The following article by Brian Lessler was originally published by the Gresham Outlook
What’s so important about this idea of using local merchants, suppliers and contractors? What difference does it really make whether you buy your new (fill in the blank) from an East County merchant, a Portland department store or online for that matter?
Is there any way to measure the impact of an individual decision to acquire goods or services locally? The answer is emphatically yes.
One local business made a commitment to hire a local design team and a local general contractor to expand its Gresham senior housing community. The direct economic impact within the community has been phenomenal. Ask the Gresham-based general contractor, PDG Construction Services, or any one of roughly 20 local material suppliers, vendors and specialty contractors who are benefiting from this owner’s decision and commitment.
Or, ask any one of the 260 construction workers, many of them living in East County, who will be employed during the 15-month expansion. Ask Axis Design and Engineering, the local design firm that spent a year in planning, designing and permitting the project.
Mary Beisley, administrator for Courtyard Fountains, explained her company’s philosophy behind the decision to hire local professionals to design and construct its Phase III mixed occupancy facility.
The project contains 44 assisted living units, 15 luxury independent senior apartments, a secured parking garage, commercial kitchen and dining facility, offices and common areas for residents.
The structure is 77,300 square feet and the cost of construction is approximately $11 million.
The owner and Beisley were adamant about using local companies because they knew local firms would take a greater personal interest in the quality of design, execution and final quality of the facility. Gresham is a relatively small community, so local contractors and trades people are committed to performing at the highest level.
Being involved in Courtyard Fountains is a great opportunity for many local firms and each of them want to have a successful outcome to promote their businesses. Further, this local business-to-business commitment has created strong ambassadors among the contractor’s team for the Courtyard Fountains’ future occupancy. It’s a win-win in every direction.
From a practical standpoint, most observers would understand and agree with this assessment. However, is there a real metric that can be looked at to measure the economic impact to the local economy, when a “buy local first” commitment is made?
The Center for Strategic Economic Research is a Sacramento-based consortium that has done specific research into this question. These researchers analyzed the economic impact on a regional economy from various types of construction projects. Courtyard Fountains neatly fits into a health care and institutional building category. The findings are revealing.
Every $1 million of construction supports 11.7 total jobs; 6.8 direct jobs plus another 4.9 jobs through indirect and induced activities. Also, each $1 million of construction cost creates an additional $770,300 of additional economic output through indirect and induced activities.
Direct impacts are the initial, immediate economic activities (jobs and income) generated by the project that correspond with the first round of spending in the economy. Indirect impacts are the production, employment and income changes occurring in other businesses in the community that supply inputs to the project and/or industry.
Induced impacts are the effects of spending by the households in the local economy as a result of new jobs created by the facility.
Beisley — the Courtyard Fountains administrator — estimates that the new staff positions required for operation will create 50 new jobs.
According to this sophisticated economic analysis model, Courtyard Fountains’ commitment to “buy local first” will have an overall economic input to the East County regional economy of almost $20 million.
That really matters, especially in light of the current economic conditions.
It makes a difference every time anyone makes the commitment to buy from local merchants, suppliers, contractors and service providers.
And, the talent and resources are locally available to accomplish almost anything. Ask your local chamber of commerce or check its Web sites for help in finding resources.
Brian Lessler is president of PDG Construction Services in Gresham and also is 2009 president for the East Metro Economic Alliance.
The “Try Local First” theme of the 10th annual East County Economic Summit manifested itself in more ways than one.
