and income, the estimates are cumulative totals over time.

As shown in Table 5, the Fitzsimons redevelopment program will spawn nearly $175 million ($2002) in state and local tax revenues, despite the fact that the public sector construction will be exempt from sales and use tax. Nearly $107 million is estimated to accrue to the state, with 53 percent of that total in the form of personal and business income taxes.

The estimated tax revenues will not accrue uniformly over time. Rather, the stream of revenues will reflect the pace of capital investment, and particularly, the rate of private sector investment. Thus, total state and local tax revenues accruing thru 2010 total $77.1 million, or 44 percent of the cumulative total, compared to $97.9 million post-2010. The effect of the disproportionate share of the private sector investment occurring post-2010 is apparent in the differences in local sales and use tax receipts between the two periods, $27.5 million versus $40.4 million.

Estimates of the local tax revenues are reported in aggregate terms: in other words, no distribution of tax revenues among the affected local jurisdictions is provided. Local sales tax receipts generally tend to be more widely dispersed throughout the economy than the construction jobs because the distribution of taxes are tied more to the residency patterns of the construction work force than the job site. Thus, although most of the sales tax revenues generated by the Fitzsimons redevelopment will accrue to other local governments in the metropolitan area, perhaps as much as 30 percent of the future local sales taxes will accrue to the City of Aurora. Furthermore, some of the sales tax receipts collected in Aurora will temporarily accrue to a tax increment finance district established to help fund infrastructure improvements on the site and promote redevelopment of nearby commercial properties around the periphery of Fitzsimons.

At the same time, use taxes levied on the construction materials and equipment used for the private sector construction, but purchased outside of Aurora, will be heavily concentrated in Aurora. Based on the development cost parameters for the FRA Development area, it is estimated that nearly $20.0 million in such use tax proceeds will accrue over time.