Yakima County Development Association - New Vision's Return on Investment

Jonathan Smith

The President’s Pen is a weekly blog written by Jonathan Smith, New Vision’s President and CEO about local economic development projects and initiatives. It also covers economic trends, workforce issues, business climate policies, and manufacturing news. 

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New Vision's Return on Investment

New Vision's Return on Investment

July 19, 2013

roiOur association recently commissioned an independent study of our results.  We asked an economic consultant with the Cascade Planning Group to analyze our impacts over the last five years and over the association's lifetime (27+ years).  As part of the exercise, we provided the consultant a list of companies we have helped expand or locate new operations in the Yakima Valley.


We were pleased with our recent results and impacts. During the past five years, YCDA materially helped 12 firms locate or expand in Yakima County. These firms have made investments in facilities and equipment totaling $82.2 million, directly creating 410 new jobs (with more anticipated). These jobs pay an estimated $12.7 million annually in wages/salaries. 


Business Assisted by YCDA Over Last 5 Years


 

Expansion/


Capital Investment

 

Estimated


Company


Recruitment


Total


New Bldg.


Taxable


Jobs


Payroll


Pacific Steel


Expansion


$1,700,000


$1,700,000


$1,700,000


8


$224,640


Italstone


Recruitment


$700,000


$700,000


$0


5


$135,200


Adventurer RV


Recruitment


$4,000,000


$0


$0


50


$1,352,000


Yakima Craft Brewing


Expansion


$500,000


$0


$0


2


$81,100


Liberty Bottles


Expansion


$4,000,000


$0


$0


30


$936,000


Paragon Films


Recruitment


$20,000,000


$1,500,000


$1,500,000


50


$1,664,000


Bale Breaker Brewing Co.


Expansion


$3,000,000


$2,500,000


$2,500,000


5


$124,800


Arvato Digital Services


Recruitment


$1,000,000


$0


$1,000,000


150


$3,879,200


Printing Press/Peninsula


Expansion


$20,000,000


$0


$0


25


$1,040,000


Amtech Corporation


Expansion


$4,500,000


$0


$0


40


$1,248,000


Biotwine  (2nd expansion)


Expansion


$750,000


$750,000


$750,000


50


$1,456,000


Darigold (planned)


Expansion


$22,000,000


$6,000,000


$6,000,000


20


$560,000


Investments 2008-2013

 

$82,150,000


$13,150,000


$13,450,000


435


$12,700,940


Investments Prior to 2008

 

$309,500,000


$213,950,000


$80,250,000


2,382


$79,200,160


Since 1988, YCDA has materially assisted 43 firms to locate or expand in Yakima County. These firms have made investments in facilities and equipment totaling $391.7 million and directly creating 2,852 new jobs. These 2,817 direct jobs represent 6.3% of the net job growth within Yakima County from 1988-2013. Workers earn an estimated $91.9 million annually in wages and salaries.

The firms assisted by YCDA since 1988 have increased their output in Yakima County by an estimated $372.6 million. This is essentially the increased business sales activity directly attributable to new firm locations and expansions.  These firms and their employees also purchase goods and services from other businesses in the county. This additional activity represents the indirect multiplier (or spin-off) effect.[i] The dollar volume of the indirect business activity is estimated to be $160.2 million annually.

As noted in the earlier section, Yakima County is estimated to have a total industry output (or GDP) of about $14.8 billion. In effect, the companies assisted by YCDA since 1988 have added $532.8 million directly and indirectly, or close to a 4% of total county-wide output.


Fiscal Benefits from YCDA Business Development Activities (since 1988)
 

Tax Generated


Construction


Operations


Property Taxes:


 


 


Business Capital Investment


 


$391,650,000  


Employee Housing Values


 


$421,500,000


Supported Assessed Value


 


$813,150,000


Average Property Tax Rate


 


$11.78


Property Taxes


 


$9,578,907


Retail Sales Tax:


 


 


Sales Taxable Capital Investment


$93,700,000


 


Employee Taxable Retail Purchases


 


$23,000,000


Sales Tax Rate


8.1%


8.1%


State & Local Sales Taxes


$7,589,700


$1,863,000


Source:  Cascade Planning Group

Business development efforts of YCDA over the last five years have generated an annual increase of $236.7 million in new economic activity in Yakima County. This dollar value encompasses annual tax revenues of $1.9 million, increased sales for local retail and service businesses of $3.2 million per year, other household income of $20.4 million, and other business income of $211.2 million per year.  Over the entire 27-year existence, YCDA have lead to $532.8 million of economic activity comprising $11.4 million in selected tax revenues, $23.0 million of local retail and service purchases, $136.0 million of other household income, and $362.4 million of other business income.


YCDA currently operates on a budget of about $500,000 per year; the longer-term annual budget has been more in the range of $300,000.  Comparing the five-year YCDA investment against the annual economic returns the local communities receive, the return on investment is about $95 dollars for every dollar spent by YCDA for economic development in Yakima County. This return recurs every year as long as companies assisted retain an active presence locally. The cumulative effect clearly represents an investment with profound long-term benefits for the people and communities of Yakima County.


Return on Investment (ROI)



Investments & Benefits


5 YR Estimate


27 YR Estimate


Investment:

   

YCDA Operating Budget


$2,500,000


$8,300,000


Current Annual Economic Benefits:

   

Selected Tax Revenues


$1,913,701


$11,441,907


Retail & Services Spending


$3,200,000


$23,000,000


Other Labor Income*


$20,400,000


$136,000,000


Other Industry Output**


$211,186,299


$362,358,093


Total


$236,700,000


$532,800,000


Annual Return on Investment per Dollar


$95


$64


These results stem from team efforts and New Vision cannot take full credit for these business development success stories.  Our hats are off to the companies who have invested in the Yakima Valley and added to local payrolls.  We also appreciate all the help from our partners on these business projects.  We win when we work together.  To learn about specific company success stories or other New Vision accomplishments, click here


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