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Economic effects
Jobs and investment make up the primary economic benefit resulting
from freight facility location decisions, and communities and companies
often estimate jobs, income, wages, and property value as direct,
indirect and induced effects of a facility. These impacts include both
the short-term construction effects and long-term operations as well
as the potential to attract other businesses near a freight facility.
These impacts must be considered and balanced with projected impacts
to evaluate how desirable these facilities are to the community and
region. Knowledge of the true costs and benefits also provides the
public sector with a much better basis for negotiations for incentives,
credits, impact fees, and other public-private partnerships.
Near-Term Construction Effects
Building the facility and proposed infrastructure as well as necessary
transportation connections requires short-term construction activity
with both direct effects and broader multiplier effects. If desired,
these impacts can be measured using input-output models, such as
IMPLAN or RIMS II, which allocate construction spending to relevant
industry categories.
Direct Economic Activity at the Freight Facility
The direct impacts of the new freight facility include the number of
people employed at the facility, their wages and salaries, changes in
revenue (business output), and any developments directly related to
the facility. Freight facilities also generate income to the community
and state directly in the form of property tax, corporate income
tax, sales tax, and the various permitting fees that accompany the
activities at the site. In addition to this, the region and state also gain
additional tax income through the income and purchasing activity of
employees and vendors.
Multiplier Effects of the Freight Facility Operations
Impacts beyond the direct impact of the facility itself are called
multiplier effects. For example, an employee at the new warehouse
receives wages that he otherwise would not have received. Put
another way, the salary paid by a freight company to an employee
Freight Facility Location Selection: A Guide for Public Officials 13
