KOSMONT STUDY

Chamber-Sponsored Study Predicts Many Benefits of Developments

Vallejo is well-positioned for a significant jump in economic growth, according to a recently released study by a Los Angeles-based economic consulting firm that specializes in studying municipalities. The Vallejo Chamber of Commerce commissioned an independent economic impact study by Lee-Kosmont Advisory Services to review the potential benefits of planned major commercial and residential developments in Vallejo. The study was completed this past month and presented to the Chamber at a special meeting of the economic development committee.

Lee-Kosmont focused its study on the fiscal and economic impacts of the five major large-scale development projects that are either in progress or planned for Vallejo: Lennar Mare Island, Downtown, Waterfront, Northgate and the Solano County Fairgrounds. The final report analyzed both the fiscal revenue (public revenues generated by new economic activities) and economic impact (cumulative effects of spending through the area economy based on new economic activities) that these major developments are projected to have over the next 20 years.

The study analyzed the potential impact of new retail, office space, industrial, facilities, residential and other new or expanded development of each project. When taken in combination, the study shows that the five projects are expected to create 1.2 million square feet of new retail space, 1.9 million square feet of new office space, 4.8 million square feet of industrial space, 385,000 square feet of new facility space and over 3,300 residences.

The total fiscal impact upon completion and stabilization of occupancy of these five projects will be in excess of $18 million of annual fiscal revenues for the City of Vallejo and for the City’s redevelopment agency. (For some perspective, the most recent annual revenues for the City of Vallejo were estimated at $75 million annually.) Over a 20-year period, the Kosmont study projects the total fiscal revenues to be approximately $340 million. The total fiscal revenues measured include transient occupancy tax, sales tax, business license tax, utility taxes and property tax increment.

Kosmont also showed that these major development projects will produce other very significant economic benefits. In terms of employment, the study projects that development construction will directly create 10.300 new jobs; an additional 8,800 will be created indirectly for a total impact of 19,100 jobs. Over $524 million in new income will be directly created as a result of the new developments, with another $319 million indirectly created, for a total of over $840 million in new income to the region. Total output in the area, as measured by the gross receipts generated by development activity, will increase by over $1.8 billion.

What the Study Means to Vallejo“ The numbers are huge, and enough to be envied by any city of any size in California,” Larry Kosmont of Lee-Kosmont stated to the Economic Development Committee.“ Vallejo has a great future if it can get out of its own way. The only enemy to this bright future is us.”

Kosmont was referring to the currently cumbersome and slow approval process that developers face with the City of Vallejo. While the City and the Chamber have been working to make the permit approval process more streamlined, Kosmont noted that it could not happen soon enough. He stated emphatically that if firms investing in the city find an efficient, relatively quick development and permit approval process, the numbers that his study projected might even be the low end of what happens. However, he warned, if the process remains inefficient, and if Vallejo and Solano County officials can’t find ways to invest in infrastructure, the potential of all of these developments may not be realized.

“ This study demonstrates that our city has the potential to significantly improve the quality of life in Vallejo for all citizens,” states Rick Wells, president and CEO of the Vallejo Chamber of Commerce. “These five major developments, as well as other new economic activity that is being generated daily in Vallejo, must be encouraged. This means more Vallejoans working, more places to work and live in Vallejo, and more money to provide better services to the citizens of Vallejo, including road repair and maintenance, park maintenance and improved police and fire service.”

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