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4A Wichita Falls Economic Development Minutes - 03/20/2025MINUTES OF THE WICHITA MALLS ECON01I DEVELOPMENT CORPORATION PRESENT: Leo Lane, President David Toogood, Vice President Brent Hillery Reno Gustafson Craig Lewis Tim Short, Mayor Mike Battaglino, Councilor, District 4 Austin Cobb, Councilor -at -Large James McKechnie, Interim City Manager Paul Menzies, Assistant City Manager Blake Jurecek, Assistant City Manager Kinl:iey Hegglund, City Attorney Stephen Calvert, CFO & Finance Director Terry Floyd, Dir of Development Services Tyson Traw, Deputy Director of Public Works Monica Aguon, Senior Assistant City Attorney Chris Horgen, Public Information Officer Paige Lessor, Legal Ass,t / Recording Secretary Jason Tole, CFO / Asst General Mgr Ron Kitchens, CEO Vicki Pratt, Partner 1. CALL TO ORDER. I WFEDC Members 18E�� City Administration § Syntrio Solutions, LLC Wichita Falls Chamber of Commerce Mr. Leo Lane called the meeting to order at 2:30 p.m. RENEE * =! a. Approval of Minutes (December 19,,2024, and February 6, 2025) Mr, Reno Gustafson requested that the minutes be corrected to reflect hiis presence at both meetings. The Recording Secretary, Ms. Lessor, acknowledged the needed correction. 31039��« Mr. Paul Menzies reported that while sales tax collections continue to show variability from WFEDC MINUTES 3/2012025 PAGE 1 OF 7 month to month with no clear trend, the overall financial outlook remains positive. Collectively, year-to-date revenues are ahead of both the previous year's performance and the current budget projections. He noted that the board currently has approximately $12.5 million in uncommitted funds. Barring any additional expenditures, or new funding commitments for the remainder of the fiscal year, although he emphasized that he hopes this is not the case, the projected year-end fund balance is estimated to be approximately $16.5 million. Mr. Lane asked if there were any further comments or questions. No comments were made, nor questions asked. Mr. David Toogood made a motion to approve the consent agenda as corrected. Seconded by Mr. Brent Hillerv, the motion carried 5-0. 3. DISCUSSION AND POSSIBLE ACTION TO CONSIDER DEDUCTIVE CHANGE ORDER #1 RELATED TO THE EXTENSION OF PRODUCTION BLVD BY CONTRACTOR E3H DEVCO IN THE WF BUSINESS PARK. Mr. Menzies provided an update to the board about the project. He noted that the change order would result in some cost savings and introduced Tyson Traw, Deputy Director of Public Works, to provide a more extensive update. Mr. Lane inquired about a status update on total bond expenditures and allocations, to which Mr. Menzies responded that he and Mr. Steven Calvert had just discussed this and were working to reconcile the figures that same week. Mr. Traw introduced himself and provided several updates. He explained that most of the underground public utilities have been installed, with storm sewer work still in progress. He further explained that the first part of Change Order #1 addressed a conflict between the storm sewer and an existing water line. Due to unforeseen conditions underground, a water line had to be lowered to avoid the storm sewer. The issue arose because the project's design engineer, not the City, was unable to identify underground conditions during the planning phase fully. The overlapping construction of a truck center facility prompted the second part of Change Order #1 . Since the truck center began construction during the project's design and approval process, adjustments had to be made to accommodate their installed infrastructure. This change increased the project cost by $21,991. However, the City identified an, opportunity to recoup costs because the contractor initially included taxes in their budget, which the, City, being tax-exempt, does not pay. Once this was, corrected, the City reclaimed that portion of the budget. Despite the added expenses, the City will save approximately $61,000 overall due to the tax adjustment. Mr. Lane confirmed that no executive session was needed before taking action. Mr, Lewis made a motion to accept and approve Change Order #1 related to the extension of Production Blvd by Contractor BH Devco, resulting in a reduction in cost of $61,,122.35. Seconded by Mr. Gustafson and with no further public comment, the motion carried-5-0, 4. DISCUSSION AND POSSIBLE ACTION RELATED TO THE PROPOSED CONTRACT WITH MIDWESTERN STATE UNIVERSITY AND ITS AFFILIATES. Mr. Ron Kitchens provided background on the previously approved financial support arrangement for MSU's Military Success Center. Initially, the WF4BSTC structured its contribution as a grant, while the WFEDC (this board) structured its contribution as a loan, intended to be forgiven over time•— a performance -based "cash -for -jobs" model. Texas Tech's legal system reviewed all necessary documentation, and initially approved it as a loan. During an audit, it was discovered that MSU, as a state entity, is legally prohibited from receiving loans from subordinate governmental entities, such as the WFEDC. MSU auditors requested that the agreement be WFEDC MINUTEs 3/2012025 PAGE 2 OF 7 restructured from a loan to a grant to comply with legal and financial requirements. MSU is already receiving a grant from the WF4BSTC, and this change would align both contributions under the same structure. Mr. Kitchens also gave a status update on the project. MSLI has secured nearly $6 million in foundational funding to support scholarships and programming for the Military Success Center. A program leader has already been appointed, and all engineering and design work for the project has been completed. The proposed contract mod ification—cha ng ing the original agreement from a loan to a grant —is the final step needed before renovations can begin on the existing facility, which will be remodeled rather than newly constructed, Mr. Hegglund requested to formally enter the following letters into the meeting record: A July 9, 2024, letter from MSU President Haney supporting the project. (Exhibit C) A June 7, 2024, letter from General Detrick, also in support, which had been previously referenced but not recorded, (Exhibit D) Mr. Hegglund asked for permission to submit these letters to the Secretary for inclusion in the official minutes. Mr. Lane granted permission, and the board acknowledged receipt and acceptance of the letters as official documents related to the item. No further comments were made, and no questions were asked. 5. DISCUSSION AND POSSIBLE ACTION RELATED TO THE PROPOSED OFFER FROM SYNTRIO SOLUTIONS, LLC TO PURCHASE 1.31 ACRES IN THE WICHITA FALLS BUSINESS PARK. Mr. Lane introduced this item, explaining that the proposed rate was $35,000 per acre. Mr. Kitchens explained that the parcel is located at the end of the road, beneath power lines, which limits its potential uses. It is adjacent to a site already under contract, and the purchase will support the infrastructure needs of current and future tenants by ensuring access to high -quality data service. Mr. Kitchens emphasized that although Syntrio originally requested the land as an incentive, the Chamber opted for an incentive -based sale price to remain in the land sales business rather than giving away property. Jason Tole, representing Syntrio, clarified that the site will house a central office with data equipment only —no retail or public -facing operations —and may include a concrete pad for occasional vehicle access. Mr. Kitchens noted that the project will still need to meet the business park's covenant and design review standards,. With no questions from the board, Mr. Tooclood made a motion to authorize the sale of 1.31 acres of Lot 2, Wichita Falls Business Park subdivision, an addition to the City of Wichita Falls according to the plat of record in Volume 28, Page 373 of Wichita County Plat Records Wichita Falls,, Wichita County, Texas, for theamount'of $35,000/acre and authorizing the board president to execute all related documents. With no public comment and being seconded by Mr. Lewis, the motion carried 5-0. 6. DISCUSSION AND POSSIBLE ACTION RELATED TO THE REIMBURSEMENT OF FUNDS TO THE WICHITA FALLS CHAMBER OF COMMERCE FOR DUE DILIGENCE FEES PAID ON THE PROPOSED WICHITA FALLS AVIATION INDUSTRIAL PARK. Mr. Lane proceeded with Item 6 andl gave the floor to Mr. Kitchens. Mr. Kitchens explained WFEDC IMINUTEs 3/201/2025 PAGE 3 OF 7 that progress is being made on developing the 120-acre site adjacent to the airport into an aviation park, which has already attracted interest from several potential tenants. In support of this project, Congressman Ronny Jackson has submitted a federal funding request for $5 million to fund the first phase of infrastructure. However, preliminary engineering work, such as determining road layout and utility access, was required to support that request. As a result, the WFEDC board was asked to approve reimbursement to the Chamber for the earnest money already paid on the property, as well as to allocate additional; funds needed to complete the remaining engineering tasks. Ms. Vicki Pratt informed the board that approximately $25,000 would also be needed for environmental assessments, including soil testing, which had not been previously included in the budget. This work will be managed by Corlette, a firm that will subcontract the environmental testing. Although Corlette is overseeing the process, neither Vicki Pratt nor Ron Kitchens could confirm the name of the subcontractor conducting the actual environmental testing. No further comments were made, and no questions were asked. 7. DISCUSSION AND POSSIBLE ACTION RELATED TO OPPORTUNITIES FOR REAL ESTATE ACQUISITION AND DUE DILIGENCE IN THE AMOUNT UP TO $500,000. Mr. Lane introduced Item 7 and opened the floor to Mr. kitchens again. Mr. Kitchens explained that revitalizing key urban areas in Wichita Fails should be a cornerstone strategy for future growth, The redevelopment would support broader community goals, including enhancing economic opportunities tied to Sheppard Air Force Base and Midwestern State University. Mr. Kitchens noted that the proposal includes two potential sites —one significantly larger than, the other —and would require an, initial allocation for earnest money and due diligence activities. The recommended approach is to issue the earnest money as a loan to the Chamber of Commerce, which would be repaid if the acquisition does not proceed,. While the full $250,000 in due diligence costs may not be necessary, the board was advised to authorize the full amount upfront to prevent funding shortfalls during the process, City Attorney Kinley Hegglund asked Mr. Kitchens to elaborate on how this type of redevelopment could impact primary job creation and support the missions of the base. Mr. Kitchens affirmed that the base and university communities currently lack sufficient shopping and services, resulting in an estimated $500 million in annual local spending losses, equivalent to $10 million in lost sales tax revenue. He emphasized that military leaders have made it clear that supporting military families through better amenities is critical. In addition to local benefit, redevelopment efforts, particularly mixed -use spaces with retail, office, and tourism elements, are recognized as primary job creators since they bring in outside dollars. Mr. Kitchens also shared that economic development prospects, such as manufacturing companies, frequently cite retail limitations as a barrier to relocation, with plant managers' spouses expressing dissatisfaction with available amenities. He concluded by stating that both he and Ms. Vicki Pratt, both certified economic developers, strongly support this strategy, which aligns with national best practices and industry research that directly links urban redevelopment with job growth and economic revitalization. No further comments were made, and no questions were asked, 8. EXECUTIVE SESSION. Mr. Lane adjourned the meeting into executive session at 2:51 p.m. pursuant to Texas Government Code §§§§ 551.072, 551.087, 551.071, and 551.074. He announced the meeting: back into regular session at 4:05 p.m. The subjects posted in the Notice of Meeting were WFEDC MINUTEs 3/20/2025 PAGE 4 OF 7 deliberated, and no votes or further actions were taken on the items in executive session. MSU MILITARY SUCCESS CENTER (MODIFIED) Mr. Toogood made a motion to modify the previous, agreement with IVISU to instead authorize a grant in the amount of $1,000,000 to Midwestern State University for the construction of the Student Success and Military Education Center, contingent upon receiving the needed outside funding and creating 25 full-time positionis. Seconded by Mr. Gustafson and with no comments or discussion made by the public, the motion carried 5-0. WICHITA FALLS AVIATION INDUSTRIAL PARK — CHAMBER REIMBURSEMENT Mr. Lewis made a motion that the Board authorize reimbursement to the Chamber of Commerce for the cost of the property option in, the amount of $20,0010, the preliminaa engineering cost of $10,850, and the estimated cost of $25,000 for the phase one and two environmental study for a total amount of $55,008.50. Seconded by Mr. Hillery and with no comments or discussion made by the public, the motion carried 4-0. Mr, Gustafson, abstained from the vote. REAL ESTATE ACQUISITION AND DUE DILIGENCE UP TO $6010,000 At the request of the Wichita Falls Chamber of Commerce, the following nine articles were submitted by legal counsel for inclusion in the official record of this meeting. These documents are intended to support the discussion regarding economic development, urban redevelopment, and military -community relations. The board accepted these materials into the minutes as referenced: 1. The Inclusive Economic Impacts of Downtown Public Space Investments — Brookings Institute 2. The Economic Impact of Shopping Centers— International Council of Shopping Centers 3. The Future of Cities: Re -Envisioning Retail — National League of Cities 4. From Vacant to Vibrant: City Projects — U.S. Real Estate Insider 5. Community Support Essential for Military Installations, DOD Official Says — U.S. Department of Defense 6. Economic Analysis., Minot Air Force Base's Impact on the City of Minot —Fifth Bomb Wing Public Affairs 7. The Economic Impact of Military Base Closures on the Surrounding Metropolitan Area — 0 . 0 8. The Military's Impact on State Economies — CSL Foundation 9. The Defense Dividend and What It Means for Cities — The New Localism These articles are hereby entered into the minutes as Exhibit B and will be maintained as part of the official meeting documentation. �� I l ill I I ill I i l l I I � I Ill I i F i I I Ill I I i 1 0 WFEDC MINUTES 3/20/2025 PAGE 5 OF 7 agreement between the Wichita Falls, Econornic Development Corporation (WFEDC) and the Wichita Falls Chamber of Commerce in support of a retail land acquisition project. The project aims to enhance economic development through expanded retail infrastructure, directly supporting primary job creation, military readiness, and urban redevelopment in Wichita Falls. As part of the record, testimony from Mr. Ron Kitchens was received and incorporated, along with the submission of nine supporting articles previously entered into evidence by legal counsel. These materials provide context and justification; for the action being taken. Mr. Hegglund read the seven Findings of Fact and Law listed in Resolution No. 03-2025 (attached as Exhibit A) into the record. 1. Retail Availability and Primary Jobs: The board finds that retail availability plays a pivotal role in fostering community growth and supporting the creation of primary jobs. Communities with diverse and accessible retail options are more appealing to prospective businesses that provide such jobs. 2. Local Impact of Expanded Retail: In Wichita Falls, expanded retail availability can enhance the city's livability and attractiveness to industries focused on primary job creation. 3. Support for Sheppard Ai�r Force, Base: The board finds that Sheppard Air Force Base plays a critical role in the local economy, and that growth in retail infrastructure directly supports the base's operations and personnel, Enhanced retail options improve the quality of life for service members and their families, making Wichita Falls a more desirable duty station. 4. Statutory Authority — Retail and Primary Jobs: Pursuant to Texas Local Government Code § 501.101, the board finds that funding land for the creation or retention of primary jobs is an authorized use of economic development funds. The board further finds that this retail project meets the statutory requirement by promoting and retaining primary jobs. 5. Statutory Authority — Manufacturing and Industrial Development: The board finds that this project qualifies as suitable for the development, retention, or expansion of manufacturing and industrial facilities, consistent with § 501.101 of the Texas Local Government Code, as it contributes to the economic conditions necessary for those sectors to thrive. 6. Support for Military Facilities: The board finds that § 501.1101 also authorizes the funding of land that supports the development, retention, or expansion of mil,,itary facilities. The board' specifically finds that this project will support the missions of Sheppard Air Force Base and help to attract new military missions to Wichita Falls. 7. Public Purpose and Economic Benefit: The board finds that the Destination Retail Site Project serves a valid public purpose by advancing the city's long-term economic interests, supporting military readiness, improving quality of life, and generating future opportunities for employment and investment. I r,J11*MTJ116E OHIO- Imm, ROOM= 1111 10. ADJOURNED. Mr. Lane asked if the public had any questions or comments. Since there were none, he WFEDC MINUTES 3/20/2025 PAGE 6 OF 7 adjourned the meeting at 4:13 p.m. -110 lun Y nnnvd- Leo Lane, President WFEDC MINUTES 3/20/2025 IPAGE 7 OF 7 2025.03.20-4A-Minutes-FINAL - no attachments Final Audit Report 2025-05-20 Created: 2025-05-20 By: Moriah Williams (moNah@vdch,itafaillsehamber.com) Status: Signed Transaction IDS CBJICHBCAABAAuH8iw5O3s9VVCTIDH-vyBxPwArn-FdsZ8 Document created by Moriah Williams (modah@wichitafalischamber.com) 2025-05-20 - 9:55:22 PM GMT Document emailed to Leo Lane (leo.lane@icloud.com) for signature 2025-05-20 - 9:5526 PM GMT if Email viewed by Leo Lane (leo.lane@icloud.com) 2025-05-20 - 9:56 : 19 PM GMT Document e-signed by Leo Lane (leo.lane@icioud.com) Signature Date: 21025-05-20 - 9:56:36 PM GMT - Time Source: server Agreement completed. 2025-05-20 - 9:56:36 PM GMT EXHIBIT A Resolution approving a $500,000 performance agreement with the Wichita Falls Chamber of Commerce related to a retail land acquisition project WHEREAS, the Wichita Falls Economic Development Corporation and the Wichita Falls Chamber of Commerce desire to enter into a performance agreement to alllow for the purchase of land to facilitate commercial retail in the city; and WHEREAS, on this date�, testimony was given, and documentary evidence was proffered and accepted by this Corporation;. NOW, THEREFORE, BE IT RESOLVED BY THE WICHITA FALLS ECONOM10 DEVELOPMENT CORPORATION, THAT: The evidence presented to the Corporation is accepted and hereby made an official part of the minutes of this meeting, to be included in the official meeting nitutes. 2. The Findings, as shown in Exhibit A of this resolutionare based on evidence and testimony presented to the Corporation and are hereby officially adopted. The WFEDC finds them to be true and accurate and shall be made part of the official minutes of this meeting. 3. The approval and funding of $500,000 for the commercial retail land project Is approved, 4. Upon receiving approval from the Wichita Falls City Council, President Leo Lane is authorized to execute this agreement in a form approved by the Board Attorney. ATTEST: Seq4wary M Made by the Wichita Falls Economic Development Corporation On this, the 20"1 Day of March, 2025, the WFEDC held a public discussion to determine whether this Boardl should support a project to fund a project for the purchase of land to be used as a destination retail site located within the city limits of Wichita Falls in the amount of $500,000, The WFEDC Board heard testimony and received evidence, which was admitted and made a part of the official record of the meeting, The WFEDC makes the following findings based on the testimony and evidence received 1. Retail availability plays a pivotal role in fostering community growth and supporting the creation of primary,jobs. 2. Communities with diverse and accessible retail options are more appealing to prospective businesses that employ primary jobs. 3, In Wichita Falls, expanded retail availability can enhance the city's livability and attractiveness for new primary job industries, 4. Sheppard Air Force Base plays a crucial role in the local economy, and retail growth directly supports its operations and personnel. Enhanced retail options can improve the quality of life for service members and their families, making Wichita Falls a more desirable assignment location, 5. In Wichita Falls, Texas, retail growth supports Sheppard Air Force Base and its missions. 6. Texas Local Government Code §501.101 specifically allows for the funding of land that is for the creation or retention of primary jiobs, and that is found by the WFEDC Board to be required or suitable for the development, retention, or expansion of manufacturing and industrial facilities creating or retaining primary jobs. This Board finds that the destination retail site project meets this requirement and that the project will help promote and retain primaryjo,bs in Wichita Falls. 7. Texas Local Government Code §501.101 specifically allows for, the funding of land that is for the creation or retention of primary jobs, and that is found by the WFEDC Board to be required or suitable for the development, retention, or expansion of military facilities to help or support an active military base and attract new military missions. The WFEDC Board finds that the destination retail site project will support the missions of Sheppard Air Force Base in Wichita Falls and will help bring in new military missions to the base, M 2/5/25, 8:41 AM The inclusive economic impacts of downtown public space investments EXHIBIT B. Introduction Social Impacts Briefs in this series Economic Impacts Civic Impacts The inclusive economic impacts of downtown public space investments Hanna Love and Cailean Kok Editor's note. This brief is part of a three-part series which examines the economic, social, and civic impacts of public space investments in Albuquerque, N.M., Buffalo, N.Y., and Flint, Mich. https://www.brookings.edu/articles/the-inclusive-economic-impacts-of-downtown-public-space-investments/ 2/15 2/5/25, 8:41 AM The inclusive economic impacts of downtown public space investments JULY 27 2021 Introduction Throughout the height of the COVI D-1 9 pandemic, public spaces provided a refuge for small businesses to safely operate and for people to gather —prompting many cities to rethink the relationship between public space and economic recovery. Now, as public ................................................................................................................................. health restrictions ease and a new "normal" emerges, critical questions are arising. Among them: What role should public spaces play as cities strive to recover more equitably? At a time when so many people and small businesses are suffering, what is the value of public space investments, and importantly, who stands to benefit from this value? This brief shines light on these questions using on -the -ground data collection from three cities that have long struggled with economic inequities: Albuquerque, N.M., Buffalo, N.Y., and Flint, Mich. As part of a three-part research series on the holistic impact of public space[i] investments, this brief centers the voices of residents, small business owners, and community -based stakeholders to document the economic impacts that numbers alone cannot capture —providing a more holistic picture of the relationship between public space investments and inclusive economic outcomes. A slippery science: Discerning the economic impacts of public space investments he economic value —as traditionally defined —of public space investments is well documented. Quality public space investments (such as those that provide urban ..................................................................................................................... T greenery, walkability, and public realm improvements) are correlated with increased land and property values in the surrounding area, including retail, housing, and residential renting values, and are associated with helping areas regain market strength through sale prices and turnover rates of commercial and residential properties.[ii] Some evidence also indicates that public spaces can generate fiscal benefits for local governments through long-term infrastructure cost https://www.brookings.edu/articies/the-inclusive-economic-impacts-of-downtown-public-space-investments/ 3/15 2/5/25, 8:41 AM The inclusive economic impacts of downtown public space investments savings.[iii] It is difficult, however, to isolate whether these economic impacts are the direct result of ............ public space investment or of other factors that affect the economies of surrounding areas.[iv] .......... Nonetheless, these traditional economic indicators are commonly accepted and used to advocate for greater public space investment.[v] In recent years, however, there has been growing recognition that examining the amount of capital that enters a geography (or the amount of public resources saved) is not sufficient for measuring inclusive economic impact. A substantial body of evidence demonstrates that the higher property values correlated with public space investments may fail to benefit underserved residents and businesses, particularly those renting and leasing.[Vi] Additionally, in "hot market" neighborhoods, .......... these higher property values may even cause harm by fueling displacement —disadvantaging longtime residents for whom many park efforts are ostensibly funded to serve.[vii] On the other hand, ............ communities of color and low-income neighborhoods are often left without access to public space or with public spaces that are smaller, poorly maintained, lack programming, and/or have limited play options —leaving them excluded from the benefits that public spaces can bring.[viii] .......... For these reasons, it is important to look beyond traditional measures of economic value and ask the questions: Who is benefitting from the economic value of public spaces? Are the benefits distributed to people of different races, incomes, ability statuses, and tenures in a community? Are there additional economic benefits public spaces produce that traditional measures are not capturing? With growing recognition among public officials that public spaces should be part of intentional place -based revitalization strategies (and many cities explicitly building and programing public spaces as part of downtown revitalization efforts), these questions are increasingly urgent.[ix] They ........... can be answered, in part, by using equity -focused metrics: examining trends in employment, poverty, demographics, business, and housing markets, as well as how such benefits are distributed across a populationjx] Several organizations, including Reimagining the Civic Commons and others, are ........ .................................................................................................................... ....................... embarking on this important work. Yet numbers alone cannot tell the whole story —particularly, the story of what residents, small businesses, and other community -based stakeholders perceive the value of public spaces to be, and who benefits most from such value. This brief centers on the third question —Are there additional economic benefits public spaces produce that traditional measures are not capturing? —and relies on community and stakeholder voices to find the answer. As the Knight Foundation pointed out, "building ......................................... public spaces alone does not create thriving downtowns or city centers," particularly if not everyone https://www.brookings.edu/articies/the-inclusive-economic-impacts-of-downtown-public-space-investments/ 4/15 2/5/25, 8:41 AM The inclusive economic impacts of downtown public space investments can access, benefit from, or feel attached to the space itself. Methods: Examining the economic impacts of public space investments in Flint, Albuquerque, and Buffalo The Brookings Bass Center for Transformative Placemaking. and Project for Public Spaces conducted on -the -ground research in Flint, Albuquerque, and Buffalo, examining the impact of three downtown public space investments: the Flint Farmers' Market, Albuquerque's Civic Plaza, and Buffalo's Canalside. (For a description of and background on the public spaces, please see the Introduction. brief.) Our research consisted of in-depth interviews with 78 residents, small business owners, public sector officials, and other key stakeholders as well as three supplemental focus groups with residents and public space vendors between February and March 2020. Project for Public Spaces had previously conducted placemaking projects in each of the three spaces —which helped facilitate connections to stakeholders on the ground —but had not been involved in the public spaces for a number of years. All 78 interviews and supplemental focus groups were recorded (unless interviewees explicitly requested not to be, in which case detailed notes were taken), transcribed, and coded using a qualitative coding scheme for consistency and quality control. Overall, we examined the impact of downtown public space investments on three key outcomes of community well-being, including economic, social, and civic outcomes. We recognize the interdependence of economic, physical, social, and civic inputs and outcomes —by investing in one class of assets (for instance, physical, through public space investments), there are interrelated effects on others (economic, social, and civic). This brief focuses on economic outcomes. Using the Bass Center's transformative Placemaking framework, we examined the extent to which public space investments can help foster downtown economic ecosystems that are: 1.1-ocally empowering: Supporting local small businesses and local investment priorities 2.1nnovative: Fostering creativity and entrepreneurship opportunities 3.Regionally connected: Connecting residents and small businesses to regional markets and networks https://www.brookings.edu/articies/the-inclusive-economic-impacts-of-downtown-public-space-investments/ 5/15 2/5/25, 8:41 AM The inclusive economic impacts of downtown public space investments To learn more about the intersections between economic, social, and civic outcomes, please see the other briefs in the series. Findings 0 ur research revealed three multifaceted findings, providing new insights into the role that downtown public space investments play in shifting perceptions of places, in inspiring new infrastructure and private sector development, and in incubating underserved small businesses within the public spaces themselves. Finding #1: Public spaces play a critical role in shifting perceptions of place All three cities invested in their public spaces as part of a larger effort to revitalize their downtown districts. Each city had wrestled with the well-known story of downtown "decline" in the latter half of last century —experiencing depopulation, job shifts to the suburbs, and economic stagnation —but had not yet "come back" as many other big -city downtowns such as Chicago, Seattle, and Dallas.[xi] .......... In Albuquerque, Flint, and Buffalo, it wasn't uncommon to hear from stakeholders that downtown was a virtual ghost town after 5:00 p.m. —impacting the small businesses trying to stay open and the growing number of residents living in the area. Figure 3. Leisure and hospitality businesses in downtown Albuquerque, Buffalo, and Flint make up 4%,,23%, and 18%, respectively, of leisure and hospitality businesses citywide Em NInside downtown 0 Outside downtown N= ffim https://www.brookings.edu/articies/the-inclusive-economic-impacts-of-downtown-public-space-investments/ 6/15 2/5/25, 8:41 AM The inclusive economic impacts of downtown public space investments 1,000 M IC Albuquerque Source: Brookings analysis of Esri Business Analyst data Buffalo Flint BMetropolitan Policy Program at BROOKINGS Yet at the time of our study, these patterns were beginning to shift and enter what stakeholders called a "momentum" phase. Residents and stakeholders across the cities pointed to a key reason why: Peoples' perceptions of downtown were changing, in part, because public spaces and a diverse activation of these spaces gave them a reason to go downtown and stay there. In Flint and Buffalo, this dynamic largely played out through the Farmers' Market and Canalside, which attracted people from across the region to downtown and gave them a reason to spend their dollars locally. "Some people haven't been downtown in 20 to 30 years," one Flint downtown stakeholder told us. "What the Farmers' Market did is it brought people from the county to downtown Flint... Without the Farmers' Market, I don't think we would have captured the wealth of a lot of that community." "The Farmer's Market was a catalyst project that people needed to see for downtown to be more than just that place where bad things happen and a couple of bars," another resident who worked at a Flint - based nonprofit told us. "They started seeing it as a destination." By virtue of seeing the market as a "destination," these visitors supported the almost 50 small businesses housed there. In Buffalo, respondents reported the same trend; however, they explained that its impact transcended the dollars spent at Canalside and helped give residents confidence in their city's economic health more broadly. I think the biggest impact Canalside has had is it's demonstrated to us that we can have our downtown back," one university stakeholder told us, echoing the thoughts of many interviewees. "it gave the city confidence in its resurgence." https://www.brookings.edu/articies/the-inclusive-economic-impacts-of-downtown-public-space-investments/ 7/15 2/5/25, 8:41 AM The inclusive economic impacts of downtown public space investments In Albuquerque, public sector officials were clear that peoples' perceptions of downtown were still a significant barrier to economic activity in the area. As one city official told us, "People's beliefs and perceptions can be so tricky to change. How do you overcome that? When a place has been ignored for a long time, how do you change people's view about it to actually get people out there to experience it?" Yet through our focus groups, residents indicated that their views of downtown were slowly changing —largely due to programming at Civic Plaza, including concerts, movie nights, and farmers' markets. This provides further indication that a diverse activation of spaces and mixed uses in downtowns can be a critical component of economic resilience. Shifting perceptions of and increasing visitation to downtown was, of course, merely a first step in revitalization —but it arose as a common pattern across all three cities and all 78 interviews as one of the most impactful ways public spaces supported small businesses in the area. This trend, however, also ushered in new dynamics between city and suburban residents —sometimes heightening long-standing social divides, which we discuss in-depth in "Exploring the often fraught relationship between public spaces and social divides." ............................................................................................................................................................................................................................................................................................... Finding #2. Public space investments can catalyze overdue infrastructure improvements and 'pave the way' for additional private sector development More tangibly, our interviews revealed that successful public space investments can help inspire long -overdue public sector infrastructure and private sector development in the downtown area, which in turn can support nearby small businesses. Stakeholders often described the public space as the "catalyst" needed to demonstrate that new private sector investments (outside of solely o.ffi..c.e. ... . ............... space) could be successful in downtowns, or the impetus for the public sector to increase public ...................... investment in the area. In Albuquerque in particular, small business owners and residents explained that they had largely felt like the city abandoned downtown until recently, and pointed to the importance of Civic Plaza in encouraging much -needed public investment downtown. I would say that the changes in Civic Plaza dramatically increased the city investment in downtown up until this point," one downtown stakeholder told us. "We felt so neglected with city improvements, infrastructure improvements. So all of a sudden they're replacing our street trees, they're putting in the bike lanes, they're redoing the fountain." When we spoke to Albuquerque Mayor Tim Keller, this sentiment bore out. He told us he was https://www.brookings.edu/articies/the-inclusive-economic-impacts-of-downtown-public-space-investments/ 8/15 2/5/25, 8:41 AM The inclusive economic impacts of downtown public space investments intentionally working to triangulate placemaking efforts downtown to spur economic development, of which Civic Plaza and the new Rail Yards Market were an important part. In Buffalo, stakeholders reported that Canalside helped catalyze new investment that transcended the immediate district and master plan for the waterfront. Many pointed to the nearby Ohio Street ........................................ Corridor revitalization into a multiuse pathway linking activity centers as an initiative the success of ............................................................................. ...................................................... Canalside spurred. "Between Canalside and the river restoration work in tandem, it's provided that springboard and safety net for these other developments," one public sector stakeholder told us. "Now you see the private development that's happening along Ohio Street. It's kind of a chain reaction, one doesn't happen in isolation of another." In Flint, stakeholders repeatedly spoke to the Farmers' Market's critical role in supporting the development of other small businesses within the downtown area by providing the necessary foot traffic and critical mass of people needed to inspire additional success. "The Farmers' Market has just been amazing catalyst in for the city and the rest of downtown:' a Flint Farmers' Market vendor told us. I don't think the rest of downtown, of Saginaw Street, that everything would look the same if the market wasn't here." From the perspective of our interviewees, what was so important about these new developments and public realm improvements was that they benefited small, locally owned businesses and downtowns that had experienced economic stagnation for too long. In other, more "hot market" cities, new development can bring gentrification. But in these cities, they were bringing long -overdue resources and amenities to the area. Finding #3. Public spaces themselves can be powerful incubators for entrepreneurs and small businesses —but achieving that goal requires intentionality Stakeholders in all three cities reported that the public space investments supported the development and success of local small businesses, either indirectly (by increasing foot traffic to the surrounding area) or directly within the public space (by providing vendors and small business owners with a physical, low -barrier -to -entry space to sell their goods). But the Flint Farmers' Market stood out in its ability to incubate underserved small businesses, largely because it embedded small business support into the core of its placemaking vision. https://www.brookings.edu/articies/the-inclusive-economic-impacts-of-downtown-public-space-investments/ 9/15 2/5/25, 8:41 AM The inclusive economic impacts of downtown public space investments With its relocation to downtown, the Farmers' Market expanded the number of vendors it could house, worked to provide below -market rent, built new commercial kitchens to allow food -based entrepreneurs to create licensed products, and launched formal entrepreneurship training. The ability to operate a low-cost, low -barrier -to -entry small business within a downtown commercial corridor was described as an unprecedented opportunity for many underserved small business owners. As one public sector official explained, the goal was to help entrepreneurs "start their own business —not out of their garage, but out of downtown's Main Street." The Flint vendors we spoke with echoed this sentiment. I don't know where in anywhere else in the country that you can start with having a place like the market and be able to access so many customers," one vendor told us. "Especially at the low rate ... 35 bucks a day or something absurd. That's something very unique." To ensure affordability, the market never raised vendors' rents. Market management partnered with Co.Starters for a training course, offered one-on-one consulting through a Flint Food Works program, and offered free use of commercial kitchens to hopefully grow vendors' capabilities to open up their own storefronts downtown. "Flint Food Works and the commercial kitchens there really allowed me to operate my business on a learning curve," another vendor told us. "I didn't even know half the equipment existed until I finally moved in here and looked at the kitchen." Yet Flint was only able to achieve this kind of inclusive impact for small businesses because they embedded small business development in their placemaking vision from the outset. The other two sites had potential to do so, but witnessed varying level of success. Canalside, for instance, made supporting local small businesses a part of their planning process, adopting a consensus document, "A Public Statement of Principles for High Road Development of Buffalo's Waterfront" after ........................................................................................................................................................................................................................................................................................................... L community activists advocated for a legally binding Community Benefits Agreement that the Erie ................................................................................................................................................................................................................................ Canal Harbor Development Corporation and other city leaders ultimately declined to enter. While Canalside stakeholders fulfilled some of the goals in this nonbinding consensus agreement (such as hosting minority- and women -owned business enterprise job fairs and seeking local vendors for programming), some residents and interviewees remained unaware of these efforts, and no annual tracking on outcomes for these inclusive economic development goals have been reported to show https://www.brookings.edu/articies/the-inclusive-economic-impacts-of-downtown-public-space-investments/ 10/15 2/5/25, 8:41 AM The inclusive economic impacts of downtown public space investments Civic Plaza also had extensive potential to provide economic opportunity to small businesses, and did so at times through events, movie nights, and markets. But public space managers and the city did not have a coordinated plan or permanent infrastructure to help support Albuquerque's local businesses through Civic Plaza's activation. As one public space manager in Albuquerque told us when reflecting on the economic impact of Civic Plaza, "Do you have a vision in place? You could light one little fire over here, but how is it connected to a larger vision? I feel like we did an amazing thing with Civic Plaza and everyone is so proud of it, but if we had had a larger downtown vision in place that it was connected to it could light a fire." These findings spoke to the importance of being intentional about inclusive economic impacts from the outset, embedding efforts to support underserved residents and small business within the placemaking vision itself, and regularly re-engaging with residents and small businesses to measure progress and success. Conclusion hroughout the COVID-1 9 pandemic, nearly nonstop conjecture about "the future of cities" emerged, with the gloomiest predictions centering on the fate of downtowns. Rather ............................................................................ T than harping on the plight of "ghost town downtowns," now is the time to think more expansively about the future of downtowns: How can they become more dynamic, inclusive, and mixed -use? How can they better support minority -owned businesses? How can they draw greater connections between prosperity downtown and nearby neighborhoods? Our research reinforces the powerful role that public spaces can play in achieving a more dynamic vision for the future of cities and downtowns, and the importance of embedding explicit inclusive economic development goals within placemaking from the outset. There are plenty of national best practices to choose from to enhance inclusive economic outcomes —from Washington, D.C.'s 11th ............... Street Bridge Park's Equitable Development Plan, to the University City District's Green City Works ........................................................................................................................................................................... ............................................................. program in Philadelphia, to Chicago's Neighborhood Opportunity Bonus that leverages downtown ............................. ....................................................................................................................... growth to provide new funding sources for neighborhoods lacking private investment. Now is the time for local leaders to seize these models and intentionally use public space investments to promote inclusive economic recovery in downtowns and beyond. https://www.brookings.edu/articies/the-inclusive-economic-impacts-of-downtown-public-space-investments/ 11/15 2/5/25, 8:41 AM The inclusive economic impacts of downtown public space investments The way we plan, design, and program public spaces has far-reaching impacts for equity —shaping the amenities people have access to, the space available to them to grow a business, and the connections forged between people and places. It is imperative as we look ahead to leverage these impacts to rebuild more equitable downtowns, cities, and regions. Cover photo. Local vendors sell goods at the Flint Farmer's Market. Photo courtesy of Flint Farmers' Market. The authors thank Joanne Kim for her excellent research assistance on this series. They express their sincere gratitude to the community stakeholders who participated in research interviews and focus groups. They also thank Lola Bird, Lavea Brachman, Karriane Martus, Steve Ranalli, Nate Storring, and Jennifer S. Vey for their review of various drafts of the series. Any errors that remain are solely the responsibility of the authors. 70MIN771=7 Research Associate — Metropolitan Policy Program https://www.brookings.edu/articies/the-inclusive-economic-impacts-of-downtown-public-space-investments/ 12/15 2/5/25, 8:41 AM The inclusive economic impacts of downtown public space investments Cailean Kok Project Associate - Project for Public Spaces [i] Please see the Introduction for our definition of "public space." [ii] Eldridge, M., K Burrowes, and R Spauste.Investing in Equitable Urban Park Systems. Urban Institute, July 2019: https://www.urban.org/research/publication/investing-equitable-urban-park- systems; Carmona, M. Place value: place quality and its impact on health, social, economic and .............................. environmental outcomes. Journal of Urban Design, 24(1),1-48, 2019: https:Hdoi.org/l 0.1080/13574809.2018.1472523; Forestry Commission. Benefits of Greenspace, ................................................................................................................................................................................ 2015: https:#doi.org/10.13140/RG.2.1.2177.6806. ........................................................................................................................................................... Did Robert Wood Johnson Foundation. The Economic Benefits of Open Space, Recreation Facilities .......... and Walkable Community Design Introduction, 2010: https://activelivingresearch.org/sites/activelivingresearch.org/files/Synthesis-Shoup- .................................................................................... - - ................................................................................... ................................................................................ Ewing-March201 O-O.pdf ........................................................................................ [iv] Hoyt, L. and D. Gopal-Agge, D. The business improvement district model: A balanced review of contemporary debates. Geography Compass, 2007:1(4), 946-958. M lzmailyan, E. Emphasizing Equity in Economic Impact Analysis. HR&A Advisors: June 2018: https://www.hraadvisors.com/emphasizing-equity-economic-impact-analysis/ .................................................................................................................................................................................. ---- .................................................................................. [vi] Gaynair, G., M, Treskon, J. Schilling, and Velasco, G. Civic Assets for More Equitable Cities. Urban Institute, August 2020: https://www.urban.org/research/publication/civic-assets-more-equitable- .................................................................................................................................................................................................................................................................... cities; Eldridge, M., K. Burrowes, and P. Spauste,Investing in Equitable Urban Park Systems. Urban .................. Institute: July 2019. https://www.urban.org/research/publication/investing-equitable-urban-park- .............................................................................................................................................................................................................................................................................. systems .............................. [vii] Gaynair, G., M, Treskon, J. Schilling, and Velasco, G. Civic Assets for More Equitable Cities. Urban ........... https://www.brookings.edu/articies/the-inclusive-economic-impacts-of-downtown-public-space-investments/ 13/15 2/5/25, 8:41 AM The inclusive economic impacts of downtown public space investments Institute, August ZU2U: https://www.urban.org/researCh/pUblication/civic-assets-more-equitable- .................................................................................................................................................................................................................................................................... cities; Rigolon, A., and J. Christensen: Without Gentrification: Learning from parks -related anti - displacement strategies nationwide. ULCA Institute of the Environment and Sustainability, 2019: https://www.ioes.ucla-edulwp-contentluploadsIGreening-without-Gentrification-report-201 9.pdf, .................................................................................................................................................................................................................................................................................................................................................... Eldridge, M., K. Burrowes, and P. Spauste,investing in Equitable Urban Park Systems. Urban Institute: July 2019. https://www.urban.org/research/publication/investing-equitable-urban-park-systems. .................. __ _ - .................... - ........................ - _._ ............... _._ ............................. ..................... - .................... - - ................ ..................... [viii] Eldridge, M., K. Burrowes, and P. Spauste,Investing in Equitable Urban Park Systems. Urban .............. Institute: July 2019. https://www.urban.org/research/publication/investing-equitable-urban-park- .............................................................................................................................................................................................................................................................................. systems. ............................... [ix] Knight Foundation. Measuring Progress Toward Downtown Revitalization and Engaging Public Spaces: A Review of Existing Research. August 2020: https:llknightfoundation.org/reports/measuring-progress-toward-downtown-revitalization-and- ........................................................ - .................................................................................. ........................................................................... .................................................................................. - ...................... engaging -public -spaces -a -review -of -existing -research/. ................................................................................................................................................................................................ am [xi] Tomer, Adie and Lara Fishbane. Big city downtowns are booming, but can their momentum outlast the coronavirus? Brookings Institution, May 2020: http://www.brookings.edu/research/big-city- ............................................................................................................................................................. downtowns-are-boominq-but-can-their-momentum-outlast-the-coronavirus/. CONTACT MEDIA RELATIONS TERMS AND CONDITIONS PRIVACY POLICY https://www.brookings.edu/articies/the-inclusive-economic-impacts-of-downtown-public-space-investments/ 14/15 ,6 < < K VALUES Wherewe've been Recent special classes at the University of Shopping Centers, web based programs and the John T. Riordan schools, have benefitted members by looking at redevelopment and retrofitting existing properties and opportunities to maximize retail productivity. Conferences, books, sessions and ICSC events around the world offer potential to assimilate knowledge, and only ICSC offers global professional certifications: CSM, CMD, CLS, CDP. Where we're. going Conferences such as our NOI+ Conference will educate members on asset management priorities and maximizing net operating income at their retail properties. We're also working with like-minded shopping center councils and associations around the globe to encourage innovative thought leadership collaboration on best practices. ADVOCACY l eire we've been Recent efforts to champion Marketplace Fairness have gained greater traction than ever before in the U.S. Congress. A robust public affairs campaign and aggressive advertising have garnered legislative support and raised public awareness. m'urn. 90,111r19 ICSC is working diligently to thwart any attempts to raise industry -focused taxes, such as on carried interest. In the regulatory arenas, we are playing a significant role in ensuring that international, national and local rules reflect the realities of operating in a multi -tenant retail environment. Member research resources span an online library, a database of more than 14,000 industry statistics, a rich offering of learning, leadership and issues videos, 11 industry -leading publications, a global shopping center directory and a wide array of special studies. Strategic alliances with complementary associations and industry research providers will bring new range and depth to our information offerings, especiallyfor new and timely industry benchmarks. RECon Las Vegas draws over 30,000 attendees annually. An additional 300 global events provide local and regional networking opportunities for 70,000 more industry professionals. Every year a significant share of all retail leasing activity is shaped at ICSC events. We will strengthen our Global RECon and local events to provide premier in -person networking opportunities for members in Asia, Europe, Latin America and the Caribbean, and the Middle East and North Africa. We will also use new media and technology to create opportunities for online and mobile networking. MARKETPLACE Since 2011, ICSC has made enormous strides in advocating for sales tax fairness. Backed by the investment approved by the Board of Trustees, ICSC put significant resources towards educating Congressional offices and the public about sales tax fairness and the outstanding tax burden that consumers currently owe on many online purchases. This campaign has translated into myriad media opportunities for ICSC and has created significant momentum for legislation at the federal level. ICSC leads the Marketplace Fairness Coalition; a unified voice for the proponents of Marketplace Fairness. The members of the Coalition represent nearly 3 million businesses, associations, and organizations located in every state throughout the country. • California has the most • Shopping center -related shopping centers-15,160. employment totaled 12.5 Wyoming has the least with million jobs in 2013. 74. • At year end 2013 there are 1,511 enclosed malls in the U.S. • The average enclosed mall contains 875,187 sq. ft. of total floor space. • The are 398 lifestyle centers operating in the U.S. • In 2013, shopping center - inclined sales accounted for $2.5 trillion. • Shopping center - inclined sales generated $137.2billion in state sales tax revenue in 2012. • Supermarkets are the most common anchor in open-air centers. Thus far, ICSC's efforts have paid off in early 2013. We had several resounding bipartisan votes of approval in the U.S. Senate, culminating May 6 with the passage of S.743 by that chamber with a 69-27 vote. The push now continues to the U.S. House for action and approval there. 2 Shoppers have found their way back to the malls; retail sales numbers for 2013 regained their strength, registering nearly $2.5 trillion in sales, an increase from $2.4 trillion in 2012. • Apparel and accessories Shopping center —related employment accounted for almost stores account for 57.8% of all non -anchor mall space. than 12.5 million jobs for 2013, an increase from 12.3 million jobs in 2012. • The last enclosed mall that was built was in 2011—City In 2013, there were 227 more shopping centers operating Creek Center in Salt Lake in the U.S. than in 2012. The total number of U.S. shopping City, Utah. centers increased in 2013 to 114,485, up from 114,258 in • Wal-Mart was the highest 2012. grossing retailer in 2012, earning $468 billion in sales. is A HISTORY OF 1 N G C E N I ERS Shopping centers have existed in some form for more than 1,000 years as ancient market squares, bazaars and seaport commercial districts. The modern shopping center, which includes everything from small suburban strip centers to the million -square -foot super regional mall had its genesis in the 1920s. 1920s The concept of developing a shopping district away from a downtown is generally attributed to J. C. Nichols of Kansas City, Mo. His Country Club Plaza, which opened in 1922, was constructed as the business district for a large-scale residential development. It featured unified architecture, paved and lighted parking lots, and was managed and operated as a single unit. In the latter half of the 1920s, small strip centers were built on the outskirts of large cities. The centers were usually anchored by a supermarket and a drugstore, supplemented by other convenience -type shops. The typical design was a straight line of stores with space for parking in front, such as the Grandview Avenue Shopping Center in Columbus, Ohio, which opened in 1928 and included 30 shops and parking for 400 cars. Many consider Highland Park Shopping Village in Dallas, Texas, developed by Hugh Prather in 1931, to be the first planned shopping center. Its stores were built with a unified image and managed under the control of a single owner. Highland Park occupied a single site and was not bisected by public streets. And, its storefronts faced inward, away from the streets —a revolutionary design. 1930s..194Os In the 1930s and 1940s, Sears Roebuck & Co. and Montgomery Ward set up large freestanding stores, with on -site parking, away from the centers of big cities. The early 1950s marked the opening of the first two shopping centers anchored by full -line branches of downtown department stores. Northgate in Seattle, Wash., (two strip centers face-to-face with a pedestrian walkway in between) opened in 1950, and Shoppers World in Framingham, Mass. (the first two - level center), debuted the following year. The concept was improved upon in 1954 when Northland Center in Detroit, Mich., used a "cluster layout" with a single department store at the center and a ring of stores around it. In 1956, Southdale Center in Edina, Minn., outside of Minneapolis, opened as the first fully enclosed mall with a two -level design. It had central air-conditioning and heating, a comfortable common area and, more importantly, it had two competing department stores as anchors. Southdale is considered by most industry professionals to be the first modern regional mall. By 1964 there were 7,600 shopping centers in the United States. Most of the centers built in the 1950s and 1960s were strip centers serving new housing developments. 1970s By 1972 the number of shopping centers had doubled to 13,174. During the 1970s, a number of new formats and shopping center types evolved. In 1976 The Rouse Co. developed Faneuil Hall Marketplace in Boston, Mass., which was the first of the "festival marketplaces" built in the United States. The project, which revived a troubled downtown market, was centered on food and retail specialty items. Similar projects were built in Baltimore, New York City, and Miami, and have been emulated in a number of urban areas. The bicentennial year also marked the debut of the country's first urban vertical mall, Water Tower Place, which opened on Michigan Avenue in Chicago. To many experts, Water Tower Place with its stores, hotel, offices, condominiums and parking garage, remains the preeminent mixed -use project in the United States. 80s The 1980s saw an unparalleled period of growth in the shopping center industry, with more than 16,000 centers built between 1980 and 1990. This was also the period when super -regional centers became increasingly popular with shoppers. Between 1989 and 1993, new shopping center development dropped nearly 70 percent, from 1,510 construction starts in 1989 to 451 starts in 1993. The sharp decline in new center starts was attributed to the savings and loan crisis, which helped precipitate a severe credit crunch. Factory outlet centers were one of the fastest -growing segments of the shopping center industry in the 1990s. In 1990, there were 183 outlet centers. Today, there are more than 225 outlet centers in the United States. By 1992, the prevailing trend in the shopping center industry had become the remodeling and expansion of existing projects. In 1992, these renovations outstripped new construction, with 571 additions and alterations reported. One of the retail formats that became increasingly popular in the 1990s was the power center. Power centers are often located near regional and superregional malls. San Francisco -based Terranomics is credited with pioneering the concept at 280 Metro Center in Colma, Calif. I THE SHOPPING CENTER INDUSTRY NATIONAL Economic Impact Shopping centers have become an integral part of the economic and social fabric of their communities. In 2013, shopping center -inclined sales were estimated at $2.5 trillion, an increase of 2.6% from the previous year. In 2012, state sales tax revenue from shopping center -inclined sales totaled $137.6 billion, up from the $131.6 billion collected in 2011. In 1995, with the construction of the Mall of America in Bloomington, Minn., entertainment quickly became an industry buzzword as technological advances allowed shopping center developments to foster the same magical experiences that were once only seen in national amusement parks such as Disney World. The Mall of America, currently one of the largest malls in the U.S., includes a seven -acre amusement park, nightclubs, and restaurants, and covers 4.2 million square feet (with about half that total devoted to retailing). Since the start of the entertainment wave, retailers have focused on keeping their presentations exciting, and shopping center owners have striven to obtain tenant mixes that draw traffic from the widest audience possible. Under one roof or in an outdoor retail format, consumers enjoy children's playscapes, virtual reality games, live shows, movies in multiplex cinemas, a variety of food in either the food court or theme restaurants, carousel rides, visually stunning merchandising techniques, robotic animal displays, and interactive demonstrations. Many shopping centers are also focused on added service - oriented tenants, which offer today's busy consumer an opportunity to complete weekly errands or to engage in a variety of other activities. Among the many services found in today's malls are churches, schools, postal branches, municipal offices, libraries, and museums. Shopping Center-Inckned Saes 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 I $1.0 $1.25 $1.5 $1.75 $2.0 $2.25 $2.5 Trillions Many hurdles were faced during this decade, which shook up the shopping center industry and ultimately created a "new normal." The economic downfall hit during the end of this decade and had a strong impact on the way future business would be conducted. By 2010 there was an all- time high of 112,384 shopping centers in the United States. Due to the downturn in the economy, sales took a hit and shopping center development saw little to no activity during the latter half of the decade. Signs of improvement have been surfacing and a new era of the shopping center industry is starting to occur. Instead of building new centers, owners are redeveloping the centers they already have, making them more appealing and driving consumers back into malls. Green initiatives have made their way into the retail real estate industry. Developersand mall owners havetaken stepsto create sustainable centers by implementing "greener" methods into everyday practices. From the land that the centers are built on to the materials used when remodeling or building a new center, to putting energy -saving solar panels on roofs, green methods can be found in many of today's shopping centers. In this process of going "green," a favorable situation has occurred: malls are now more eco-friendly while operating more cost efficiently for the owners. Sustainability is a trend that will likely stick around for the coming years. Although this decade had its moments of ups and downs, the shopping center industry proved its strength. THE SHOPPING CENTER INDUSTRY NATIONAL Shopping ernteir-Related If;;;rnlpll yirnernt 2013 Shopping center -related employment accounted for 12,476,750 jobs in 2013, 2012 nearly 9.2% of the country's workforce. 2011 This figure represents an increase of 2010 1.2% from 2012. At year-end 2013, there 2009 were 114,485 shopping centers, up from 2008 114,258 the previous year, containing 7.49 billion square feet of gross leasable 2007 area (GLA) in the U.S. 2006 2005 2004 2003 2002 2001 12.0 12.1 12.2 12.3 12.4 12.512.6 12.7 12.8 12.9 13.0 I Millions 2013 MONTHLY DISTRIBUTION OF SA� ................. US SHOPPING CENTER ANNIOUNW." lRegioinai [Mall] General merchandise or fashion -oriented offerings. Typically enclosed with inward - facing stores connected by a common walkway. Parking surrounds the outside perimeter. [Center Count] 831 [Aggregate GLA sq. ft.] 488,594,847 [Share of Industry GLA] 6.5% [Average Size sq. ft.] 587,960 [Typical GLA Range] 400,000-800,000 sq. ft. [Trade Area Size] 5-15 miles Sulpor.-Illegioinai [Mall] Similar in concept to regional malls, but offering more variety and assortment. [Center Count] 680 [Aggregate GLA sq. ft.] 833,812,001 [Share of Industry GLA] 11.1% [Average Size sq. ft.] 1,226,194 [7ypical GLA Range] 800,000+ sq. ft. [Trade Area Size] 5-25 miles S-turiiillp/Coiinveiiniiieiince [Open -Air] Attached row of stores or service outlets, managed as a coherent retail entity. A strip center does not have enclosed walkways linking stores. A convenience center is among the smallest of the centers, whose tenants provide a narrow mix of goods and personal services to a limited trade area. [Center Count] 68,127 [Aggregate GLA sq. ft.] 895,849,415 [Share of Industry GLA] 12.0% [Average Size sq. ft.] 13,150 [7ypical GLA Range] < 30,000 sq. ft. [Trade Area Size] 1 mile I 2013 GEOGRAPHIC 5-10 million sq. ft. IIIIIIIIIIIIIIIIIIIII 11-40 million sq. ft. 41-95 million sq. fL IIIIIIIIIIIIII 96-165 million sq. ft. 0 166-250 million sq. ft. III IIIIIIIIIIIIIIIII 251-750 million sq. fL 750+ million sq. ft. US SHOPPING CENTER DEFINITIONS Neighborhood [Open -Air] Convenience oriented [Center Count] 32,301 [Aggregate GLA sq. ft.] 2,322,119,720 [Share of Industry GLA] 31.0% [Average Size sq. ft.] 71,890 [Typical GLA Range] 30,000-125,000 sq. ft. [Trade Area Size] 3 miles iir iir iniir [Open -Air] General merchandise or convenience - oriented offerings. Wider range of apparel and other soft goods than neighborhood centers. The center is usually configured in a straight line as a strip, or may be laid out in an L or U shape, depending on site and design. [Center Count] 9,562 [Aggregate GLA sq. ft.] 1,884,308,441 [Share of Industry GLA] 25.2% [Average Size sq. ft.] 197,062 [Typical GLA Range] 125,000-400,000 sq. ft. [Trade Area Size] 3-6 miles California, Texas and Florida continue to outperform other states in shopping center gross leasable area (GLA). Combined they account for 29.4% of the total GLA. In 2013, California led the nation in GLA, with 895.4 million square feet, or 12.0% of the total United States, up from 892.6 million in 2012. Texas centers have 708.6 million square feet, from 706.2 million in 2012. Florida has 594.8 million square feet, up from 594 million in 2012. The next largest concentrations are in Ohio, Georgia, Illinois, and New York, which all together have 16% of the total GLA. These seven states contain 45.3% of the total U.S. shopping center GLA. In contrast, the sparsely populated states of Wyoming, Vermont, South Dakota, North Dakota, Alaska and Montana are home to less than 1.0% of the total shopping center GLA. Ill iifes l [Open -Air] Upscale national -chain specialty stores with dining and entertainment in an outdoor setting. [Center Count] 398 [Aggregate GLA sq. ft.] 126,247,790 [Share of Industry GLA] 1.7% [Average Size sq. ft.] 317,206 [Typical GLA Range] 150,000-500,000 sq. ft. [Trade Area Size] 8-12 mile UNITED STATES 2013 T -'E U ET NTR v F,', .. . . . . . . LES Total Retail Sales $4.53 trillion Year -on -Year Change in Retail Sales 4.2% Total Retail Sales per Capita $14,339 Total Retail Sales % GDP 27.0% Shopping Center Sales $2.49 trillion Year -on -Year Change 2.6% Shopping Center Sales per Capita $7,875 Shopping Center Sales % GDP 14.8% EP,, `,//1`,, Total Retail Employees 15.1 million Total Shopping Center Employees 12.5 million Shopping Center GLA 7,487,402,518 sq. ft Total Shopping Center GLA per 100 Inhabitants 2,368 sq. ft US SHOPPING CENTER DEFINITIONS III cur Ceiintvr [Open -Air] Category -dominant anchors, including discount department stores, off -price stores, wholesale clubs, with only a few small tenants. [Center Count] 2,028 [Aggregate GLA sq. ft.] 827,923,296 [Share of Industry GLA] 11.1% [Average Size sq. ft.] 408,246 [Typical GLA Range] 250,000-600,000 sq. ft. [Trade Area Size] 5-10 miles r1heiirne/111:::`es-6vall [Open -Air] Leisure, tourist, retail and service -oriented offerings with entertainment as a unifying theme. Often located in urban areas, they may be adapted from older —sometimes historic —buildings, and can be part of a mixed -use project. [Center Count] 178 [Aggregate GLA sq. ft.] 26,161,261 [Share of Industry GLA] .3% [Average Size sq. ft.] 146,973 [Typical GLA Range] 80,000-250,000 sq. ft. [Trade Area Size] 25-75 miles Outlet [Open -Air] Manufacturers' and retailers' outlet stores selling brand name goods at a discount. [Center Count] 340 [Aggregate GLA sq. ft.] 76,259,181 [Share of Industry GLA] 1.0% [Average Size sq. ft.] 224,292 [Typical GLA Range] 50,000-400,000 sq. ft. [Trade Area Size] 25-75 mile a UNITED STATES 2012 Malls in the U.S. posted their highest sales per square foot ($475) ever recorded in 2013. Consumers visited malls on average 3.4 times per month. In each visit, they spent over $97 for an average of nearly $ 3 31 per month. Women spent the most, averaging $344 per month. Men averaged less, spending $321 per month, but actually made slightly more trips - but those trips were 10 minutes less in duration than trips made by women. Wal-Mart Kroger Target costco The Home Depot US SHOPPING CENTER DEFINITIONS Iflrrlp ulr' IlRe— ail [Special Purpose] Consolidation of retail stores located within a commercial airport. [Center Count] 40 [Aggregate GLA sq. ft.] 6,126,566 [Share of Industry GLA] .1% [Average Size sq. ft.] 153,164 [Typical GLA Range sq. Ft.] 75,000-300,000 sq. ft. IFive III ,,,,allr t II °talll llr V10o V10 �00 \� �o ��A�10 o0 �o oo �o goo 4T�lp eQI',��'p IIIIIIIIIIIIII Domestic Sales IIIIIIIIIIIII International Sales r - al Industry 7 ail. Simon Kimco Realty DDR General Growth Brixmor [Mall+Open-Air+Special Purpose] IFive III ,,,,allr t Shopping Centeiir Owners gyp,• 5A 5A 5A "oo� IIIIIIIIIIIIII Domestic GLA IIIIIIIIIIIII Total GLA (including International GLA) [Center Count] 114,485 [Aggregate GLA sq. ft.] 7,487,402,518 [Share of Industry GLA] 100% [Average Size] 65,401 sq. ft. A11�30U IIICSC I Founded in 1957, ICSC is the premier global trade association of the shopping center industry. Its more than 60,000 members, in over 90 countries, include shopping center owners, developers, managers, marketing specialists, investors, retailers and brokers, as well as academics and public officials. As the global industry trade association, ICSC is linked to more than 25 national and regional shopping center councils throughout the world. For more information, visit www.icsc.org. 20/03/2025, 10:42 From Vacant to Vibrant: City Projects City projects play a crucial role in revitalizing vacant areas, breathing new life into neglected spaces. By implementing innovative designs and strategies, these projects can transform abandoned places into vibrant community spaces. Vacant areas within cities often suffer from neglect, becoming eyesores and magnets for crime. However, city projects offer a solution to this problem by repurposing these spaces. The projects encompass a range of initiatives, including the redevelopment of vacant buildings, the creation of parks and green spaces, and the establishment of community hubs. City projects have gained traction in recent years due to their numerous benefits. Not only do they enhance the aesthetic appeal of the surrounding area, but they also contribute to economic growth. Revitalized spaces attract more visitors, lead to increased property values, and stimulate business activity. Additionally, these projects foster a sense of community pride and cohesion, as residents feel a stronger connection to their neighborhood. One example of a successful city project is the High Line in New York City. This elevated park was created on a historic freight rail line, transforming a disused space into a vibrant destination that attracts millions of visitors each year. The success of the High Line has inspired similar projects worldwide, demonstrating the potential impact of city projects on urban environments. In essence, city projects are essential for revitalizing vacant areas and creating vibrant communities. Through innovative planning and design, these initiatives can transform neglected spaces into thriving urban hubs. By embracing city projects, cities can unlock the potential of their vacant areas and enhance the quality of life for their residents. Transform Your Real Estate Decisions Unlock personalized real estate insights crafted just for you. Get actionable advice designed to amplify your success. Get Started read://https_usrealestateinsider.com/?url=https%3A%2F%2Fusrealestateinsider.com%2Fvacant-to-vibrant-city-projects%2F 1 /10 20/03/2025, 10:42 From Vacant to Vibrant: City Projects Denning V t areas What constitutes a vacant area A vacant area refers to a space within a city that is unused or unoccupied. Vacant areas can include buildings, lots, or even large sections of land. These areas may have been abandoned or left vacant due to various reasons such as economic decline, natural disasters, or population shifts. Vacant areas can be found in both urban and rural settings. These spaces often lack any productive activity or purpose and can negatively impact the surrounding communities. Types of vacant areas (abandoned buildings, empty lots, etc.) Abandoned buildings These are structures that have been left vacant and are no longer in use. Reasons for abandonment can include financial issues, structural damage, or changing business conditions. Abandoned buildings can be eyesores, attract criminal activities, and create safety hazards. Empty lots These are parcels of land that are undeveloped and currently serve no purpose. Empty lots can be found in both residential and commercial areas. These spaces can become overgrown with weeds and attract illegal dumping or become breeding grounds for pests. Brownfield sites Brownfields are vacant areas that were previously used for industrial or commercial purposes but are now contaminated or perceived as contaminated. These areas may have harmful chemical residues or pollutants present in the soil or groundwater. Brownfield redevelopment projects aim to remediate the contamination and revitalize the site for productive use. read://https_usrealestateinsider.com/?url=https%3A%2F%2Fusrealestateinsider.com%2Fvacant-to-vibrant-city-projects%2F 2/10 20/03/2025, 10:42 From Vacant to Vibrant: City Projects Publish your company profile on our blog for just $200. Gain instant exposure and connect with a dedicated audience of real estate professionals and enthusiasts. Publish Your Profile Vacant storefronts These are commercial spaces, usually found in shopping districts, that remain unoccupied by businesses. High vacancy rates in storefronts can negatively impact the overall vibrancy and economic health of an area. The revitalization of these vacant storefronts can include attracting new businesses or transforming them into community spaces. Vacant government -owned properties These are properties owned by government entities that are currently not being utilized. Government -owned properties may include abandoned schools, hospitals, or other public infrastructure. Finding innovative uses for these vacant properties can contribute to the revitalization of communities and provide valuable resources. Vacant residential properties These are homes or apartments that are unoccupied or abandoned. Vacant residential properties can result from foreclosures, evictions, or a declining population. These spaces can attract squatters, become targets for vandalism, and have a negative impact on the neighborhood's stability. Vacant parks and public spaces These are open spaces designated for public use that are currently underutilized or abandoned. Vacant parks and public spaces often lack maintenance, amenities, or programming that could attract community engagement. Transforming these spaces into vibrant parks or recreational areas can enhance community well-being and social cohesion. In fact, vacant areas can be defined as unused or unoccupied spaces within a city. These areas can include abandoned buildings, empty lots, brownfield sites, vacant storefronts, government -owned properties, vacant residential properties, and vacant parks or public spaces. Understanding the types of vacant areas is crucial for developing strategies to revitalize and repurpose these spaces for vibrant community projects. read://https_usrealestateinsider.com/?url=https%3A%2F%2Fusrealestateinsider.com%2Fvacant-to-vibrant-city-projects%2F 3/10 20/03/2025, 10:42 From Vacant to Vibrant: City Projects Read: Senior Living Facilities: Growing market i 1 ' Revitalizing vacant areas through city projects has a multitude of benefits for both local communities and the city as a whole. Economic benefits One of the significant advantages is the economic boost these projects bring. By creating employment opportunities, city projects generate jobs for local residents. This influx of jobs not only reduces unemployment rates but also improves the overall economic conditions in the area. As a result, residents have greater financial stability and the city experiences enhanced economic growth. Additionally, these projects have a positive impact on attracting businesses and investments to the area. Revitalized vacant areas often become attractive locations for new businesses, as they provide a fresh canvas for innovative ventures. The infusion of businesses and investments can further stimulate the local economy, leading to increased prosperity and development. Social benefits Apart from the economic benefits, city projects also contribute to the social well-being of the community. Revitalization efforts improve the quality of life for residents by transforming once dilapidated and neglected areas into vibrant and functional spaces. This includes the development of parks, community centers, and recreational facilities, providing residents with accessible and enjoyable amenities. Furthermore, city projects aimed at revitalizing vacant areas encourage community engagement and cohesion. By creating shared spaces where residents can interact and participate in various activities, these projects foster a sense of belonging and a stronger community bond. This social cohesion not only enhances the overall quality of life but also contributes to a safer and more harmonious living environment. Environmental benefits read://https_usrealestateinsider.com/?url=https%3A%2F%2Fusrealestateinsider.com%2Fvacant-to-vibrant-city-projects%2F 4/10 20/03/2025, 10:42 From Vacant to Vibrant: City Projects In addition to economic and social benefits, city projects in vacant areas can have significant environmental advantages. Publish your company profile on our blog for just $200. Gain instant exposure and connect with a dedicated audience of real estate professionals and enthusiasts. Publish Your Profile By converting unused spaces into green areas, these projects contribute to the city's aesthetics and environmental sustainability. Parks, gardens, and green spaces improve air quality, promote biodiversity, and provide recreational opportunities for residents, thereby enhancing the ecological well-being of the entire community. Moreover, these projects play a crucial role in reducing urban blight and pollution. Transforming vacant lots and abandoned buildings into functional and visually appealing spaces reduces the chances of crime, vandalism, and illegal dumping. Additionally, incorporating sustainable practices in these projects, such as energy -efficient designs and green infrastructure, helps mitigate the negative environmental impacts caused by urbanization. In short, city projects focused on revitalizing vacant areas bring numerous benefits to communities, economies, and the environment. From creating jobs and attracting investments to enhancing community engagement and promoting environmental sustainability, these projects play a pivotal role in transforming dormant spaces into vibrant and thriving parts of the city. Read: Small Town, Big Mall:... Study read://https_usrealestateinsider.com/?url=https%3A%2F%2Fusrealestateinsider.com%2Fvacant-to-vibrant-city-projects%2F 5/10 20/03/2025, 10:42 From Vacant to Vibrant: City Projects The High Line in New York City 1. Overview of the project: The High Line project in New York City aimed to transform an abandoned elevated railway into a vibrant public space. 2. Transformation of an abandoned elevated railway into a vibrant public space: By repurposing the abandoned railway, the High Line project created a unique elevated park that became a major tourist attraction. Millennium Park in Chicago read://https_usrealestateinsider.com/?url=https%3A%2F%2Fusrealestateinsider.com%2Fvacant-to-vibrant-city-projects%2F 6/10 20/03/2025, 10:42 From Vacant to Vibrant: City Projects 1. Overview of the project: Millennium Park in Chicago involved the transformation of an underutilized rail yard into a cultural hub. 2. Transformation of an underutilized rail yard into a cultural hub: The project redeveloped the rail yard into a world -class urban park, featuring iconic landmarks, art installations, and outdoor performance spaces. The Beltline in Atlanta 1. Overview of the project: The Beltline project in Atlanta focused on the transformation of unused railway tracks into a network of trails and parks. 2. Transformation of unused railway tracks into a network of trails and parks: Through careful planning and community involvement, the Beltline project created a revitalized urban corridor with walking and biking paths, parks, and accessible public transit. Read: Waterfront Development: ,..bide of Success Uncover the Details: Industrial Property Demand in 2024 TT11111141111TIR 1 1 Financial constraints and funding issues 1. Limited budget often hinders progress and implementation of city projects. 2. Difficulty in securing funding sources for large-scale urban development projects. 3. Insufficient financial resources to effectively address urban issues and cater to growing needs. Resistance from stakeholders and community members Opposition from local residents and community groups can significantly delay or derail city projects. 2. Disagreements regarding the scope, design, or impact of the project can lead to conflicts. 3. Lack of community engagement and consultation can breed mistrust and resistance. Legal and regulatory hurdles 1. Complex and lengthy bureaucratic processes pose significant challenges to city projects. 2. Compliance with numerous regulations and codes can increase project costs and timelines. 3. Legal disputes and litigation can arise, causing delays and negative financial implications. read://https_usrealestateinsider.com/?url=https%3A%2F%2Fusrealestateinsider.com%2Fvacant-to-vibrant-city-projects%2F 7/10 20/03/2025, 10:42 From Vacant to Vibrant: City Projects Maintenance and sustainability concerns 1. Ensuring long-term maintenance and sustainability of city projects can be a major challenge. 2. Lack of adequate funding for ongoing maintenance can lead to deterioration and inefficiencies. 3. Balancing economic growth with environmental sustainability requires careful planning and execution. In general, city projects face various challenges and obstacles that can hinder their successful implementation and impact. Financial constraints, resistance from stakeholders and community members, legal and regulatory hurdles, as well as maintenance and sustainability concerns, all contribute to these challenges. However, with proper planning, community engagement, and financial support, these obstacles can be overcome, leading to vibrant and transformative city projects. Read: Rural Healthcare Real Estate:... Surprising Boom. Uncover the Details: Mixed Use Developments: The Future 111 ' 1 1 11111111 1 1 1 Successful implementation of city projects requires various strategies. Below are four key strategies: Collaboration between public and private sectors 1. Cities should establish partnerships with private entities to leverage resources and expertise. 2. Public -private collaborations can help secure funding and access to innovative technologies. 3. Joint efforts can lead to efficient project management and streamlined decision -making processes. 4. Collaboration fosters creativity, diversity, and a shared sense of responsibility for the project's success. 5. Open communication channels between sectors enable effective problem -solving and conflict resolution. Comprehensive planning and feasibility studies Prioritize thorough planning to ensure the project's objectives align with the city's long- term vision. 2. Conduct feasibility studies to assess the financial, environmental, and social viability of the project. read://https_usrealestateinsider.com/?url=https%3A%2F%2Fusrealestateinsider.com%2Fvacant-to-vibrant-city-projects%2F 8/10 20/03/2025, 10:42 From Vacant to Vibrant: City Projects 3. Consider potential risks and challenges, allowing for proactive measures and contingency plans. 4. Engage urban planners, architects, and engineers to ensure the project's design and functionality meet standards. 5. Integrate sustainable practices and resilient design principles to future -proof the project. Community engagement and participation 1. Involve community members early in the project's development to gather diverse perspectives and ideas. 2. Host public forums, workshops, and online platforms to encourage active participation and feedback. 3. Community engagement builds trust, fosters ownership, and aligns the project with local priorities. 4. Ensure transparency by sharing project updates, milestones, and decisions with the community. 5. Empower citizens to contribute to the project's success through volunteer opportunities or task forces. Adaptive reuse and sustainable design principles 1. Rather than demolishing vacant spaces, explore adaptive reuse options to revitalize them. 2. Consider repurposing abandoned buildings or industrial sites, preserving their historical or cultural value. 3. Encourage sustainable design practices, such as energy -efficient systems and green infrastructure. 4. Create spaces that promote walkability, accessibility, and a sense of community identity. 5. Integrate nature -based solutions, such as urban gardens or rooftop parks, to enhance the urban environment. In addition, successful implementation of city projects relies on collaboration, comprehensive planning, community engagement, and sustainable design. By fostering partnerships, analyzing feasibility, involving communities, and embracing adaptive reuse, cities can transform vacant spaces into vibrant and thriving urban landscapes. In a nutshell, city projects play a crucial role in breathing new life into vacant areas. read://https_usrealestateinsider.com/?url=https%3A%2F%2Fusrealestateinsider.com%2Fvacant-to-vibrant-city-projects%2F 9/10 20/03/2025, 10:42 From Vacant to Vibrant: City Projects These initiatives not only bring economic growth but also enhance the quality of life for residents. It is imperative that communities continue to invest in and support city projects. By doing so, they can create vibrant and sustainable neighborhoods that attract businesses, tourists, and residents, leading to long-term prosperity. Revitalizing vacant areas requires collaboration between the public and private sectors. We must come together to generate innovative ideas, secure funding, and implement effective strategies. Together, we can transform neglected spaces into thriving and vibrant communities. Don't miss the opportunity to be a part of this positive change. Get involved in city projects, advocate for their importance among decision -makers, and contribute your time and resources to support the revitalization efforts. Together, we can make a difference and create cities that are not only functional but also beautiful and inspiring. read://https_usrealestateinsider.com/?url=https%3A%2F%2Fusrealestateinsider.com%2Fvacant-to-vibrant-city-projects%2F 10/10 Community Support Essential for Military Installations, DOD Official Says June 12, 2019 1 By David Vergun You have accessed part of a historical collection on defense.gov. Some of the information contained within may be outdated and links may not function. Please contact the DOD Webmaster with any questions. People in communities across America appreciate having military installations nearby because they provide jobs, tax revenue and support national security, the assistant secretary of defense for sustainment told attendees of the 2019 Defense Communities National Summit in Washington. "If you have a military installation in your community, it's a right, not a privilege, and you have to earn that right every day;' Robert McMahon said yesterday. There's no guarantee that future defense budgets will be as adequate as they are today, he said, and that could mean cuts to installations that affect the surrounding communities. Also, there is always that potential for a future base realignment and closure, where installations are shuttered, as has happened in the past, McMahon noted. Communities that support their installations will fare much better than those that don't do as much, he predicted. Community Support to Installations McMahon provided some examples of community support that benefits installations as well as the communities themselves. School quality is a major concern amongfamilies, he said. Communities that work to improve learning environments are much welcomed, and sometimes, federal grants are available to do this, McMahon said. Ensuring that the community is a safe place to live is another concern, he said. Not just safe from crime, McMahon said, but with safe drinking water, safe housing and infrastructure safeguards to mitigate natural disasters such as flooding and cybersecurity. Communication between communities and installations is the key to making this all happen, McMahon said. One of the first steps community leaders can take is to meet with their installation commander and discuss mutual concerns. Communities and their installations are places where service members and their families "live, eat, work, play and pray;' he said. As such, ensuring a high quality of life will help ensure that installations are permanent fixtures. Mark Correll, deputy assistant secretary of the Air Force for environment, safety and infrastructure, noted that it's also important for communities and defense manufacturers to work together to support each other in similar ways. Examples of Military -Community Cooperation John A. Kliem, executive director of the Navy's Energy Security Programs Office, said Naval Support Activity Mid -South and the city of Millington, Tennessee, collaborated on a win -win project for both. The Navy leased 450 acres to the community for a horse farm and solar farm and the air station received lower rates on their energy bill. A second example, he said, is Joint Base Pearl Harbor-Hickam, Hawaii, which is working with the city of Honolulu to provide reliable energy required to meet the needs of Navy and Air Force missions. A third example, Kliem said, is Naval Submarine Base New London, Connecticut, which is working with the community of Groton to get a natural gas backup in case power to the grid goes out as it did in 2012, when Superstorm Sandy swept through. Hosted by Defense Media Activity - WEB.mil M I N O T AIR FORCE BASE IIPIFIIGIr 0IDIE 'IWIIt.,'./ I1&(9yMNIIHILOAD IfIIII11E S. Economic analysis: Minot Air Force Base's impact on city of Minot 0 0 Published March 12, 2025 By Airman 1 st Class Wesley Davies 5th Bomb Wing Public Affairs MINOT AIR FORCE BASE, N.D. -- MINOT AIR FORCE BASE, N.D. —When all factors are considered, the total economic impact of Minot Air Force Base on the city of Minot reaches more than $651,000,000 annually. This economic output reflects not only the direct contributions of military and civilian payroll but also the broader effects of construction, service contracts, procurements, and indirect job creation. Minot AFB's influence stretches across almost every sector of the local economy, enhancing the city's financial stability and growth. Minot Air Force Base plays an essential role in the economic fabric of the city of Minot, North Dakota. The base, home to more than 12,000 personnel, including 5,500 military members, 6,300 military family members, and is a place of work for almost 1,000 civilian employees, serves as a major driver of local economic activity. The combined economic footprint of the base creates thousands of jobs, generates significant payroll, and supports various industries in the region, making Minot AFB a cornerstone of the city's economy "The relationship between Minot AFB and the City of Minot is remarkably strong, and while the impact cannot be measured solely in quantitative terms, the Economic Impact Report truly does highlight the monetary significance of the partnership between the city and the base," said U.S. Air Force 1 st Lieutenant Michael Reissfelder, 5th Comptroller Squadron financial analysis deputy flight commander. "That bond makes our mission possible, provides opportunities to our Airmen, and helps the City of Minot grow and prosper." The economic impact of Minot AFB begins with its payroll. The base's military payroll totals $370,000,000 annually, while civilian payroll adds another $81,000,000. Together, the base's personnel account for a total annual payroll of $451,000,000. This sum directly contributes to the local economy by providing income to thousands of individuals, many of whom live in Minot and contribute to the local housing market, retail businesses, and service industries. These payroll expenditures also support local tax revenue, contributing to Minot remaining a vibrant and economically stable community. Minot AFB also impacts the local construction and service sectors. The base has made many construction contracts for operations and maintenance within the city of Minot, totaling up to $18,000,000. These contracts help support local construction companies and workers, ensuring that the base operates effectively while stimulating economic activity in the region. Minot AFB also uses base support service contracts and medical service contracts worth approximately $13,000,000. These contracts help provide essential services, including maintenance, healthcare, and base operations, while also generating revenue for local businesses and creating jobs for civilian employees. M I N O T AIR FORCE BASE local economy. "Minot is recognized as an exceptional place to live, characterized by a welcoming community that fosters a sense of belonging," said Leanna Porter, budget analyst for the 5th Comptroller Squadron. "The local workforce benefits from employment opportunities, while both children and adults have access to an outstanding education system. These outcomes exemplify the most important effects of the economic contribution made by the Air Force Base, of which we are proud to be a part" The base's presence creates a ripple effect throughout the local economy, with an estimated two thousand indirect jobs created by the base's activities. These jobs are spread across industries such as retail, hospitality, and real estate, and contribute a total dollar value of $118,000,000. Global Journal of Accounting and Finance Volume 1, Number 2, 2017 THE ECONOMIC IMPACT OF MILITARY BASE CLOSURES ON THE SURROUNDING METROPOLITAN AREA Jamie Amos, Hampton University ABSTRACT Amidst the decline in defense spending following the end of the Cold War, military base closures have prompted some of the most vocal public concerns. Public expectations of the impact often are very bleak, and economic forecasts of the local effects seem to bolster such fears. When a military base is slated to close, the surrounding community immediately goes into panic mode and thinks it is the start of an economic domino effect that will trickle down to every part of the community. However, economic devastation is not always the case as my research has found that an economic decline is not the probable outcome. The closing of a military base is not as devastating as most predict it would be. The Base Realignment and Closure Commission (BRAC) was created to provide an objective, thorough, accurate, and non partisan review and analysis, through a process determined by law, to create a list of bases and military installations which the Department of Defense recommends to be closed and/or realigned. This study focuses on factors that indicate the economic health of a community and expands the scope to metropolitan areas. A "pre " and "post " closure approach is taken to compare the differences in the economy of the surrounding metropolitan area. The economic factors included in this study are unemployment rate, median home value, population, median household income, real estate taxes paid and K-12' school enrollment. Of those factors, unemployment rate and population were impacted positively, while median home value was the only factor negatively impacted. The bases closed in the year 2011 as part of the 2005 BRAC round of closure is the focus as this was the last round of closures and provides the latest information on this topic. Depending on the extent to which a military base supports the surrounding community, it could have far-reaching financial implications for that community; however, this research suggests most communities are not impacted as much as the negative predictions seem to be. INTRODUCTION Catastrophic, apocalyptic, and disastrous are words used to describe the impact of military base closures on the surrounding communities. Hooker & Knetter (2001) shows that a closure has a dire initial impact that gets better over time and eventually the community will spring back to some type of normalcy as time progresses. Other studies (Bayly, 2014), (Dardia, et al., 1996), (Nijhawan & Jackson, 2011), (Soresnson & Stenberg, 2015) have viewed the impacts as long lasting at times and the community can never totally recover from the base closure. Both studies have legitimacy, depending on the extent of economic and financial influence the base exerted in that community. The size and location of the base also play a major role in the impact it has on Global Journal of Accounting and Finance Volume 1, Number 2, 2017 that community. The effects can be socioeconomic, political, direct, and indirect, along with other significances that come with a major change. The closing and/or realignment of U. S. Military bases nationally and internationally have presented challenges for the Department of Defense (DoD) and the surrounding communities. Past research has brought about varied results, as different variables can influence the outcome of those results (Dardia, et al, 1996). This study will focus on the metropolitan areas of the bases closed in the year 2011 as part of the 2005 BRAC round of closures, with emphasis on six key economic indicators. Those economic indicators include the unemployment rate, median home value, population, median household income, property taxes paid, and K-12th school enrollment. BACKGROUND With the passage of the Base Realignment and Closure Act (BRAC Act. 1998), Congress instituted a new process with which to determine how military bases would be closed and/or realigned (Beaulier, Hall, & Lynch, 2011). The BRAC process can be considered as a two -stage process. Initially, a list of sites is gathered for BRAC scrutiny; then, each site is carefully considered for closure or realignment. There are four possible outcomes of the base closure and realignment process: closure, realignment resulting in a loss of employees and budget share, realignment resulting in an increase in employees and budget share, or no meaningful change (Beaulier, Hall, & Lynch, 2011). Minimum oversight was given to Congress in the closing of military bases by the Department of Defense. Per the Department of Defense (2005), however, in 1977, Congress passed legislation requiring DoD to notify Congress if an installation became a closure or realignment candidate. These and other procedural requirements effectively halted base closures until the last several rounds between 1988 and 2005. By 1988, the Defense budget had declined for three straight years and was predicted to decline further. The Department of Defense has estimated that the four previous BRAC rounds eliminated approximately 21 percent of DoD's 1988 installation capacity. These changes required an up -front investment of $22 billion, and through fiscal year 2001, produced net savings of approximately $17.7 billion, including the cost of environmental cleanup. Recurring savings and cost avoidances beyond 2001 are approximately $7.3 billion annually (Defense, 2005). LITERATURE REVIEW The BRAC Commission was created to provide an objective, thorough, accurate, and non- partisan review and analysis, through a process determined by law, to create a list of bases and military installations which the Department of Defense recommends to be closed and/or realigned (Defense Base Closure and Realignment Commission, 2005). The Commission is required to assess each recommendation to ensure it meets the eight selection criteria set forth by Congress in P.L. 108-375 (Defense Base Closure and Realignment Commission, 2005). Recommendations by DoD that substantially deviate from these selection criteria can be modified or rejected by the Commission by a simple majority vote of the Commissioners. The Commission can also add installations to the closure or realignment list recommended to the President, but only through a `a Global Journal of Accounting and Finance Volume 1, Number 2, 2017 process in which seven of nine Commissioners vote to do so, the Secretary of Defense is properly notified in writing 15 days prior to the proposed change, and only after at least two Commissioners physically visit the military installation in question (Defense, 2005). The Commission's assessment of the selection criteria and Force Structure Plan took place in the context of a balance between the goals of realizing savings and rationalizing our military infrastructure to meet the needs of future missions. Table 1 shows United States National defense consumption between the years 2005 — 2016. U. S. national defense spending increased each year from 2005 to 2011, then decreased starting in 2012 which coincides with the year after the closing of the bases in this study. Table 1 United States National Defense Consumption United States National Defense Consumption S = billions 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 $608.30 $642.40 I $678.70 $754.10 I $788.30 $832.80 I $836.90 S817.90 $767.00 $746.00 $732.00 $732.20 The Base Realignment and Closure process has been one of the Defense Department's most effective tools to trim excess infrastructure and better align the remaining base structure to the U.S. force structure; and over the years, these effects have provided significant savings that have been redirected to readiness (Sands, 2011). Base closure impacts are registered in job loss, income terms, and may be disaggregated as well into direct, indirect, and induced components (Poppert & Herzog, 2003). Personal income represents the income that households receive from all sources including wages and salaries, fringe benefits such as employer contributions to private pension plans, proprietors' income, and income from rent, dividends and interest and transfer payments such as Social Security and unemployment compensation (econoday.com, 2016). According to Bradshaw (1999), the time lag from closure to reuse of a base typically means that workers cannot wait for new opportunities on the base and will seek employment elsewhere in the area or move to another region. In addition, when bases are reused, the new industries are usually quite different and need workers with different skills and sometimes specialized training; and when laid -off workers do find other work, their income is well below what they received working on the base (Bradshaw T. K., 1999). Many examples of workers affected by base closures reinforce the widespread belief that people taking new jobs often must settle for lower pay (Bradshaw T. K., 1999). One systematic study by Mackinnon (1978) showed that workers in the early waves of a base closure took jobs that on average were lower paying. According to the United States Bureau of Labor Statistics (2016), the unemployment rate is a key indicator of the local economic conditions. Because a base closure creates changes in the population and income, it also impacts the housing market which in turn affects real estate tax Global Journal of Accounting and Finance Volume 1, Number 2, 2017 paid. Community vulnerability is also sensitive to the presence of a school on the base and the age distribution of the dependent populations; the greater the fraction of the local school population accounted for by military dependents, the greater the loss in government funding after those children leave the district (Dardia, et al, 1996). RESEARCH DESIGN A causal -comparison design is adopted for this study to show the difference between the year prior to closure to the year after. Per Fraenkel and Wallen (2006) causal -comparative research, like correlational research, seeks to identify associations among factors. A causal -comparative research attempts to determine the cause or consequences of differences that already exist between or among groups of individuals (Fraenkel & Wallen, 2006). A Wilcoxon signed -ranks test is utilized to calculate the difference between the year before and the year after the base closure to determine if there is an impact using different factors. Past research has mixed results as to the level of impact to the surrounding communities when a military base is closed if any at all. The six factors used in this study includes median home value, real estate taxes, population, median household income, unemployment rate and K-12' school enrollment; which will serve as the independent variables. The Wilcoxon signed -ranks test used to analyze the impact of base closure is suitable since the sample size is small and does not meet the stringent assumptions of normality required in a similarly paired t-test (Pett, 2016). It is a non -parametric statistical hypothesis test used when comparing two related samples, matched samples, or repeated measurements on a single sample to assess whether their population means ranks differ (Laerd Statistics, 2017). In the 2005 BRAC round of closures there were six bases closed in the year 2011; and although other bases were realigned, this study only focuses on the ones that were closed during that year. It focuses only on those bases that were closed the same year which keeps other factors that could have affected the economy in that year the same, and not cause the data to be slanted by some type of anomaly. The independent variables chosen for this study provide a framework for the economic health of a community. Combining each factor will provide a collective view of the impact that was felt by each metropolitan area. The data for each variable was gathered from the United States Census Bureau and the United States Bureau of Labor Statistics. DATA COLLECTION The data for each variable was gathered from the United States Census Bureau and the United States Bureau of Labor Statistics. The United States Census Bureau is a principal agency of the U.S. Federal Statistical System, responsible for producing data about the American people and economy. The Census Bureau is part of the U.S. Department of Commerce. The U.S. Census Bureau is overseen by the Economics and Statistics Administration (ESA) within the Department of Commerce. The Economics and Statistics Administration provides high -quality economic analysis and fosters the missions of the U.S. Census Bureau and the Bureau of Economic Analysis. The Bureau of Labor Statistics is a unit of the United States Department of Labor. It is the principal fact-finding agency for the U.S. government in the broad field of labor economics and statistics. 4 Global Journal of Accounting and Finance Volume 1. Number 2. 2017 STATISTICAL ANALYSIS Growth is viewed as essential for a stable and good economy. A strong economy bolsters a strong middle class along with increasing purchasing power for all walks of life. It also allows the government to spend more money on research and spur innovation. This research used that doctrine as a guide to determine the economic variables used in this research. The data was compiled and organized by the years being compared - prior to closing (2010) and after closing (2012) by each variable. It was then loaded into SPSS and analyzed to reveal results for each variable by year. A 0.05 confidence level was used during the testing. The effect size is calculated by dividing the z-score by the square root of the total number of occurrences. In this case, it will be six data points in the year 2010 and in the year 2012, which will be a total of twelve occurrences. FACTORS ANALYZED Impacts of base closure have been assessed by comparing measures of local wellbeing of pre -and post-BRAC statuses. The factors for this study were chosen because they are all key economic indicators of the health of a community. Unemployment rates express the number of people who are out of work and looking for jobs. Household income represents the earnings that households receive from all sources and is a major determinant of spending. Population is one of the most direct indicator a community's vulnerability. Home values are also a great indicator of economic health because it takes other factors like unemployment and income in consideration. In connection to home values, property taxes paid is also a factor that help express the health of a local economy. Lastly, K-12' school enrollment was included as military -connected schools are also impacted by military base closures. DISCUSSION OF RESULTS The impact of the base closures was not as devastating as most would think. Although there is some economic downturn to the community, the catastrophic predictions did not come to fruition in this research. The mean change in the unemployment rate is 1%. With a p-value of 0.01, the test revealed a statistically significant difference in the unemployment rate, with an effect size of 0.70. The unemployment rate decreased, which means more people in the metropolitan area were working after the base closure. The mean change in median home value is $9,567. With a p-value of 0.05, the test revealed a statistically significant difference in median home value, with an effect size of 0.58. The median home value decreased from the year prior to closing to the year after. The mean change in population is 76,988. With a p-value of 0.03, the test revealed a statistically significant difference in population, with an effect size of 0.64. The population increased in the metropolitan areas surrounding the base after closure. The mean change in median household income is $141. With a p-value of 0.96, the test revealed there was not a statistically significant difference in median household income, with an effect size of 0.03. This indicates that there was no economic impact to the surrounding metropolitan area after the base closure on median household income. The mean change in real estate taxes paid is $13,348. With a p-value of 0.07, the test revealed there was not a statistically significant difference in real estate taxes paid, with an ,1 Global Journal of Accounting and Finance Volume 1, Number 2, 2017 effect size of 0.52. This is an indication that there is basically no economic impact on real estate taxes paid for the surrounding metropolitan area after a base closure. The mean change in school enrollment is 1,172. With a p-value of 0.75, the test revealed that there was not a statistically significant difference in school enrollment, with an effect size of 0.09. This is an indication that there is no economic impact in the surrounding metropolitan area on school enrollment after a base closure. UTILIZATION OF VACANT BASE FACILITIES The Department of Defense clearly states that base closures are conducted to improve military readiness and streamline the spending of defense funds (Defense, 2005), but environmental considerations also feature in the process of evaluating and converting sites (Havlick, 2014). When closing a military base, the government looks at the preservation options of the land. According to Havlick (2014), closed military bases are converted to a variety of new uses, ranging from playgrounds or recreational facilities to housing developments, business parks, and university campuses. However, many military lands face limited options for future use due to chemicals hazards, munitions, buildings, or aging infrastructure that remain on site. Due in part to these reasons, more than 15% of the major U.S. bases closed since 1988 have been re -designated as national wildlife refuges managed by the U.S. Fish and Wildlife Service (Havlick, 2014). Although sometimes the reuse of these lands can be made in reaction to the panic of closing the bases, instead of a methodical plan to reuse the land to the best of its ability. When communities find out that one of the major resources in their area is shutting down, they rally together to either stop the process or take the opportunity to create something better. Successful base reuse planning begins before closure; communities with strong leadership and organizational capacity minimize the panic sometimes associated with base closure and also position it for a stronger response (Mayo, 1988). Base closure generally places extraordinary demands on local governments, community organizations and economic development programs; however, it also stimulates and strengthens a community's organizational capacity and its ability to work collaboratively and in innovative ways (Bradshaw, 1999). CONCLUSION This study aimed to determine the economic impact of the bases closed in 2011 as part of the 2005 round of BRAC closures as it pertains to six economic factors. Using the Wilcoxon signed -ranks test, it revealed that of the six factors in the study, only three of them proved to be significant. Employment, population and median home value were all significant factors in the economic impact of the base closures. The impact on employment and population proved to be positive for the local community and the impact on median home value proved to be negative. The mean unemployment rate decreased one full percentage point prior to closing to after closure, which suggests of the people who remained, more of them were working after the base closure. Using a Wilcoxon signed -ranks test to compare the difference between pre and post base closure, all metropolitan areas in the study expressed a negative rank for the unemployment rate showing that 2012 was less than that in 2010. Additionally, the population increased for the Global Journal of Accounting and Finance Volume 1, Number 2, 2017 surrounding metropolitan areas of these bases. The mean change in population between the year prior to the year after increased over 75,000, which suggests most people stayed and more people came to those metropolitan areas after the bases was closed. The test revealed that the population ranks for all metropolitan areas in the study were positive showing that the population in 2012 was greater than that in 2010 after the base closures. However, this research shows that the housing value in these metropolitan areas declines because of the base closure, with an approximate mean change of a $10,000 price drop in median home values. The test revealed that five of the metropolitan areas in the study expressed a negative rank, while one revealed a positive rank showing that median home value in 2012 decreased from 2010. The median home value was the only factor that proved to be significant and negative, which suggests that base closures are not the "end of the world" predictions that most proposed. The other three factors used in this study, median household income, real estate taxes paid and school enrollment K-12th did not show a significant difference from the year prior to closing to the year after. Although they didn't prove to be significant, they are still important factors to consider when deciding which bases to close. United States defense consumption has fluctuated over time and as part of that fluctuation, military bases were closed and realigned to downsize its force structure and overhead expenses (Kuhn & Akers, 1997) however; with new concerns that threaten our everyday freedoms on a regular basis, these actions must be carefully considered. Bases must be scrutinized to reflect the impact of the military structure along with the impacts to the homeland. REFERENCES Bayly, J. (2014, October 17). Challenges Remain 20 Years After Loring Air Force Base Closure. Banger Daily News. Beaulier, S., Hall, J., & Lynch, A. (2011). The Impact of Political Factors on Military Base Closures. Journal of Economic Policy Reform, 333-342. Bivens, J. (2003). Updated Employment Multipliers for the U.S. Economy. Washington, DC: Economic Policy Institute. Bradshaw, T. (1994). Defense Industry Conversion, Base Closure, and the California Economy: Critical Issues for a Statewide Strategy. Fisher Center Working Papers. Bradshaw, T. K. (1999). Communities Not Fazed, Why Military Base Closures May Not Be Catastrophic. Journal of the American Planning Association, 193-206. Bureau ofEconomic Analysis. (2017, February 28). Retrieved from Bureau of Economic Analysis: https://www.bea. gov/iTable/iTable. cfm?RegfD=9& step= l#regid=9& step=3 &isuri= l &90 4=2005&903=98&906=a&905=2017&910=x&911=0 Bureau ofLabor Statistics. (2016, December 26). Retrieved from Bureau of Labor Statistics Web Site: https://www.bls.gov/cps/cps_htgm.htm Census Bureau. (2016, December 8). United States Census Bureau: Metropolitan and Micropolitan. Retrieved from United States Census Bureau: http://www.census.gov/population/metro/ Collins, D. W., & Dent, W. T. (1979). The Proposed Elimination of Full Cost Accounting In the Extractive Petroleum Industry. Journal of Accounting and Economics, 3-44. rA Global Journal of Accounting and Finance Volume 1, Number 2, 2017 Dardia, M., McCarthy, K., Malkin, J., & Vernez, G. (1996). The Effects ofMilitary Base Closures on Local Communities. Santa Monica: RAND. De Pedro, K. T., Esqueda, M. C., Cederbaum, J. A., & Astor, R. A. (2014). District, School, and Community Stakeholder Perspectives on the Experiences of Military -Connected Students. Teachers College Record, 1-32. Defense Base Closure and Realignment Commission. (2005, September 8). Retrieved from Defense Base Closure and Realignment Commission: www.brac.gov Defense, D. o. (2005). Base Closure And Realignment Report. Washington D.C.: Department of Defense. Department of Defense, U. S. (2005). 2005 Defense Base Closure and Realignment Commission Report. Arlington: Department of Defense, United States. econoday.com. (2016, July 11). Retrieved from 2016 Economic Calendar: http://mam. econoday. com/byshoweventfull. aspx? event_id=269&cust=mam Fraenkel, N. E., & Wallen, J. R. (2006). How To Design And Evaluate Research In Education. New York: McGraw-Hill. Garner, J. K., Arnold, P. L., & Nunnery, J. (2014). Schoolwide Impact of Military -connected Student Enrollment: Educators' Perceptions. Children and Schools, 31-39. Gretzel, U., Yuan, Y.-L., & Fesesmaier, D. R. (2000). Preparing for the New Economy: Advertising Strategies and Change in Destination Marketing Organizations. Journal of Travel Research, 146-156. Havlick, D. (2014, January 3). Opportunistic Conservation at Former Military Sites in the United States. Progress in Physical Geography, pp. 271-285. Hooker, M., & Knetter, M. (2001). Measuring The Economic Effects of Military Base Closures. Ecnomic Inquiry, 583-598. Johnston, K. (2016, July 29). Chron. Retrieved from www.chron.com: http://smallbusiness. chron. com/low-population-growth-affect-local-business-3 803 9.html Kitmitto, S., Huberman, M., Blankenship, C., Hannan, S., Norris, D., & Christenson, B. (2011). Edcuational Options and Performance ofMilitary-Connected School Districts. San Mateo: American Institutes For Research. Knight, M., Loayza, N., & Villanueva, D. (1996). The Peace Dividend: Military Spending Cuts and Ecnomic Cuts. Washington D.C.: The World Bank Policy Research Department Macroecnomics and Growth Division and International Monetary Fund. Kuhn, J., & Akers, S. (1997, Winter Winter). U. S. Miliatry Spending: A Survey of Analysis and Critique. Reference & User Service Quarterly, p. 137. Laerd Statistics. (2017, May 1). Retrieved from Laerd Statistics: https:Hstatistics.laerd.com/spss- tutorials/wilcoxon-signed-rank-test-using-spss-statistics.php Liow, K. H. (2010). Firm Value, Growth, Profitability and Ccapital Structure of Listed Real Estate Companies: an nternational perspective. Journal of Property Research, 119-146. Matishak, M. (2016, December 26). The Fiscal Times. Retrieved from The Fiscal Times: http://www.thefiscaltimes. com/2016/03/08BRAC-Back-Will-Congress-Actually-Close- More-Military-Bases 8 Global Journal of Accounting and Finance Volume 1, Number 2, 2017 Mayo, P. (1988). Military Base Closure and Community Transformation: The Case of England Air Force Base in Central Louisiana. New Orleans: University of New Orleans. Metcalf, T. (2016,7 11). Chron.com. Retrieved from Chron.com: http://work.chron.com/job-loss- affect-community-22916.html National Association of Realtors. (2016, December 26). Retrieved from National Association of Realtors: https://www.nar.realtor/ Nijhawan, I., & Jackson, P. (2011). Ecnomic Impact of Base Realignment and Closing On The Fort Bragg Region and The Largest Military Base In The United States. Journal of Economics and Economic Research, 1-12. Pett, M. A. (2016). Nonparametric Statistics for Healthcare Research: Statistics for Small Samples and Unusual Distributions. Thousand Oaks: Sage Publications. Poppert, P., & Herzog, H. W. (2003). Force Reduction, Base Closure, and the Indirect Effects of Military Installations on Local Employment Growth. Journal of Regional Science, 459- 481. Sands, A. (2011). Base Realignment and Closure Dollars and Sense in a Dynamic Environment. The Journal of the American Society of Military Comptrollers, 12-14. Simmons, T., & Kayn, T. (1992). Base Realignment and Closure; The Human Impact of Relocation. Armed Forces Comptroller, 16. Small Business Profit Explosion. (2015, April 30). Retrieved from Small Business Profit Explosion: http://wjb-cpa.typepad.com/wayne_j_belisle_cpa_busin/sales_ marketing/ Soresnson, D., & Stenberg, P. (2015). The Effects of Military Base Closures on Rural County Economies: An Evaluation of the 1988-1955 Rounds of Cuts. Washington DC: International Atlantic Economic Society. Tadlock, C. (2012). Military Base Closures: Socioeconomic Impacts. Washington D.C.: Congressional Research Service. United States Securities and Exchange Commission. (2015, July 31). Retrieved from United States Securities and Exchange Commission: https://www.sec.gov/investor/pubs/tenthingstoconsider.htm Wilkerson, C. R., & Williams, M. D. (2008, Second Quarter Second Quarter). How Is the Rise in National Defense Spending Affecting the Tenth District Economy? Economic Review, pp. 49-79. 9 Report Impacton State Economies Updated April 09, 2018 Related Topic: INICS11... IForuindadoi n The Department of Defense (DoD) operates more than 420 military installations in the 50 states, the District of Columbia, Guam and Puerto Rico. These installations sustain the presence of U.S. forces at home and abroad. Installations located within the United States and its territories are used to train and deploy troops, maintain weapons systems and care for the wounded. They also support military service members and families by providing housing, health care, childcare and on -base education. The DoD contributes billions of dollars each year to state economies through the operation of military installations. This spending helps sustain local communities by creating employment opportunities across a wide range of sectors, both directly and indirectly. Active duty and civilian employees spend their military wages on goods and services produced locally, while pensions and other benefits provide retirees and dependents a reliable source of income. States and communities also benefit from defense contracts with private companies for equipment, supplies, construction and various services such as health care and information technology. According to an analysis by the Il)olD Orrice or Ii-conorniic Adjusbmenl: (OEA), the department spent $408 billion on payroll and contracts in Fiscal Year 2015, approximately 2.3 percent of U.S. gross domestic product (GDP). Spending was highest in Virginia, followed by California, Texas, Maryland and Florida. Virginia has the largest defense spending as a share of state GDP at 11.8 percent, followed by Hawaii at 9.9 percent. Top States by Total Defense Spending (in billions) 601 01 401 01 201 �I I� Total Defense Spending Highest Defense Spending as a Percentage Of state GDP y1aC"�� a�sdtiaa aa�ct, 1W �ad'Qid1r, a,:;yaarc9' Cr1Ja orV t�Cati¢rk� ivr�� yea Percent of State GDP The economic benefits created by military installations are susceptible to change at both the federal and state levels. Recent events such as the drawdown of troops in Iraq and Afghanistan, federal budget cuts, and potential future rounds of Base Realignment and Closure have left government officials uncertain of the future role and sustainability of military installations. These trends have been a driving force behind many states' decisions to commission studies that define the military activity and infrastructure that exists in the state and measure the economic impact of military presence. Economic impact studies allow states to better advocate on behalf of their installations and plan for future growth or restructuring. At least 24 states have commissioned their own study to quantify the direct and indirect effects of military presence on a state's economy. Impacts generally include salaries and benefits paid to military and civilian personnel and retirees, defense contracts, local business activity supported by military operations, tax revenues and other military spending. In 2015, for example, military installations in North C::arealhna supported 578,000jobs, $34 billion in personal income and $66 billion in gross state product. This amounts to roughly 10 percent of the state's overall economy. In 2014, Collorado lawmakers appropriated $300,000 in state funds to examine the comprehensive value of military activities across the state's seven major installations. The state Department of Military and Veterans Affairs released its study in May 2015, reporting a total economic impact of $27 billion. Kentucky has also taken steps to measure military activity, releasing its fifth study in June 2016. The military spent approximately $12 billion in Kentucky during 2014-15. With 38,700 active duty and civilian employees, military employment exceeds the next largest state employer by more than 21,000 jobs. Even states with relatively small military footprints have reported significant economic gains. In Mic:hiainn, for example, defense spending in Fiscal Year 2014 supported 105,000 jobs, added more than $9 billion in gross state product and created nearly $10 billion in personal income. A 2016 study sponsored by the Michigan Defense Center presents a statewide strategy to preserve Army and Air National Guard facilities following a future Base Realignment and Closure (BRAC) round as well as to attract new missions. Economic Impact of Military Presence by State DoD Office of Economic Adjustment Study (FY 2015) State -Commissioned Studies Defense a" of Spending FY State State 2015 GDP Alabama $12.2 billion 5.9% Alaska $3.3 billion 6.1% Arizona $10.0 billion 3.4% Defense Personnel (Active, Year Civilian, Guard/Res) 52,116 27,764 42,547 Arkansas $1.4 billion 1.2% 20,229 California $49.3 billion 2.1% 269,540 Colorado $8.7 billion 2.8% 61,294 Key Findings N/A None Found N/A None Found 2008 $9.1 billion in economic output • 96,328jobs created or supported • Annual state and local tax revenue of $401 million N/A I None Found N/A I None Found 201 S $27 billion in total state output from DoD expenditures DoD Office of Economic Adjustment Study (FY 2015) State -Commissioned Studies Defense % of Defense Personnel (Active, Spending FY State Year Key Findings Civilian, Guard/Res) State 2015 GDP • 170,000 jobs, 5.2% of total • $11.6 billion in earnings, 7.5%oftotal .................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................... Connecticut $9.7 billion 3.8% 15,414 N/A None Found Delaware $676.8 million 1.0% 9,959 2011 * The Delaware National Guard paid costs of nearly $67.5 million to employ 759 military personnel and civilian employees as well as $24.2 million to the 2,462 Soldiers and Airmen on drill status. • The DNG spent nearly $33 million in construction District of $6.8 billion 5.7% 25,550 N/A None Found Columbia Florida $17.6 billion 2.0% 126,292 20113 Total defense spending amounted to $31.3 billion • Defense spending was directly or indirectly responsible for $73.4 billion, or 9.4% of Florida's 2011 Gross State Product • Provided a total of 758,112 direct and indirectjobs. Georgia $12.6 billion 2.6% 129,463 N/A None Found Hawaii $7.8 billion 9.8% 73,487 20112 Direct and indirect impacts exceeded $14.7 billion • Provided 102,OOOjobs Idaho $643.3 million 1.0% 10,436 N/A None Found Illinois $7.0 billion 0.9% 57,078 20114 $13.3 billion in gross state product • $9.7 billion in earnings and retirement benefits • Provided 150,OOOjobs Indiana $3.9 billion 1.2% 31,376 N/A None Found Iowa $1.4 billion 0.8% 12,969 N/A None Found Kansas $3.3 billion 2.3% 41,152 2009 $7.7 billion per year in gross state product, 7% of total • 169,560 jobs supported directly or indirectly (9.4% of total employment) • $393.6 million per year in city/county, region and state tax revenue Kentucky $9.0 billion 4.7% 57,080 20116 Nearly $12 billion in federal military spending • With over 38,000 full-time employees, it is the largest employer in Kentucky. • About 28,500 military retirees received $637 million in retirement pay. Louisiana $3.8 billion 1.5% 41,250 201I3 $8.7 billion in economic output • 82,700 jobs tied to the military (4.35% of total employment) • $287 million in state and local tax revenue DoD Office of Economic Adjustment Study (FY 2015) State -Commissioned Studies Defense % of Defense Personnel (Active, Spending FY State Year Key Findings Civilian, Guard/Res) State 2015 GDP Maine $2.6 billion 4.7% 11,794 N/A None Found Maryland $20.5 billion 5.7% 93,183 2015 15 military installations supported 410,219jobs • Generates $57.4 billion in total output and $25.7 billion in total wages Massachusetts $12.2 billion 2.6% 24,174 2015 Military installations total expenditures over $8 billion in 2013 • Atotal of 57,618jobs supported directly or indirectly by the militarys presence in Massachusetts. • Total economic output of $13.2 billion Michigan $2.9 billion 0.6% 25,689 2016 Supported over 105,000job throughout the state • Added more than $9 billion in Gross State Product • Created nearly $10 billion in personal income • Activities supported nearly $8 billion in personal expenditures Minnesota $4.3 billion 1.3% 21,823 N/A None Found ........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................ Mississippi $5.2 billion 4.9% 37,006 N/A None Found Missouri $10.6 billion 3.7% 43,020 2013 Created $39.76 billion in total economic impact • Added 275,350 direct and indirect jobs Montana $519 million 1.1% 9,185 N/A None Found Nebraska $1.5 billion 1.3% 16,776 2015* Nebraska Military Department employed 4,545.5jobs with a total payroll of about $150 million • Received $22 million in federal appropriations Nevada $2.3 billion 1.6% 20,683 2014 The DoD budget in Nevada accounted for 53,000 jobs • Increased economic output by $28 billion • Provided $9 billion in increased personal earnings • Created $307 million in increased state taxes New Hampshire $1.4 billion 2.0% 6,350 N/A None Found New Jersey $6.6 billion 1.2% 33,834 20113 $4.8 billion in DoD military expenditures resulted in $6.5 billion in gross state product • Creation of 73,234 direct and indirectjobs New Mexico $3.1 billion 3.4% 23,539 N/A None Found New York $9.1 billion 0.6% 61,765 2012 In Progress DoD Office of Economic Adjustment Study (FY 2015) State -Commissioned Studies Defense % of Defense Personnel (Active, Spending FY State Year Key Findings Civilian, Guard/Res) State 2015 GDP North Carolina $9.8 billion 2.0% 144,881 2015 $66 billion in gross state product, roughly 10%of the state's economy • 578,000 direct and indirectjobs • Provided for $34 billion in personal income North Dakota $747.2 million 1.4% 13,296 N/A None Found Ohio $6.9 billion 1.2% 60,224 N/A None Found Oklahoma $4.7 billion 2.6% 57,080 2011 $9.6 billion in gross state product, 7% of statewide total • Supported 133,800 direct and indirectjobs • Average militaryjob paid $41,742 compared to the state average of $38,237 Oregon $1.3 billion 0.6% 13,356 N/A None Found Pennsylvania $12.7 billion 1.9% 57,919 N/A None Found Rhode Island $2.0 billion 3.5% 12,216 N/A None Found South Carolina $5.3 billion 2.7% 65,632 2012 $15.7 billion in economic activity • 138,161 jobs supported • Since 2000, DoD has distributed over $34 billion to defense contractors, accounting for 2% of gross state product each year South Dakota $456.8 million 1.0% 9,257 N/A None Found Tennessee $2.4 billion 0.8% 71,441 N/A None Found Texas $37.9 billion 2.3% 218,523 2015 - $136 billion in total economic impact 20115 • More than 232,000 personnel at 15 military installations • $16.64 billion in total defense contract funds • $13.8 billion in DoD military expenditures Utah $3.2 billion 2.2% 30,486 2014 In Progress (2014 HB 313) Vermont $295.5 million 1.0% 4,931 N/A None Found Virginia $53.0 billion 11.2% 246,553 2014 Defense spending was $59.6 billion or 13% of gross state product • Military spending accounts for 44% offederal spending in Virginia Washington $12.6 billion 2.9% 107,341 2010 $7.9 billion in military installation expenditures and $5.2 billion in contract spending • $12.2 billion in gross state product, 4% of total • Supported 191,600jobs West Virginia $527 million 0.7% 10,204 N/A None Found Wisconsin $2.3 billion 0.8% 18,035 N/A None Found DoD Office of Economic Adjustment Study (FY 2015) State -Commissioned Studies Defense % of Defense Personnel (Active, Spending FY State Year Key Findings Civilian, Guard/Res) State 2015 GDP Wyoming $370 million 0.9% 7,171 N/A None Found American Samoa N/A N/A N/A N/A None Found Guam N/A N/A N/A N/A None Found Northern Mariana N/A N/A N/A N/A None Found Islands Puerto Rico N/A N/A N/A N/A None Found U.S. Virgin Islands N/A N/A N/A N/A None Found Additional Studies Study Year Key Findings I Link 50-State 2011 This Bloomberg Government study examines U.S. military spending in fiscal year 2009 and provides a snapshot of 1::11lo uirnbeirg Government Study defense spending at the state and local levels for all 50 states and the District of Columbia. Study (2009 Data) For fiscal year 2009, $527.8 billion was spent in the U.S. for the salaries of military personnel and civilian employees, military pensions, contracts for military equipment supplies, construction, services and research, and for grants. The Defense Department operated 4,742 sites, such as bases and office buildings, in the U.S. in 2009. 50-State 2016 State leaders' focus on preserving the presence and economic contribution of military installations has reached an all- State Support tdir Study time high, with eight states establishing military affairs organizations in the past three years. Defense Ilnstallllatiio ns Budget cuts at the Pentagon have fallen particularly hard on installations, trimming funding for facility maintenance, upgrades and new construction, as well as quality -of -life services for military members and their families At the same time, DOD has urged Congress to approve a new round of base closures every year since 2012. New England 2012 The defense industry is a major contributor to the economy of New England and to each of the six states that INew IEi ogllaind I1.)efense Study comprise it. IlindiuFtmy� (2011 Data) Defense and Homeland Security contracting is responsible for a total of more than 319,000 jobs and a total payroll of more than $22.6 billion across the region. The overall direct, indirect and induced economic activity generated by the resulting work performed in New England exceeds $62 billion Related Resources Updated July 25, 2024 2025 NCSL Legislative Summit Prospectus Network effectively with state legislators and staff at the 50th NCSL Legislative Summit in Boston. Elevate your brand and connect with decision -makers from across the nation as an exhibitor, advertiser, or sponsor. NCSn... (Foundation Updated February 28, 2025 Welcome to the NCSL Foundation Welcome to the NCSL Foundation! Here's what you need to know to take full advantage of your sponsorship. N CS 8... IFo a ind at lia in Updated January 10, 2025 NCSL Foundation Board of Directors 2025 Winter Meeting T H E N E W LOCALISM V9Vd IIIjag QUA i',,•m! EHdEMY NQWAK The Defense Dividend and What it Means for Cities SHARE 000. For the past 30 years, with the fall of the Berlin Wall and the dissolution of the Soviet Union, the notion of a "peace dividend" took hold in the United States. To use an old metaphor, less funding for guns meant more resources for butter. Times have changed. The world has, once again, become a dangerous, polarized place. Russia's invasion of Ukraine, rising tensions with China and the reignited Mideast conflict following the Hamas assault on Israel have meant that defense spending in the United States (and among its allies across the world) is on the rise. The numbers speak for themselves. In FY 2023, Department of Defense Appropriations totaled $797 billion, an almost 10 percent increase over FY 2022. Remarkably, Congress provided $45 billion over what the Biden Administration had initially requested, a product of growing national security concerns as tensions with China worsened during the fiscal year. The expanded spending will advance national security by modernizing the military, developing new technologies, and enhancing the readiness and resiliency of defense facilities. Since the start of our republic, national defense investments have had profound local implications. If history is any guide, a subset of US cities and metros will experience a substantial defense dividend from the current level of spending. At its most basic level, the defense dividend comes from additional spending for contracts and personnel, resources which then get recycled in the metropolitan economy. Yet smart communities can go further, leveraging defense spending to grow quality jobs, equip workers with the skills they need, fund local suppliers, redevelop u central business districts with excess office capacity, accelerate the clean energy transition and drive the formation and expansion of innovative technology companies. At the same time, the development of strong metropolitan ecosystems around military -funded bases, production facilities and R&D capabilities has broad national security implications. As recently observed, "Militaries very rarely decisive outcomes, they win battles. [In attritional conflicts such as Ukraine], it's economies that win wars." [1] Compared with other industrial policy achievements of the Biden era (e.g., the Bipartisan Infrastructure Law, the CHIPS and Science Act and the Inflation Reduction Act), federal defense spending has unique features. • Unlike these other investments, defense spending does not represent a one -time -only surge in expenditures. Rather these are annual appropriations that provide a predictable flow of funding over multiple years and a new floor for future spending. • Unlike most federal agencies, the Department of Defense is not allocating resources through block grants or competitive programs. It is, rather, a super -sized employer and a massive buyer of goods and services. Defense appropriations, therefore, involve direct federal spending rather than being distributed through states, localities and a plethora of public authorities and agencies. It is also a central element of what has been labeled,..p..��.e...,....IL...P....!L�^. • Unlike many federal programs, defense spending is not allocated across the country based on need criteria and will not affect all areas of the country equally. Rather, as described below, it will disproportionately benefit communities that have distinctive military assets developed over decades if not, in some cases, centuries. Realizing a defense dividend requires local and state leaders to understand their special role and function within the nation's sprawling defense establishment and work to leverage its impact to the maximum extent possible. The military industrial complex, to use an evocative phrase popularized by President Dwight Eisenhower, is spatially distributed in ways that give cities, metropolitan areas and states radically different starting points as the federal government makes its procurement decisions. Fortunately, the Department of Defense is unusually transparent about its spending patterns and procurement decisions. Just last month, for example, the Office of Local Defense Community Cooperation released a report entitled simply Defense Spending by State, FY2022 The uc iaj is a treasure trove of information and a starting point for every city, county, metropolis and state trying to understand their role in the defense establishment. As summarized in the report's introduction: "The report's graphs, maps, and tables present a range of findings, such as total spending figures, categories of contracted goods and services, major defense vendors, numbers, and types of defense personnel, and, for the first time, grants awarded by DoD. This snapshot provides public and private leaders with a starting place to assess how defense investments across installations, communities, and the private sector can be optimized by supporting regional innovation, industrial capability and capacity, supply chain resilience, and cultivating a skilled workforce' Within this report, it is revealed that the Department of Defense's total expenditure across all 50 states and the District of Columbia amounted to $558.7 billion, equivalent to 2.2% of the nation's GDP. Most of these funds, $389.5 billion, were dedicated to contracts, while personnel payroll accounted for $159.4 billion, and grants constituted $9.7 billion. Here is a 5-part typology that might be helpful to communities as they begin to sort out their own, customized defense dividend. This typology is not exhaustive nor totally reflects how the Department of Defense organizes itself. Rather, it is built from the bottom up as a practical guide to enable local communities to recognize different kinds of defense spending, leverage it for maximum local impact and help the Department of Defense take full advantage of the economic ecosystems that communities offer. Military bases: Each of the Armed Services (i.e., Army, Navy, Air Force, Marines, Space Command) has bases for its personnel across the country. These bases are often vast enterprises that have enormous economic benefits for the communities in which they are located. As a report of the Texas Comptroller concluded: "Texas' military bases aren't just barracks, mess halls and firing ranges. They're more like cities, and in some cases like large cities. Modern military bases include machine shops, garages, water treatment plants, hospitals, wellness centers, hotels, stores, restaurants, day-care centers, movie theaters and more, employing civilians and military contractors as well as service members." [2] El Paso's Fort Bliss, for example, is an army base supporting over 28,400 active duty and civilian employees, ranking loth in defense personnel nationwide. The DOD report shows that bases yield a dual benefit. In FY 2022, El Paso received over $562.6 million in contract spending (in part related to the operation and maintenance of the base) and $1.9 billion in personnel spending. This direct spending represents 6.4% of the metro's Gross Domestic Product. Command Centers: Some military bases or installations serve broader purposes for either separate Services or the military as a whole. Scott Air Force Base in St. Clair, Illinois, for example, supports close to 8,400 active duty and civilian employees. The base is home to the United States Transportation Command (TRANSCOM), which is responsible for the logistical movement of troops, equipment, munitions and other supplies across the world. The command's role has been on display recently, coordinating and delivering supplies for the war in Ukraine. In FY 2022, St Clair, Illinois received $1.3 billion in contract spending (second highest in the state of Illinois) and over $790.3 million in personnel spending (highest in the state), representing a significant 16% of St Clair County's Gross Domestic Product. Production Hubs: The military is a platform for advanced manufacturing in the United States. Unlike civilian manufacturing, the offshoring and outsourcing of defense related manufacturing has been constrained; the threats to national security are too profound. With enhanced federal spending, the Department of Defense has already declared its intention to build the next generation of fighter jets, drones, nuclear submarines, hypersonic weapons, artificial intelligence, and cybersecurity. This is compelling some rapid shifts in focus and investment. As the Financial Times reported yesterday, "Analysts say the Ukraine war has provided something of a wake-up call for the US defense industry, which had been de- emphasizing production of weaponry needed in traditional land wars and focusing more on technologically advanced surveillance and reconnaissance systems needed for counter- terrorism missions and deterring China in the Pacific." [3] The local implications are significant. Boeing, for example, has a major presence in St. Louis County in Missouri. The company employs about 15,800 people in the area, and it has been a part of the community for nearly 80 years. Boeing's St. Louis operations are focused on advanced manufacturing; the company also has several research and development facilities in the area. In FY 2022, St. Louis County received $5.4 billion in contract spending (equivalent to 6.08% of the County's Gross Domestic Product); Boeing itself received $4.1 billion. Innovation Hubs: Each of the Services have major research and development facilities that enable the testing and development of next generation technologies and weapons. The largest of these facilities include the Naval Undersea Warfare Center in Newport, RI, Wright -Patterson Air Force Base in Dayton, OH, and the Army Research Laboratory in Adelphi, MD. As a result, Newport, RI and the surrounding community received nearly $586 million in contract spending and $753 million in personnel spending. Distributed R&D: Each of the Services as well as other DOD entities such as the Defense Advanced Research Projects Agency (DARPA) have ample research budgets and work closely with networks of researchers at universities, research institutions and industry partners across the country. All this is complemented by additional federal R&D funding to promote business innovation and technology transfer in defense -related areas, such as the SBIR/STTR awards. Massachusetts Institute of Technology, for example, received $1.1 billion in contract spending in FY 2022; the University of Dayton, located near Wright -Patterson Air Force Base in Dayton, OH, received $157.4 million. In some cases, DOD funds special university centers to enable closer collaboration between the military, corporations, start-ups and researchers and accelerate technological breakthroughs and improvements. The National Robotics Engineering Center (NREC) at Carnegie Mellon University, for example, conducts research on a wide range of robotics technologies, including autonomous vehicles, unmanned aerial vehicles, and exoskeletons. These kinds of centers are likely to grow in number and size given the changing nature of warfare and the rise of Defense Tech. In September 2023, for example, DOD announced the award of nearly $240 million dollars to eight regional "innovation hubs" around the United States to help the development of a domestic microelectronics manufacturing industry. As these examples illustrate, the reach of defense spending is far and wide. The economic benefit of these facilities and activities are pronounced, providing cities and metropolitan areas with a steady demand for both talented workers who earn decent wages that recirculate throughout local economies as well as local enterprises that can supply a broad array of quality goods and services to military bases and facilities. For metros that cross state lines, the economic benefits are even more substantial than DOD's report suggests. The St. Louis metropolis, for example, encompasses 15 counties in both Missouri and Illinois. Local stakeholders, therefore, can only ascertain the full impact of defense contract and personnel spending by reviewing information for both states. In many respects, the impacts of defense spending are similar to those of any large employer in a metropolis. But they are only the tip of the iceberg. Local communities, working closely with the Department of Defense, can realize a full defense dividend by acting with intention and purpose. Here are 5 strategies that build upon existing strategies and hold great promise. • Regenerate downtowns: Many central business districts have been hit hard by remote work. In metros with a large military presence, vacant office space can be taken by innovative defense firms as well as defense personnel themselves. In Dayton, Ohio, for example, Infinity Labs, a fast-growing firm in the advanced air mobility sector, has taken space in the historic Dayton Arcade. The potential to move several hundred personnel from "behind the fence" of Wright Patterson Air Force Base to the center of the downtown would have immeasurable benefits, without compromising national security. • Accelerate the clean energy transition: The Department of Defense has a clear mandate and interest to accelerate the transition to reliable and resilient clean energy. The 2021 DoD Climate Adaptation Plan strives to reduce the adverse impacts of climate change by strengthening the resilience of critical supply chains and leveraging DoUs purchasing power. Under this Climate Adaptation Plan, each of the Armed Services has started to release its own climate strategy with specific goals around the reduction of GHG emissions that could have significant implications in regional economies. There is enormous potential for DOD to work with utilities, energy developers and technology firms on accelerating the clean energy transition. In El Paso, Fort Bliss has already worked with the city of El Paso and the local water utility to create the world's largest inland desalination plant, which now provides fresh water for the city and the base. • Boost local businesses: The Department of Defense is one of the largest purchasing entities in the world. The expansion and maintenance of military bases requires the purchase of a broad spectrum of goods and services, a portion of which can be supplied by local and diverse firms. The execution of Intergovernmental Services Agreements, which enable buying decisions to be delegated from the Department of Defense to local governments, has been tested in San Antonio and elsewhere and offers the potential for broader local impacts. • Train workers for quality jobs: The boost in defense -related manufacturing has the potential to create good paying jobs for workers who can obtain the necessary skills and credentials through community colleges. The model for business -led skills training already exists. Since 2007, the St. Louis Community College and Boeing have worked closely together to train and successfully place more than 1200 participants as aircraft assembly mechanics. • Create innovation centers and districts: The design of next generation defense systems will require continuous innovation and close collaboration between university researchers and defense manufacturers. In St. Louis, Boeing has led a successful effort to create an Advanced Manufacturing Innovation Center in partnership with local universities and economic development organizations. The Center, modelled after the Advanced Manufacturing Research Centre in Sheffield, England, is now moving from concept to reality, backed by federal, state, local and corporate funding. These strategies, and others, work best when they are part of larger partnerships between defense installations and the broader economic development ecosystems (e.g., city, county and state economic development organizations, business leadership groups, universities, community colleges, infrastructure and energy utilities) that populate cities and metropolitan areas. A local defense council or consortium could play a crucial role in coordinating these efforts, ensuring effective communication and a unified approach to leveraging defense spending for local growth. The upshot of our analysis is sobering but realistic. As the world enters a new period of sustained geo-political tension and live regional conflicts, a substantial increase in US military spending can be expected for the foreseeable future. A defense dividend will accrue to those US cities, metros and states able to align key policies and strategies to the demands of national security. Bruce Katz is the Founding Director of the Nowak Metro Finance Lab at Drexel University. Milena Dovali and Victoria Orozco are Research Officers at the Nowak Lab. [1] Christopher Miller and Ben Hall, "Lessons from the Summer Offensive," Financial Times, 9/15/2023 [2] Bruce Wright, "Military Installations Worth Billions for Texas," FiscalNotes, 9/2016 [3] Steff Chavez and Felicia Schwartz, "War tests US defense sector strained by Kyiv demands," Financial Times, 10/18/2023 Zf BN RICE KATZ AR 0, JAC'0)1' I-LAIN SEPTEMBER 28 How Cities Navigate the New Economic Order Books for our Times F01,',P Al"""I"'Y 51 FAKIIN* 10114 OUIR IIAAIIIII 111114G 11 ur1 I' , 0 j r i,r iir r i,s c o i,� rAC r R EXHIBIT C 10 01�1�rrrq MSU �ETEXAS, TO: Leo Lane, Chair, 4A-Wichita Falls Econornic Development Corporation FROM: Stacia Flaynie, President DATE: July 9, 2024 RE: Student Success and Military Education Center C)FRCE OF THE PRESIDENT 3410Taft Boulevard Wichita Faffs, Texas 76308-2099 o940.397.4211 f940.39T4010 msut"as.edu Midwestern State University (MSU) is dedicated to fostering student success, and retention through strategic initiatives. As part OfOUr overall enrollment plan, we are deeply committed to enriching educational Opportunities for military and military -affiliated individUals at Sheppard Air Force Base (SAFB) and the many veterans residing within our region ofTexas. Our Student Success initiative, anchored by rr Military Education (...enter, is a. testament to this commitment, This Center would be a. centralized support hub, facilitating streamlined access tca services tailored to military -affiliated students' Uni(ILIc requirements. Our unwavering commitment to the success of these students is at the core of this initiative. Furthermore, this initiative will enable the development of academic programs that align with military preparedness standards, It is crucial for both MSU and Sheppard Air Force Base to remain vital pillars supporting the economic stability of the North Central Texas region. This initiative stands, as a 1'orce multiplier, bolstering enrollment at the university, supporting the base, and sohdif�,ing the position and interdependence ofboth organizations in the Wichita Falls community. The Center will be located on the second floor ofthe Bridwell Activity Center. Originally rnade possible by the Bridwell Foundation in 2022, the Bridwell Activity Center's second floor has remained unfinished, contrasting with the Student services programs and sororities' chapter houses oil the first floor. With its student energy and amenities like a coffee shop and study spaces, this location offers a vibrant campus atmosphere for individuals connected to the military to access set -vices at the Military Education, (,"enter oil the second floor. At the heart of the Center will be a comprehensive support network comprising staff members from variOLIS departments, including admissions, registration, financial aid, veterans' benefits. academic advising, technological Support services, and career counseling trained to effectively address the unique educational needs of military -affiliated students and their Families. Moreover, tailored services exclusively designed for MSI..)',s veteran students will seamlessly integrate within this centralized support hub. The university seeks $1,000,000 ill Support of $4,000,000 construction project, Thus Gar, the University has secured $2,000,000 in gills and pledges to Support construction for an M t D W'E S T E R N S T A T E U N I V E R S I T Y A Member of the'llexas 1Lch University System An EE01ADAAA Compliance Employer and Educator I approximately '11,00() square foot complex in the second floor ofthe Bridwcll Activities (..enter. As noted below, we have also secured an additional $753,740 in scholarship support. Funding for the facility: $ 1,000.000 received and $ 1,000,000 pledged from the Bridwel I Foundation Funding for Military Education Scholarships: $453,,740 received frorn three local inundations (McCoy, Fain, and Edwards) and one individual. $300,000 pledged from two local foundations (Fain and Edwards). More critically for the purposes of this request, we are requesting $2,840,000 in annual support from the Texas Legislature to provide staffing, faculty training and course development, maintenance and operations, equipment, travel, and information technology support. Ofthat amount, $1,990,000 would cover salaries and Fringe benefits for 25 rull-time employees, plus up to 20 student workers and ten adjunct faculty. The salaries for these 25 full-time employees would range from $27,3 15 to $69,257 per year. We believe this initiative will increase the retention of` all MSLJ students, but it will also strengthen the relationship of two anchor institutions, both of which are significant economic drivers of the Wichita Falls area. A Meinber of theTexas Tuch University SysLein An EFOIADAAA Compliance Employer and Foucator EXHIBIT D 01 V, o, DEPARTMENT OF THE AIR FORCE AIR EDUCATION AND TRAINING COMMAND mortr-49im Brigadier General George T,M.. Detrich III Commander, 82d Training Wing 419 G Ave Suite: I Sheppard AFB TX 76311 Mayor, Wichita Falls, 1300 7th Street Wichita Falls TX 76301 Mayor Short As my tenure as the installation commander at Sheppard Air Force Base winds to a close, I am grateful for the incredible support the city and the community provide to our Airmen and our missions. As you know, there are a few core issues the Air Force prioritizes when assessing community support, such as healthcare, spouse employment, and education. Regarding the latter, I am excited about the efforts Dr. Stacia Haynie and Midwestern State University are making to expand support for military members, their families and veterans in our community, and specifically their intent to establish a dedicated Military Education Center. Midwestern State University's vision of a dedicated Military Education Center focused on helping our members and families succeed will address both issues, and in concert with other community efforts it will make Sheppard Air Force Base a coveted assignment. Not only would it draw active members to Wichita Falls, but I am confident it will draw many retiring and separating veterans back to the area. The City of Wichita Falls supports the base in so many ways, and I hope you and the other city leaders will strongly consider supporting this and other higher education initiatives as well. I am confident these efforts will benefit our people and missions at Sheppard and the community in general. Respectfully