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The Power and Promise of Ucsf ECONOMIC IMPACT REPORT | JUNE 2010

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The Power and Promise of Ucsf ECONOMIC IMPACT REPORT | JUNE 2010 the power and promise of ucsf ECONOMIC IMPACT REPORT | JUNE 2010 University of California School of Dentistry San Francisco School of Medicine School of Nursing School of Pharmacy The Graduate Division UCSF Medical Center The Research Institutes Office of the Chancellor Susan Desmond-Hellmann, M.D., M.P.H. June 11, 2010 Chancellor Arthur and Toni Rembe Rock Distinguished Professor Colleagues and Friends: 513 Parnassus Avenue, S-126 San Francisco, CA 94143-0402 We are pleased to present this Economic Impact Report, which documents the tel: 415/476-2401 significant impact of the University of California, San Francisco (UCSF) on the economy fax: 415/476-9634 through jobs and spending that support local businesses and our community. email: [email protected] Such information was last provided in 2003 when a report was released based on data from FY 2000-01, before the opening of the Mission Bay campus. The current report clearly indicates the advancement of the University in just under a decade. Based on data from FY 2008-09, the report reflects the direct and indirect economic growth generated by UCSF’s $3.3 billion enterprise, its 21,900 employees and the world-class research, patient care and education they support. Together, they generate a $6.2 billion impact on industry output in the Bay Area, an increase from $1.8 billion just eight years ago. The report demonstrates that UCSF is essential for a vital local and regional economy and plays a critical role in generating the excitement, energy and innovation that make San Francisco one of the great intellectual capitals of the world. UCSF commissioned Economic & Planning Systems, Inc., a Berkeley consulting firm, to conduct the independent study of UCSF’s economic impact within San Francisco and the nine-county Bay Area. The firm’s research applied common impact methodologies and economic modeling that are widely used in economic forecasting. Also utilized were independent investigation and research, as well as financial and operational data provided by UCSF, the UC Office of the President, the City and County of San Francisco, and other published and non-published sources. Members of UCSF’s Community Advisory Group also participated in meetings to provide input into the methodology and assumptions of the report and reviewed an early draft to provide feedback. UCSF leadership and representatives from relevant agencies of the City and County of San Francisco also reviewed a preliminary version of the report to ensure that it reflected the full impact of this complex, world-renowned institution. This document is only the beginning of the story. As a retrospective report, it neither includes the potential impact of the University’s future operations or projects, nor its impact beyond the San Francisco Bay Area. There are many significant developments underway. At Mission Bay two research buildings progress and the hospital complex is slated to open in 2014, at Parnassus Heights the stem cell research building approaches completion, and at Mount Zion the new Osher Center is anticipated to open late this year. UCSF has much more to give, and I trust that you, like me, look forward to seeing where the next decade will take us. Sincerely, Susan Desmond-Hellmann, M.D., M.P.H. Chancellor Arthur and Toni Rembe Rock Distinguished Professor A Study of the Economic and Fiscal Impact of the University of California, San Francisco Prepared for: Prepared by: Economic & Planning Systems, Inc. June 2010 Final Report EPS #19049 Table of Contents 1. INTRODUCTION AND SUMMARY OF FINDINGS .................................................................. 1 Introduction ............................................................................................................. 1 Report Organization .................................................................................................. 2 UCSF Background and Mission .................................................................................... 3 Summary of Findings ................................................................................................ 5 2. OVERVIEW OF UCSF ........................................................................................... 12 UCSF Background and Mission .................................................................................. 12 UCSF Facilities and Locations.................................................................................... 12 UCSF Students, Faculty, and Staff............................................................................. 14 UCSF Program Overview .......................................................................................... 16 Community Health Clinics ........................................................................................ 19 UCSF Affiliations ..................................................................................................... 20 UCSF Budget Overview ............................................................................................ 21 3. PRIMARY ECONOMIC IMPACTS ................................................................................. 23 Overview of Input/Output Modeling........................................................................... 24 Primary Economic Impact Analysis and Results........................................................... 26 4. SECONDARY ECONOMIC IMPACTS ............................................................................. 38 Economic Overview ................................................................................................. 38 The Bay Area Life Sciences/Biotech Industry .............................................................. 39 UCSF Innovation and Technology Leadership.............................................................. 43 Firm Creation and Support ....................................................................................... 49 Professional Relationships and Knowledge Transfer ..................................................... 56 5. FISCAL IMPACT METHODOLOGY AND BUDGET OVERVIEW .................................................. 60 Overview of Fiscal Impact Analysis............................................................................ 60 Overview of San Francisco Budget ............................................................................ 61 Fiscal Impact Methodology ....................................................................................... 66 Table of Contents (continued) 6. GENERAL FUND FISCAL IMPACT CALCULATIONS............................................................. 75 General Fund Revenue Analysis ................................................................................ 75 General Fund Expenditures Analysis .......................................................................... 85 General Fund Net Impact and Sensitivity Analysis ....................................................... 93 7. MISSION BAY SAN FRANCISCO REDEVELOPMENT AGENCY AND COMMUNITY FACILITIES DISTRICT ANALYSIS ........................................................................................................ 97 SFRA Analysis......................................................................................................... 97 Mission Bay CFD Analysis......................................................................................... 99 Other Parks and Open Space Contributions .............................................................. 102 Appendices APPENDIX A: List of Tables and Figures APPENDIX B: Primary Economic Impacts Analysis; Supporting Tables APPENDIX C: Secondary Economic Impacts Analysis; Supporting Tables 1. INTRODUCTION AND SUMMARY OF FINDINGS Introduction This report assesses the variety of fiscal and economic effects that the University of California, San Francisco (UCSF) has within San Francisco and the broader Bay Area, including its academic, research, and medical functions. Although UCSF has previously sponsored studies on these topics, this analysis updates and expands upon prior analyses to reflect new programming information and economic conditions. UCSF retained Economic & Planning Systems (EPS) to evaluate three discrete categories of impacts relevant to UCSF, as described below and summarized in Figure 1. • Primary Economic Impacts. The primary economic impact of a university and/or research institution derives from its local and regional spending and those of its faculty, staff and students. Specifically, UCSF and its employees and students purchase goods and services in the local economy which, in turn, create a “ripple” effect throughout the economy as local businesses expand and hire new workers and generate successive rounds of spending. These primary economic impacts can be quantified using input-output (I/O) analysis based on economic multipliers that quantify “direct,” “indirect,” and “induced” effects on local and regional output and employment.1 • Secondary Economic Impacts. The secondary economic impacts of a university and/or research institution stem from its role in enhancing the overall competitiveness of a region by providing specialized research and a highly educated workforce. Specifically, by hiring and training highly skilled individuals and investing in specialized research activities, UCSF helps support a business environment conducive to economic innovation, growth, and diversification, especially in the life sciences sector. Although these secondary economic impacts are generally more difficult to quantify in terms
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