Hogan study looks at numbers outside of downtown Scottsdale

SCOTTSDALE INDEPENDENT David Smith Dec 23rd, 2016

I saw a piece in the Independent online and wanted to share some comments.

I certainly agree with the premise that our downtown is an important economic engine. That’s why I argue for doing all we can to enhance it. And, protect it from any and all negative influences.

I’m not familiar with the Hogan study referred to, but I’d be interested in seeing and reading it.

I’m particularly interested in what geographic area he studied. Apparently it was slightly more than 1 square mile; considering the employment statistics he developed, it must reach as far south as Honor Health and as far north as Fashion Square.

I’m a little confused by Hogan’s “Direct Economic Impact” the majority of which he says comes from “downtown employment” of $3.4 billion. Since Hogan identifies a total of 27,970 downtown individuals paid salaries of $1.272 billion, I’m not sure how this gets grossed up to $3.4 billion, unless he’s including indirect employees outside the downtown area.

I’m also not sure how excited to be about the “jobs impact” downtown.

Just looking at his direct salary estimates, the 27,970 individuals are apparently earning about $45,000 per employee, which is substantially below the city average. Furthermore, considering the vast majority of these employees probably don’t live in Scottsdale — pretty much true all across the city — they probably wouldn’t spend their disposable income in Scottsdale.

By the way, one of Mr. Hogan’s cited statistics may be out of context.

The $19.2 million of bed tax benefit is the annual bed tax generated for the entire city — not just downtown hotel property guests. This significantly overstates the “Direct Taxes” he says are enjoyed by the city. I have no idea what the bed tax attributable to the downtown properties might be.

I’m a big champion of downtown — I just want to be sure we don’t kill the goose that’s laying the golden egg!