2007 Page i Table of Contents Chapter 1 - Economic Impact Methodology...1-1 1.1 Study Overview...1-1 1.2 Airport Activities...1-2 1.3 Impact Analysis...1-3 1.3.1 Direct Impacts...1-3 1.3.2 Indirect Impacts...1-5 1.3.3 Multiplier and Total Impacts...1-6 1.4 Report Outline...1-8 Chapter 2 - Demographic & Economic Trends...2-1 2.1 Population...2-1 2.2 Employment...2-2 2.3 Income...2-4 2.4 Gross State Product...2-6 Chapter 3 - Chicago Executive Airport Economic Impacts...3-1 3.1 Direct Impacts...3-1 3.2 Indirect Impacts...3-3 3.3 Multiplier and Total Impacts...3-5 Chapter 4 - Airport-Related Tax Impacts...4-1 4.1 Income Taxes...4-1 4.2 Personal Property Taxes and Registration Fees...4-1 4.3 Business Taxes...4-2 4.4 Total Taxes...4-3 Chapter 5 - Business User Impacts and Other Benefits...5-1 5.1 Aviation-Dependent Industries...5-1 5.2 Typical Value-Added Impacts...5-2 5.2.1 Previous Study Business User Surveys...5-3 5.2.2 Chicago Executive Airport Business User Survey...5-4 5.3 Business Aviation at Chicago Executive Airport...5-4 5.4 Other Qualitative Benefits...5-5 5.5 Business User Impacts and Other User Benefits Summary...5-6 Appendix
2007 Page ii Exhibits No. Title Page 1-1 Airport Location...1-2 1-2 Based Aircraft and Aircraft Operations by Airport...1-2 1-3 Economic Impact Types...1-3 1-4 Airport Tenants and Through-the-Fence-Operators...1-5 1-5 Components of Economic Impact Types...1-6 1-6 Economic Impact Types and Measures...1-8 2-1 Historical Population Trends, 1970-2006...2-1 2-2 Forecasted Population Trends...2-2 2-3 Industry Employment, 2006...2-3 2-4 Industrial Location Quotient Based on Employment, 2006...2-4 2-5 Industry Average Earnings, 2006...2-5 2-6 Mean Household Income...2-5 2-7 Illinois Gross State Product by Industry...2-6 3-1 Economic Impact Summary...3-1 3-2 Direct Economic Impacts...3-2 3-3 Indirect General Aviation Visitor Impacts...3-4 3-4 Impact Breakdown by Measure and Type...3-5 4-1 Real Property Tax Assessed Value and Amount Paid...4-2 4-2 Business Taxes by Type...4-3 4-3 Total Taxes by Type...4-3 5-1 Business Location Factors and GA Business Use...5-3 5-2 Business User Survey Firm Characteristics...5-4 5-3 Qualitative Activity Benefits...5-6
2007 Page 1-1 Chapter 1 - Economic Impact Methodology The economic impact of the Chicago Executive Airport is calculated using a methodology that evolved over the past two decades and is nationally recognized as the standard for conducting economic impact studies of airports. The methodology is consistent with that advocated by the Federal Aviation Administration (FAA), and explicitly follows the FAA-suggested procedures. 1 The study also uses the IMPLAN input/output model with multipliers specific to the Cook and Lake County, Illinois. The study methodology is an "impact" approach rather than a "transportation benefits" approach. Therefore, the study does not explore the efficiencies, the productivity, or the travel benefits from, air travel. Rather, it measures the importance of the airport as an industry, in terms of the employment and earnings it generates, and the locally produced goods and services which it consumes. All impacts are expressed in annual terms, with all impact calculations based on the latest year for which data are available (generally for the year 2007). 1.1 Study Overview Chicago Executive Airport serves the general and business aviation sector. With approximately 300 based aircraft and over 100,000 aircraft operations annually, Chicago Executive is the third busiest airport in the Chicago area, after O'Hare International and Midway. Originally a modest grass strip created by an early aviation enthusiast, the airport was known as Gauthier's Flying Field in the early 1920 s. In the 1928, the field was renamed Pal-Waukee, after the two highways that formed its southern and eastern boarders. The airport was purchased in 1953 by George Priester who expanded the facility until it was purchased by the Village of Wheeling and the City of Prospect Heights with FAA and State funding in 1986. Renamed Chicago Executive Airport in 2006, to more accurately reflect its regional importance, the facility now covers over 400 acres and is a key building block and powerful economic engine for both communities as well as the surrounding area. This study was sponsored by the Chicago Executive Airport with the purpose of developing an unbiased, thorough quantification of the airport s economic impact on the airport s service region. To do so, the airport operator and tenants were surveyed regarding number of people employed and typical annual operating expenditures. Further, corporate users were identified to understand nature and magnitude of major corporate users who depend on the airport. The airport location is shown on the map in Exhibit 1-1. Lastly, this report also provides estimates of state and local tax collections associated with airport activity. 1 Estimating the Regional Economic Significance of Airports, Federal Aviation Administration, Washington, DC, 1992.
2007 Page 1-2 Exhibit 1-1 Airport Location Source: www.chiexec.com 1.2 Airport Activities Chicago Executive Airport is a major general aviation airport catering to the corporate aviation user. In doing so, the airport alleviates the demand for corporate activity at O Hare International by providing quick, efficient airside and groundside access. The associated 112,911 annual aircraft operations and the 294 based aircraft are presented by type in Exhibit 1-2. Exhibit 1-2 Based Aircraft and Aircraft Operations 2007 Aircraft Operations Based Aircraft Type Number Type Number Air Taxi 12,126 Single Engine 192 Itinerant 75,336 Multi-Engine 45 G.A. Local 25,410 Jet 52 Military 39 Helicopter 5 Total Operations 112,911 Total Aircraft 294 Source: Chicago Executive Airport
2007 Page 1-3 1.3 Impact Analysis The airport economic impacts associated with Chicago Executive Airport are generated in three ways: Direct, Indirect, and Multiplier Impacts. Combined, the three impact types yield an airport s total economic impact, as shown in Exhibit 1-3. The following discussion describes these impact types and how they are calculated. In addition, the discussion describes the three impact measures jobs, earnings and economic activity. Exhibit 1-3 Economic Impact Types + Direct Impacts + + Indirect Impacts Multiplier Impacts = Total Impacts 1.3.1 Direct Impacts The "Direct" impacts include local expenditures at or near an airport by firms involved in the provision of aviation services, such as the airlines, fixed-base operators, aviation component manufacturing firms, flight and ground schools, the control tower, etc. The direct impacts associated with the provision of aviation services consist of three general classifications: 1. Direct Payroll The annual gross payroll for any employed person at the airport whose job is attributable to the tenant firm. When possible these figures also include payroll taxes, unemployment insurance and other related payroll expenses. 2. Capital Expenditures Investment at or near the airport by either the airport operator or by the airport's public and private tenants associated with buildings, structures, runway improvements, terminals, etc. Since capital expenditures fluctuate significantly by year, a ten-year average is used. Aircraft purchases, however, are excluded since they are not manufactured locally and represent little, if any, local impacts. 3. Operating Expenses The annual operation costs of the airport operator, businesses, tenants and agencies at the airport. These costs include utilities, repair, maintenance, supplies, legal and professional services, etc. Operation expenses made by one entity at the airport to another airport entity are excluded. For example, tenant rent, leases, fees, etc. made to the airport operator are excluded, because these operator revenues are paid
2007 Page 1-4 out to operator employees and other operator expenses. To include such expenditures under both the tenant and the airport operator would be to double-count the expenditures. Calculation of the "direct" impacts comprises a four-step process: 1. Airport Operator Data Request Background information from the Airport was obtained regarding capital expenditures, aircraft operations, etc. In addition, a tenant listing both on-airport and through-the-fence operation was obtained including contact name, address and phone number. Airport operator information concerning jobs, revenues and expenditures also was obtained, as was financial operating data included information regarding revenues, expenses, and rents, fees and taxes paid by airport tenants. 2. Airport Surveys With the information provided by the Airport, a list was developed of airport tenants. Surveys were developed and either mailed out or distributed in person to all tenants and related firms. The surveys requested information on employment, operations, revenue, and expenditures. A copy of the survey form and letter of introduction is presented in the Appendix. 3. Airport Visits The Consultant also visited the Airport, interviewing the airport operator and tenants. Previously collected information was verified and missing information was collected. This provided insight into the Airport's overall operation, layout, and the economic roles, which the various entities play. 4. Direct Impact Calculations The collected data was verified to check reasonableness, e.g., payroll per employed person, etc. In doing so, the impacts were compared to benchmarks established through other airport impact studies. Tenant List A list of all aviation-related tenants and through-the-fence operators evaluated in the analysis is presented in Exhibit 1-4. All of the on-airport aviation tenants responded to the survey or were interviewed, as did all but three of the through-the-fence aviation-oriented businesses. Conversely, corporate operators are often reluctant to participate in impact surveys. At Chicago Executive this was also witnessed to some degree, especially from smaller operators. However, the larger operators were quite responsive and helpful in gaining insight to the relative size and nature of non-responding corporate tenants and general airport impacts. Airport data on jet and piston aircraft by corporate operator also provided another useful tool used to estimate the impact of non-responding corporate operators. Combined, the different perspectives of the major corporate operators and the airport management representatives, combined with the extensive airport data provided a sound basis for generating a comprehensive understanding of the direct impacts associated with firms located at the airport as well as the indirect visitor impacts associated with airport operations.
2007 Page 1-5 Exhibit 1-4 Airport Tenants and Through-the-Fence-Operators Aviaton Corporate On-Airport Tenants Chicago Executive Airport Gov't C.F. Industries FAA (Control Tower) Gov't Maranatha Ministries U.S. Customs Gov't Newberg Signature Flight Support FBO Potomac Atlantic Aviation FBO Lake Capital Northern Illinois Flight Center Air Taxi PAS-Keller Systems Preister Aviation Air Taxi Klein Tools Windy City Flyers Air Taxi/Training Woodhill American Flyers Training CED Boram Aviation Training Allmetal Palwaukee Flyers Training SG III Chicago Executive Srv. Center Maint Indeck/IPOII North American Jet Maint. Maint/Air Taxi EJM Duncan Aviation Maint DS Advisors Landmark Aviation Maint Alpha Mike Aviation Hertz Car J&S Aviation Flight World Limited Flying Club MMA Investments Paragon Flying Club Flying Club McLennan Companies 20 Other Corporate @ Atlantic Aviation Off-Airport Firms and Through-the-Fence Operators Great Bear Aviation Air Taxi Alberto Culver Propeller Service, Inc. Maint Allstate Avis Car Duchossois Enterprise Car Henry Crown (Including HSBC) T.C. Becks Catering JCG Aviation Georgies Catering McClean Fogg 94th Aero Squadron Restaurant Motorola Phil oung Redleaf Management 1.3.2 Indirect Impacts "Indirect" impacts reflect expenditures made by airport users in the impact area. These typically consist of expenditures by visitors at hotels, restaurants, etc. General aviation visitor expenditures were calculated in a manner consistent with the methodology advocated by the Aircraft Owners and Pilot Association (AOPA). The methodology estimates the number of visitors arriving at the airport and multiplies the number of visitors by an estimated average expenditure rate per visitor. Visitors are defined as persons who reside in places external to the airport's region of impact who arrive via Chicago Executive Airport. The average expenditure per visitor (e.g., lodging, food, retail etc.), persons per party and average length of stay, were compiled from a transient pilot survey, discussions with airport management, corporate tenants, fixed-base-operators and from
2007 Page 1-6 previous studies. The Airport provided information on registered aircraft operations as well as insight on the estimated share of itinerant and air taxi aircraft operations conducted by local residents versus regional visitors. 1.3.3 Multiplier and Total Impacts The primary direct and indirect economic impacts represent increases in final demand in the airport impact areas. Such final demand increases, however, do not represent the total economic impact value attributable to an airport. Rather, a secondary or multiplier impact also occurs. The components of these three impact types are shown in Exhibit 1-5. The secondary multiplier effect is measured using IMPLAN 2 multiplier coefficients for the primary impact areas, (i.e., Cook and Lake Counties). These multipliers are based on the U.S. Regional Input/Output tables, as developed by the U.S. Department of Commerce, Bureau of Economic Analysis. Exhibit 1-5 Components of Economic Impact Types Aircraft Services Airport Mgmt & Oper. Air Taxi/Charter Car Rental Agencies Corporate Flight Ops. Fixed-base Operator Government Oper. Other Tenants/Users DIRECT IMPACTS INDIRECT IMPACTS General Aviation Visitors Corporate Aviation Visitors MULTIPLIER IMPACTS Intermediate Suppliers Induced Expenditures TOTAL IMPACTS Economic Activity Earnings Jobs 2 The Minnesota Implan Group s Regional Input Output Modeling System (IMPLAN)
2007 Page 1-7 Multipliers trace money flows through a regional economy. The longer money circulates in the region, the better-off the region is and the higher the multiplier. The multiplier exemplifies, through supplier expenditures and the respending of earnings, that many people and businesses benefit, even those who do not use or directly serve the airports. For example, if an airline employee earns $100 at the airport, and uses it to buy $100 worth of groceries, he is better off by $100 because he has $100 worth of groceries, and the local grocer is better off because he has the $100. The grocer then pays his employees, the delivery truck operator, etc. all of whom then are slightly better off due to the airport. The multiplier traces this flow of funds until the money ultimately leaks to places outside the impact area, or reaches the source of its raw material. Therefore, the larger and more developed the impact area, the longer the money remains in the regional economy, resulting in a higher average multiplier. Secondary Multiplier Model To estimate the multipliers, The Minnesota Implan Group s Regional Input-Output Modeling System (IMPLAN) is used. Final demand expenditures (i.e., primary direct and indirect impact values) are categorized into industrial codes and applied to a variety of different multiplier classifications, depending on the nature of the final demand activities. The size of the multipliers varies depending on the study area s size (population) and economic base. Typically, the larger and more developed the impact area, the longer the money re-circulates in the regional economy, resulting in a higher multiplier. For this study, multipliers for the Illinois Counties of Cook and Lake are used. Three Measures of "Economic Impact" The IMPLAN model provides three measures of the total economic impact attributable to the airports: Economic Activity (Output), Earnings (Payroll), and Jobs. The total impacts include the aviation sector itself (i.e. the "direct and indirect impacts"), as well as the "multiplier effect" of the aviation sector. The impacts are estimated for the ear 2007. All three indicators of economic impact are useful, however the monetary measures should not be added together, as explained below: Economic Activity The value of the aviation primary expenditures (aviation or airport service), plus the secondary multiplier effect (the sum of all of the intermediate goods and services needed to provide aviation services, plus the induced impacts of increased household consumption). Total economic activity equals the sum of intermediate demand, consumption demand, government demand, investment demand, and net export demand. Because Economic Activity includes intermediate demand it should not be compared to Gross State Product. Earnings The primary and secondary wages and salaries, other labor income and proprietors income paid to all employed persons that deliver final demand output and services. Earnings Impacts are part of Economic Activity, so they should not be added to the Economic Activity impact. Jobs The number of employees who provide aviation service or manufacture aircraft, plus the aviation-oriented share of those that are employed in sectors that support the air passenger (hotels, restaurants, etc.), plus those employed in the industries included in the
2007 Page 1-8 multiplier effect impacts. Jobs are expressed in terms of annual full-time-equivalents (FTEs), where two part-time jobs are represented as one full-time job. These three impact "measures" and the three impact "types" explained earlier are inter-related. Specifically. the economic activity, earnings and job impact measures comprise direct, indirect, and multiplier impact types. The interaction of the three impact measures and their three impact types are presented below in Exhibit 1-6. The total economic activity, earnings and jobs impact measures presented in Chapter 3 comprises these three impact types. Exhibit 1-6 Economic Impact Types and Measures Impact Measures Economic Activity Earnings Jobs Direct Impacts Indirect Impacts Multiplier Impacts T o t a l I m p a c t s Impact Types 1.4 Report Outline Background demographics and economic trends for the Illinois are first summarized in Chapter 2. The Chicago Executive Airport economic impacts are described in Chapter 3. Chapter 4 summarizes the local and state-related tax impacts associated with the Airport. Lastly, Chapter 5 addresses the nature and magnitude of the businesses that depend on the airport for transportation.
2007 Page 2-1 Chapter 2 - Demographic & Economic Trends Various industries in the State of Illinois, and specifically within the greater Chicago area, are dependent on air transportation for the sustainability of current operations and for expanding market access to customers, suppliers, and business collaborations. Air transportation enables industries and specific companies to become and remain competitive in an economic environment that persistently compels an increasingly quicker and more efficient exchange of goods, services, and ideas. This section summarizes recent trends in population, current employment, and household income levels. This data provides the context from which to compare the airport economic impact findings presented in the subsequent sections. 2.1 Population Cook County is, by far, the largest populated county in the State of Illinois and the second largest populated county in the United States, next only to Los Angeles County, California. In fact, with nearly 5.3 million people in 2006, Cook County has a population greater than the population of 31 states. 3 Chicago is located within the entirety of Cook County and contributes to the large population. However, Cook County population declined slightly (3.7%) from about 5.49 million in 1970 to 5.29 million in 2006, as shown in Exhibit 2-1. Conversely, Lake County, Illinois, which is located between the borders of Cook County and the State of Wisconsin, nearly doubled over the same historical time period, growing from about 382,000 to 713,000 people. Exhibit 2-1 Historical Population Trends (1970 to 2006) Population ear Change Geography 1970 1980 1990 2000 2006 1970-2006 Study Area Cook County 5,493,766 5,253,628 5,105,067 5,376,741 5,288,655-3.7% Lake County 382,638 440,388 516,418 644,356 713,076 86.4% Subtotal 5,876,404 5,694,016 5,621,485 6,021,097 6,001,731 2.1% State of Illinois 11,110,285 11,427,409 11,430,602 12,419,293 12,831,970 15.5% Source: 1990 Census of Population and Housing, Population and Housing Unit Counts, and 2000 Census Between 2000 and 2030, population in the Cook-Lake County study area is expected to grow, in nearly 14% while the State of Illinois is expected to grow at almost 22%, as shown in Exhibit 2-2. Lake County is expected to grow more quickly than Cook County and Illinois, due lack of physical room for expansion due to high population density. 3 US Census Bureau: Annual Estimates of the Population for the United States, Regions, and States and for Puerto Rico: April 1, 2000 to July 1, 2006
2007 Page 2-2 Exhibit 2-2 Forecasted Population Trends (1970 to 2006) Population ear Change Geography 2000 2010 2020 2030 2000-2030 Study Area Cook County 5,386,673 5,472,429 5,707,832 5,990,243 11% Lake County 645,503 762,918 820,250 873,024 35% Subtotal 6,032,176 6,235,347 6,528,082 6,863,267 14% State of Illinois 12,440,846 13,279,091 14,316,487 15,138,849 22% Source: Illinois Dept. of Commerce and Economic Opportunity; Business Assistance, Facts & Figures, Population Projections 2.2 Employment The study area employed 2.5 million in year 2006, half of all private sector employees in the State of Illinois, as shown in Exhibit 2-3. Major study area industries include health care and social assistance, manufacturing, and retail trade. Industry Concentration Location quotient is a measure of the relative industrial concentration of a specific geographic or economic region in comparison to a broader base geographic or economic region. It is calculated as the ratio of a specific industry s share of the local economy to the respective industry s share of the base economy typically calculated by the number of persons employed in the specified industry to total employment within the economy. An industry with a location quotient less than 1 has a share of the local economy proportionally smaller to the same industry share in the base economy, indicating that the local economy is a net importer of the goods and services of that industry from the base economy. An industry with a location quotient greater than 1 has a share of the local economy proportionally larger than the same industry share in the base economy. A location quotient greater than one indicates that the local production of an industry generally exceeds the local demand for the goods and services of that industry (given the assumption that the demand for the goods and services of that industry in proportion to the entire economy are the same at both the local and base geographic area) allowing the excess production to be exported to the geographic or economic base area.
2007 Page 2-3 Exhibit 2-3 Industry Employment (2006) Study Area State of Industry Cook Lake Subtotal Illinois Total Private Sector 2,224,051 289,669 2,513,719 5,021,458 Agriculture, Forestry, Fishing & Hunting 553 na 553 15,877 Mining 919 na 919 10,156 Construction 96,864 17,982 114,846 278,318 Manufacturing 245,100 50,083 295,183 683,877 Wholesale Trade 115,911 21,971 137,882 308,803 Retail Trade 239,224 42,891 282,115 623,426 Transportation & Warehousing 117,557 4,708 122,265 221,684 Utilities 4,109 469 4,578 23,080 Information 59,172 4,520 63,692 116,638 Finance & Insurance 171,131 17,057 188,188 314,484 Real Estate & Rental & Leasing 48,102 4,043 52,145 85,076 Professional, Scientific & Technical Services 201,035 21,703 222,738 358,157 Management of Companies & Enterprises 46,966 7,725 54,690 94,776 Administrative & Waste Services 186,100 25,799 211,899 403,551 Educational Services 70,905 5,699 76,604 115,220 Health Care & Social Assistance 290,062 26,928 316,990 635,840 Arts, Entertainment & Recreation 34,979 7,568 42,547 83,071 Accommodations & Food Services 196,626 21,562 218,188 445,708 Other Services 94,829 8,670 103,499 196,729 Unclassified 3,905 291 4,196 6,988 Source: Illinois Department of Employment Security: LMI Source, Quarterly Census of Employment and Wages (ES 202) Exhibit 2-4 depicts the industrial location quotient for the study area and is sorted by decreasing industrial concentrations. Service industries are heavily concentrated in the study area as educational services, professional, scientific, and technical services, financial and insurance services, information services, other services, and administrative and waste services all have location quotients greater than 1, at 1.33, 1.24, 1.20, 1.09, 1.05, and 1.05, respectively. Real estate, company management, transportation and warehousing, and arts, entertainment, and recreation industries are also concentrated industries in the study area relative to Illinois. Those three industries that are very ill concentrated in the two counties study area are the utilities, mining, and agricultural, forestry, and fishing industries.
2007 Page 2-4 Exhibit 2-4 Industrial Location Quotient based on Employment (2006) Study Area Industry Cook Lake Subtotal Educational Services 1.39 0.86 1.33 Professional, Scientific & Technical Services 1.27 1.05 1.24 Real Estate & Rental & Leasing 1.28 0.82 1.22 Unclassified 1.26 0.72 1.20 Finance & Insurance 1.23 0.94 1.20 Management of Companies & Enterprises 1.12 1.41 1.15 Transportation & Warehousing 1.20 0.37 1.10 Information 1.15 0.67 1.09 Other Services 1.09 0.76 1.05 Administrative & Waste Services 1.04 1.11 1.05 Arts, Entertainment & Recreation 0.95 1.58 1.02 Health Care & Social Assistance 1.03 0.73 1.00 Accommodations & Food Services 1.00 0.84 0.98 Retail Trade 0.87 1.19 0.90 Wholesale Trade 0.85 1.23 0.89 Manufacturing 0.81 1.27 0.86 Construction 0.79 1.12 0.82 Utilities 0.40 0.35 0.40 Mining 0.20 na 0.18 Agriculture, Forestry, Fishing & Hunting 0.08 na 0.07 Source: Illinois Dept. of Employment Security: LMI Source, Quarterly Census of Employment and Wages (ES 202) Unemployment Rate The annual average adjusted unemployment rates for the United States was 4.6% in 2006. Illinois unemployment rate of 4.5% is just slightly below the national rate. Lake County s unemployment rate of 4.2% is below both the national and state unemployment rates, and Cook County s at 4.7% is slightly higher. Weighted more heavily by greater employment in Cook County than Lake County, the two counties study area exhibited a 4.6% rate, equal to the national rate and slightly higher than the state rate. 2.3 Income Average earnings, by industry in year 2006, are higher within the two county study area than in the State of Illinois as a whole for all industries with the exception of farming, see Exhibit 2-5. Total average earnings across all industries are just over $60,500 and $51,100, respectively.
2007 Page 2-5 Exhibit 2-5 Industry Average Earnings (2006$) Study Area State of Industry Cook Lake Subtotal Illinois Total Average Earnings $60,500 $60,700 $60,500 $51,900 Farm 11,300 15,900 13,700 16,300 Agricultural Services, Other 26,900 33,300 29,100 25,500 Mining 107,400 65,700 98,200 78,000 Construction 74,200 60,700 72,100 61,700 Manufacturing 85,900 98,300 87,800 76,800 Transport, Comm. And Public Utilities 68,600 66,900 68,500 65,900 Wholesale Trade 78,600 103,600 83,100 73,100 Retail Trade 27,600 32,400 28,300 24,800 Finance, Insurance, and Real Estate 83,700 65,700 81,700 64,800 Services 53,500 49,000 53,000 46,300 Federal Civilian Govt 93,800 86,000 92,900 89,700 Federal Military Govt 43,600 66,100 58,000 57,300 State and Local Govt 61,900 56,300 61,300 53,900 Source: Woods & Poole Economics, Inc., 2006 Illinois exhibits higher mean household income than the nation, at about $97,000 and $90,000, respectively. Cook and Lake Counties both have higher mean household income than the State at almost $106,000 and $149,000, respectively, with a combined mean household income of $110.5 thousand, see Exhibit 2-6. Exhibit 2-6 Mean Household Income (2006) Geography 2006 Cook County $105,728 Lake County $148,897 Counties Sum $110,504 Illinois $97,056 United States $90,285 Source: Woods & Poole Economics, Inc., 2006 4 4 Woods & Poole Economics, Inc. Washington D.C. Copyright 2006. Woods & Poole does not guarantee the accuracy of this data. The use of this data and the conclusions drawn from it are solely the responsibility of Wilbur Smith Associates, Inc.
2007 Page 2-6 2.4 Gross State Product Real Gross State Product (GSP) in Illinois is shown by industry in Exhibit 2-7. Between 1999 and 2006, overall GSP grew by 12% with the largest growth occurring in the retail trade and information sectors, 28.8% and 28.5%, respectively. Transportation and warehousing was the third largest growth sector, at 24.1%. Exhibit 2-7 Illinois Gross State Product by Industry (Million 2000$) Industry 1999 2000 2001 2002 2003 2004 2005 2006 Change Total GSP 452,859 464,194 464,910 466,150 479,293 488,016 492,341 507,037 12.0% Ag., Frstry., Fish., Hunt. 1,545 2,090 2,038 2,516 2,889 3,663 1,897 1,852 19.9% Mining 1,226 1,151 1,149 1,063 1,017 948 910 889-27.5% Utilities 9,808 10,428 9,679 10,073 10,361 10,375 10,591 10,597 8.0% Construction 20,472 20,685 20,621 20,603 20,094 19,281 19,314 19,384-5.3% Manufacturing 66,420 68,990 64,983 64,633 65,551 70,718 70,599 72,069 8.5% Wholesale trade 33,192 33,419 35,291 35,254 35,472 35,559 36,033 36,539 10.1% Retail trade 25,704 27,445 29,367 29,769 30,499 31,021 32,073 33,109 28.8% Trans. & Warehousing 16,476 17,149 17,014 17,204 17,159 18,764 19,328 20,444 24.1% Information 18,728 17,822 18,811 18,942 19,027 21,141 22,898 24,073 28.5% Finance &Insurance 43,429 45,362 45,469 44,072 46,816 47,269 45,352 47,321 9.0% Real Estate 55,229 57,341 58,550 58,843 58,111 59,926 61,090 65,380 18.4% Prof. & Tech. Serv. 36,761 38,587 38,479 37,503 37,990 40,313 42,858 44,365 20.7% Management 10,751 9,571 9,649 10,650 10,900 11,670 11,386 11,510 7.1% Admin. & Waste Serv. 14,952 13,930 13,163 12,920 13,925 14,149 14,730 15,350 2.7% Educational Services 3,976 4,019 3,995 4,007 4,198 4,286 4,342 4,482 12.7% Health Care & Social Assis. 25,973 26,775 27,461 28,056 29,049 29,592 30,547 31,370 20.8% Arts, Entertnmnt, & Rec. 3,858 3,854 4,013 4,291 4,328 4,277 4,273 4,319 11.9% Accom. & Food Serv. 10,203 10,436 10,149 10,024 10,306 10,719 10,994 11,362 11.4% Other Services 11,244 11,102 10,744 10,921 11,053 10,883 10,718 10,780-4.1% Government 43,056 44,037 44,432 44,947 50,455 44,577 44,201 44,105 2.4% Source: Bureau of Economic Analysis, U.S. Chamber of Commerce: Regional Economic Accounts
2007 Page 3-1 Chapter 3 - Chicago Executive Airport Economic Impacts The detailed analysis of aviation at Chicago Executive Airport indicates the combined annual economic impacts of the airport s operation, visitors and multiplier impacts totals over $330.8 million in economic activity, of which $124.2 million is paid in earnings to 2,426 jobs. These impacts result from the direct provision of aviation services, the indirect use of aviation services, and the multiplier effect of subsequent transactions in the Chicago land area economy. The impact flow is summarized in Exhibit 3-1 and is detailed in the ensuing chapter. Exhibit 3-1 Economic Impact Summary Direct Impacts $128,075,700 Indirect Impacts $17,673,700 Multiplier Impacts $185,026,800 Economic Activity Earnings Jobs Total Impacts $330,776,200 $124,223,800 2,426 3.1 Direct Impacts The 73 firms and agencies located at the airport that provide aviation services and equipment generate $128.1 million in direct aviation related impacts. These at-airport direct impacts are presented by impact component and expense type in Exhibit 3-2. A major share (26%) of these expenditures is paid in the form of earnings, $33.3 million, to the 547 full-time equivalent (FTE) jobs. The capital expenses of $19.3 million comprise (15%) and the operations expenses account for $75.4 million (59%).
2007 Page 3-2 Exhibit 3-2 Direct Economic Impacts Jobs Expenses Full Part Total FEQ Payroll Capital Operations Total Airport Firms Government 27 7 34 31 $2,950,600 $16,299,600 $1,225,600 $20,475,800 Aviation Services 226 34 260 245 10,039,600 2,027,100 20,334,500 32,401,200 Corporate 110 0 110 110 9,585,700 577,200 25,078,400 35,241,300 Sub total 363 41 404 386 $22,575,900 $18,903,900 $46,638,500 $88,118,300 Through-the-Fence Corporate 90 1 91 91 $8,271,400 $361,800 $26,531,700 $35,164,900 Aviation Services 41 0 41 41 1,927,100 43,700 1,663,400 3,634,200 Others 24 7 31 29 541,700 34,400 582,200 1,158,300 Subtotal 155 8 163 161 $10,740,200 $439,900 $28,777,300 $39,957,400 Total 518 49 567 547 $33,316,100 $19,343,800 $75,415,800 $128,075,700 Source: Wilbur Smith Associates Location of Impacts Breakdown of expenses by location suggest that 71% of the FTE jobs (386) and 69% of the expenditures ($88.1 million) occur on airport property, versus 29% of the FTE jobs (161) and 31% of the expenditures ($40.0 million) arise from through-the-fence operations. Business Type Expenditure Impacts Impact breakdown between payroll, capital and operation expenses varies by business type. The vast majority of capital expenses are incurred by airport operations, namely the Chicago Executive Airport who finance various landside and airside infrastructure improvement projects required to accommodate the aviation training and corporate demand. In addition, the FAA has a notable presence on the airport. Combined with U.S. Customs, government operations account for 16% ($20.5 million), of the direct airport-related expenditures. Comparatively, the 48 corporate operations identified in the study account for 55% ($70.4 million), of the airport expenses a large share of which reflects fuel costs. The extensive flight training, fixed-base-operators, flight clubs and other general aviation related service firms account for 28% ($36.0 million) of the airport-related direct expenditure impacts. Lastly, car rental, catering and the restaurant account for the remaining impacts ($1.2 million). Jobs Impacts An estimated total of 567 people work at the airport on either a full or part-time basis. Of these, a vast majority (518, 95%) are employed on a full-time basis versus the remaining (49, 5%) employed on a part-time basis. Combined, an estimated 547 FTE jobs occur at Chicago Executive Airport. The majority of these FTE jobs (286, 52%) work for aviation service related firms. Corporate aviation firms employ 201 (37%) FTE jobs, while government firms account for 31 jobs (6%) and other jobs account for 30 FTE jobs (5%). Payroll Expenses Payroll to people who work at the Airport and typically live in the region totals $33.3 million annually. This payroll goes to the estimated 567 people who work at the airport (547 FTE jobs). Many of these jobs are high paying, with the average FTE employee
2007 Page 3-3 earning an annual salary of $60,900. However, average payrolls range significantly between business type and firm. Government employees, which includes many traffic controllers as well as other airport operation services, generate the highest average payroll of $95,200, Corporate operations, which employee pilots, mechanics and other support services ($88,800). The airport service-related firms average $41,900. Capital Expenses The $19.3 million in capital impacts (see Exhibit 3.2) comprise capital investments made in which the recipient of the expenditures typically is located in the region. Capital investment represents physical improvements to airport facilities, either public or private. However, capital expenditures on aircraft are excluded because the recipient, the aircraft manufacturer, is located outside of the study region. Funds may come from private sources such as leaseholders, government agencies such as the airport operator, or through aid grants from the Federal Aviation Administration (FAA), or the State of Illinois. The largest share of capital impacts typically originate from the airport operator who manages the airport, and finances airside and landside improvements. Total airport operator capital costs evaluated in this study comprise an annual average of the capital costs over the past ten years and those programmed over the next five years, inclusive of the matching state and federal contributions. The annual average estimation approach better reflects the typical annual impact that large capital investment projects have on the local community. For example, actual airside and landslide improvements averaged $8.5 million over the last 10 years (1998-2007), the vast majority attributable to the $46.5 million allocated in 2007. This spike in capital expenditures is expected to continue with an annual average of $24.1 million in programmed expenditures between 2008 to 2012. Operation Expenses Operation expenses include expenditures for local utilities, operations, parts and supplies, services, aviation fuel, and other local purchases. All of these are of economic value to the Chicago Executive Airport service area totaling an estimated $75.4 million. It is recognized that a significant portion of the airport operation expenses is made by one airport business to another at-airport business. 3.2 Indirect Impacts The estimated $17.7 million in total indirect impacts at Chicago Executive Airport include visitor impacts associated with air taxi, corporate and personal aircraft operations. Each visitor type demonstrates different travel patterns regarding percent visitors, percent staying overnight and expenditures per day, etc. Based on these differences, a composite of the visitor impact estimation is diagramed in Exhibit 3-3.