Newswise — A study by Anderson Economic Group, a respected economics research firm commissioned by the University of Chicago to analyze the economic impact of a Barack Obama Presidential Library on Chicago’s South Side, has concluded that the library “can provide a significant economic boon to the neighborhood and the city.”
The report, completed in April 2014, estimated future economic activity exclusively due to the library. This analysis projected the net impact of library construction, operations, and additional visitors on measures including employment, earnings, and tax revenues. Its main findings:
◦ The annual economic impact to the City of Chicago would be $220 million, due primarily to an increase in visitors to the city. It would create 1,900 permanent new jobs, increasing annual local earnings by $56 million.
◦ The study estimates that 800,000 visitors will come to the library each year, including 350,000 visitors from outside the Chicagoland area. The visitors would bring additional spending of $31 million on food and retail to the neighborhood near the library, enough to support 30 new restaurants, 11 new retail outlets and a new hotel. Visitors to the city would spend about $110 million in all in the city that would not be spent otherwise.
◦ Construction of the library would have a $600 million economic impact on the city. It would create 3,280 local jobs for a total of $156 million in earnings over the course of the construction project. The analysis projected that construction alone would cost $380 million—based on costs of other presidential libraries, anticipated features of the Obama Presidential Library, and the Chicago construction market. The construction costs plus other indirect expenditures would provide a total of $600 million in economic impact.
◦ The library would help the city's fiscal position; tax collections to the city and CPS would increase by $5 million annually, including such taxes as property, sales, restaurant, hotel, parking, and car rental.
The study’s assessment of net economic impact does not include all economic activity by the library or its visitors. Rather, the authors counted only spending or employment that would not happen without the Library. The estimate of 800,000 visitors per year is almost twice the number of visitors to the Reagan Presidential Library in Simi Valley, Calif., which is the most visited presidential library in the country. The authors noted that an Obama Presidential Library on Chicago’s South Side, as the nation’s first truly urban presidential library, would be more accessible to transportation and a large base of visitors than any other presidential library, and would benefit from Chicago’s well-developed amenities for tourists.
As with the other projections, the study authors used conservative methodology to arrive at the visitor estimate. The report notes that the Museum of Science and Industry, also in the heart of the South Side, attracts more than 1.4 million visitors annually. The authors added that “due to the historical significance of Obama’s presidency,” the Obama Presidential Library “will be a tourist attraction for reasons that other presidential libraries cannot claim.”
Other presidential libraries provide evidence that such institutions can act as local economic engines and community resources, according to the report. It points to the distinctive programming, speakers, conferences and resources that presidential libraries offer, in addition to educational programs for hundreds of thousands of schoolchildren. For example, the authors say anecdotal evidence suggests that the William J. Clinton Presidential Center in Little Rock, Ark., “[contributed] to the revival of that city’s blighted downtown and [sparked] local investment thanks to its ability to attract tourism to the city.”
The study provides clear evidence of the broad benefits the Obama Presidential Library would bring to the South Side, said Susan Sher, senior advisor to the president at the University of Chicago.
“Without question, the numbers resulting from the AEG analysis show that the OPL would create a substantial number of new jobs and be a catalyst for economic development—a significant boon to the South Side and to the City of Chicago,” Sher said.
Sher noted that the report did not consider the potential effects of additional, concerted efforts by private and public entities to spur private development near the library. Rather, it considered the impact only of the Obama Presidential Library itself on the neighborhood and the city. Beyond the scope of the study’s analysis, the authors wrote, “It is possible that other private development or infrastructure improvements that complement the Obama Presidential Library would result in an even greater and more localized economic impact.”
The University and its community partners believe private-public partnerships would further amplify the library’s economic and cultural benefits for the South Side and the city, Sher said. The University of Chicago recently has worked with local residents, businesses, elected officials and the City of Chicago in a successful effort to revitalize the key commercial corridor of 53rd Street in Hyde Park. Similar collaborations could help the Obama Presidential Library become an anchor for even broader economic development that creates jobs and enriches quality of life on the South Side, Sher said.
“The library presents an incredible opportunity to make further progress on the kind of economic development that South Side residents and leaders have sought for many years,” Sher said.