HomeMy WebLinkAboutAgenda - 09-01-2009 - 7aORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: September 1, 2009
Action Agenda
Item No. -7 -- q
SUBJECT: Update of Activities on Orange County Economic Development Efforts
DEPARTMENT: Economic Development PUBLIC HEARING: (Y/N) No
ATTACHMENT(S): INFORMATION CONTACT:
Hospital Information Brad Broadwell 245-2325
PURPOSE: To provide the BOCC with an update of activities on Orange County economic
development efforts including: the development of a Solar Cluster; the partnership with the
Chapel Hill-Carrboro Chamber of Commerce promoting the Buy Local program; discussions
with Buckhorn Partners, LLC on designing a state certified business park at the Buckhorn EDD;
and discussions with the Town of Hillsborough regarding the incubator development along the
US 70/Cornelius Street Corridor and the proposed UNC hospital systems new facility in
Waterstone Village.
BACKGROUND: Discussion will focus on information as presented at the May 5, 2009 Board
of County Commissioners meeting, the Economic Development Commission's strategy and
vision for the development of a solar cluster in Orange County. One component of this vision
included the very real possibility of a solar .5 MW solar array on a closed portion of the Orange
County landfill. This potential installation would serve several purposes:
• It would be a reference project to showcase the application of solar technologies;
• It would allow the county to obtain a small revenue from an underutilized public asset;
• It would be a visual confirmation of Orange County's acceptance of renewable energy;
• It would provide market demand for local solar companies; and
• It would allow the County to tap two renewable energy sources from the county landfill
(methane and solar) which to our knowledge, has not yet been done in the state of North
Carolina.
At this point it is requested that the BOCC authorize staff to initiate a Request for Proposals
(RFP) process for a solar installation at the County landfill. The RFP would be presented to the
Board before it is issued. Additionally the BOCC will be update on discussions with NCDOT
regarding a solar highway in Orange County, local solar activities for farmers, and solar
outreach and education for local businesses. The Economic Development Department's
business attraction efforts of Solar companies will also be presented.
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The EDC has been a strong supporter in the County's buy local program. New posters and in
store materials will be presented to the BOCC which acknowledges continued support of the
effort.
Meetings have been held with officials from the State Department of Commerce, local officials
and the principals of the Buckhorn Partners, LLC to discuss the feasibility, standards and
conceptual understanding for consideration to build a North Carolina State Certified technology
park in the Buckhorn EDD.
Meetings have also occurred with Town of Hillsborough Planning Director Margaret Hauth to
discuss the implementation of a collaboration/class project for the Fall semester to develop a
retail incubator proposal for the US Highway 70 business corridor in Hillsborough under the
tutelage of Associate Professor Meenu Tewari with the Department of City and Regional
Planning, at the University of North Carolina at Chapel Hill.
FINANCIAL IMPACT: None
RECOMMENDATION(S): The Interim County Manager recommends that the Board receive
the report.
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Economic Development
Commission
It seems wherever you turn, there are signs of a remarkable surge in hospital
construction. Here in the Raleigh/Durham region according to the Triangle Business
Journal (1/25/09) there is phenomenal growth in hospital construction. As of January
2009 there has been over 1.5 billion dollars of construction proposed or currently
underway in hospital construction in the triangle. Most experts agree that this will in fact
change the look of area health care and shift market share in unpredictable ways.
At this point in time it is very difficult for me to quantify the actual impacts of constructing
and servicing a 68-bed, $227 million hospital in Hillsborough. It's my opinion that the
UNC health care system submitted some impact numbers in their application to build
the facility, to the state's Division of Health Service Regulation's Certificate of Need
Section, but how significant an effort in determining the economic impacts remain to be
seen and what gets released to the public should be forthcoming.
What we would hope to find is a study using input-output models that determine
economic multiplier affects developed by the United States Department of Commerce's
Bureau of Economic Analysis, the output multiplier considers the "ripple" effect of direct
hospital expenditures on other sectors of the economy, such as medical supplies,
durable medical equipment and pharmaceuticals. Economic multipliers are used to
model the resulting impact of a change in one industry on the "circular flow" of spending
within an economy as a whole.
Even if the affects are yet to be determined there are many objective conclusions that
can be drawn in building hospitals. I believe these basic principles would be relevant to
this situation:
• Health care attracts external dollars
o In this case health care will attract external dollars into the community
from
- PO Box 1177 • Hillsborough, NC 27278
(919) 245-2325 • FAX: (919) 644-3008
EMAIL: edcmailCa~co.orange.nc.us • WEB ADDRESS: www.co.orange.nc.us/ecodev
outside the local area, probably Alamance and Chatham County's.
The UNC medical center and health care employees are purchasers of local
goods and services
o keeps local dollars at home
o will have multiplier effects
Identifies & addresses supply-demand gaps
o Are there health services that can be provided locally where people are ~-
currently leaving the community?
A factor to business recruitment & retention
o attracts & retains local industries & companies
o promotes a healthy and productive workforce
o Attracts services and amenities such as hotels/restaurants Provide goods
and services locally for consumers and business
o Provides goods and services locally for consumers and businesses
expenditures
In searching the Internet looking for newly constructed medical facilities (2004 to
present) and have found study's that surmise the following:
...Cincinnati Children's Hospital Medical Center every dollar they spend on patient care,
research and education generates an additional $1.25 throughout the Cincinnati region
in jobs, tax revenues and other economic benefits. They are attracting more than $328
million in grants and visitor spending each year.
.... University of Connecticut Health Center study showed the economic benefits of
building a large public teaching hospital could generate as many as 18,000 new jobs,
for the region.
... University of Iowa Hospital and Clinics generates 7,464 jobs that add $370,913,481
to Johnson County's economy, according to the latest study by the Iowa Hospital
Association.
.... Brookhaven Memorial Hospital Medical Center in East Patchogue, New York the
facility had an estimated total annual economic impact of $396,116,000. The hospital
supported 2,970 jobs, which paid $16,138,000 in state and local personal income and
sales taxes. Brookhaven Memorial Hospital employs 1,546 FTE's, with a total payroll of
$111,859,000
...Economic activities of Marshall County, KY hospital& its employees created, 319
local jobs, 17.4 million in local revenues, 9.2 million dollars in labor income, 11 million
in valued added in Marshall County as a result 4.3 percent of the local jobs in Marshall
County are dependent upon Marshall County hospital
..., McDuffie Regional Medical Center in McDuffie County, Georgia generated more
than $42 million in revenue for the local economy. Sustaining more than 363 full-time
jobs throughout McDuffie County and the rest of the state. They had direct expenditures
to the county of more than $17 million in 2006. When combined with the an economic
multiplier developed by the United States Department of Commerce's Bureau of
Economic Analysis, the total economic impact of those expenditures was more $42
million.
... And a final example, in this case from Davidson County, North Carolina and
economic impact study that was done buy UNC-Greensboro found that the Thomasville
Medical Center a 149-bed private, not-for-profit hospital in Thomasville, had a fiscal
impact to the county of 78.86 million dollars a year.
Obviously it's impossible to equate these projects with the proposed Hillsborough facility
but the facts remain that this hospital's payroll expenditures will serve the community as 5
important economic stimulus, creating and supporting jobs throughout local and regional
economy. The dollars earned by the UNC medical facility employees will be spent on
groceries, clothing, mortgage payments, rent, etc., generating a significant sum as seen
in other localities. The remaining 245 acres of Waterstone Village and Hillsborough area
will support additional commerce such as physician offices, pharmacies, nursing homes,
equipment suppliers, restaurants, motels and florists". The UNC Hospital will of course
spend a significant sum on the goods and services it needs to provide health care -- for
example, medical supplies, electricity for its buildings, and food for patients.
One final note there are some health care analysts that would argue that the cost
impact' studies the hospitals are doing do not take into account the 'lost opportunity
cost' of employers paying more and more and more for health insurance (which
provides the reimbursements revenue streams) that the hospitals are using to do this
building and expanding. ... Reducing this to its simplest terms some feel dollars be
more productive if left in the hands of local businesses, i.e. in wage increases to their
employees instead of increased premiums. Leading to the question would the dollars be
more productive spent by employees in local stores, instead of in the hospitals because
of their higher deductible plans? ... thus leading to the chicken or the egg question of
which expenditure has a better return on investment for economic development?"