HomeMy WebLinkAboutPlanning Comm Reports/1992/06/24 (6)
Economics Research Associates
Af1ii'C:9C ''''''1:,'': Dr,vers Je,"as
Los Ange;es
Sa~, Fra'1clsco
San Diego
Chicago
BCS1:Jn
Was~:'1g:o~1 0 C
Fo~: ~a.JGe,:a'e
MEMORANDUM REPORT
ECONOMIC IMPACT STUDY
CHULA VISTA MEDICAL CENTER
PREPARED FOR
KAISER PERMANENTE
JANUARY 1992
ERA PROJECT NO. 10373
10990 Wilshire Boulevard, Sui1e 1600, Los Angeles California 90024
(310,477-9585 Telex 857661 IECON RES LA) Fax {310J 478.1950
GENERAL LIMITING CONUITIONS
Every reasonable effoM has been made to ensure that the data
contained in this study reflect the most accurate and timely infor-
mation possible, and they are believed to be reliable, This study is
based on estimates, asswnptions and other infonnation developed by
Economics Research Associates from its independent research effoM,
general knowledge of the industry and consultations with the client
and the client's representatives. No responsibiliry is assumed for
inaccuracies in repoMing by the client, the client's agent and repre-
sentatives or any other data source used in preparing or presenting
this study.
This repoM is based on infonnation that was current as of January
1992 and Economics Research Associates has not undeMaken any
update of its research effoM since such date.
No warranty or representation is made by Economics Research
Associates that any of the projected values or results contained in
this study will actually be achieved.
Possession of this study does not carry with it the right of publica-
tion thereof or to use the name of "Economics Research Associates"
in any manner without fust obtaining the prior written consent of
Economics Research Associates, No abstracting, excerpting or
summarization of this study may be made without fust obtaining
the prior wrinen consent of Economics Research Associates, This
repoM is not to be used in conjunction with any public or private
offering of securities or other similar purpose where it may be
relied upon to any degree by any person other than the client with-
out fust obtaining the prior wrinen consent of Economics Research
Associates, This study may not be used for purposes other than
that for which it is prepared or for which prior wrinen consent has
fir1;t been obtained from Economics Research Associates.
This study is qualified in its entirety by, and should be considered
in light of, these limitations, conditions and considerations,
TAULE OF CONTENTS
Page
INTRODUCTION .""",...""",. .."..,."",.,.,... I
PROPOSED DEVELOPMENT , , , , . , , . , . . , . . , , , , , , , , . , . , , . , . . I
DEVELOPMENT TLME FRAME AND MARKET SUPPORT . , . , . . , , , I
ECONOMIC IMPACTS RESULTING FROM KAISER PERMANENTE'S
CHULA VISTA MEDICAL CENTER , , . , . . , , . , , . . , . , , . . . , , . , , , 4
RELATED SOURCES OF ECONOMIC BENEFIT/IMPACT, , , , , . , . , , 9
FISCAL IMPACTS OF KAISER PERMANENTE DEVELOPMENT "" I I
APPENDIX TABLES 1-18 . . , , , . . . . , , , . . . . . . , , . , , . , . . , , , , , . 17
u
INTROUUCTION
Kaiser Pennanente is proposing the development of a 1.3-mill ion-square-foot medical
center to be constructed on a 32-acre site in the Eastlake I area of Chula Vista, California,
The preliminary development plans call for a 780,000-square-foot, 439-bed hospital facility,
a 350,000-square-foot medical office complex, 150,000 square feet of administrative office
space, and a central plant area of approximately 41,000 square feet. The proposed
development schedule would conunence construction in 1994 and have a phased completion
schedule of approximately 3 years.
The proposed development represents a major activity and employment center for the
Southern San Diego area and will have a significant influence on economic growth within
the region, Economics Research Associates (ERA), an independent economic consulting fmn,
was retained by Kaiser Pennanente to assess the expected economic impact resulting from
the proposed development. TILis report is intended 10 assess the potential economic benefits
accruing to the City of Chula Vista specifically, as well as the Southern California region
generally.
This Memorandwn Report is set forth with text and an Appendix containing all
freestanding tables.
PROI'OSEU UE\'ELOPMENT
Kaiser Pennanente has prepared a preliminary development plan for the proposed
medical center. TIle medical center will represent a major provider of medical services within
the San Diego County region and the City of Chula Vista, The proposed center is pl3lUled
as a multi-use development consisting of the following elements:
. Hospital Building:
. Med ical Offices:
. Administrative Offices:
. Central Plant:
. Parking:
439 beds and 780,000 square feet
350,000 square feet
150,000 square feet
41,000 square feet
Approximately 5,500 spaces
UE\'ELOPMENT TIME FRAME ANU MARKET SUPPORT
Kaiser Pennanente expects to begin construction in 1994 with a three-phased
development program lasting approximately 3 years. Phase I consists of the development of
the initial medical offices. The offices are expected to be completed by late 1995, The
initial construction of the hospital 31 I administrative facilities constitutes Phase II and is
expected to be completed by 1997, Additional hospital and medical office facilities will be
constructed in Phase Ill, with construction occurring when the Kaiser Pennanente membership
increases to sufficient levels,
I
ERA has provided the following excerpt from materials submitted by Kaiser
Permanente to the City of Chula Vista. This excerpt is intended to provide a brief overview
of the current and projected market support for the proposed project.
In order to determine market support for a new medical facility, among other factors,
Kaiser analyzes population growth trends in a given region as well as historic and projected
membership trends. Kaiser then estimates approximately what percentage of a given market
area population is likely to become Kaiser Permanente members.
Currenrly, the existing Kaiser Pennanente San Diego Medical Center is providing
services for 393,000 members, This membership is forecasted to grow to approximately
500,000 members by 1998 and to 690,000 by 2007. Of the current 393,000 members in the
greater San Diego area, approximately 93,000 reside in the South County area, Kaiser
Pennanente intends 10 better serve these 93,000 members by constructing and operating the
proposed medical center. Kaiser Pennanente does not currently have the facilities needed to
provide local services to members who reside in South County, nor is there sufficient
conununity capacity to provide service locally, The South County area has a member density
of 93,000, which will support construction of an additional medical center, The following
text table, as well as Figure I on the following page, shows the projected membership and
population trends for Kaiser P'rmanente's San Diego region between 1990 and 2000,
County Kaiser Capture
Year PopuJatioD Members Rate
1990 2,520,500 378,075 15%
1995 2,919,200 437,880 15%
2000 3,262,700 522,032 16%
Source: Kaiser Permanente
As indicated from the above information, Kaiser Permanente is a majur service
provider 10 San Diego area residents and is expected to continue in rl1is role, Kaiser's
membership growth continues to place demands on the existing health care system, This
demand is currently handled through contracts with various conununity hospitals in San
Diego and the Kaiser Permanente San Diego Medical Center. Unfortunately, there are very
few options to contract for hospilal services in the South San Diego County area, Therefore,
to continue to provide service, members will have to travel to the existing San Diego center
and other community hospitals in the West/Central San Diego Area until such time as the
proposed Kaiser Pennanente Chula Vista Medical Center is constructed.
2
o
o~
0...
C\le:
I ~
00
O>u
~o
..0)
~Q)
... .-
~c
o e:
'- (\':S
C)Cf.)
.Q. Q)
~...
tJ) e:
'- Q)
Q) e:
.c(\':S
E E
Q) '-
~~
.. '-
~Q)
Q).~
'- (\':S
5~
.-
LL.
-
II')
'C
C
as
II')
::::I
o
.c
.-
-
o
o
CD
o
o
10
o
o
C\I
o
o
...
o
o
~
o
o
(I)
o
o
o
C\I
10 '-
0) ca
~~
o
0)
0)
...
o
II')
...
CI)
.Q
e
CI)
~
-
o
...
CI)
.Q
e
::::I
z
I
III
-
C
III
C
.,
E
...
.
Q.
...
.
.
ii
~
ii
u
...
~
o
CD
Et:ONOJ\IIt: 1J\II'At:TS RESULTI'Ili FROM KAISER I'EI{J\lANENTE'S
t:IIULA 'ISTA I\IEUlt:AL t:ENTER
hupacl l\Ielhodolo~\'
Economic impact is measured in tenns of gross business activity, employment and
corresponding payroll, and local government revenues generated by a proposed large-scale
development. Gross business activity is equal to the value of services provided or total
business volume occurring as a result of the proposed project, For the proposed Kaiser
Pennanente Chula Vista Medical Center. ERA has defmed gross business activity as the
estimated total expenditures by Kaiser Pennanente and its employees associated with the
ongoing operation of the completed Chula Vista Medical Center,
The economic impact assessment is typically segmented into ongoing alUJual impact
and one-time impact associated with construction activities, as well as a variety of local
government revenues, These impacts occur on two levels: direct and secondary, Direct
impact occurs on site at the facility; while secondary impact occurs in the local economy as
a result of the direct impact. ERA has quantified these secondary in1pacts in tenns of the
number of additional jobs created hy the direct economic activity of the medical center. For
example, ERA has estimated the number of secondary jobs created for each direct job at the
medical center. As mentioned above, the regions of influence for the study are d~rined as
the City of Chula Vista and the greater Southern Califomia region. Ongoing impact is
projected at full buildout of the project as well as at projected occupancy and usage levels.
I'roicded Uired and Secondan Economic hupal'l
Kaiser Pennanente's Chula Vista Medical Center is a proposed 439-bed medical center
located in the EastJake I area of Chula Vista,-California. The hospital is expected to generate
approximately $400 million in business activity from some 112,000 wmual room-night
admissions and 125,000 annual out-patient visits, Medical center employment is projected
to IOtaJ approximately 4,000 employees, including approximately 500 physiciw1s. Total
payroll at full operation will be approximately $203 million,
The largest benefit provided to the City of Chula Vista and the surrounding fl'gion by
development of the proposed medical center will be the additional medical service capacity
to be provided, The new medical center will create comprehensive, convenient medical
service opportunities for 93,000 current South San Diego residents as well as a mu'tiple of
this number of future residents, Many of these people reside or will reside in the City of
Chula Vista. Although the exact economic benefit of this increase in medical service quantity
and quality cannot be measured, its importance should not be underestimated, Within a
higher growth area such as South San Diego County and Chula Vista, the proposed Kaiser
Pennanente Medical Center will help balance the local land-use mix, providing medical
services to local residents,
4
In addition, the medical center will provide large-scale employment opportunities for
the City of Chula Vista, as well as the San Diego County, The creation of 4,000 jobs in
Chula Vista at the medical center, as well as thousands of related secondary jobs located in
the local and regional economies, is an extremely important economic benefit provided by
the proposed Kaiser Pennanente Chula Vista Medical Center. lbis job creation component
is especially important in a rapidly growing area such as Chula Vista, which seeks to balance
jobs and housing, The economic growth generated by the medical center will also create
tangible, quantifiable economic benefits for the City of Chula Vista and the surrounding
region,
Emvlmmenl Le\cls and Estimated Business Acth'itv
As shown in Table I, direct employment at buildout, expressed in tenns of full-time
equivalent employees, is projected at approximately 4,000 persons with corresponding payroll
estimated at $203 million annually, There will be approximately 3,500 non-physician
employees as well as 500 physicians, Regarding salaried employees, the weighted average
annual wage should be slightly more than $38,000, For all physicians, the average annual
wage should be on the order of $140,000, These salary levels are significantly higher than
current average Chula Vista salary levels for employees in four major job categories (see
Table 2),
Table 3 outlines average payroll and value characteristics for selected health service
finns in the San Diego Metropolitan Statistical Area. As indicated, a typical health service
facility spends approximately 30 to 40 percent of their total receipts on payroll expenses, At
these facilities, physicians' wages are usually not considered part of payroll expenses. For
Kaiser Pennanente's proposed Chula Vista Medical Center, physicians' wages are included
as part of the facility's payroll expense, Therefore, ERA expects that Kaiser Peml8Jlente's
ratio of payroll to receipts is higher than ratios at typical medical centen;, As a fairly
conservative assumption, ERA estimates that Kaiser Pemlanente's payroll to receipt ratio is
approximately 50 percent, Kaiser Pennanente's average payroll per employee is significantly
higher than the other categories due to the inclusion of physicians' salaries in the total payroll
estimate,
With an 8IIDUal payroll of approximately $203 million and a payroll-to-receipts ratio
of 50 percent, Kaiser Pennanente Chula Vista Medical Center's total arumal business activity
can be estimated at approximately $407 million (see Table 4), lbis estimate includes payroll
expenses as well as all other Kaiser Pennanente expenses, including equipment rental,
insurance, debt service, other overhead, etc,
5
Estimal~tI Emplo\ment Impalls
By utilizing the estimated gross business activity of the Chula Vista Medical Center,
ERA has derived an estimate of the total number of direct and secondary jobs creatld by the
development. A direct job is defined as a job located on site at the medical center. There
are expected to be approximately 4,000 direct jobs at the proposed center, A secondary job
is defmed as an off-site job located within the regional economy and supponed by the
activities of the medical center, its employees and visitors, For example, a local service
sector job which is created by demand from Kaiser Pennanente employees is considered a
secondary job.
In order to estimate the nwnber of secondary jobs generated by the proposed Kaiser
Pennanente Medical Center, ERA has used the Regional Industrial Multipliers (RIMS) II
system, 1987 edition, for the Southern California Region,. In 1987, the RIMS II system
estimated that approximately 34.7 secondary jobs were created for each $1.0 million of
primary economic activity in Southern California relating to health services, ERA has
adjusted this estimate accounting for inflation and projects that $1,0 million of business
activity relating to health services in 1991 yields approximately 26,0 jobs,
Applying this estimate tC1 the total medical center business activity estimate of $407
million, ERA estimates that the Kaiser Pennanente Chula Vista Medical Center will create
an additional 6,593 secondary jobs in addition to the 4,000 jobs created on-site, It should be
emphasized that these additional secondary jobs will be dispersed throughout the Southern
California region, Thus, ERA estimates that primary and secondary employment resulting
from the Kaiser Pennanente Chula Vista Medical Center will be approximately 10,593, as
shown in Table 5, Figure 2 outlines these employment estimates,
Location or Uirecl and S~condan EIIIPIO\m~n1
As stated earlier, secondary employment generated in suppon of the Chula Vista
Medical Center will occur throughout the Southern California region. while direct
employment will occur on site in Chula Vista, In order to detennine the positive economic
benefit accruing to the City of Chula Vista, it is necessary to estimate the number of direct
jobs to be held by Chula Vista residents, as well as the number of resulting secondary jobs
likely to be located in Chula Vista.
The proposed Chula Vista facility will be located approximately 12 miles south of
Kaiser's San Diego hospital facility and approximately 10 miles to the southwest of a smaller
Kaiser medical complex in EI Cajon, At present, it is estimated that between 50 and 100
'Regional Multiplier.;: A User Handbook for the Regional Input-Output Modeling System, U.s. Department of
Commerce. The Input-Output multiplier tabks are usualJ)' published for entire state-regiom. The Department
of Commerce bas provided ERA witb . spe< aI computer run of Southern California-specific multiplier.;,
6
CI)
.D
o
"'"')
CI)
c:
CO
--0
.~o
Cl)i.O
>-
.r.
CL
'-
Q)
+J
C
+JQ)
OC)
~
0.-
E ~
C\.I - ._
"'C
Q) +J Q)
,-cOIIII:::::
:JQ)IIIIII::::
c>>E
,- ~~
u.oCi)
c.>
E ~
w_
:J
~
C)
--
--0
~o
Cf)cq,
>-C')
......
CO
E
CI)
.D
o
"'"')
>-C')
......0)
co~
"Oca
c:
o
l)
Q)
Cf)
-+---'
C
CD
E
~
o
D-
E
w
CD
-+---'
~
<
a:
w
'g
C
lIS
CD
-
C
CD
c
lIS
E
~
CD
0.
~
CD
III
'ii
~
Ii
u
~
:::I
o
(/)
Kaiser Pennanente employees reside in,the City of Chula Vista and corrunute to either of Ihe
two existing complexes in southern San Diego County, When the proposed Chula Vista
facility opens, ERA estimates that the City, due to its supply of relatively affordable housing
stock, will attract a subs1antial number of Kaiser Pennanente employee transfers and/or new
hires.
Based on infonnation from a 1991 study of Kaiser Pennanente employee conunuting
patterns,t it has been established that approximately 61 percent of the typical Kaiser
Pennanente employee base live within 10 miles of their job site! Using the 61 percent
average as a statting point, it is anticipated that approximately 2,135 Kaiser Pennanente
employees will eventually live within 10 miles of the new facility, ERA ha~ discounted this
value further by approximately 40 percent to account for Kaiser Pennanente employees who
may choose to reside in one of Chula Vista's neighboring conununities, Based on these
assumptions, ERA anticipates that one-third, or 1,320 of the 4,000 jobs. will be filled by a
Kaiser Pennanente transfer or by a new hire who will reside within Chula Vista,
Of the 500 physicians to be employed at the facility, it is expected that no more than
J() percent will eventually reside within Chula Vista, According to Kaiser Pennanente survey
data, physician staff members typically will conunute much greater distances than other
employees, It is expected that a majority of physicians employed at the Chula Vista facility
will live in areas as far north as La Jolla and North San Diego County,
Using the assumption that approximately 1.320 of Ihe 4,000 direct jobs at the facility
will be pennanently held by Chula Vista residents. ERA estimates that approximately 1,980
additional secondary jobs will be generated locally in Chula Vista to support the additional
residential base.' Based on these assumptions, ERA estimates that approximalely 3,300 jobs
out of the approximately 10,500 regional jobs crealed will be held by Chula Vista residents,
The additional 7,293 direct and secondary jobs will be held by employees living and working
throughout San Diego County and the Southern California region (see Table 6),
Estimafe of .Jobs for Exislinl! Chula '"isla Residents
ali(I Nell Bires Helol'atin!! in Chula "ista
ERA estinlates that approxinlately 3,300 direct and secondary jobs will eventually be
filled by Chula Vista residents, Obviously, some combination of existing Chula Vista
residents who transfer employment to work at Kaiser Pennanente Chula Vista Medical
Center, as well as some new Chula Vista residents who relocate to Chula Vista to work at
'Employee Resid.ntial Locations and CommUlin~ Pan.ms of Kaiser Penn....n'. Employees: ~''''I.gic Issues
in Transponarioo Demand Manag.ment, The Urban Innovations Group, V.C.L.A., 1991.
~This value does nO! oe~ssarily hold {or physician employees.
'Assumes a multiplier of 1.5 secoodar)' jabs ror eveT)' .loa! direa job cre<IIed.
8
the proposed medical center, will comprise the direct and secondary employment work force,
ERA estimates that approximately 75 percent of those persons directly employed by Kaiser
Pennanente and choosing to live in Chula Vista will originate from outside Chula Vista and
will relocate to the City, As shown in Table 7, ERA estimates that approximately 25 percent,
or 990, of the 4,000 Kaiser Pennanente employees will relocate to Chula Vista, The
remaining 25 percent, or 330 employees, will be hired from the existing Chula Vista labor
pool.
In tenns of secondary employment, ERA estimates that approximately 55 percent of
the secondary employment created will be filled by Chula Vista residents with approximately
1.089 jobs, Estimated secondary employment for residents relocating to Chula Vista is
approximately 891. Thus. ERA estimates that Kaiser Pennanente's Chula Vista Medical
Center will create approximately 1,400 jobs for existing Chula Vista residents and
approximately 1,881 jobs for new Chula Vista residents who relocate as a result of the
establisluuent of the medical center.
Estimated NumlJeI" or Total Ne\\ lIousehold/l'opulalion
Added to (he Lit\' or Chula "isla
Using ERA's estimate of approximately 1,881 jobs which amact new residents to
Chula Vista, ERA assumes that each of these residents represents one household in the City.
Using a 1991 Chula Vista estimate of 2,89 persons per household', ERA estimates that
construction of the Kaiser Pennanente Chula Vista Medical Center will suppon a total
population of approximately 5,435 additional persons in Chula Vista, (See Table 8,)
RELATED SOl!RCES OF ECONOMIC lJENEFlTil!\ll'ACT
The above analysis utilizes accepted economic impact methodology to generate the
gross regional business activity, direct payroll and employment, and secondary employment
related to Kaiser Pennanente Chula Vista Medical Center. In the following sections of this
repon. ERA has supplemented this general analysis, with more specific infonnation relating
to existing Kaiser Pennanente Medical Centers in Southern California, as well as local
circumstances in Chula Vista,
Using infonnation provided by Kaiser Pennanente, ERA has estimated the following
additional sources of economic benefit provided to the City of Chula Vista and its local
economy,
'C:ilifornia Department of Fmance. 1991.
9
Outsidt' Least' "(thi! \'
Typically, Kaiser Pennanente requires additional office and medical service space
SUI rounding their facilities. This means that, once the Center is fully operational, Kaiser
generates additional demand for leased space in the areas inunediately surrounding the
medical center. For example, at the existing Kaiser Pennanente San Diego Medical Center
facility, Kaiser is currently engaged in 13 leases with an annual lease value of $2,375,430.
These leases are for a variety of uses, including administrative office, storage, X-ray me
storage, medical offices. optometry, member health, and warehouse, The proposed Chula
Vista Medical Center can be expected to lease significant office and other real estate space
within the Chula Vista and the South San Diego real estate market. This additional demand
for related development product is an economic benefit of the proposed medical center.
Based on a comparison of medical center sizes and regional operations, ERA has placed on
a very conservative value of $1.5 million on outside lease activity estimated for Chula Vista
resulting from Kaiser operations.
Outside Maintenance Cuntracturs
Kaiser Pennanente currently spends approximately $5OO,OOU per year on outside
service contractors who provide maintenance services at the existing San Diego Medical
Center. These outside contracts are as follows:
Annual Contract Amount
Elevator
Landscape
Water Treatment
Sign Maintenance
Interior Plants
Infectious Waste
Trash Hauling
Supplies
$102.500
66,000
36,000
6,000
7,200
120,000
] 56,000
6.000
ToUli
$499,700
Many of these local contracts are located in the area inunediately surrounding the
medical center, Using the San Diego center as a basis for comparison, ERA assumes that the
proposed center will contract out approximately $500,000 annually in outside maintenance
contracts, Due to the nature of these contracts, ERA assumes that approximately 70 percent
of 'hese contracts will be with Chula Vista finns, This expenditure will result in increases
in business activities for local flI111s engaged in these areas,
10
Local Procuremcnl or (;oods and Scn ices
Generally, Kaiser will not be purchasing most of its supplies directly from local
vendors in the Chula Vista area. Most suppliers are contracted from a region or national
distribution netwOlk. ERA assumes that a small percentage of total supply purchases will
necessarily be local in nature, such as perishable items. ERA estimates this local expenditure
to be approximately $300,000 annually.
(;estures or Goudwill/Conllllunih hn'ohement
Kaiser Pennanente, as a nonprofit health care organization, is extremely responsive
to conununity needs, Annually. Kaiser Pennanente maintains nwnerous educational, health
service, and other programs which benefits the residents of conununities served by Kaiser
Pemlanente. Kaiser Pennanente is also a large-scale direct contributor to numerous local
charitable and other organizations, For example. during the past three years, Kaiser
Pennanen1e has contributed at least $700,000 in direct contributions to San Diego
organizations, in addition to operating numerous educational and other programs. Kaiser
Pennanente can be expected to spend at least $50.000 annually supporting local organizations
within Chula Vista and the immediate surrounding area.
It should be noted that local deveJopmentimpact fees to be collected from the Medical
Center are not included as part of the impact estimates of this report.
Ollc-Time COllslrudion Imp:!d
In addition to the ongoing annual economic activity generated at the medical center.
there will be a one-time constJ1lction impact attributable to development of the project. This
one-time construction impact will occur over the 3-year development period, The total
construction cost relating to de' elopment of the project is estimated at $193,000,000 (constant
1994 dollars), Approximately 200-300 direct jobs will be created during the construction
period with an approximate annual payroll during the three years of $5,0-$7.0 million',
FISCAL IMPACTS OF KAISER PERI\IANENTE UEVELOPMENT
The Kaiser Pennanente Hospital and Medical Offices complex will generate
approximately $461,380 fOl the City of Chula Vista in temporary property tax revenue and
one-time fees. Thereafter, Ihe City will receive annual General Fund revenues of
approximately $629,815 resulting from increases in local retail sales, Kaiser Pennanenle
utility use, and increases in roonuught demand at local hotels,
I Average cODSbUction salary estimated at $24,000,
II
The following section details ERA's estimation of these revenues flows to the City
of Chula Vista. All revenue estimates are reponed in constant 1992 dollars,
Re1ail EXDenditures
In addition to direct employment and payroll impacts, one of the most imponant
economic development roles of an institution such as a Kaiser Permanente Hospital is the
generation of retail expenditures in the local conununity, The City will realize positive sales
impacts from the following five sources:
. Sales from new resident employees of the Kaiser Pennanente facility
. Sales from nonresident employees of the Kaiser Permanente facility
. Sales from visitors of inpatient admissions
. Sales from oU1patient member visits
. On-site taxable sales
As shown in Table 9, nonresident employee-oriented retail sales are based on a very
conservative estimate of per-employee expenditure factors of $1,000 per employee! Thus,
total employee-related expenditures are estinlated to be approximately $2.7 million per year,
This includes purchases at local restaurants, local retail goods and services, gasoline at service
stat ions, etc.
In addition, local retail sales will be generated by nonresident visitors to the hospital
and to doctor's offices. Together, new retail expenditures generated by this source will total
approximately $515,808 per year, This number includes nearly $300.000 annually from in-
patient care and follow-up visits and $218.750 generated annually by local spending
associated with outpatient visits,
In addition to local retail sales generated by employees, patients and visitors to the
medical facility, Kaiser Permanente also generates taxable retail and service-oriented revenues
on site each year, Annual taxable revenues are expected to be approximately $4,05 million
(see Table 10),
As indicated in preceding sections, ERA antICipates that approximately 1,881
households in the City of Chula Vista will be directly supponed by development of the
Kaiser Pennanente facility, These households will add local purchasing power to the City's
economy. In order to derive the amount of anticipated local purchasing power that the new
households will bring to ChuJa Vista, ERA has used two distinct methods of estimation,
'International Council of ShoppiDg Ccnter.<, Retail Expenditures Survey: Average expenditures of dowDlown
worlcers in areas of limitcd retail di":OUOled by 30 percent to recognize noDoffice nature of health care worlc.
panicularly hours of employmeDt.
12
Based on a estimated number of 1990 occupied households in the City of 48.382 and
a total reported 1990 taxable retail sales volume of $903.1 million, average retail sales per
household totaled $18.666 in 199U,' 111is value. however, includes sales from nonresidents
to the City, In addition, most cities only capture a portion of their total residential sales
expenditures, Because the anticipated incomes of the Kaiser Pennanente-related residents will
be significantly different than the averagt' ChuJa Vista resident, it was decided to employ a
second method of spending estimation,
Table J I takes the new housei1"ld estimate of 1,881 and indicates the various
employment subgroups represented in this total. Table 12 takes these values and segments
them into single-earner and dual-earner households so that specific retail purchase estimates
can be made, Estimates of average household income levels are based on Kaiser salary data
and ERA estimates of typical household income levels for various employment categories,
Secondary (or support) employment income levels are derived from the weighted average of
1991 Chula Vista wages in the four major employment categories,
Finally. local retail spending estimates are derived from the above data by applying
average percentage of income spent on retail goods to an assumed Chula Vista capture rate,
(See Table 13.)
The resulting increase in purchasing power of $27 million indicates that, on average.
each new Kaiser Pennanente-related household (including support/secondary jobs) will spend
approximately $14,4UUU annuall)' on local retail purchases,
In sum, the Kaiser Pennanente Chula Vista facility will generate an aJmual average
increase in local retail spending of approximately $34,3 million. Annual incremental sales
generated from these sources would economically support approximately 185,5UU S4uare feet
of retai] space within the City,:
Sales and llse 1'a, Re\ enul: (;l'nl:raled b\ Kaiser Permanenle Aclh il\'
Retail sales generated by hospital employees, patients and visitors and on-site
operations are estimated to total approximately $7,248,256 annually. Increases in sales
resulting from new residents to the conununity are estimated at $27,077,4UO, 111e total of
these sources is $34,325,656 in new sales revenue, At the current County of San Diego sales
tax levy of 8,25 percent, over $2.8 million in total tax revenue would be collected, 11le
aJnount of tllis revenue which will accrue to the City of Chula Vista should be on the order
of $343,256 per year,
11990 taxable retail sales as reponed by the California State Board of Equalization. 1990 occupied
households estimated by averaging the April!. 1990, V.S, Cemus value and the January J. 1991,
California Depallment of FInance value for Cbula Vista.
'Based on all industry average sales.pcr-square-foot value of $185,
13
Proverlv Tax R,,'ellue
The proposed site for the Hospital is located within the Eastlake I project area in the
northeast corner of Chula Vista.' The current propeny value of the project site is
approximately $8,1 million, ERA estimates that as of Fiscal Year 1990/1991, the City of
Chula Vista received $11,135 in propeny tax revenue from the subject parcels.1
Kaiser Pennanente Hospital facilities are 501-C nonprofit corporations. At the point
of hospital occupancy, the entire Kaiser Pennanente property will be removed from County
propeny tax rolls. Until this occurs. however, Kaiser is still responsible for atulUaI property
tax payments, Table 14 presents an anticipated schedule of events for construction and
property transfer of the Chula Vista Medical Facilities,
Based on the City of Chula Vista's property tax millage rate of 0,0013746985, the
following property tax revenue should accrue to the General Fund in each of the following
Fiscal Years:
Fiscal Year 1'1'11/1'192
Fiscal Year 1'1'12/1993
Fiscal Year 1'1'13/1994
Fiscal Year 19'14/1995
Fiscal Year 1995/1'196
Fiscal Year 1996/1997
$ 22,682
$ 23,136
$ 23598
$ J 24.424
$ 126.912
$ 129.450
Cuwu1alive Tax Revenue
$ 461,380
In addition. though the Kaiser facility will be removed from County tax rolls sometime
in Fiscal Year 1997/1998. Kaiser Permanente will still be responsible for payment to a
Community Facility District Fund and Assessment District No, 88-1. As of Fiscal Year
1991/1992, annual payments to these two funds totaled $44,238.
OllwI Onl!oilll!. Cih Re' enu"s
In addition to sales tax and property tax revenues. the City of Chula Vista will receive
revenues from Kaiser Pennanente for annual business license and utility users fees.
Additionally. ERA anticipates some increase in annual Transient Occupancy Tax revenue
resulting from increased roonmighl demand at the City hotels,
'11,. proposed site is identilied by Ao;scssors Parcel Number 595-070-016. 1be site is localed wilhin County
Tax Rate Area Number 01129,
'Acconling 10 the San Diego County Office of the Assessor and the Office of the Auditor Conlroller, tho lotal
proper1y tax rate for the subject sile is 0.0104349 mils. 1be City of Cbula Vista receives its revenue based on
a current rate of 0.00 I 3747 mils.
14
The City charges a Business Lil'ensing Fee based on number and status of the
businesses employees. As outlined in Table 15, one-time revenues to the City from this
source will total $20,015. Annual ongoing revenues for license renewal wiU total $75,302.
Chula Vista assesses a utility users tax on businesses that utilize telephone, gas, and
electric service, The fees are based on monthly usage and are coUected by an assessment
which is included with the monthly service billing, Table 16 indicates that 8IU1Ual City
revenues from this source should total $165,034,
FinaUy, visiting doctors, temporary staff relocations, 10caUy sponsored conferences and
overnight stays of patient visitors will provide an 8IU1ual demand for some local hotel/motel
space in Chula Vista. The City will collect transient occupancy taxes based on roomnight
revenues, CUlTently the City assesses an occupancy tax of 8 percent on room revenues,
According to City officials, it is likely that the City occupancy tax rate will be raised to 9
percent in the near future and it is possible that a 10 percent rate will be assessed within
several years. For this study, ERA has assumed a 9 percent TOT rate for our projections.
As indicated in Table 17. annual City revenue from additional hotel use should total $1.985.
CONCLl'SIONS
The development and operation of the Kaiser Pennanente Chula Vista Medical Center
will have a positive effect on the economy of the City of Chula Vista. As detailed in this
report. it is expected that when completed, the medical center will provide direct employment
for 4,000 people. The average Kaiser Pennanente physician will be paid $140,000 in salary
and the average non-physician employee will earn over $38,000 annuaUy. llJese anticipated
wage levels are significantly in excess of current Chula Vista average wages.
In addition to the direct jobs cre'lIed at the medical center, ERA estimates that an
additional 6.593 secondary jobs will be created regionwide to support the existence of the
4,000 medical center jobs. Although these jobs will be located within the larger Southern
Califomia region, at least a portion can he expected to be located within the Chula Vista
economy. Of the total 4,000 johs created hy the medical center operation, ERA has estimated
that approxinJately 1.320 would be filled by residents of Chula Vista. Some of these are
current residents and some are residents expected to relocate to the area to take a job at the
new medical center. Additionally, of the secondary jobs generated in support of the Kaiser
Pennanente employment increases. approximately 1,988 are expected to be filled by current
or new Chula Vista residents.
In addition to new jobs created in the City's economy, the Kaiser Pennanente ChuIa
Vista Medical Center will create local demand for additional office and storage space leases,
and will purchase some local supplies and utilize local maintenance and service flnns for
outside contracts, During the three-year construction process, it is anticipated that between
15
200 and 300 jobs will be created in various construction-oriented capacities, The addition
of new residents and Kaiser employees in Chula Vista will ~enerate demand for increased
retail sales, ERA estimates that the City's annual retail sales will increase by $27 million,
Finally, Kaiser Permanente invests in the cOlTUnunities in which its facilities are localed. II
is expected that Kaiser Permanente will be active in local conununity service,
The last area of impact examined was on City government. TIle medical center, its
employees. patients. visitors, and the new residents to the City attracted by the Kaiser
Permanente jobs will contribute a si~nificant amount of municipal revenue to the City. One-
time revenues, consis1ing principally of shon-tenn propeny tax revenues. will total
approximately $461,380, These revenues will flow to the City over time between the initial
land purchase and the opening of the hospital facility, Once operational, the medical center
facility and its employees will generate annual revenues for the City of approximately
$630.()()0. These revenues include increases to the City's sales tax fund, business license and
utility users fees. as weU as increases in aJutual transient occupancy tax revenues, Table 18
sununarizes all economic and fiscal impacts discussed in this repon,
16
APPENDIX TABLES
Table 1
PROJECI'ED EMPLOYMENT LEVELS
AND SALARY DISTRIBUTION
KAISER PERMANENTE CHULA VISTA MEDICAL CENTER
Number Percent Average
Salal)' Rangel of Distribution Annual Total Payroll
Positions SalatT
515,000 - 519,999 104 3% 518,926 51,972,633
520-000 - 524,999 1,026 29% 522,956 523,543,914
525,000 - 529,999 354 10% 526,638 59,439,911
530,000 - 534,999 336 10% 532,275 510,832,021
535,000 . 539,999 104 3% 537,740 53,933,591
S40,OOO - $44,999 104 3% S42,428 S4,422,216
S45,OOO - S49,999 736 21% $48,305 535,545,460
$50,000 - $54,999 215 6% $52,595 $11,292,732
$55,000 - $59,999 196 6% 556,366 511,044,916
S60,OOO - $69,999 236 7% $62,839 514,802,159
570,000 + 90 3% $76,709 $6,875,941
Subtotal 3,500 100% $38,218 $133,705,493
i
~
TOTAL
~
II
4,000
100')1,
550,940
570,000,000 I]
$103,705,493 I
Physicians
500
100%
5140,000
Estimated salary ranges based on current non-physician salary distributions for Kaiser Pennanente's
Woodland Hills Medical Center,
Z Based on weighted averages of Woodland Hills Medical Center,
Source: Kaiser Permanente and ERA.
Table 2
ESTIMATED 1991 AVERAGE SALARIES
FOR CITY OF CHULA VISTA EMPLOYMENT
FOUR MAJOR ECONOMIC SECfORS
Categories for Existing Chula 1991 Average Annual
Vista Jobs Salary!
City of Chula Vista
Retail S13,113
Wholesale Trade $21,162
Business and Personal Services S22,307
Manufacturing S36,907
Weighted Average S22,620
1
1991 average salaries by economic sector were derived using U.S, Department of Commerce, 1987
California Census data for tbe City of CbuJa Vista, 1987 industry wage averages were escalated to 1991
values using tbe CPI-U index for San Diego County,
Source: '1987 California Census of Retail Trade', U,S, Department of Commerce, Bureau of the Census; "1987
California Census of Wholesale Trade', U,S, Department of Commerce, Bureau oftbe Census; "1987 California
Census of Manufacturers', U,S, Department of Commerce, Bureau of tbe Census; '1987 California Census of
Service Industries', U,S, Department of Commerce, Bureau of tbe Census; and ERA,
Table 3
AVERAGE PAYROLL AND VALUE OF SERVICE RATIOS
SELECI'ED HEALTH SERVICE ESTABLISHMENTS
SAN DIEGO S.M. SA. . 1991
Average Ratio of Value of
Category Payroll Per Payroll to Service Per
Employee1 Receipts Employee
Health Services. San Diego SMSA
. Offices and Clinics - Doctors of Medicine $49,089 46,9% $104,581
. Offices and Clinics - Doctors of Osteopathy $33,207 43.4% $76,468
. Offices and Clinics - Other Practitioners $21,397 28,7% $74,347
. Hospitals $21,030 33,2% $63,280
. Other Health Services $23,734 42,8% $55,346
Health Services Total $30,365 42,2% $71,911
Chula Vista Medical Center2 $50,926 50,0%3 $101,852
1
1991 values estimated by applying the CPI-U index to 1987 payroll and receipt data,
2 Includes physicians salaries in payroll averages,
3 The California Census of Service Industries does not include the salaries of independent practitioner
doctors as pan of its payroll estimates, Because Kaiser's physicians are on an annual payroll system,
it is estimated that Kaiser Permanente's annual ratio of payroll to receipts would be higher than the
norm, ERA estimates that this ratio is as high as 50 percent for a Kaiser Permanente hospital
operation,
Source: '1987 Census of California Service Industries', U,S. Department of Commerce: Bureau of the Census;
and ERA,
Table 4
ESTIMATED GROSS BUSINESS ACfIVI1Y
KAISER PERMANENTE CHULA VISTA MEDICAL CENTER
Chula Vista Medical Center Total Expense
Employee Payroll
. Non-Physician Employees $133,705,000
. Physician Employees $ 70,000,000
Tot31 Payroll $203,705,000
Payroll/Receipts Ratio 50%
Estimated Business Activityl $407,410,000
Estimated business activity covers the economic value of 311 components of hospital operations, including
payroll, overhead, insurance, debt service, and other expenses,
Source: Kaiser Permanente and ERA,
Table 5
ESTIMATED PRIMARY AND SECONDARY EMPWYMENT GENERATION
RESULTING FROM
KAISER PERMANENTE CHULA VISTA MEDICAL CENTER
Chula Vista Medical Center Employment/Business
Activity
Employment
. Non-Physicians 3,500
. Physicians 500
Total Direct Employment 4,000
Total Direct Business Activity $407,410,986
Employment Multiplier 26,01
Estimated Secondary/Support Employment
Generated 6,593
Total Direct and Secondary Employment
Generated 10,593
1991 multiplier derived from 1987 RIMS II Input-Output multipliers for Heath Care services in the
Southern California economy, The CPI-U index of consumer inflation was used to escalate the 1987
multiplier of 34,7 to a 1991 value of 26,0, Use of the multiplier is as follows: For every $1 million
increase in heatb care-related business activity within the area, 26,0 additional jobs within all sectors of
tbe regional economy will be created, Regarding tbe proposed South San Diego Medical Center, for
every $1 million in business activity, roughly 9.8 direct Kaiser Permanente jobs will be created and 16,2
secondary or support jobs will be created within the larger regional economy (which includes the City
of Chula Vista).
Source: Kaiser Permanente; 'Regional Multipliers: A User Handbook for the Regional Input-Output Modeling
System (RIMS II)',U,S, Department of Commerce, 1987; and ERA.
Table 6
WCATION OF DIRECI' AND SECONDARY EMPWYMENT
RESULTING FROM KAISER PERMANENTE
CHULA VISTA MEDICAL CENTER
Chula Vista Medical Center Employment
Activity
Direct Employment @ Hospital 4,000
Secondary/Support Employment Demand Created Within Region 6,593
Total Direct/Secondary Employment Demand (regional) 10,593
Estimated Medical Center Jobs Filled by Chula Vista Residents 1,3201
Estimated Secondary/Support Jobs Filled by Chula Vista Residents 1,9s02
Total Direct/Secondary Employment to Chu1a Vista Residents 3,300
Total Direct/Secondary Employment to Non-City Residents 7,293
Based on Kaiser Permanente study of employee commuting patterns at existing facilities, ERA
estimates that by full operational status, approximately 33 percent of Kaiser Permanente employees will
reside within the City of Chula Vista,
2 Secondary employment estimated based on basic/non-basic multiplier of 1.5:1 applied to direct Kaiser
Permanente jobs filled by City of ChuJa Vista residents.
Source: Kaiser Permanente; "Employee Residential Locations and Commuting Patterns of Kaiser Permanente
Employees: Strategic Issues in Transportation Demand Management', The Urban Innovations Group, UCLA
1991; and ERA,
Table 7
ESTIMATE OF EMPLOYMENT OPPORTUNITIES FOR
EXISTING CHULA VISTA RESIDENTS AND FOR
EMPLOYEES RELOCATING TO CITY
Chula Vista Medical Center Employment
Activity/Jobs
Total Direct Employment for City Residents 1,320
Estimated Direct Employment to Existing Residents 3301
Estimated Direct Employment to New City Residents 990
Total Secondary Employment for City Residents 1,980
Estimated Secondary Employment to Existing Residents 1,08~
Estimated Secondary Employment to New City Residents 891
Total Estimated Employment to Existing Residents 1,419
Total Estimated Employment to New City Residents 1,881
It is estimated that 25 percent of the local, direct jobs available will be f1Iled by existing City residents,
Conversely, 75 percent of the locally filled Medical Center jobs are expected to be f1Iled by new
residents to tbe City,
2 It is estimated that 55 percent of the secondary or support jobs expected to be filled by City residents
will be filled by existing City residents, The remaining 45 percent will be f1I1ed by Dew residents to the
City,
Source: Kaiser Permanente aDd ERA.
Table 8
ESTIMATED NUMBER OF NEW HOUSEHOLDS AND POPULATION
ADDED TO THE CllY OF CHULA VISTA AS A RESULT OF THE
KAISER PERMANENTE CHULA VISTA MEDICAL CENTER
Employment/Household
Chula Vista Medical Center Impacts for City of
Chula Vista
Direct and Secondary Jobs for New City Residents 1,881
Additional Households Added to City 1,881
Current Persons-Per-Household in City 2,89
Estimated Population Added to City 5,436
Source: Kaiser Permanente; California Department of Finance and ERA,
Table 9
ESTIMATED VISITOR AND EMPLOYEE RETAIL EXPENDITURES
RELATED TO KAISER PERMANENTE CHULA VISTA MEDICAL CENTER
Employee-Related Retail Purchases
.
Total Non-Resident Kaiser Employees:
Annual Local Purchases Per Employee:
2,680
51,0001
Total Annual Retail Spending Impact:
$2,7 million
Inpatient-Related Retail Purchases
.
Total Number of Beds @ Chula Vista Facility:
Average Daily Occupancy:
Total Annual Number of Roomnights:.
less City Resident Occupancy @ 30%:
439 beds
70 percent
112,165 roomnights
78,515 roomnights
.
Average Visitor Per Roomnight
Average Annual Non-Resident Patient Visitors:
Average Local Expenditure Per Visit:
0.5
39,257 visitors
$7.50
Total Annual Retail Spending Impact:
5294,433
.
Inpatient Follow-Up Visits (average):
less City Resident Visits @ 30%:
Average Local Expenditure Per Visit:
Total Annual Non.Resident Retail Spending Impact:
3,000 patient visits
2,100 patient visits
$1.25
$2,625
Outpatient-Related Retail Purchases
.
Average Annual Outpatient Visitation:
less City Resident Visitation @ 30%:
Average Local Expenditure Per Visit:
Total Average Annual Non-Resident Retail Expenditures:
125,000 patient visits
87,500 patient visits
52.50
$218,750
TOTAL ANNUAL LOCAL RETAIL SPENDING
IMPACT OF KAISER FACILITY (average):
a195.80~
1 International Council of Shopping Centers, Retail Expenditures Survey: Average expenditure of
downtown workers in areas of limited retail discounted by 30 percent to recognize non-office nature of
health care work, particularly hours of employment.
Source: Kaiser Permanente and ERA,
Table 10
ESTIMATE OF ON.SITE TAXABLE SALES AT
KAISER PERMANENTE CHULA VISTA MEDICAL CENTER
Category Estimated Annual
Taxable Revenues
Health Plan $812
Hospital Group! $2,943,915
Medical Group2 $1,107,721
Totals $4,052,448
Includes revenues from the gift shop and cafeteria,
2 Includes revenues from the gift shop and cafeteria,
Source: Kaiser Permanente and ERA,
Table 11
ANTICIPATED KAISER PERMANENTE EMPWYEES
ADDED AS RESIDENTS TO THE CI1Y OF CHULA VISTA
RESULTING FROM THE CHULA VISTA MEDICAL CENTER
PHYSICIAN/NON.PHYSICIAN JOBS
New Households
Employment Category in City
Total Number of Kaiser -Related Households Added
to City
. Non-Physician Households . 940
. Physician Households 50
Total 990
Total Number of Secondary Employment Households
Added to City
. Secondary Employment-Related Households 891
Source: Kaiser Permanente and ERA,
Table 12
ESTIMATED AVERAGE ANNUAL HOUSEHOLD INCOMES
FOR CHULA VISTA RESIDENT
KAISER PERMANENTE EMPLOYEES OF TIlE
CHULA VISTA MEDICAL CENTER
Estimated Average
Number of Household Gross
Employment Category Households Income1
Non-Physician Households
. Single-Earner Households 280 $38,300
. Dual-Earner Households 660 $60,000
Physician Households
. Single-Earner Households 40 $140,000
. Dual-Earner Households 10 $175,000
Secondary-Employment Households
. Single-Earner Households 200 $22,620
. Dual-Earner Households 691 $40,000
1 Household income estimates based on typical Kaiser Permanente employee salaries and ERA estimates
of second incomes in dual earner households,
Source: Kaiser Permanente and ERA,
Table 13
ESTIMATE OF INCREASE IN CHULA VISTA RESIDENTIAL
PURCHASING POWER ATI'RIBUTABLE TO NEW RESIDENT
KAISER PERMANENTE EMPLOYEES
Portion of Portion
Average Household Spent in Total
Household Type Household Gross Income City of Local
Income Spent on Retail Chula Spending
Purchases! Vista2
Non-Physician Households
. Single Earner Households $38,200 $17,190 $12,033 $3,369,240
. Dual Earner Households $60,000 $27,000 $18,900 $12,474,000
Physician Households
. Single Earner Households $140,000 $42,000 $21,000 $840,000
. Dual Earner Households $175,000 $52,500 $26,250 $262,500
Secondary-Employment Households
. Single Earner Households $22,620 $10,179 $7,125 $1,425,060
. Dual Earner Households $40,000 $18,000 $12,600 $8,706,600
TOTALS $27,077,400
Based on data from tbe 1987 Consumer Expenditure Survey, V,S, Census, Non-Physician and Secondary-
Employment households are estimaled to spend 45 percent of Ibeir gross annual income on retail goods,
For households in the income calegory of physicians, it is estimated that 30 percent of tOlal annual gross
income goes 10 purchase retail goods,
2 Estimated City capture rate for Non-Physician and Secondary-Employment bousebold spending at 70
percent. For Physician households, the estimated caplure rale is 50 percent.
Source: Kaiser Permanente; V,S, Department of Commerce, Bureau of the Census; and ERA,
...
-
::E
OZ
11:0
10.-
t.:)ti
z~
-II:
~~
"'m
~z
mo
:U
10111:
~Ioj
...~
<z
>101
...U
~...
11:<
IojU
Ao-
o~
II:::E
Ao
z<
-~
m!a
101>
m<
<...
:;>
U::
ZU
-101
...~
<Z
;>101
Zz
Z<
<::E
10.11:
0101
IojAo
~III:
<101
::E!a
-<
t;~
101
II
:;
"
~
..
...
- -
,,-
.U
· "
.- . N ~
< II Ie ! !'1 ~ ~ -
'2 ; - .. ~
- ~ ..; ~ . ~ ~
- II ;; j;j N
" ~ ;; ;; ;;
E II
;11:
.. "
101 ..
~
N
II io!
II "
~- ~ ~ ~ !:j ~ ~
- " ~ ~C<
ii> .. ~
- ... ~ ~ ~ ~ ~ ! C< ;
"- .. f~
E .. - ..; ..; ..: ~ ~ .
" II ~ ;; ;; ;; a e
u8' It'"
..
Ao
..~
" ::
..- ~ ~~~ U
" "
->
- ~ ~ .~ ~.
... II :iI :iI :iI :iI :iI :iI
E :; -~ . .~
..; N -. !:j..;
-... ~t;;;
.. ... ;; ;~
c ..
" "
UAo
..
cT
..
~
~
.. !! "'rJ
@"
... !. i~
... "ti = ~
-
-.: ctI ~ i:1; ....~
= . ~ .....~
- .2 ~ ~N i .. .
... ."N
< ~'" .@ I "'~@
_@J.CI ~.!2! f ~
Cflx@J= ur
i I; gt_u u 5 2 ...
;; u =2 rJ ~ ..
1 = .. ~o; ~ 1t}:::,.D5 j g !
~ Ii ~u_ '" ~U'
!jJ!!~ u ~
'" i 'fi -lEi i -"-!! 2 5 'ii
.a iou~ i 0.. ;; I
< x 0.. ..
;; 1 " ~ ~
.;1 0 :I . . . o . . 0
w z ::E x x
i ~ '" Si i ~ ~ I
- .. ~
" ..
... II I ~ ~ I I I -
~... ~ ;::
~ ~ !!!
-
..;
-
,~
..
..
0
1
I;
'tI
=
"
i
J
..
..
..
..
2
..
>
i
..
rJ
.. <i.
..
.. 0::
j; w
i 'tI
=
..
i is
..
N .; rJ
(; ! ..
..
rJ '" <
~ ..
.. =
~ (;
j; '" ..
8 "
r! ! i!5
~ = .:;
Ii (; ?o
=
-! .. 8
f -i! '! u
J!I I
1 j; ..
11 :>
.. j =
j; !I! <.> c7!
i I (; 0;-
J Ii i
<.> =
.. E
I J g
.. i 0..
!I! S I;
.. ..
:f .! ;:!
N .. j
Table 15
ESTIMATED CIIT OF CHULA VISTA
ANNUAL BUSINESS LICENSE
FEE REVENUE RESULTING FROM THE
KAISER PERMANENTE CHULA VISTA MEDICAL CENTER
Employer Ongoing
Categories Fee Categories One-Time Fees Annual Fees
Base Fee @ 552,SO 552.SO
Hospital Operation Zoning Fee @ $15,00 515,00
Employee Fee @ S6.SO/employee 522,7SO
Physicians Base Fee @ 525/physician 512,500
Zoning Fee @ 515/physician 57,500
Physician Fee @ 5105/physician 552,500'
TOTALS 520,015 575,302
, Fee assessed beginning with second year of operation,
Source: City of Chula Vista, Kaiser Permanente, and ERA.
Table 16
ESTIMATED CI1Y OF CHULA VISTA
ANNUAL UTILl1Y USERS FEE REVENUE
RESULTING FROM THE
KAISER PERMANENTE CHULA VISTA MEDICAL CENTER
Estimated
Utility Fee Category Method of Average Kaiser Annual City Fee
Assessment Monthly Usage Revenues
City assesses 5% of $65,000 in phone
Telephone Usage monthly billing total charges 539,000
City assesses $0,0025 3,8 million
Electri""l Usage per kilowatt of use kilowatts 1 5115,740
City assesses :93,344 therms2
Gas Usage $0,00919 per therm 510,294
of use
TOTAL ANNUAL 5165,034
COLLECTION
Based on the following annual usage per-square-foot breakdown: Medical Center - 36,40 KWh (includes
Central Plant); Medi",,' Office Building - 27,71 KWh; Administrative Building - 26,42 KWh; Parking
Structure (@ 250 sq, ft. per space) - 2,00 KWh,
2 Based on tbe following annual usage per-square-foot: Medical Center. 1.03 tbenns (includes Central
Plant); Medi",,1 Office Building. 0,60 therms; Administrative Building - 0,43tbenns; Parking Structure.
0,00 tbenns.
Source: City of Chula, Kaiser Permanente, and ERA,
Table 17
ESTIMATION OF ANNUAL CI1Y OF CHULA VISTA
TRANSIENT OCCUPANCY TAX REVENUE
RESULTING FROM KAISER PERMANENTE.GENERATED
LOCAL HOTEL DEMAND
Estimated Annual Estimated Annual
Demand Category Roomnight City TOT Revenue
Demand @1)%1
Visiting Staff Members/Conferences
500 $1,805
Overnight Stays of Patient Visitors
50 $180
TOTALS 550 $1,985
1 Roomnight revenue based on 1991 Pannell, Kerr, Forrester survey of San Diego Soutbbay cities.
Average room revenue equals $40,11,
Source: City of Chula Vista; Kaiser Permanente; Pannell, Kerr, Forrester; and ERA,
Table 18
SUMMARY OF ECONOMIC AND FISCAL IMPACTS
KAISER PERMANENTE CHULA VISTA MEDICAL CENTER
Kaiser Permanente Employment,
Chula Vista Medical Center Economic and Fiscal
Impacts
Employment Impacts: General
. Direct Hospital Jobs at Medical Center 4,000
. Off-Site (Secondary) Job Demand Generated by Hospital (regional) 6,593
. Estimated Employee Payroll at Hospital $203,7 million
. Estimated Hospital Business Activity $407.4 million
Increases in City Residential Base
. Estimated New Housebolds Added to City 1,881
. Estimated Population Increase 5,438
Employment Impacts for City Residents
. Estimated Kaiser Permanente Jobs to Existing/New Residents 1,320
. Estimated Secondary Jobs to Existing/New Residents 1,988
Otber Economic Benefits to Cbula Vista's Local Economy
. Additional Retail Sales $27 million annually
. Additional Office/Storage Lease Activity $1.5 million annually
. Local Service/Maintenance Contracts $500,000 annually
. Local Purchases of Supplies/Services $300,000 annually
. Goodwill/Community Service $50,000 + / - annually
One-Time Construction Impacts (3 Years)
. Total Construction Value $193 million
. Total Construction Jobs Created 200 to 300 jobs
. Total Annual Construction Payroll $5 to $7 million annually
F'ascaIlmpacts to Cbula Vista Government (1992 dollars)
. One- Time Revenues to City $461,380
. Ongoing Annual City Revenues $629,815
Source: Kaiser Permanente and ERA,