Defining the Economic Impact of WeWork

April 19, 2018 / Comments Off on Defining the Economic Impact of WeWork

Challenge

As part of an initiative to shape the future of work and cities, WeWork was interested in demonstrating how the WeWork community creates an economic ripple effect for people, businesses, neighborhoods, and cities.

Solution

To quantify the economic benefits of WeWork to a range of stakeholders interested the company’s growth, HR&A developed the first detailed economic and fiscal impact analysis of WeWork communities in New York City, Los Angeles, and Chicago. The analysis focused on WeWork’s value-add to each partner and its crucial role in growing each city’s innovation economy, small business sector, and entrepreneurial community. HR&A built on this by assessing neighborhood-level demographics and market trends, and creating illustrative profiles of WeWork’s members. Finally, HR&A developed projections to estimate how WeWork’s expansion could impact other cities across the U.S.
 
 

IMPACT

Our study found that WeWork would be among the largest private-sector employers in New York City, Los Angeles and Chicago, supporting 50,000 jobs across the three cities. For each member, one additional job is created somewhere else where in the city, in total representing nearly 1% of each city’s workforce. A subsequent report, WeWork’s Global Impact Report 2019, expanded to track impacts the impacts of the company worldwide. Findings from both studies will be incorporated into WeWork’s Future of Work initiative and will continue to support outreach to policymakers as WeWork expands.

Los Angeles Economic Development Framework

February 10, 2016 / Comments Off on Los Angeles Economic Development Framework

HR&A worked with the City Administrative Officer and Chief Legislative Analyst of the City of Los Angeles to evaluate and recommend a new approach to citywide economic development.

Following the recent dissolution of Community Redevelopment Agencies throughout California and the lingering effects of the 2007-2009 Great Recession, the Los Angeles City Council voted unanimously in support of a new framework for the City’s economic development structure. HR&A prepared this framework with the following recommendations for a new public-private structure to deliver economic development services:

  • A new Economic Development Department to support the City’s businesses, industries, and communities; direct production of a citywide economic development strategy; manage and facilitate the distribution of federal and state resources; and consolidate certain economic development functions from existing City entities, including workforce development.
  • A new independent Citywide Economic Development Nonprofit partner, operating under contract with the City, to manage the City’s strategic real estate assets; advance major economic development and public-private real estate projects; manage the City’s off-budget finance entities; and provide expert research, analytic, and transaction negotiation services.
  • A Deputy Mayor for Economic Development charged with ensuring coordination among the Mayor’s office, the economic development department , the independent economic development non-profit, other related City departments, proprietary agencies, and external economic development stakeholders.

This new framework will provide the organizational platform required for the City to create new jobs, attract new businesses and industries, maintain global competitiveness in the 21st Century, and grow its tax base.

The report’s recommendations are based on the HR&A team’s analysis, which was completed in three months of intensive work. The analysis included interviews with more than 80 key stakeholders, including executives and staff from the Mayor’s office, City Council, City departments, proprietary City agencies, nonprofit and community-based organizations, and private industry leaders; an online survey distributed to more than 160 economic local development entities; detailed organizational reviews of 19 City departments and proprietary agencies; and in-depth case studies of economic development organizational models employed in eight other U.S. cities.

To date, the City Council has approved formation of, and allocated the inaugural-year budget for, a new Economic and Workforce Development Department, and Mayor Eric Garcetti appointed a new Deputy Mayor for Economic Development in 2013.

Image Courtesy: Historic Core of Downtown Los Angeles

100 Resilient Cities Logo

100 Resilient Cities Challenge

February 8, 2016 / Comments Off on 100 Resilient Cities Challenge

HR&A is supporting urban leaders in 100 cities across the United States as they develop comprehensive, actionable plans to become more resilient to social, economic, and physical risks and challenges.

HR&A supports the 100 Resilient Cities program, a global initiative pioneered by The Rockefeller Foundation, and Chief Resilience Officers across the United States as they develop comprehensive resilience strategies and implementation plans that respond to their cities’ unique set of risks and long-term vision and goals. Each strategy and implementation plan is designed to build the capacity of individuals, communities, institutions, businesses, and systems within a city to not only survive a major disruption event such as an earthquake or flood, but also to adapt and grow in the face of chronic stresses such as poverty or housing availability.

HR&A works with each Chief Resilience Officer and other senior officials to develop comprehensive resilience strategies.

At the forefront of Resilience Strategy Development, HR&A has supported the comprehensive strategic plans for Norfolk, New York City and New Orleans – the first to be delivered as a part of the 100RC program.  In Norfolk, HR&A worked with the Chief Resilience Officer (CRO) to design initiatives that will make the coastal city more prepared for climate change, create economic opportunity in new and growing sectors, and strengthen communities and neighborhoods while deconcentrating poverty. New York City’s strategy, developed with support from HR&A, envisions a more resilient city embracing balanced growth, a more inclusive economy, sustainability in the face of climate change, and more resilient infrastructure and services. In New Orleans, HR&A supported the CRO in prioritizing initiatives advancing coastal protection and restoration, creating equity through opportunity, and redesigning regional transit systems. Future strategies may include the development of high priority implementable projects and initiatives that strengthen infrastructure, generate economic opportunity, improve governance structures, and build social capital.

 

Through the Resilience Strategy Development process, HR&A supports cities and CROs to:

  • Identify and prioritize potential acute shocks and chronic stresses that their cities face;
  • Provide thought leadership by guiding use of best practices and delivering data-driven analyses;
  • Coordinate and facilitate stakeholder workshops; and
  • Design a Phase-1 Resilience Strategy

 

HR&A led agenda-setting workshops for six of the ten selected North American cities: Los Angeles, California; Norfolk, Virginia; Boston, Massachusetts; Boulder, Colorado; Tulsa, Oklahoma; St. Louis, Missouri; and El Paso, Texas. Prior to each workshop, HR&A analyzed the city context, including demographic, economic, social, and physical metrics, to define a city-specific strategic plan. Learn more about the program at 100resilientcities.org

NBCUniversal Economic Analysis

NBC Universal Evolution Plan

December 18, 2015 / Comments Off on NBC Universal Evolution Plan

HR&A provided detailed economic analysis for NBC Universal’s entertainment and studio complex expansion plan.

HR&A analyzed population, housing, public school enrollment, employment, economic and fiscal impacts of a proposed $1.6 billion Specific Plan that will increase the intensity of development at Universal City. The project site is the home of NBC Universal’s 400-acre film studio, studio tour, entertainment retail, commercial office and hotel complex. HR&A’s analyses were included in the Environmental Impact Report on the project.

The project is located in an unincorporated area of Los Angeles County, but also includes areas that are in the City of Los Angeles. Some areas may be annexed to or detached from each jurisdiction, which required rigorous attention to measuring impacts by jurisdiction under multiple development scenarios.

 

All project entitlements, except for the minor jurisdictional annexations/detachments have now been approved by both the City of Los Angeles and the County of Los Angeles.

 

HR&A also prepared similar impact analyses for the Walt Disney Company’s multi-billion dollar expansion of Disneyland in the City of Anaheim, 20th Century Fox’s expansion of its facilities in Century City, and a new pending master plan for Paramount Pictures Corporation in Hollywood.

Los Angeles Homeless Housing Program

December 18, 2015 / Comments Off on Los Angeles Homeless Housing Program

HR&A worked with the Los Angeles County Department of Mental Health to design and implement the County’s Mental Health Services Act Housing Program.

The Mental Health Services Act Housing Program is a voter-approved initiative charged with expanding mental health services in the state of California. Among its many initiatives is a funding allocation to each county to provide pre-development, permanent financing, and capitalized operating subsidies for new, permanent supportive housing for persons with serious mental illness who are homeless or at risk of homelessness.

Through HR&A’s work, $111.9 million has been committed to 30 affordable housing developments to date, with half the projects either completed or under construction.

Projects selected for funding will leverage another $408.0 million from other sources to produce 1,375 units of affordable housing, of which 716 are targeted to MSHA Housing Program clients. New permanent supportive affordable housing, targeted to a range of populations – including seniors, families, and transitional-age youth – will be developed in all five Supervisorial Districts and nearly all of the County’s eight mental health services areas.

Since 2007, HR&A has worked with Department of Mental Health to:

Plan the Los Angeles County MHSA Housing Program,

Design the local project application review process,

Review Letters of Interest from affordable housing developers for consistency with adopted funding priorities,

Review the financial feasibility of individual projects,

Respond to project financing issues raised by the California Housing Finance Agency (the loan underwriter),

Improve coordination among local public affordable housing funders, and

Trouble-shoot issues as they arise during the the complex process each developer undertakes to package the necessary project financing.

The program’s administrative process has improved coordination of resources, and maximized funding availability from multiple County affordable housing programs and programs administered by other local public funders, which includes the Community Redevelopment Agency of the City of Los Angeles, the Los Angeles Housing Department and the Housing Authority of the City of Los Angeles.

LAX Economic Impact Study

December 18, 2015 / Comments Off on LAX Economic Impact Study

HR&A advised Los Angeles World Airports on the local and regional economic impacts of redeveloping and expanding Los Angeles International Airport.

HR&A prepared detailed regional and local economic impact analyses necessary to evaluate alternative Master Plan concepts for the future of the Los Angeles Airport (LAX) as they evolved over nearly 10 years, and through three different mayoral administrations.

Using extensive REMI and IMPLAN modeling, the firm projected future baseline economic conditions and forecasted conditions under alternative development scenarios. Our forecasts considered the City of Los Angeles, various subareas of the City, the County of Los Angeles, the other four urban counties in the region, and the five-county Southern California region as a whole.

HR&A also assisted senior management, City officials and other project team leaders to respond to questions from a wide range of elected officials and other local and regional leaders, and the general public, about the economic implications of the alternatives.

Our work with LAX led to airport economic impact work across the country.

  • In association with the Los Angeles Economic Development Commission and other consultants, HR&A estimated the economic value to Los Angeles of accommodating new transoceanic flights, like those associated with next-generation aircraft.
  • Prepared regional and local economic impact analyses for Chicago O’Hare International Airport’s O’Hare Modernization Program and alternatives, for the Chicago Department of Airports and the FAA.
  • Provided two rounds of regional economic impact analysis for future options to expand capacity at San Diego International Airport, first for the San Diego Association of Governments and then for the San Diego County Regional Airport Authority.
  • Contributed to the socioeconomic forecasts used by aviation consultants to the FAA to analyze future airspace and airport capacity in the New York City-Northern New Jersey-Connecticut-Delaware metro area.
  • Prepared an in-depth economic impact and fiscal impact analysis demonstrating that the Santa Monica Airport generates $275 million in direct and indirect economic activity for the City of Santa Monica, and supports almost 1,500 full- and part-time jobs.
Wilshire Grand Render

Wilshire Grand Redevelopment

December 18, 2015 / Comments Off on Wilshire Grand Redevelopment

HR&A assessed the economic and fiscal impacts of the Wilshire Grand Tower to justify public investment in the tallest building in Los Angeles.

For Hanjin International and Thomas Properties Group, HR&A prepared the detailed economic and tax revenue analyses components of a proposal to replace Los Angeles’ obsolete Wilshire Grand hotel with a 2.4 million square foot, mixed-use development. The development,  located in Los Angeles’ central business district, will house a five-star luxury hotel, Class-A office space, 100 condominiums, and retail to draw international businesses to downtown Los Angeles. Once completed in 2017, the 73-story Wilshire Grand will be the first high-rise office building constructed in Downtown Los Angeles in over 20 years.

Our analysis demonstrated that the new development would generate sufficient net new revenues to justify a subvention agreement, with the City committing 50 percent of the project’s transient occupancy tax revenue for a fixed period of time to aide development feasibility. HR&A participated in working group sessions with senior City staff and the City’s outside real estate advisor to confirm analysis assumptions and results.

 

The Los Angeles City Council unanimously approved the financial structure of the subvention in 2011. The Wilshire Grand Tower was completed in June 2017.

Economic Impacts of Airbnb

November 12, 2015 / Comments Off on Economic Impacts of Airbnb

On behalf of Airbnb, an online service for short-term vacation rentals, HR&A conducted an economic impact assessment of Airbnb rental activities in San Francisco and New York City.

Airbnb is a leader in the “sharing economy,” a new trend in the sharing of resources facilitated by network technologies and social tools, and HR&A’s reports are among the most in-depth studies to date of the impacts of this economic trend.

The studies reveal multiple ways in which the new economic activities associated with Airbnb — which has grown exponentially since 2008 to serve 9 million guests in cities around the world — have significant impacts on a city and its neighborhoods, businesses, and residents:

  • Airbnb benefits its many hosts, who use Airbnb to supplement their income;
  • Airbnb impacts neighborhoods that are off the main hotel beat, distributing visitor spending across many neighborhoods and businesses throughout the city;
  • Airbnb benefits the city as a whole. In San Francisco, it generated $56 million in direct and indirect spending in one year and supported 380 full-time equivalent jobs. In New York, it generated $632 million in economic activity in New York and supported 4,580 jobs throughout all five boroughs.;
  • Much of this economic activity is new. Even as hotel occupancy has climbed, the number of Airbnb reservations has grown dramatically, indicating that many Airbnb users are a different visitor segment than hotel guests. Airbnb brings new economic spending to cities from visitors who are price-sensitive and seek a “live like a local” experience they may not otherwise find in conventional accommodation; and
  • Airbnb also enables cities to become more competitive by attracting skilled workers and incentivizing relocation with innovative short-term stay opportunities.

HR&A’s studies have been covered by WNYC, The Wall Street Journal, Business Insider, Real Estate Weekly, Media Post, New York Business Journal, Digital Journal, Tech Hive, Curbed,Morningstar, Forbes, TechCrunch, Marketwire, and The Huffington Post, among other news sources. It also attracted substantial attention from policy experts, and elected officials. The official press release for the New York Study is available online.

Image Courtesy of: Airbnb