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Santa Monica Airport economic impact no more than a “medium-sized strip mall”

The supporters of Measure D have recently been claiming that Santa Monica Airport makes a far larger financial and employment contribution to the city of Santa Monica than it actually does. They reference a study by HR&A, which the city commissioned a few years ago. However, they conveniently neglect to mention that the numbers they refer to in the study combine both aviation and non-aviation use of the airport land.

When looking at only the aviation use of the land, the economic contribution is actually quite small. In fact, City Manager Rod Gould just quoted one of the consultants of the study as saying that the actual aviation fiscal impacts are similar to a “medium-sized strip mall.”

Here’s the transcript of the above video, from the City Council Meeting on September 23, 2014:

Councilmember Ted Winterer:

“The other issue that’s been raised, and maybe the city manager can address this, there have been some concerns raised by the public that the financial analysis on the airport operations, and if you could just lend some clarity, or a brief summary of what that was.”

City Manager Rod Gould:

“Approximately three years ago, the city began a three-phase airport visioning process. One contract went to the Rand corporation to envision different possibilities for Santa Monica Airport in the future. Another contract when to HR&A to analyze the question of “What did the airport mean to the region economically? What did it mean to the city economically? And lastly, what was its financial impacts on the city budget?”

“The study indicated that contrary to conventional wisdom, that Santa Monica Airport’s contribution to the regional economy was far smaller than had been imagined. As was the case with the city itself. In fact, I believe that the principal consultant Paul Silvern likened the tax and employment impact of Santa Monica Airport to a medium-sized strip mall. And then as far as the impact on the city budget itself, as you well know, until last year, the airport was never able to cover its operating and capital costs, and therefore amassed a $13 Million debt to the general fund.”

Update – A few minutes after publishing this post, we realized it would be good to include a list of the top employers in Santa Monica. You’ll notice that the aviation industry is nowhere to be found.

  1. City of Santa Monica (2,528 employees)
  2. Santa Monica-UCLA Hospital (2,079 employees)
  3. Santa Monica College (1,953 employees)
  4. Saint John’s Hospital Medical Center (1,676 employees)
  5. Santa Monica-Malibu Unified School District (1,457 employees)
  6. RAND Corporation (842 employees)
  7. Universal Music Group (743 employees)
  8. Activision Blizzard, Inc. (692 employees)
  9. ET Whitehall Santa Monica Partners LP (568 employees)
  10. Lion’s Gate Entertainment Corporation (555 employees)

Source: Santa Monica Comprehensive Annual Financial Report, 2012-2013 (page 163)

Also see the October 2, 2014 summary of the HR&A report by City staff.

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2 Responses to Santa Monica Airport economic impact no more than a “medium-sized strip mall”

  1. Peter Donald September 25, 2014 at 5:04 pm #

    Thank god this finally was brought up. As an Airport Commissioner, I had made a motion for the Council to revisit the specious HR&A study that keeps being quoted by airport enthusiasts. This should hopefully help to put the issue to rest.

  2. Martin Rubin September 26, 2014 at 12:50 am #

    I imagine the figure would be far, far into the negative if the negative impacts of the airport were taken into consideration. (health impacts from air and noise pollution)
    This video segment is clear and concise. I too feel that this should put the issue to rest, but I imagine the pro-SMO “in your back yard’ers” will chant their mantra; “deny, deny, deny”.