Social and Economic Impact Studies
A principal area of FXM Associates’ practice has been to assess the economic and fiscal effects of proposed new projects and other investments. The wide range of project types and clients in this area of practice - from major private developers to national representative organizations, foundations, and government agencies - attests to the firm’s reputation for objectivity, depth, and quality of analytic work. The firm is recognized internationally for its state-of-the-art economic impact assessment techniques and has successfully defended its work before US District courts and in the precedent-setting case of Sierra Club v. Marsh in the First US Circuit Court of Appeals. As federal, state, and municipal agencies demand increasing more rigorous – and defensible – assessments of net economic and fiscal benefits of potential investments and regulatory changes, FXM’s work has stood out for its clarity, objectivity, and success in helping achieve outcomes that advance economic development objectives and public benefits.
FXM’s work in economic and fiscal impact assessments is also featured in additional project examples in the Transportation projects section of this website.
South Hingham Office Park Market & Fiscal Impact Analysis
Bristol Brothers Development Corporation, Hingham, MA
FXM Associates recently (March 2012) prepared an independent economic analysis for the Hingham Planning Board regarding proposed zoning amendments that would allow commercial uses on a 115-acre undeveloped site. FXM assessed general market support for potential 1,260,000 square feet build-out of office, light industrial/warehouse, and retail space; and, compared the effects of potential commercial development to 80-100 single-family residential development allowed by existing zoning on net municipal revenue to the Town. Using FXM proprietary Municipal Fiscal Impact Model – which accounts for all categories of municipal revenues and costs attributable to residential and/or commercial development -- the analysis determined that there was sufficient market area demand to support commercial development and that net fiscal revenues to the Town of Hingham would be substantially greater if the proposed zoning articles were adopted to allow commercial uses. Owing largely to FXM’s report, both the Planning Board and Advisory (Finance) Committees for the Town voted to support the proposed zoning articles before Town Meeting, and the articles passed at Town Meeting (April 2012).
Sewer Infrastructure Economic Impact Analysis
Office of Community Planning, Town of North Reading, Massachusetts
FXM Associates evaluated potential economic effects of proposed installation of municipal sewer service to accommodate increased commercial development on Concord Street and Main Streets. The analysis was based on types and amounts of commercial uses allowed under existing zoning regulations, supplemented with data from real estate industry sources and input from interviews with commercial brokers, developers and property managers. Kleinfelder SEA engineers worked with FXM to compile a comprehensive parcel database for the two study areas from town assessor records and GIS mapping system. The consultants estimated increased commercial property value and density attributable to municipal sewer service, and described market factors that might limit buildout potential. This report included an analysis of current and projected local and regional real estate market conditions, and estimated potential additional commercial property tax revenue from installation of municipal sewer service. (Completed 2011)
Newport Harbor Economic Study
University of Rhode Island, Coastal Resources Center, City of Newport, Rhode Island
This unique study was commissioned to determine the importance of water-dependent and other waterfront uses to the municipal economy and tax revenues. Conventional wisdom has been that waterfront residential condominiums, hotels, restaurants and retail shops generate more local tax revenues than marinas, ship repair facilities, excursion/charter operations, and landside businesses servicing commercial and recreational vessels. FXM Associates derived the per acre yield in municipal revenues for each category of Newport waterfront land use from a comprehensive property data base developed by URI CRC staff and City officials, as well as visitor surveys, interviews, and secondary source data on business sales and spending by type of consumer. The study findings addressed direct and indirect municipal revenue attributable to waterfront uses, and showed that water-dependent uses yield significantly more per acre in municipal revenues than any other land use type – 2.5 times more than residential condominiums, for example. The study will help guide future City zoning and infrastructure investment decisions, as well as provide planning and elected officials with an objective basis for evaluation of proposed waterfront development projects. (Completed 2010)
Port of New Bedford South Terminal Development Plan
Massachusetts Clean Energy Center and Executive Office of Administration & Finance
The Massachusetts Clean Energy Center and Executive Office of Energy & Environmental Affairs commissioned an engineering and economic evaluation of Commonwealth ports suitable to service offshore wind energy development. FXM Associates assessed economic and fiscal consequences of prospective development projects to the Massachusetts economy. For the proposed South Terminal facility, FXM identified potential new cargoes in addition to off-shore wind projects; and prepared a business plan with projected costs and revenues, potential economic effects, and facility fee schedule. In October 2010, Governor Patrivk announced plans to construct South Terminal as the nation’s first port facility designed specifically to support off-shore wind projects.. Cape Wind will use this facility during construction and manufacturing phases of its 130-turbine off-shore array, creating as amany as 1,000 jobs in southeastern Massachusetts. In addition to support of offshore wind energy projects, FXM identified container, bulk, and break bulk cargoes that could be serviced from a new port at South Terminal and that would generate net new economic benefits to Massachusetts. FXM also prepared a business plan and economic and fiscal impact assessment for these cargo services, showing that the port could cover annual operating costs, generate sufficient net income to support annual operation, and produce net new tax benefits to the state justifying additional capital investment by the Commonwealth of Massachusetts. Recently (2012), the governor of Massachusetts announced that Massachusetts would provide a $35 million capital investment for the South terminal Port construction.
Carver Water Supply Project
Town of Carver, Massachusetts
FXM Associates assessed the economic and fiscal implications of alternative municipal water supply options for North Carver. Using data provided by the Norfolk Ram Group engineering firm, interviews with Town officials, and FXM databases, FXM estimated that the provision of municipal water to key development parcels in North Carver would enable about 70,000 square feet of restaurants and 80,000 square feet of other retail development potential based on current market opportunities. Based on full build-out at the market assumptions further described in the final report, at current tax rates, FXM estimated that the Town of Carver would realize approximately $1.2 million of net new property taxes per year with municipal water supplied to prospective users in the vicinity of the Route 44/58 Interchange.
Municipal Fiscal Impact Model
Town of Sandwich, Massachusetts
As a component of the Sandwich Comprehensive Plan Update, FXM Associates created a Fiscal Impact Model to aid Town officials in evaluating pending and potential development projects. FXM senior staff worked closely with the Town Manager, Chief Assessor, Treasurer and major department heads to calibrate baseline physical and personnel capabilities, and cost of services for residential and commercial land uses. The model was tested using a specific proposed development project to show its effects on municipal service costs and revenues. FXM also contributed to the economic development component of the Plan, defining priority initiatives and strategies to advance community goals and objectives for business retention and attraction, increased employment opportunities, and expanded municipal tax base. Several years after FXM delivered its Fiscal Impact Model, town officials report is has continued to be a valuable tool for assessing net fiscal impacts of proposed development projects.
River Run Mixed Use Development Fiscal and Economic Impact Assessment, Plymouth, Massachusetts
ADM Development LLC
FXM was retained by ADM Development LLC to conduct a fiscal impact assessment of the proposed development of a planned, pedestrian-friendly community of approximately 1,000 residential units, 100 assisted living units, and 90,000 square feet of commercial space on 400 acres of a 1,320 acre site. The assessment consisted of estimates of gross tax revenues to be generated by the project compared to an estimate of municipal operating and capital costs attributable to the project over each year of a 12-year build-out period, and upon completion. In addition to fiscal impacts, FXM estimated increased business output within Plymouth County, jobs and household income, and expenditures during project construction, as well as projected spending by new households for local goods and services and additional jobs in the local area economy that would be supported by new household spending. As a consequence of FXM’s objective and comprehensive analysis, the Plymouth Planning Board approved zoning changes that have allowed the project to go forward.
Direct, Indirect, and Induced Effects of Chain Stores on the Cape Cod Regional Economy
Cape Cod Smart Planning & Growth Coalition
FXM assessed the effect that big box and other chain retailers could have on the overall economy of Cape Cod if growth in retail demand were largely captured by the chains by 2014. The study involved an analysis of secondary source data and case studies done in other communities; an independent baseline econometric forecast of population, employment, and income growth in the regional economy; and application of the R/Econ input output model to measure total direct, indirect, and induced effects on output, jobs, earned income, profits and other unearned income, and local, state, and federal taxes. The study concluded that if chain stores captured 50% of forecast growth in retail demand that by 2014 the Cape Cod region would lose over 9,000 jobs, $600 million per year in business output, over $200 million per year in household income, and over $10 million per year in local taxes.
Review of Medfield State Hospital Redevelopment Proposals
Town of Medfield, Massachusetts
FXM Associates undertook a detailed review of state redevelopment plans for an 80-acre former mental hospital in order to examine the viability of reuse and environmental remediation assumptions, economic feasibility, and fiscal impacts on the town. Key elements of this research and analysis focused on economic issues related to the National Historic Landmark status of the Medfield State Hospital campus and buildings, and physical constraints influencing marketability of a proposed 300+ unit retirement community at the site. FXM and its subconsultant Earth Tech, Inc. analyzed financial data and pro formas prepared by the Department of Capital Asset Management for two redevelopment scenarios, and found significant additional costs that would have to be borne by potential developers. The fiscal impact of the reuse plans and alternative development scenarios formulated by FXM were found to be positive. FXM's report provided the town a blueprint for assessing future development options, including value and net fiscal impacts per unit for single family, condominium, assisted living, and skilled nursing facilities.
Economic Effects of a Building Cap
Town of Barnstable, MA
FXM Associates prepared an independent assessment of the impact a reduction in the number of permits issued for new single family home construction would have on related industry employment, household earnings, local spending, town infrastructure projects, town school enrollment, and net fiscal revenues to the town. FXM interviewed town and school employees, residents, and local contractors and suppliers. Other towns which had adopted building caps were visited and assessed to learn from their experiences. The final assessment included a discussion of the time value of money, the countdown in years to total buildout, the real estate tax impact, economic loss from reduced housing, versus gain from fewer demands on many outdated infrastructure elements. Also included in the study was the impact on varying the type of construction including remodels, tear-downs, and renovations, as well as the impact on the type of product, including market rate and affordable housing. A final recommendation for a phased-in approach was suggested amd adopted by the Town of Barnstable.
Port of New Bedford, Benefit/Cost Analysis of Navigational Dredging
New Bedford Harbor Development Commission,
FXM assessed possible direct, indirect, and induced economic and tax effects of dredging the navigational channel in New Bedford/ Fairhaven Harbor. Analyses included projections of potential cargo vessel and large cruise ship callings, relationships between channel depths and fishing and other vessel users of the port, potential business sales and jobs created for local maritime and seafood industries and integrated logistics/wholesaling firms, and the indirect and induced effects of expanded economic activity in the New Bedford, regional, and state economies. FXM’s analysis showed that – in addition to creating or sustaining new jobs and business sales -- the Commonwealth of Massachusetts would recoup its investment in dredging within several years (via net new income and sales taxes), and as a consequence the State expended over $10 million in the dredging project.
Fall River State Pier Redevelopment
Massachusetts Seaport Advisory Council and City of Fall River, Massachusetts
As part of a consulting team headed by Bermello Ajamil & Partners (Miami, FL), FXM conducted a benefit/cost analysis of redevelopment options for the State Pier in Fall River. The study involved assessment of market demand, including ocean freight, cruise ship callings, excursion vessels, and mixed-use office, commercial, and meeting space; concept and design options, including construction cost estimates; and an economic benefit and cost assessment, addressing direct, indirect, and induced effects on business sales, jobs, and taxes within Fall River and the state overall. FXM’s responsibilities included the market demand estimates for ocean freight and excursion vessels, and the technical analysis of economic and fiscal benefits and costs. The Commonwealth of Massachusetts has pledged to spend up to $18 million in reconstruction and expansion of State Pier in Fall River, as part of the state’s Seaport Bond Initiative.
Economic Impacts of Golf Course Operations
The National Golf Foundation
FXM Associates conducted an analysis to estimate the direct, indirect, and induced economic impacts of golf course operations nationwide on the U.S. economy, including effects on business output (sales), employment, wages, value added, and federal/state/local tax revenues. The final report included discussion of economic impact assessment methods; profiles of typical municipal, daily fee, and private course operations; case study examples of the economic and fiscal impacts of specific courses; and a how-to workbook for golf industry associations, course operators, and developers to guide their evaluation of economic impacts on local communities and regions. Subsequent to this assignment, FXM assisted NGF in separate studies of the economic effects of the golf industry in Southern California, Arizona, Minnesota, Massachusetts, and Pennsylvania.
MacMillan Pier Economic and Financial Assessment
Massachusetts Development Finance Agency
FXM Associates assessed the economic impacts attributable to users of the public pier in Provincetown, Massachusetts, and analyzed the financial consequences of existing and prospective new pier operations. FXM’s analysis showed that users of MacMillan Pier -- including whale watch and charter vessels, ferry service to Boston, commercial fishing, and the pirate ship Whydah Museum -- generated over $26 million in lodging, restaurant, gift shop, and other business sales, and accounted for over 600 full- and part-time jobs. These were significant effects within the Provincetown and outer Cape Cod economy. The evaluation also indicated that a properly reconstructed and managed pier facility could generate net operating income and contribute additional economic benefits within the regional economy. MacMillan Pier’s reconstruction was subsequently funded ($18 million) and the facility has been successfully operated since reconstruction.
Hyannis Freight Economic Impact Study
Woods Hole, Martha’s Vineyard & Nantucket Steamship Authority
FXM analyzed a shipping survey of all freight to and from Nantucket and Martha’s Vineyard to determine the type and value of freight originating in Hyannis. Of particular interest was identifying what products and supplies were purchased from businesses in Hyannis as a means of measuring the economic value of island freight relative to Hyannis’s businesses. Overall amounts of wholesale goods and jobs supported were derived from the data and summarized to reflect the economic significance of the Steamship Authority’s services in and out of Hyannis.
Fiscal and Economic Effects of a Proposed Major Retirement Community
Brandt Point Corporation and the Town of Mattapoisett, Massachusetts
FXM completed an in-depth assessment of the potential fiscal and economic effects of a proposed 450-unit retirement community in the Town of Mattapoisett. At full buildout, the project would add nearly 20 percent to the current town-wide housing inventory. FXM analyzed 10 years of historical data on municipal revenues and costs, by line item category; prepared independent forecasts of population by age cohort and number of school age children for the town overall; assessed the effects of comparable projects in other communities; and conducted extensive interviews with municipal and school department officials to assess capacity constraints and the potential marginal costs of new development on water, sewer, roadway, police, fire, and school infrastructure as well as operating capabilities and budgets. Copies of FXM’s report were distributed to over 400 town residents, and the methodology and findings discussed at a major public hearing and Special Town Meeting.
Trout Brook Valley Golf Club and Residences, Easton, Connecticut
FXM Associates provided the developers of an exclusive housing and golf development an independent financial analysis of the project’s impact on the Town of Easton. FXM investigated all municipal service income and expense to the town, examined statewide and local trends to determine prospective school enrollment and costs per student, assessed market feasibility by looking at comparable developments for both upscale housing and golf courses, and evaluated marginal impacts on the town that might drive future capital or infrastructure needs. FXM provided a highly detailed summary and spreadsheets listing all income sources and expenses over a one- to ten-year time frame for the developer’s use in their approval process with the town.