The Strategic Value of the Hamilton Harbour Stelco Lands a Socio-Economic Investigation
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The Strategic Value of the Hamilton Harbour Stelco Lands A socio-economic investigation April 2017 An independent study conducted on behalf of: The Strategic Value of the Hamilton Harbour Stelco Lands: A socio-economic investigation About the Canadian Centre for Economic About the Report Analysis The Canadian Centre for Economic Analysis CANCEA does not accept any research funding or (CANCEA) is a socio-economic research and client engagements that require a technology firm that periodically provides predetermined result or policy stance or objective, independent and evidence-based otherwise inhibits its independence. analysis dedicated to a comprehensive, In keeping with CANCEA’s guidelines for funded collaborative, and quantitative understanding of research, the design and method of research, as the short- and long-term risks and returns well as the content of this study, were behind policy decisions and economic outcomes. determined solely by CANCEA. At the centre of CANCEA’s analysis is its This information is not intended as specific Prosperity at Risk simulation platform which is an investment, accounting, legal or tax advice. agent-based, geo-spatial socio-economic computer platform that reproduces and forecasts activity across over 5,500 Canadian regions. Using “big data” technology advancements, Prosperity at Risk simulates the interactions of more than 40 million virtual agents (individuals, corporations, governments, and non-profit organizations) to realistically understand the consequences of market and policy developments for our clients. ©2017 City of Hamilton Citation: Printed in Canada • All rights reserved The Canadian Centre for Economic Analysis. The Strategic Value of the Hamilton Harbour Stelco Lands: A socio-economic investigation. April 2017. The Strategic Value of the Hamilton Harbour Stelco Lands: A socio-economic investigation TABLE OF CONTENTS Executive Summary ....................................................................................................................................... 1 1. Introduction .......................................................................................................................................... 4 1.1 A short history of Hamilton Harbour ............................................................................................. 4 1.2 Canada’s “Steel City” ..................................................................................................................... 5 1.3 The Lands ...................................................................................................................................... 7 2. The Study ............................................................................................................................................. 10 2.1 Modeling approach ..................................................................................................................... 10 2.2 Applying PaR to this study ........................................................................................................... 11 2.3 Scenarios ..................................................................................................................................... 13 3. Results ................................................................................................................................................. 16 3.1 Long-term results by scenario ..................................................................................................... 16 3.2 What does success look like for Hamilton? ................................................................................. 20 3.3 What does success look like for Ontario and Canada? ................................................................ 20 3.4 “Optimal” development mix ........................................................................................................ 21 4. Conclusion ........................................................................................................................................... 23 5. References ........................................................................................................................................... 24 A. Defintions ............................................................................................................................................ 26 The Strategic Value of the Hamilton Harbour Stelco Lands: A socio-economic investigation LIST OF FIGURES Figure 1. Cumulative growth in employment in Hamilton (CMA) by industry (from 1987 base) ............. 6 Figure 2. Cumulative growth in employment in Hamilton (CMA) by job type (from 1987 base) ............. 6 Figure 3. Cumulative growth in production of crude steel (From 1987 base) .......................................... 7 Figure 4. Share of total world production of crude steel ......................................................................... 7 Figure 5. Proximity to the Lands ............................................................................................................... 8 Figure 6. Current distributions of households near the Lands ................................................................. 9 Figure 7. Current density of housing by type ........................................................................................... 9 Figure 8. Average estimated real estate value uplift by proximity to the Lands .................................... 13 Figure 9. Evolution of Land Uses in Each Scenario ................................................................................. 15 Figure 10. Expected cumulative incremental GDP in Hamilton by Scenario ............................................ 20 Figure 11. Expected cumulative incremental GDP in Ontario and Canada by Scenario ........................... 21 Figure 12. Economic ranking of scenarios by order of government ......................................................... 21 Figure 13. Aggregate economic ranking of scenarios across orders of government ................................ 22 LIST OF TABLES Table 1 Summary of job density (per hectare) likelihoods by land use .................................................... 11 Table 2 Average annual incremental economic activity (over 45 years) – Scenario 1 ............................. 16 Table 3 Average annual incremental economic activity (over 45 years) – Scenario 2 ............................. 17 Table 4 Average annual incremental economic activity (over 45 years) – Scenario 3 ............................. 18 Table 5 Average annual incremental economic activity (over 45 years) – Scenario 4 ............................. 19 The Strategic Value of the Hamilton Harbour Stelco Lands: A socio-economic investigation EXECUTIVE SUMMARY The objective of this study was to find an evidence-based and realistic understanding of the socio-economic value of the 329 hectares (813 acres) of industrial land occupied by Stelco (the “Lands”) on the southern shore of Hamilton Harbour. The short answer: the Lands should not sit idle, as they possess significant strategic economic value. Situated in the rapidly growing Greater Golden Horseshoe region of Ontario, the Lands are spatially and economically significant given their location (e.g., a 5 kilometre drive from downtown Hamilton and a 68 kilometre drive from the U.S. Border at Lewiston). The socio-economic potential of the land is highly dependent upon a coordinated response by planners and economic developers across all levels of government. In that regard, what is at risk (i.e., foregone opportunities for significant economic uplift) of the land being mismanaged or suffering patchwork development has been measured over a 45 year planning horizon and includes: For Hamilton: between 440,000 and 530,000 incremental job years (or an expected 10,800 per year on average) with between $31B and $38B in aggregate incremental wages paid in the region; For Ontario: an expected 150,000 incremental job years (or an expected 3,300 per year on average) with between $2.4B and $3.2B in aggregate incremental provincial tax revenues across the province; and For Canada: at least 38,000, and likely 115,000 incremental job years (or 800/2,500 per year on average) with between $150M and $520M in additional GDP per year. Land use scenarios Urban Strategies Inc. – in consultation with N. Barry Lyons Consultants Ltd. – prepared four scenarios that reflect possible planning and development outcomes for the Lands. Each scenario represents the extrapolation of a particular development program and site planning direction in order to differentiate and clarify such trends for detailed analysis. While each scenario is presented here in abstract, they are feasible from a city planning perspective. (The following coloured bars show the end state of the scenario – please see Section 2.3 for more details.) Note that for each scenario, the net benefits to Hamilton may compete with other regions in Ontario and across Canada (i.e., things that might have otherwise occurred outside Hamilton no longer would). In other words, the methodology employed in the study is sensitive to the movement of people and capital and can quantify how much relative benefit Hamilton yields in each scenario due to a new (additional) comparative advantage. That Ontario and Canada still benefit in aggregate is an indication of the net economic value of the scenarios writ large. Page | 1 The Strategic Value of the Hamilton Harbour Stelco Lands: A socio-economic investigation SCENARIO