Technical Report LAX Master Plan EIS/EIR 5. Economic Impacts Of

Technical Report LAX Master Plan EIS/EIR 5. Economic Impacts of Los Angeles International Airport and the LAX Master Plan Alternatives on the Los Angeles Regional Economy January 2001 Prepared for: Los Angeles World Airports Prepared by: Hamilton, Rabinovitz & Alschuler, Inc. Table of Contents 1. Executive Summary......................................................................................................................... 1 2. Purpose and Scope of the Analysis ................................................................................................. 5 2.1 Introduction ......................................................................................................................... 5 2.2 Overview of Los Angeles International Airport.................................................................... 5 2.2.1 The Southern California Regional Airport System ................................................. 5 2.2.2 Current Operating Characteristics of LAX ............................................................. 7 2.2.3 Forecast of Future LAX Operations..................................................................... 11 2.3 The LAX Master Plan Process.......................................................................................... 13 2.4 Purpose of the Analysis .................................................................................................... 15 2.5 Organization of the Report................................................................................................ 15 3. Methodology for Assessing Economic Impacts ............................................................................. 16 3.1 Traditional Airport Economic Impact Methodology ........................................................... 16 3.2 Limitations of the Traditional Methodology ....................................................................... 18 3.2.1 Dynamic vs. Static Analysis ................................................................................. 18 3.2.2 Accounting For The Network Economics of Airports ........................................... 19 3.2.3 Accounting For Productivity Changes Over Time................................................ 21 3.2.4 A Redefinition of “Direct” Impacts........................................................................ 22 3.3 The REMI Models of the Southern California Economy ................................................... 25 3.3.1 Overview of The Remi Forecasting Model........................................................... 25 3.3.2 REMI Model Validation ........................................................................................ 31 3.4 Derivation of the Passenger and Cargo Activity Economic Impact Factors...................... 36 3.4.1 Estimating Historic Activity Levels At The Region’s Airports ............................... 36 3.4.2 Estimating the Relationship Between Passenger and Cargo Activity At LAX And Regional Economic Output................................................................................ 39 3.4.3 Passenger Activity and Direct Impacts Of Passenger Spending ......................... 43 4. Overview of LAX’s Role in the Los Angeles Regional Economy ................................................... 45 4.1 The Structure of the Regional Economy........................................................................... 45 4.1.1 General Structure of the Regional Economy ....................................................... 46 4.1.2 The State and National Outlook to 2015.............................................................. 50 4.1.3 The Regional Employment Forecast to 2015 ...................................................... 53 4.2 Dependence on LAX By Industries Critical to the Future Regional Economy .................. 55 4.2.1 Motion Picture and MultiMedia Production .......................................................... 56 4.2.2 The Electronics Manufacturing Industry .............................................................. 60 4.3 Examples of Economic Sectors Dependent on LAX ........................................................ 62 4.3.1 Selection of Sectors to Which LAX Activity is Critical.......................................... 62 4.3.2 The Fresh Cut Flower Industry ............................................................................ 63 4.3.3 The Apparel Industry............................................................................................ 65 4.3.4 The Processed Food Industry.............................................................................. 67 4.3.5 The Automobile Part And Component Industries ................................................ 69 4.4 Baseline Forecasts to 2015 .............................................................................................. 71 4.4.1 Details of the “Demand” Forecast........................................................................ 72 4.4.2 Summary of Economic Activity Associated with the Demand Scenario .............. 75 4.4.3 Final Economic Impact Factors for the Demand Forecast and Comparison with EIS/EIR NO Project Alternative............................................................. 76 5. Economic Impacts of LAX and the LAX Master Plan EIS/EIR Alternatives................................... 80 5.1 No Project Alternative .......................................................................................................80 5.1.1 Description of the Alternative............................................................................... 80 5.1.2 Construction Impacts ........................................................................................... 80 5.1.3 Employment impacts ........................................................................................... 80 5.1.4 Economic Output impacts.................................................................................... 81 5.1.5 Population and Households Impacts ................................................................... 82 5.2 Build Alternative A - Five Runways, North Airfield ............................................................ 82 5.2.1 Description 0f The Alternative.............................................................................. 82 5.2.2 Construction Impacts ........................................................................................... 83 5.2.3 Employment impacts ........................................................................................... 84 5.2.4 Economic Output impacts.................................................................................... 84 5.2.5 Population and Households Impacts ................................................................... 85 5.3 Build Alternative B: Five Runways – South Airfield........................................................... 86 Los Angeles International Airport i LAX Master Plan Draft EIS/EIR 5.3.1 Description of the Alternative............................................................................... 86 5.3.2 Construction Impacts ........................................................................................... 86 5.3.3 Employment, Economic and Related Impacts..................................................... 87 5.4 Build Alternative C: Four Runways ................................................................................... 87 5.4.1 Description of The Alternative.............................................................................. 87 5.4.2 Construction Impacts ........................................................................................... 87 5.4.3 Employment Impacts ........................................................................................... 88 5.4.4 Economic Output Impacts.................................................................................... 89 5.4.5 Population and Households Impacts ................................................................... 90 5.5 Summary of the Economic and Employment Impacts of the Alternatives ........................ 90 6. Geographic Distributions of Employment Impacts......................................................................... 91 6.1 The Geographic Distribution Model .................................................................................. 91 6.1.1 The Geographic Component ............................................................................... 92 6.1.2 The Economic Component .................................................................................. 92 6.2 The Geographic Distribution of Direct Jobs ...................................................................... 93 6.2.1 Jobs Distribution by REMI Model Areas .............................................................. 93 6.2.2 Direct Job Impacts By County and City................................................................ 94 6.3 Direct Job Impacts Within the City of Los Angeles........................................................... 97 7. Conclusion ................................................................................................................................... 106 Glossary of Terms..................................................................................................................................... 111 Abbreviations and Acronyms .................................................................................................................... 113 References...............................................................................................................................................

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