SunCal’s Economic Benefit Report for Oak Knoll Exceedingly Optimistic

SunCal used a different economic modeling system to create its economic benefit report (EBR) for Oak Knoll than what has been frequently used in the city to estimate economic value for projects of significant size. East Bay Residents for Responsible Development (EBRRD) has prepared its own economic analysis that uses another common model and has found several projections of the SunCal EBR to be exceedingly optimistic. 

SunCal used a modeling system called IMPLAN to create its EBR for Oak Knoll, while many Oakland projects have used the modeling system RIMS II. RIMS II was developed by the US Department of Commerce’s Bureau of Economic Analysis and is frequently used in both the public and private sector. It has been used by the US Department of Defense to estimate the regional impacts of military base closings, and on private sector projects like new shopping malls and sports stadiums

The City of Oakland does not require that projects use RIMS II; however, the modeling system was used to project the economic benefits of the Oakland Army Base/Gateway Redevelopment Project and Restoring Oakland’s Working Waterfront project. It was also used by the Bay Area Council Economic Institute to forecast the impact of a new Oakland baseball stadium.

EBRRD created a comparative economic analysis for Oak Knoll using RIMS II. Among the differences in projections between the SunCal IMPLAN and EBRRD RIMS II reports:

  • SunCal’s claim that 5,000 new jobs would be created from Oak Knoll appears to be overstated. EBRRD believes that about 2,500 jobs, mostly very short-term jobs, would result from building at Oak Knoll.
  • In total, the EBRRD reports shows that 2,437 new – albeit primarily temporary – jobs will be created if the Oak Knoll Project is built. This is a ratio of 2.6 jobs per unit. SunCal’s EBR claims a shockingly high ratio of 5.36 new jobs per unit (5,013 jobs / 935 new units). 
  • If just 2,500 jobs are created, the one-time increase in Oakland residents’ household earnings would also be smaller – $127 million, rather than the $335 million projected by SunCal. Because SunCal will not commit to hiring locally, no employees on the project are guaranteed to be local workers, and therefore, little of the $127 million is likely to be recirculated within Oakland’s local economy. Moreover, almost all those jobs would be temporary in nature.
  • EBRRD believes the forecasted overall economic output for Oak Knoll is $48 million less than SunCal’s forecast.

EBRRD believes that SunCal should prepare a proper EBR using the same RIMS II criteria used for other big projects in Oakland.

Read EBRRD’s RIMS II economic analysis for Oak Knoll.

Read SunCal’s original economic benefits report for Oak Knoll.







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  • Sam Felsing
    published this page in Archive News 2017-09-29 09:34:47 -0700