Economic Value of Multipurpose
Facilities in Community and
Economic Development
by
Al Myles
Community Resource Development Department
Mississippi State University Extension Service
Prepared for
Southern Community Development Educators
Tampa, Florida
May 19-21, 2004
What is Economic Impact Analysis?
A method of tracing the impact of an economic
change or activity through an economy and
measuring the cumulative effects of that
occurrence.
What Information is Used?
Data unique to the project or
event under study.
Why Undertake an Economic Impact
Analysis?
An economic environment is shaped by events in
the community.
Who Would Use the Results
•
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•
•
Business firms
Trade associations
Governments
Planners
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Economic developers
Service organizations
Policy-makers
Public interest groups
Multipurpose Facilities
• Create a board-base collection of activities and
functions that, when taken together, can
produce a significant economic impact in the
community.
• Sometimes multipurpose facilities represent
the center piece of civic activity in the
community.
Benefits of Multipurpose Facilities
• Draw:
– Commercial
– Industrial
– Residential customers to the community
Activities and Events
• Create direct and indirect effects in the form
of:
– Retail shopping
– Tourism
Retail Shopping and Tourism
• Include:
–
–
–
–
–
Eating and drinking
Groceries
Hotel/Motel lodging
Gasoline and service stations
Other retail establishments
Measuring Facilities Impact…
• Can be difficult because of limited data
about the facility.
• Therefore, must rely on employees at the
facility to provide information about the
demand/use of the building.
Demand/Use
• Consist of:
– Agricultural
– Nonagricultural
Revenue Generators
• The obvious impact on the community is in the
retail sector.
• Specific revenue generators include:
– Food and beverage sales
• Restaurant
• Concession
– Lodging sales
– Building rental fees
– Stall fees
Food and Beverages
Restaurant Sales
• Local visitors spend
about $12 per day on
food.
• Non-local visitors spend
about $20 per day on
food.
Concession Sales
• Average person attending events at a
multipurpose facility would likely spend
about $3.00 per day.
Lodging
• The average motel rate in Mississippi is about
$65 per night (excluding taxes).
• Revenue from an event drawing visitors from
outside the community would be derived by
multiplying the number of days in the event
times the number of overnight guest
associated with a particular event times the
average motel rate.
Sales Tax
• Mississippi motel, restaurant, and retail
sales taxes generate revenues for
municipalities in the state.
Tax Rates
• Motels/restaurants are taxed an additional
2% on goods and services sold.
• All other retail sales are taxed at an average
of 7%.
Tax Shares
• Municipalities receive about 18.5% of the
total receipts in the counties.
• The state receives the remaining 81.5%.
Counties
State
Tax Benefits
• Depending on the frequency and level of
activities, sales taxes associated with events
held at multipurpose facilities can be
SIGNIFICANT!
• While there are NO direct monetary benefits to
the county, it benefits from these funds through
PROJECTS and ACTIVITIES started in
local municipalities.
Facility Income
Rental Fees
• Most communities will use one of two
methods to charge for facility use.
– Flat fee covering the length of the activity.
– Two tier fee system where:
• First day of activity charged one fee
• Every day thereafter is charged a lesser fee
Stall Fees
• Livestock requiring overnight housing at
multipurpose facilities are usually placed in
stalls and must be cleaned everyday.
• Stall rentals could cost $10/day.
• Shavings for the stalls cost about $3/bag and
sold for $5/bag
• Labor for cleaning the stalls could cost about
$3/hour.
• These prices result in a net income of
$7/stall.
Summary
• In general, multipurpose facilities provide economic
and social benefits to the community.
• Multipurpose facilities described in this presentation
includes auditoriums, civic and convention centers,
and general-purpose buildings.
• The term “general-purpose” suggest that many types
of activities could occur at these facilities such as
sporting events, seminars, talent shows, livestock
shows and others.
• Several factors can change the success of
multipurpose facilities, including poor
marketing and management, poor location,
badly designed space, lack of hotels, and a
general lack of demand for the facility.
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veteran status.