Thursday, April 12, 2007

Economic and Fiscal Impacts of the Proposed Harrison Square Project

The City has released the study that it paid a consultant to produce.

You can read the study for yourself at:

I will not have time to look through this carefully for another couple of days; however, I did glance through it

I have several comments about this study and I would be interested in hearing your thoughts:

1. The study in no way, shape, or form discusses any of the negative financial impacts the proposed project will cause. For example, if we build a new hotel it is likely that nearby hotels will see their occupancy rates decrease, which means less tax revenue will be generated from nearby hotels. This is NOT accounted for at all and it certainly should be accounted for.

2. The report refers to another report called the "City of Fort Wayne, Indiana, Downtown Community Revitalization Enhancement District, Consultant's Report." I do not know what this report is. I have sent out an email asking Pat Roller where I can find the report. Does anyone who reads this blog know what this report is and where I can find it?

3. This report uses the report mentioned in "2" above to estimate revenues from the InnKeepers tax. Until I read the above report I will not be able to determine what hotel occupancy rate Crowe is using for their revenue projections; however, I can make a guess and here it goes.

Lets assume that the hotel opens Jan 1, 2010. Lets assume that the average room rate charged is $110 per night (Realize they will use several different rates, I am just estimating an average rate). The innkeeper tax is 6% and each retailer is allowed to keep .83% of the total tax collected as a collectors fee.

The Crowe report estimates that the new 250 room hotel will generate $368,450 in revenue from the InnKeeper tax. This would equate to 56,295 rooms rented. This would result in a hotel occupancy rate of 61.7% for 2010 for the new hotel.

Realize that the current hotel occupancy rate for Allen County is between 44% and 48% per the last statistics I have seen.

Realize that there are already three new hotels that are "in the pipeline" to be built in Fort Wayne. These three hotels "in the pipeline" will be built prior to any hotel associated with Harrison Square. There is one going up next to IPFW, one up on Lima Road near the Spiece Fieldhouse, and one up near Parkview North.

Logic would dictate that when four new hotels are built in Fort Wayne the hotel occupancy rates in Fort Wayne will decrease unless four hotels of similar size are closed during the same time period unless Fort Wayne experiences a massive surge in tourism...

Maybe tens of thousands of people will descend on Fort Wayne to watch single A baseball and they will all stay and spend the night in Fort Wayne?

4. Crowe's revenue projection for the income expected to be generated from taxes levied by a brand new 900 space parking garage is very interesting. Crowe is projecting $951 in tax revenue from the new parking garage. $735 of this comes from State Income Tax (Personal) and $216 from County Income Tax.

Editor's note: These figures do not include parking fees, nor do they include parking expenses.

In other words this project would cost at least ten million dollars plus interest and the project will generate $951 in tax revenue the first full year of operation.

5. Another item in this report is the revenue that Crowe is projecting that will be generated by the baseball stadium. Crowe is estimating that the baseball stadium will generate $41,729 due to State Sales tax from its employees in 2010.

Lets get a couple of things straight. The people who currently work for the baseball stadium are already getting paid and this revenue from State income tax is already being generated. This is ex isting income. Please keep this in mind.

6. Talking about the baseball stadium they are projecting $8000 will be generated by the Allen County Food and Beverage Tax (That temporary tax we are all still paying) in 2010. This equates to $800,000 in food sales at the baseball park. I can believe that; however, we are already generating this revenue at Memorial Stadium today.

7. The Construction Impact is typical for this kind of report. It bascially says that we will be spending a ton of money on the construction and this will create temporary jobs.

8. The new hotel is estimated to employ 145 people with average earnings of $21,303 each. Note that if two parents with two children were employed at the motel in 2010 at the average wage they would be below the Federal Poverty level... Not exactly the high paying jobs we have heard about....

9. They are actually projecting that 30,000 square feet of retail will create 157 jobs. This seems extremely high to me. The average retail employee would get $6017 in earnings each. They must all be part time students earning minimum wage. This is not impressive.

10. The baseball park will employ 65 people at an average wage of $23,962 each. These jobs already exist!

11. The parking garage will employ one person at $21,632 per year. They must be projecting a lot of automation...

12. So in total this project is expected to move 368 jobs from one part of the City to another (Economic Re-arrangement at its finest). These jobs will pay an average wage of $15,252. This is below the Federal poverty level. These jobs on average pay significantly less then jobs at WalMart...

I would think that anyone who is "on the fence" would oppose the project after reading this report. It does not paint a pretty economic picture.

Mike Sylvester


Jeff Pruitt said...


I reviewed the report the night it came out and posted the following thoughts over at downtown fort wayne baseball. I was wondering when you'd get a chance to review the impact study and it doesn't surprise me that we're on the same page with this one...

Jeff Pruitt said...
A few thoughts:

1. The administration did the right thing by pusuing and releasing the results of this economic impact study

2. The job numbers are misleading as they are not all full-time positions. The 368 operational jobs created are really only 148 full-time equivalent jobs.

3. It's incorrect to assume that the construction jobs will lead to such a substantial increase in indirect jobs. This is due to the temporary nature of these construction jobs. The assumption that 855 temporary jobs will create 1176 more temporary jobs is not grounded in economic reality.

4. Most of the inputs for this study came from something called the CRED consultants' study. Anyone know what this is referring to? Has this been published?

5. It appears there may not be enough tax revenue generated in the first year to make the bond payments. How will the city make up this shortfall?

barranda said...

Ah, the double-edge sword.

1. The City didn't do the research.
2. The City got the answers it paid for.

LP Mike Sylvester said...


Good job of avoiding all the points I made...

I think if you look at it you will be disappointed in the project as well...

Mike Sylvester

Jeff Pruitt said...


Where in either Mike or I's post could you come to the conclusion of "the city got what it paid for?"

Frankly, I bore of such sarcastic comments. If you disagree w/ something then argue your point. This whole debate has turned into a snark-fest by anonymous posters that simply have nothing to contribute to the debate...

William Larsen said...

From what you wrote, the Harrision Square project will create $358 jobs. Let us be optimistic, let us assume it creates 500 new jobs. We are going to spend $80 million up front with $10 million in yearly interst.

I have a better idea, why not drop the project and just pay each one of these people $20,000 a year for forty years

The yearly cost of $10 million pays each one $20,000 a year. The $80 million would be mostly there when were done.

Based on Fort Wayne Accounting they will go forward with Harrison Square, get into a financial pinch, and some bright candidate will propose saving millions by closing the Harrision Square project and take credit for saving millions in tax dollars.

Anonymous said...

There are just too many unanswered questions about this project. It would be wonderful to have a revitalized downtown, a place to go, to be proud of. But do we have the money? Do we really want a baseball stadium to be the center of our downtown? Let's not rush into something when there are so many questions still to be answered.

Search This Blog

Alfie Evans

1. When a doctor says A and a parent says B, I tend to go with what the doctor says. Usually the doctors are right. After reviewing Alfie...

Blog Archive


Brgd. General Anthony Wayne US Continental Army


My blog is worth $11,855.34.
How much is your blog worth?


About Commenting

Keep it clean and relevant to the post. If you have a question that isn't related to a recent post, email me at . You can also email me if you want to make an anonymous comment.


Per the by-laws of the Libertarian Party of Allen County, the Chair is the official spokesperson of LPAC in all public and media matters.

Posts and contributions expressed on this forum, while being libertarian in thought and intent, no official statement of LPAC should be derived or assumed unless specifically stated as such from the Chair, or another Officer of the Party acting in his or her place, and such statements are always subject to review.