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Chapman worth $204 million to O.C. economy

November 22nd, 2009, 8:00 am · 21 Comments · posted by Gary Robbins, science writer-editor

chapmanphoto-copy

Chapman University in Orange has about 6,100 students. Image courtesy of Chapman

Chapman University in Orange and its education center in Irvine collectively pumped $204.2 million into the Orange County economy during the fiscal year that ended on May 31, the school says in a new report.

The figure is about $158 million higher than what Chapman contributed to the local economy in 1991, the last year a similar study was done. But the school’s growth is still overshadowed by UC Irvine, which said during a report in February 2009 that it adds about $4.2 billion to the county’s economy annually. Irvine has almost 28,000 students, or more than four times  the enrollment of Chapman, a non-profit school.

Chapman says in its new report that it estimates its local impact based on “the annual level of Orange County personal income as a result of the University’s presence. This involves estimating the impact of University expenditures for wages and salaries, goods and services, equipment and capital improvements.

“In addition, it involves estimating the impact of student expenditures as well as analyzing the impact of the University of taxes and education costs.

It’s not directly mentioned in the report, but Chapman pays in the vicinity of $500,000 a year in property taxes.

chapmansceneThe report says, “It might be argued that local governments lose revenue because if the tax exempt status of the University. The actual loss of tax revenue would depend on the land use that would occur if the University were not here. It should be noted, however, that residential or nonresidential use of Chapman University property would increase the demand for public services (i.e., public safety, education), thereby generating additional public expenditures.

“The net financial impact to local governments would therefore be the difference between the loss in tax receipts and savings in public expenditures that occur as a result of the University’s presence.

“A study conducted by (Chapman’s) A. Gary Anderson Center for Economic Research suggests that property development results in local government revenues and expenditures that largely offset each other. We therefore estimate the tax impact of alternative use of the University’s property to be negligible and do no include it here.”

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 21 Comments

  • Short Sightedness says:

    Perhaps the City of Orange mayor should be notified of Chapman’s contribution to the local economy.

    Hello mayor?

  • Spence says:

    204 million to UCI’s 4.2 billion.
    hmmm…I think “overshadowed” is a bit of an understatement. More like unequivocally dominated.

  • Bennett says:

    There is no point whatsoever comparing the impacts of Chapman vs a huge university like uci - uci is a research institution with a hospital, etc …of course its economic impact will be exponentially greater than chapman’s. Apples and oranges.

  • bpsqwerty says:

    fantastic

  • smoothoperator says:

    How much does Cal State Fullerton add to the local economy?

  • smoothoperator says:

    Also UCI is run with taxpayer dollars so that should be subtracted from that 4.2 billion figure to get the net economic benefit. Not really an apples to apples comparison

    • A says:

      Don’t people who go to chapman pay tuition to keep it running also? Money that could have gone into the economy in other ways? We should subtract that from its economic contribution.

  • Marla Jo Fisher, Staff Writer says:

    Sorry but these reports are notorious b.s. I have written about many of them in my career. Usually though it’s public universities or publicly funded facilities trying to justify their existence that spend money to create these things. Let me tell you how it works: They make stuff up. They say, “Oh, the institution brings in one dollar here and that one dollar gets spread around, hmm, my guess would be three times, so it really brings in three dollars, not one dollar, so we’re going to multiply everything by three.” Try that at home with your own checking account, folks. I still remember this ridiculous report like this that was done on the Anaheim Angels when they claimed their biggest economic boost to the city of Anaheim was from hotel taxes from visiting teams–which they claimed brought in about a zillion dollars a year. Until you called up the teams and found out they didn’t even stay in Anaheim, they stayed over the border in Orange, to avoid the Anaheim hotel taxes. Oops. Throw that report away.

    • Mr. NoSpin says:

      Thank, Thank, Thank you Mary Jo. Finally someone at the OCR that is willing to say a political press release from a bz or college is BS.

      If it walks like a duck, quacks like a duck and smells like it a duck, guess what its not a Swan.

      • Mr. NoSpin says:

        A parallel story of sorts. This is the same type of BS that the Seattle Seahawks spewed back in the 90’s when they wanted a massive tax hike to pay for a 300 million tax initiative for a new stadium complex. They claimed it would bring in Billions to the community. Claimed figures from other sports arenas around the country. They had Ron Sims, (know who he is? Obama’s No2 go to guy in HUD) under there belt. See he was the Seattle Area County Executive in charge of protecting the tax payers from fraud.

        Unfortunately for Mr. Sims one of the local Boeing Engineers, Armen Yousoufian filed suit under the Freedom of Information Act to see all the Historical Facts from all these other sports arena’s showing the windfall profits that where promised. Ron Rice stopped him from seeing all this so called historical ledgers. He filed a suit in 2000 that went all the way to the State Supreme Court. Two Weeks before Rice took office for Obama this year they ruled in Armen’s favor and sent it back to the lower courts to provide Armen with a windfall payout. The estimate is it will be in the millions.

        So when I see B.S. spewed from Chapman College I want to see the ledger of purchases, and I don’t mean the beer and pretzel tab at the local 7-11 for a bunch of frat boys.

    • cardcounter says:

      I agree completely with Mary Jo Fisher. The more important question is why the Register is reporting “notorious B.S.” as news.

    • Lucifer'sFlowers says:

      Fallacious. Just because in the past you’ve come across reports that by have been fabricated, doesn’t mean this report is also fabricated.

  • TheTruthIsOutThere says:

    So, hmm…then they shouldn’t release these kinds of reports at all, even as an estimate of their impact? Because any college or university (it’s Chapman UNIVERSITY, Mr. NoSpin, not Chapman College) does have an economic impact on its community, yes?

    So what you’re saying is hey, don’t let the institution do the estimate, let’s wait for some outside party to do so? But who?? Says here that Chapman hasn’t released such a report since 1991 — seems they don’t do it all that often, and no one else has bothered to do any such estimate in the meantime. So if NO ONE estimates their economic impact, then the public is just completely in the dark about this? Hmm.

  • Mary Platt says:

    Hi, Marla and NoSpin -

    I don’t know if you have something against economic impact reports in general, or if you’re questioning the credibility of the “multiplier” factor (sounds like both, really), but it’s not, in actuality, “b.s.” I’m not an economist, but I know that Chapman and many other institutions that do these types of studies don’t just make up or generate their own multiplier -(as in “oh, my guess would be the dollar gets spread around three times, so it really brings in three dollars”). It’s not a guess factor. In our case, the Anderson Center uses a multiplier that is generated by the U.S. Department of Commerce, Bureau of Economic Analysis.

    The unspoken, underlying factor beneath ALL such economic impact reports is, “what would happen if this institution weren’t here?” Now THAT ends up being somewhat speculative, because who knows what would be here if Chapman weren’t here, or if the Angels weren’t here, etc.? Maybe there’d be a park or school, maybe a manufacturer or more businesses, or a subdivision. A manufacturer might add more tax dollars to the local economy, but might impact the neighborhood negatively with trucks and pollution. A park might be nice and quiet, but wouldn’t offer any or a little economic impact and none of the intangibles that a university offers, like concerts, plays and lectures. If the Angels weren’t here, wouldn’t baseball fans be driving up to L.A. and spending their money there? (Btw, I believe Orange has a hotel tax…)

    Also, it is patently odd to even compare a small private university like Chapman to a large research institution like UCI, which has its own hospital and exponentially more students and employees. Whoever made the comment above that Chapman is “unequivocally dominated” by UCI in the economic impact category, thank you, Mr. Obvious. We all know – they’re bigger.

    As far as why these economic impact surveys are done in the first place — well, Chapman hasn’t even done one since 1991, which is a long gap. We were just interested in crunching some numbers (not made-up numbers; well-accepted, proven numbers) and seeing how we’ve progressed. The alternative, I suppose, would be for institutions to never do such surveys, which would leave the public completely uninformed and give you nothing to discuss.

    Mary Platt, Director of Communications, Chapman University

    • Mr. NoSpin says:

      Mary, I don’t know what smells more your come back comment or the teacher’s union whining they don’t have enough money and it’s the tax payer’s fault the education system in California is failing.

      I own two successful businesses in Orange County. I have employees that get paid well when you consider the current economic situation. I was born and raised in Orange and I can bet you I know more about the political propeganda history at Chapman College then you do. (and no I am not some disgruntled employee of Champan or Student, or even an applicant. I got my degree’s from a University with some credibility behind it)

      Here are the real world facts. I cannot go to my bank with an analytical report that uses government generated indicators if I want a 1) line of credit, or 2) a loan.

      As a member of my banks private banking division I know my banker personally and frankly I could not hold it against him if he started laughing at me if I went in asking for a loan based on “indicators.”.

      The bank wants hard financial facts before they will issue a loan. There going to want to see past performance, tax returns, future signed contracts, current economic growth in our business arena just to name a few things.

      So Mary all make it very simple. Why don’t you post on this blog or present Gary Robbins with the OCR with a financial breakdown, (ledger) showing where Two Hundred and Four Million Dollars were spent and where it trickled into the Orange County Economy? You show me that and I will recant my disbelief in Chapman Universities self serving economic report.

  • Debbie says:

    Can’t buy Mary Platt’s Director of Communications, Chapman University story.

    1. Platt is a spin doctor not an economist, accountant, etc. She’s spinning the story (as is her job) for Chapman.

    2. She plays the story as if Chapman is this small private university. They have satellite campus’ everywhere. They have four schools and four colleges, (law, Business, Film, Education, Performing Arts, Science, Humanities, and they are in a partnership KOCE.

    3. The gee whiz “Chapman hasn’t even done one since 1991, which is a long gap. We were just interested in crunching some numbers and seeing how we’ve progressed.” is BS. An 18 year gap is a long time and generally reports are done at 3, 5, 10, 15 and 20 years so I have a hard time with odd numbered year decision. It is known that Chapman has been agressive in their growth and competition.

    4. Unless an independent ran the numbers I don’t buy it. Especially from a “communications person.” I want to see independent numbers not hear a mouthpiece.

    • Mary Platt says:

      1. First time in my life I have ever been called a “spin doctor”! Hee - thank you! Although I think Gary (and Marla) can tell you that I am not known for spinning the spin just to spin it. I’m about getting the facts out and having them discussed fairly. To actually spin things, I would need a significant raise.

      2. Chapman has seven (not eight) schools and colleges, which are academic divisions and have nothing to do with the size of the school or its economic impact. Brandman University is our network of satellite campuses for adults returning for degrees — it is separately incorporated and accredited, and only one of its campuses, the one in Irvine (the only one in OC), is included in the Anderson Center study on Chapman’s economic impact on Orange County. Chapman’s partnership with KOCE (on the OC Channel) is academic and brings in no money - both we and they are non-profit.

      3. What can I tell you? We truly haven’t done an economic impact survey since 1991. Check the news archives - you won’t find one. We;re under no obligation, as a privately funded institution, to do one regularly or even to release the resulting information — we did so because the results are interesting and they show a significant positive growth in the impact Chapman has had on our county since the last one was done 18 yeara ago. Marla is correct that these studies are mostly done by public, taxpayer-supported universities to justify their value to those who pay for them.

      4. We’d be happy to have an independently funded source calculate Chapman’s economic impact on the county. If any such reputable independent came to us we’d be glad to cooperate and compare with the Anderson Center’s findings. The more information the merrier.

      I will get the Anderson Center’s report posted on the Chapman website and post the URL here as soon as it goes up, so you can read the actual report.

      Mary Platt, Director of Communications, Chapman University

      • Mr. NoSpin says:

        Mary Platt said: We’d be happy to have an independently funded source calculate Chapman’s economic impact on the county. If any such reputable independent came to us we’d be glad to cooperate and compare with the Anderson Center’s findings. The more information the merrier.
        —————————

        That’s fancy double talk for prove us wrong. Guess what no-one really cares because your a private university. If you were publicaly funded some watch dog group would be sure to challange the findings and guess what the open door policy you claim would surely be met closed with a do not knock sign on it.

        Mary Platt Said: I will get the Anderson Center’s report posted on the Chapman website and post the URL here as soon as it goes up, so you can read the actual report. ”

        ——————————-
        Don’t bother unless it has a detailed itemizied listing of every dollar spent and where and how it was spent in Orange County, because frankly a good chunk of the readers here can read between the lines.

        For example, the title of Communication Director in an arena of Politics is called a Press Secretary, and we all trust them don’t we?

  • Mike Lopez says:

    so is that enough money to move the campus to Orange Hills?

  • Mary Platt says:

    Well, since no institution is going to have an accountant with a ledger following every student and faculty member as they shop and eat in OC; or every audience member or athletics fan who comes to see a concert, play or game at Chapman and then shops or dines in Orange; or every member of every students’ family who comes to commencement and then spends money on hotels and dining in OC; or every profit made by the OC vendors and contractors hired by the university, etc., etc., then what Mr. NS is asking for is an impossibility. Economic impact reports are, by their nature, educated estimates, and the Anderson Center is very upfront that their study is an estimate - in fact, Gary says so in the above article as well. In fact, the report is probably an UNDERestimate, as economists, knowing that they are estimating, tend toward the conservative side in such reports.

    For anyone interested in reading the actual report — which uses the word “estimate” lots and lots — you can access the PDF here:

    http://www.chapman.edu/argyros/asbecenters/acer/press.asp

    Or bring it up directly here:
    http://www.chapman.edu/images/userImages/mthomas/Page_4388/Economic_Impact_of_CU_on_OC_2009.pdf

  • Lucifer'sFlowers says:

    Too bad this report came out after Orange passed that Party House Bill.

    Perhaps the mayor could make a comparison between the few local resident complainers and the hundreds of millions college students contribute to the Orange economy.

    All the locals bitch about Chapman college students, yet don’t mind taking their money at the local bars, dinners and shops etc.