"Renaissance on the River": Economic Impact of Riverfront Development Projects Cincinnati USA

A number of projects in Greater Cincinnati in recent years have focused
on development of the riverfront. Projects on both the Ohio and Kentucky sides of
the Ohio River ranging from new sports stadiums to retail and entertainment
complexes have resulted in billions of dollars of construction spending along the
riverfront and have attracted tourists and metropolitan area residents alike down
to the river. Rather than a line of division separating parts of Greater Cincinnati,
the Ohio River is a focal point for the region and provides a common resource
that ties together all residents of the Cincinnati Metropolitan Area.

This report describes the more prominent projects that have taken place on
the downtown riverfront in the five years between 1997 and 2001. The focus of
this report is on construction spending; however, further economic benefits of
certain projects, such as spending by tourists, will be described when possible.
Much of the analysis in this report is based on previous studies by the Center for
Economic Education (CEE) about some of these individual projects. A detailed
summary of the updated impact analysis of Paul Brown Stadium is presented, and
new economic impact analysis is presented for the construction of Fort
Washington Way and the Freedom Center.

When studies of individual projects such as the Newport Aquarium or
Paul Brown Stadium are viewed independently it is easy to forget that they all
share the common trait of their location on the downtown area riverfront. This
report serves to bring together these various projects under the single theme of
Cincinnati USA riverfront development. By looking at all of these projects
together it is easier to see that the downtown riverfront, on both sides of the river,
is truly a focal point for the region and a catalyst for regional development.

Total spending for the construction of riverfront development projects,
including the Newport Aquarium, Fort Washington Way improvements, the new
stadiums, and other projects in downtown Cincinnati and Northern Kentucky will
approach $2 billion spent between 1997 and 2002. The construction alone of these
projects creates a total impact on the regional economy of $2.7 billion. In addition
to these impacts, the ongoing operation of these facilities generates further
impacts and ensures continued activity along the riverfront for many years to
come.

Taken as a whole, the various riverfront construction projects represent a
significant investment in urban infrastructure. This construction spending along
Greater Cincinnati’s Riverfront ranks Cincinnati among the top cities in recent
downtown infrastructure investment. By comparison, Columbus, Ohio has had
nearly $800 million in recent investment that included office and retail space,
entertainment and sports venues, hotels, and office space. In Raleigh-Durham,
recent investment of about $850 million includes government facilities,
entertainment and sports venues, and corporate office and research facilities. At
the other end, nearly $6 billion of investment is occurring in downtown Detroit,
including sports stadiums, corporate headquarters, casinos and hotels, and a $1.5
billion riverfront park and entertainment district. Generally considered the largest
downtown infrastructure project, Boston’s “Big Dig” is a downtown expressway
project totaling nearly $14 billion in spending over a 10-year period.

The unique aspects of the projects in Cincinnati included in this report are
the focus on the riverfront, including both the Ohio and Kentucky riverbanks, and
the focus on entertainments facilities. The ability of these types of facilities to
draw both residents and tourists to the riverfront will spur other types of
investment, such as additional office, hotel and retail space. The development
projects in Detroit are the most comparable in that they include many
entertainment venues. However, the construction in Detroit is spread throughout
the downtown area, not just along the river.

Economic impacts of projects described in this report are based on the
Regional Input Output Modeling System (RIMS II), developed by the Bureau of
Economic Analysis at the U.S. Department of Commerce (BEA). The model uses as
inputs estimated local expenditures and applies a set of multipliers developed by
the BEA. These multipliers represent successive rounds of re-spending within
Greater Cincinnati of the initial project outlay and are based on interrelationships
among businesses and households within the region.

Economic impact figures represent the total effect of a project on regional
business sales (or output). Also included in the estimation are the numbers of new
jobs, stated in full-time job year equivalents, that are created in order to produce
this output. Finally, these new workers must be paid wages, or existing workers
must be paid higher wages in order to produce the increased output. Thus,
estimated impacts also include household earnings, representing the change in the
amount of wages and salaries that must be paid to workers in the region in order
to generate the additional output.

• All impact numbers (for construction and operations) are estimated in terms of
  current (2000) dollars.
• In general, RIMS II specifies that impacts will be felt in the economy over a one
  to three year period after the initial spending takes place.
• Every household in the region will feel the economic growth differently. The
  comparison presented here is a general one, assuming an equal distribution of
  growth across households.