The overall economic impact of the BioDistrict in downtown New Orleans will be well over $6 billion in terms of infrastructure investments, new and “saved” jobs, personal earnings and tax collections, according to LSU economist James Richardson, who also is a member of the Louisiana Revenue Estimating Conference.
Richardson’s projections are contained in a report completed last month for BioDistrict New Orleans. The report measures the economic impact of the district’s construction phase, which will be most intense in the first five years but will continue up to 20 years, as well as the impact of ongoing operations once the district’s component institutions are up and running.
Richardson’s study estimates total “investment” during the first five years will be more than $1.6 billion — not including major equipment purchases — with a total of more than $3.3 billion in economic impact during that same period. That $3.3 billion includes more than 7,000 jobs a year (most of them in construction) and more than $1.1 billion in personal earnings. New state and local tax collections will reach $140 million or more during those same five years, he estimates.
“The construction activity in the first three to four years will create a noticeable surge in the economy,” Richardson writes, adding that the cash infusion will come both from public as well as private sources. The first five years will see most of the public investment, he writes, with private and institutional investment following in years 6 through 20.
In years 6 through 20, Richardson estimates total “estimated business activity” related to the construction phase at more than $3.2 billion, sustaining more than 2,000 jobs per year and personal earnings between $426 million a year and $650 million a year.
Once the district is operational, the economic impact will be even more significant, according to Richardson. “Direct jobs are expected to grow from 8,800 in year 5 to over 21,000 direct jobs in year 20, an increase of over 12,000 jobs. Overall direct and indirect job growth is estimated at over 22,600 new jobs due to the development of the BioDistrict from year 5 to year 20.” Richardson estimates total jobs — saved and new — will exceed 36,000 by year 20.
The total economic impact of construction and operations, he says, will mean nearly $2.6 billion in annual personal earnings by year 20 and more than $330 million in local and state tax collections.
On a final note, Richardson wrote that he believes his estimates are somewhat conservative. (On the state Revenue Estimating Conference, he is typically the most conservative member in terms of forecasting revenues.) “We did not project the same growth pattern for New Orleans as have occurred in other medical districts,” the report states, “but this is not to say that this higher level of growth cannot be obtained.”