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Economic Impact Study The Economic and Societal Impact of Hampton Roads Transit Prepared for: Hampton Roads Transit 509 East 18th Street, Norfolk, VA 23504 Prepared by: Economic Development Research Group, Inc. 155 Federal Street, Suite 600, Boston, MA 02110 June 23, 2016 TABLE OF CONTENTS EXECUTIVE SUMMARY ........................................................................................................... 1 Chapter 1: Introduction ........................................................................................................ 8 1.1 Objectives and Scope ................................................................................................................. 9 1.2 Study Approach ........................................................................................................................ 10 Methods for Assessing Impacts and Benefits ........................................................................... 11 Measures of Economic Value ................................................................................................... 11 Economic Modeling and Multiplier Effects .............................................................................. 12 Data Sources and Analytical Tools ............................................................................................ 13 1.3 Using this report ...................................................................................................................... 15 Chapter 2: Regional Effects of Today’s Transit Services......................................................... 17 2.1 The Hampton Roads Transportation Economy ........................................................................ 17 Regional Economy Overview .................................................................................................... 17 Transit’s Place in Regional Context ........................................................................................... 19 The HRT System and Ridership Profile ..................................................................................... 20 2.2 The Role of Transit ................................................................................................................... 24 Stimulus Effects of HRT Operations and Capital Spending ....................................................... 25 Workforce Participation ........................................................................................................... 27 The Transit Consumer Economy ............................................................................................... 29 2.3 Performance Benefits and Impacts of Transit ......................................................................... 31 Methodology ............................................................................................................................ 31 Results ....................................................................................................................................... 32 Chapter 3: Critical Perspectives: Transit and the Economy .................................................... 35 3.1 Place Making ............................................................................................................................ 36 Background ............................................................................................................................... 36 Transit-Oriented Place making in Hampton Roads................................................................... 37 3.2 Call Centers and Contact Centers ............................................................................................ 42 Industry Background ................................................................................................................. 42 Call Centers and Transit in the Hampton Roads Economy ....................................................... 42 3.3 Shipbuilding and Repair ........................................................................................................... 46 Industry Background ................................................................................................................. 46 The Role of Transit at the Shipyard .......................................................................................... 46 3.4 Health Care Services ................................................................................................................ 49 Industry Background ................................................................................................................. 49 Transit and the Health Care Industry in Hampton Roads ......................................................... 51 3.5 Higher Education ...................................................................................................................... 55 Industry Background ................................................................................................................. 55 Transit and the Hampton Roads Higher Education Sector ....................................................... 57 3.6 Hospitality and Tourism ........................................................................................................... 61 Industry Background ................................................................................................................. 61 Transit and the Hampton Roads Hospitality and Tourism Economy ........................................ 62 Conclusions ......................................................................................................................... 66 EXECUTIVE SUMMARY Hampton Roads Transit (HRT) provides bus, light rail, ferry, Transportation Demand Management, and paratransit services in six of Virginia’s ten most populous cities. This includes Hampton and Newport News on the Peninsula, and Norfolk, Portsmouth, Chesapeake, and Virginia Beach on the Southside. There are currently approximately 3,200 bus stops, 11 light rail stations, and ferry landings in downtown Norfolk and Portsmouth. Approximately 71% percent of jobs in the HRT service area are located within a quarter mile of a transit stop, and 44% of working residents live within the same distance of HRT service.1 In fiscal year 2015, HRT facilitated 16 million transit trips.2 Objectives and Scope Within the overall scope of describing and quantifying the societal and economic value of public transportation in Hampton Roads, this study is structured to achieve the following specific objectives: Characterize the sectors of the Hampton Roads economy currently supported by transit in the region. Quantify the performance benefits and impacts of the HRT system. Assess the likely impact of enhanced public transportation investment. Bring the story of transit to life. The results provide a multi-faceted and meaningful view of the economic role of public transportation in the Hampton Roads region. This study explores the economic role and impact of transit through a comprehensive approach. Overall, this approach is taken to (1) describe the transit market, (2) consider its existing and potential economic impacts and (3) interpret these findings with respect to issues of strategic significance for the regional economy and Hampton Roads’ competitiveness. HRT Transit Market and Ridership Profile The current level of transit activity in the region highlights how transit can, does and may support current and emerging business and industry needs. Evaluating the ridership profile of the Hampton Roads Transit (HRT) system provides insights into the demographics of users and the ways in which transit enables economic and social participation within the region. These insights help to better understand the role that transit plays in the regional economy. The HRT system served over 16 million trips in fiscal year 2015 (July 2014 through June 2015)3. Over 88% of these trips used the bus system, 9% used light rail, and the remaining 4% used either the ferry or 1 EDRG Group analysis using 2013 LEHD data from the U.S. Census. 2 Hampton Roads Transit. Ridership Trends as of June 30, 2015. Available at: http://gohrt.com/public-records/Operations- Documents/Ridership/2015/June-2015-Presentation-Ridership.pdf. 3 Hampton Roads Transit. Ridership Trends as of June 30, 2015. The Economic and Societal Impact of Hampton Roads Transit 1 paratransit services. HRT invested $100.4 million in operations and maintenance expenditures in 2015 to provide a network of multimodal services. These investments directly support employment and operations at HRT itself, and also enable a broad range of users to participate in the broader Hampton Roads economy. Stimulus Effects of HRT Operations and Capital Spending In 2015, $100.4 million was invested in operating and maintaining the regional transit system. This was total spending, and includes everything from employee wages and benefits to fuel, tires and other materials, utilities, and contracted services. As is the case with most industry activities, some of HRT’s goods and service needs can be met locally while others require sourcing from outside the region. Dollars spent on imported goods are not recycled through the regional economy. This phenomenon is called economic leakage. Economic modelling for this study sought to accurately reflect local purchasing patterns and economic leakage. For example, model inputs were adjusted for expenditures on fuel, utilities and some contracted services, like paratransit customer service, to account for economic leakage. Overall, spending
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