Luxury or High Value Projects
I'm using IMPLAN to evaluate the economic impacts associated with new proposed construction. The proposed project is what I would consider luxury or "high value" and includes hotel, retail, office, condo and for-rent residential.
My question is associated with the gross sales of the retail product type. The retail product includes high end retailers and restaurants (think South Coast Plaza in Costa Mesa CA, which grosses about $1.5b or over $900/sf).
When I run the retail independently, apparel/clothing (Sector 327) for example, the gross sales are $37.5m in 52,632 sf (about $712/sf). When I run this retail category through IMPLAN, I get 195 direct impacts (270 square feet per employee). Now, common sense says that this is an extremely high employee density for any retail product, much less a high end product. The figures that I have been able to find indicate that I should expect employee densities 2 to 4 times higher (400 to 800 sf per employee). I suspect the problem is associated with the fact that I am trying to affiliate regional retail metrics with a high value/luxury product.
Has anyone dealt this anything like this? Are there any adjustment methodologies I should be aware of?
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IMPLAN SupportHi Brandon, To help us to better answer your question can you tell us how you are setting up the impact? With the Retail Sectors are your choosing Gross Retail Sales or Gross Retail Margin in the pop-up screen? Are your 195 Direct impacts jobs? If so a couple of considerations in that regard are that IMPLAN jobs are not people or FTE's but are annual average jobs. Retail Sectors tend to have high part-time Employment and seasonal Employment which can sometimes shift number for expectation. In addition, if you have an estimation of what you feel the Employment should be you can set the Employment directly in Event. However, it is important to keep in mind that Employment doesn't drive any impacts in IMPLAN. Instead, Labor Income values do. If you happen to have an estimation of labor payments that differ from our estimates you can certainly overwrite these as well. Hopefully this will help, and if you can get back to us with the information about your Event setup that would be help us to assist you. Thanks!0 -
We have some retail sectors set up with margins, and some without. Restaurants (413), for example have no margins, while General Merchandise (329) has margins. Everything has been entered as an industry change event. I have developed a methodology for converting to full time/part time jobs using your FTE conversion table, so I'm going to go ahead and look at that, to see if it is realistic. If not, I will go ahead and adjust the number of jobs manually. Interesting point about the seasonal employment in retail. While this factor is certainly at play, I don't think it tells the whole story.0
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IMPLAN SupportHi Brandon. In reading your recent Post, we are not sure what we can add beyond your observations about your project. Again, we would emphasize that you have the ability to modify the employment and payroll estimates in the model. And if you have projections on annual sales for the retail component of your project, you can edit them as well. We would make one comments and that relates to employee compensation per worker. As you know, the employee compensation per worker will be much higher for the type of establishment that you describe versus a low to medium type retail store. High value retail stores also tend to hire fewer workers. So these issues may be contributing to the variances in what IMPLAN is projecting and what you know to be the case. Again, with the ability to customize the events, you can simulate fairly closely the experiences of establishments like South Coast Plaza. If you have additional questions or comments, please feel free to contact us.0
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