Economic Impact Study Results
An independent study of The Block’s potential economic impact was conducted by Bradley University Department of Economics Chairperson Robert Scott, Ph.D., and Assistant Professor of Economics Joshua Lewer, Ph.D. The researchers, who performed the research as private citizens and did not charge a fee, reported these results:
The Block will produce strong economic benefits to the Peoria area:
§ Job creation
§ Economic growth stimulus
§ High-impact return on low-burden public funding
The Block is Peoria’s own economic stimulus package:
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Because of the ratio of private-to-public funding on construction and associated costs, The Block would have a far greater impact than a standard stimulus package such as that proposed by President Obama.
§ For each $1 in sales tax directed toward the Peoria Riverfront Museum the community would get a $14 return in economic activity over the 20-year period of the proposed quarter-of-a-cent tax increase
§ The cost in sales tax per county resident would be less than $17 a year
§ Returns would come in the form of construction, attraction and visitor spending, plus the multiplier effect from such spending
The Block will increase employment levels in the Peoria area:
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Approximately 1,100 jobs during the 25-month construction phase
§ Consistent with 250 to 300 construction jobs per month
§ Remaining jobs result from a multiplier effect caused by increased earning, spending and savings by construction job holders
§ 87 jobs per year after construction in ongoing operations and visitor-induced job creation
The Block is an engine of economic growth:
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$210 million in business development and county growth during construction phase
§ $12 million in additional economic activity per year from facility operations
§ $9 million in additional commerce per year from visitor spending
§ $572 million in total economic impact over a 20-year period
Data and formulas for this analysis came from the following sources:
§ Bureau of Economic Analysis, including Regional Input-Output Modeling System (RIMS) II
§ State of Illinois Department of Revenue
§ Ullman and Dacey (1960)
§ U.S. Bureau of the Census
§ Peoria Area Convention and Visitors Bureau (PACVB)
§ Museum Collaboration Group
Key concepts and data used in this analysis include:
§ Multiplier effect: Spending creates new spending, generating multiple positive secondary impacts. A multiplier of 1.7 was used for our region, which translates to 70 cents of additional spending for every $1 of sales tax collected. This multiplier is directly in line with Peoria County’s stated multiplier range of 1.5 to 2.0.
§ 14-to-1 return: This return on investment refers solely to money raised through a proposed Peoria County quarter-of-a-cent sales tax increase. Such an increase would raise up to $40 million to be directed to the Peoria Riverfront Museum, creating an estimated $572 million in total economic return to the community over the 20-year period of the proposed tax. This high rate of return is possible because every $1 of tax spending is leveraged by roughly $3 in private spending in construction and operations, compounded by the multiplier effect.
§ Jobs during construction: Investment in construction is estimated at $77 million and investment in associated costs is estimated at $46 million, for a total of $123 million. The Bureau of Economic Analysis Rims II models adjusted for Peoria indicate 5.3 jobs are generated per $1 million of construction spending. Note: A significant portion of construction spending is allocated for materials. The resulting estimate of 250 to 300 construction jobs per month created by The Block is consistent with independent estimates provided by local contractors.
§ Jobs after construction: Non-construction jobs occur from continuous operations and spending from The Block. Ongoing incremental increases in operations are estimated at $6.7 million per year. Using the 1.7 multiplier, the total becomes $11.4 million per year. Direct and indirect spending would create an estimated 68 jobs and visitor spending would create an estimated 19 jobs for a total of 87 jobs per year from ongoing activities.
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Attendance: Total average annual attendance for The Block is projected to be 360,000 visitors. This figure is composed of three categories:
o 120,000 visitors who visit only the Peoria Riverfront Museum
o 120,000 visitors who visit only the Caterpillar Experience
o 120,000 visitors who visit both facilities during their visit to The Block
Therefore, the average annual attendance projection for the Peoria Riverfront Museum and the Caterpillar Experience is 240,000 visitors each.
The projected 240,000 annual visitors to the Peoria Riverfront Museum include:
o 56,000 for galleries and planetarium only
o 53,000 combination admissions to galleries/planetarium/IMAX
o 93,000 for IMAX only
§ 44,000 daytime IMAX visits
§ 49,000 evening IMAX visits
o 19,000 for planetarium only
o 19,000 for other visitors, including classes, special events, exhibit openings, etc.
The projected 240,000 annual visitors to the Caterpillar Experience include:
o 65,000 Caterpillar Inc. employees, retirees and their guests
o 43,000 official Caterpillar Inc. guests (primarily dealers and customers)
o 65,000 general public
o 50,000 school-age tour groups (fifth grade through college)
o 17,000 adult tour groups
These figures are based on stable, fourth-year attendance projections. They were researched extensively by The Block collaborators using attendance figures for similar American museums in the Midwest, including the John Deere Pavilion in Moline, Illinois, and the Putnam Museum in Davenport, Iowa; the latter also provided the primary comparison for IMAX attendance. Additional factors considered included, among others, current attendance for Lakeview Museum gallery and planetarium offerings; visitor studies using U.S. Census Bureau information; continual updates planned for all content area; strong interest by Caterpillar in encouraging dealers, other visitors and students to visit the Caterpillar Experience; and the draw of the riverfront location.
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Visitor spending: PACVB data indicate overnight visitors spend an average of $150 per day (per hotel room occupancy). Assuming an average occupancy of two persons per room, total visitor spending totals $8.8 million per year.
To view the official report from Dr. Bob Scott and Dr. Josh Lewer please click on the link below.