Huntsville Regional Economic Development Brief

REGIONAL ECONOMIC DEVELOPMENT

BRIEF

CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY 2016-2017

Huntsville Regional Economic Growth Initiative

CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY

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Table of Contents Huntsville Regional Economic Growth Initiative . . . . . . . . . 3 2016-2017 State of the Economy . . . . . . . . . . . . . . . . . . . . . . . 6 UAH Economic Impact Study . . . . . . . . . . . . . . . . . . . . . . . . 23

2016-2017

Huntsville Regional Economic Growth Initiative

CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY

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Introduction Why has Huntsville been so successful? Is it that we are just lucky or is it something more? Luck has sometimes been described as the confluence of preparation and opportunity. We would propose that our community has been successful because we have positioned ourselves to be lucky!

The resources entrusted to the Chamber by our HREGI investors, coupled with the insightful guidance of our public and private sector leadership has resulted in a series of significant wins in the economic development arena and enhancements to our region’s quality of life.

This document articulates the success made possible through the resources provided by our HREGI investors, and lays out the path forward for the next phase of the program. Our Chamber is a more dynamic and effective organization due to the unique position we have in the community. We enjoy a healthy partnership with our public sector partners, working to navigate through challenges and exploiting opportunities. A culture has developed where we can work with our partners to craft effective solutions to the issues which need to be addressed. We benefit from a wealth of experience and perspectives – all of which bring value to the discussion.

Our community provides fertile ground for leveraging HREGI Investments to realize significant gains.

The Chamber engaged the University of Alabama in Huntsville (UAH) to provide an objective analysis of the economic impact of the projects

2016-2017

we announced from 2013-2015. The UAH research team determined the projects announced over the three-year period will result in an increase in the regional GDP of $4.2 billion, the creation of 15,200 operations related jobs, and just under $1 billion a year in additional payroll – a 3,500% return (measured against the increase in GDP) on the $7 million invested in the HREGI program over the last five years.

Investors in the HREGI Program entrusted the Chamber with the additional resources with the belief that they would be utilized in a manner that would enhance the economic vitality of the region. The results speak for themselves. When resources are leveraged properly, they yield positive results for our community and the region. The impact of these efforts is a stronger, more vibrant economy, and a higher quality of life.

We need your support to ensure that we maintain the momentum we have created. Strong private sector leadership will ensure that the business community plays a proactive role in addressing the issues that will shape our community and region for decades to come. We look forward to working with you to grow our economy, enhance the workforce and education systems, and improve the quality of life of the Huntsville Region.

We thank those who have made our success possible and look forward to welcoming new investors!

Joe Newberry

Rose Allen

2017 Board Chair

HREGI Taskforce Chair

Chamber of Commerce of Huntsville/Madison County

Chamber of Commerce of Huntsville/Madison County

Huntsville Regional Economic Growth Initiative

CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY

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HREGI Investors

as of February 20, 2017

DEVELOPMENT PARTNER

DEVELOPMENT COUNCIL CHAIRMAN’S COUNCIL

PRESIDENT’S CIRCLE

Huntsville Hospital | Regions Bank Madison County Commission REGIONAL PARTNERS

Port of Huntsville | Tennessee Valley Authority

LEADERSHIP FORUM ADTRAN, Inc. | The Boeing Company | City of Madison | Landers McLarty Corporation 2016-2017

Huntsville Regional Economic Growth Initiative

| Redstone Federal Credit Union | Vertiv CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY

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EXECUTIVE COUNCIL | Crestwood Medical Center | Dynetics, Inc. | General Atomics | Lockheed Martin Corporation

BBVA Compass

| SAIC | SES - Science and Engineering Services, LLC | Teledyne Brown Engineering, Inc.

PNC Bank

CHAMBER TRUSTEES | Aerojet Rocketdyne | All Points Logistics, LLC | Blue Cross & Blue Shield of Alabama

AEgis Technologies Group

| DynCorp International | First Commercial Bank | Intuitive Research and Technology Corporation

Booz Allen Hamilton, Inc. Jerry Damson, Inc.

| KBRwyle | Lanier Ford Shaver & Payne P.C. | Northrop Grumman Corporation | PARSONS | S3 | Sealy Management Company, Inc. | Torch Technologies

Raytheon Company

PROGRESS PARTNERS |

ASRC Federal Analytical Services

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Bradley Arant Boult Cummings LLP

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Corporate Office Properties Trust (COPT) Hexagon US Federal

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ServisFirst Bank

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BASF Corporation

Coates Transportation Group

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Davidson Technologies, Inc.

J. Smith Lanier & Co.

Radiance Technologies

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Baron Services, Inc.

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Keel Point, LLC

Google

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BB&T

Bill Penney Toyota, Scion & Mitsubishi

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Colliers International

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Huntsville-Madison County Builders Association

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L3 Technologies

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LogiCore

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Connected Logistics

The Orthopaedic Center

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Rosie’s Restaurants, Inc., & Right Way Restaurants, Inc. (DBA Steak Out)

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Turner Construction

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Vencore, Inc.

Wells Fargo Bank

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IBERIABANK

Progress Bank

SELEX Galileo Inc.

Woody Anderson Ford

PROGRESS INVESTORS 4SITE, Inc.

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BancorpSouth

AECOM

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Alpha Beta Technologies, Inc.

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Hiley Cars Huntsville

Deloitte LLP

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North Alabama Multiple Listing Service

2016-2017

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Sierra Lobo, Inc.

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Bryant Bank

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PALCO Telecom Service

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Century Automotive

Digium, Inc.

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CFD Research Corporation

Fite Building Company, Inc.

The Lioce Group, Inc. PHOENIX

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LSINC Corporation

PROJECTXYZ, Inc.

Systems Products and Solutions, Inc.

Huntsville Regional Economic Growth Initiative

Anglin Reichmann Snellgrove & Armstrong, PC

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Technicolor

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Troy 7, Inc.

Averbuch Realty Co., Inc. – Scott Averbuch

Coast Personnel Services

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Venturi, Inc.

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deciBel Research

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Renasant Bank

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West Huntsville Land Co., Inc.

CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY

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Garver

InterFuze Corporation

National Bank of Commerce QTEC

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Fountain, Parker, Harbarger

Huntsville Tractor & Equipment, Inc.

MSB Analytics, Inc.

Public Financial Management, Inc.

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Foreign Language Services

Huntsville/Madison County Convention & Visitors Bureau

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CB&S Bank

DESE Research, Inc.

IronMountain Solutions

Sigmatech, Inc.

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Amanda Howard Real Estate

Huntsville Botanical Garden

Investor’s Resource/Raymond James S&ME, Inc.

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Brown Precision, Inc.

Decisive Analytics Corporation HEMSI

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nLogic, LLC RJ Young Company

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Wilmer & Lee, P.A.

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201 6-2017 STATE OF THE ECONOMY

MEASURING ECONOMIC PERFORMANCE CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY 2016-2017

State of the Economy

RESEARCH & INFORMATION SERVICES ~ CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY

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More than 9,000 new jobs over the past 3 years 5-year projection: 8.5% growth; 38,000 new residents Expected to grow beyond 500,000 people by 2023

Athens

LIMESTONE COUNTY MADISON COUNTY

Population Density

Huntsville Madison

Redstone Arsenal

10,173 - 14,511

7,487 - 10,172

5,147 - 7,486

3,250 - 5,146

592 - 3,249

2015 Total Population (Esri) by Census Tracts

2016-2017

State of the Economy

RESEARCH & INFORMATION SERVICES ~ CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY

page | 7

Population Growth Trends Population Growth 2010-2015 | Southeast Metros Myrtle Beach, SC Fort Myers, FL Orlando, FL Charleston, SC Fayetteville, AR Sarasota, FL Nashville, TN Lakeland, FL Atlanta, GA Miami, FL Jacksonville, FL Port St. Lucie, FL Tampa, FL Huntsville, AL Pensacola, FL Greenville, SC Lexington, KY New Orleans, LA Daytona Beach, FL Columbia, SC

14.1% 13.1% 11.6% 11.5% 10.3% 9.3% 9.2% 7.8% 7.7% 7.6% 7.4% 7.0% 6.7% 6.1% 6.0% 5.9% 5.7% 5.6% 5.5% 5.2%

#14 in the South

Huntsville is one of the Top 40 fastest growing major metros in the country.

2016-2017

State of the Economy

RESEARCH & INFORMATION SERVICES ~ CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY

page | 8

Population Growth Trends Population Growth 2010-2015

Huntsville

Alabama Huntsville

79,243 27,159

(2 counties)

Remainder of Alabama (65 counties)

34%

66%

Huntsville accounted for 34% of Alabama’s growth.

2016-2017

State of the Economy

RESEARCH & INFORMATION SERVICES ~ CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY

page | 9

Gross Domestic Product Growth Bureau of Economic Analysis Metrics, 2001-2015 60%

Huntsville

50%

53%

40%

United States

29%

30%

21%

20%

Alabama 10% 0%

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

The Huntsville economy continued to grow during the recession.

2016-2017

State of the Economy

RESEARCH & INFORMATION SERVICES ~ CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY

page | 10

Gross Domestic Product Growth Bureau of Economic Analysis Metrics, 2001-2014 | U.S. Metros Austin, TX Portland, OR Fayetteville, AR Provo, UT San Jose, CA Durham, NC Bakersfield, CA McAllen, TX Huntsville, AL Dallas, TX Raleigh, NC Corpus Christi, TX Charleston, SC San Antonio, TX Houson, TX Des Moines, IA Nashville, TN Killeen, TX Baton Rouge, LA Charlotte, NC

78% 76% 74% 71% 64% 59% 57% 57% 54% 52% 50% 49% 46% 46% 45% 44% 43% 42% 42% 40%

#5 in the South

Huntsville GDP growth is among the Top 10 major metros in the country.

2016-2017

State of the Economy

RESEARCH & INFORMATION SERVICES ~ CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY

page | 11

Gross Domestic Product Growth Bureau of Economic Analysis Metrics, 2001-2015

Huntsville

$7.6 Billion

Birmingham Mobile Montgomery

$6.5 Billion $2.0 Billion $1.3 Billion

Huntsville accounted for 25% of Alabama’s GDP growth.

2016-2017

State of the Economy

RESEARCH & INFORMATION SERVICES ~ CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY

page | 12

Combined Employment, GDP & Wages Metro Area Coincident Index, 2001-2015 40%

Huntsville 34%

35% 30% 25%

United States

20%

18%

15%

11%

10%

Alabama

5% 0% 2001

2002

2003 2004

2005

2006

2007 2008

2009

2010

2011

2012

2013

2014

2015

The Huntsville economy continues to outpace the state and national economies in overall economic growth.

2016-2017

State of the Economy

RESEARCH & INFORMATION SERVICES ~ CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY

page | 13

Employment Growth Bureau of Labor Statistics Metrics, 2001-2016

Huntsville 20%

20% 15%

United States

10%

9%

5%

3%

Alabama

0% -5%

2001

2002 2003 2004 2005

2006 2007

2008 2009

2010

2011

2012

2013

2014

2015

2016

Huntsville added more than 33,700 new net jobs (88% of total Alabama growth).

2016-2017

State of the Economy

RESEARCH & INFORMATION SERVICES ~ CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY

page | 14

Employment Growth Bureau of Labor Statistics Metrics, 2001-2016

Huntsville

36,342

Alabama

58,258

Huntsville’s employment growth was 62% of the Alabama total.

2016-2017

State of the Economy

RESEARCH & INFORMATION SERVICES ~ CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY

page | 15

Wage & Salary Growth Bureau of Economic Analysis Metrics, 2001-2014 (adjusted for inflation)

30%

Huntsville

25%

28%

$1.9 billion more per year

20% 15%

13% 9%

United States

10% 5%

Alabama

0% -5%

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Huntsville wage growth was not affected by the recession, but by sequestration.

2016-2017

State of the Economy

RESEARCH & INFORMATION SERVICES ~ CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY

page | 16

Huntsville Metro Area Market Report Moody’s Economic Forecast, November 2016

The Huntsville market is steady and balanced, and is expected to outperform the nation for the remainder of 2017.

2016-2017

State of the Economy

RESEARCH & INFORMATION SERVICES ~ CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY

page | 17

Huntsville Metro Area Market Report Moody’s Economic Forecast, November 2016

Despite its recent troubles, Huntsville will outperform Alabama and the nation over the coming year, though potential trade disputes threaten goods producers. More high-paying jobs in research, engineering and manufacturing will create positive spillover in retail and housing. Potential new federal defense spending adds upside risk in the outlook for military contractors. HUN’s well-built labor force, which includes a high concentration of mid-career professionals and college-educated residents, will help keep it a step ahead of the state and nation in the coming years.

Jeremy Cohn

1-866-275-3266 November 2016 help@economy.com

2016-2017

State of the Economy

RESEARCH & INFORMATION SERVICES ~ CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY

page | 18

Huntsville Metro Area Market Report Moody’s Economic Forecast, November 2016 3,000

Moody’s projection

Single-Family permits Multi-Family permits

2,500 2,000 1,500 1,000 500 0

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

New home construction is projected to increase by 10% over the next five years.

2016-2017

State of the Economy

RESEARCH & INFORMATION SERVICES ~ CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY

page | 19

Huntsville Business Confidence Index Business Environment Expectations, Q1 2017 vs. Q4 2016 (Huntsville Metro Area)

Business Confidence is up more than 10% over last quarter.

2016-2017

State of the Economy

RESEARCH & INFORMATION SERVICES ~ CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY

page | 20

Media Recognition BOMA says HSV is TOPS Huntsville tops the Building Owners and Managers Association’s list for hi-tech coolness and southern style-and BOMA says we have the least expensive office space in the U.S. (FYI: New York City has the highest).

“800 Hudson Way” coming to Biotech Campus

HDT expands in Huntsville HDT Global announced it is expanding its operations in Huntsville (in Limestone County) at an event which featured Governor Robert Bentley, Mayor Tommy Battle, and Limestone County Commission Chairman Mark Yarborough. HDT manufactures rugged and durable products used for expeditionary applications in the most extreme and harsh environments. At the HSV facility, HDT will make the Deployable Rapid Assembly Shelters (DRASH) and AirBeam and Base-X models. This expansion will add roughly 120 new jobs to our area.

HudsonAlpha Institute for Biotechnology announced that it will break ground on a new building tomorrow. The 100,000-squarefoot building will foster job growth of several new and expanding life sciences companies, and also will house components of HudsonAlpha’s research, Educational Outreach, genomic medicine and informatics programs.

GE Aviation announces plans for Huntsville advanced manufacturing facilities -- Adjacent factories to produce raw material for ceramic matrix composites (CMCs) -- GE partnering with USAF Research Lab Title III Office on silicon carbide technology 2016-2017

State of the Economy

RESEARCH & INFORMATION SERVICES ~ CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY

page | 21

Media Recognition Study ranks Madison among the most affordable cities to buy a home in the U.S. 24/7 Wall St., January 2017

Alabama among top 10 states in business climate rankings Site Selection magazine, November 2016

Instead of Austin, Texas, Try Huntsville, Alabama The Wall Street Journal, November 2016

Huntsville is the least expensive U.S. office market Building Owners and Managers Association (BOMA), October 2016

Huntsville is among The 25 Best-Paying Cities for Software Engineers Forbes, September 2016

Huntsville is Business Facilities’ top metro in the STEM Growth Leaders category Business Facilities, August 2016

2016-2017

State of the Economy

RESEARCH & INFORMATION SERVICES ~ CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY

page | 22

Economic Impacts

of the Economic Development Announcements 2013-2015

An analysis of the economic development projects announced by the Chamber of Commerce of Huntsville/Madison County for years 2013, 2014, and 2015

EXECUTIVE SUMMARY Analysis performed by:

Center for Management & Economic Research, College of Business Administration, University of Alabama in Huntsville Dr. Brinda Mahalingam and Mr. Jeff Thompson

January 2016 UAH: Economic Impacts – Executive Summary

January 2016

COMMISSIONED BY THE CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY

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Economic Impacts of Economic Development Announcements 2013-2015

Introduction Huntsville is a technology-rich city, and a major hub in the North Alabama region. The population growth in this city over the past five years has been about 4.4%. The unemployment rate, currently 5%, is typically below the national and state unemployment rates. Nicknamed “Rocket City” because of its long and significant role with the U.S. space and missile programs, the city has been at the forefront in developing space technology. Huntsville/Madison County serves as the economic center of north Alabama, and relies significantly on the surrounding region for workforce, industry suppliers, shoppers, and resources necessary for industry success. The City of Huntsville in Madison County has successfully attracted new industries into the local area for many years. Several companies have located to this area for the rich resources as well as the highly educated and technical labor force.

Economic development is an activity focused on growing jobs for residents, customers for businesses, suppliers for industry, and economic activity for the local economies. The diversity of an industrial base can also be managed through targeted development to maintain a more stable and resilient economy. Typically, economic development success is measured in terms of jobs and capital investment. Annual announcements of new and expanding industry are made by economic development organizations to show the level of success for the past year. However, the realization of the impacts from new and expanding industries normally occurs over several years as plants are built, employees are hired, and operations reach the planned levels.

The actual impacts of economic development efforts are multifaceted and may exceed expectations.

One of the most important steps in estimating impacts is the selection of the geographic region (county, state, etc.) to be affected by the new project or activity. Expansions of existing operations tend to be completed in less time than the establishment of new operations, which often require new facility investments. A single project may include multiple phases (construction, workforce training and hiring, etc.) over several years to reach announced levels. Each phase may uniquely impact the region depending on the size, scope, and integration with the existing industrial base.

January 2016

UAH: Economic Impacts – Executive Summary

Economic impacts may be defined in various terms such as jobs, economic activity (output), payroll, and tax generation among other measures. The impacts are typically shown as direct impacts and multiplier impacts. Impacts are spread over the multiple industry sectors in the region and are affected by the extent to which a specific industry sector exists in the region analyzed.

Spending (the direct impact) of a specific industry results in production and spending in other industries. The construction, equipment, and operations of an expansion, will result in the production of products and services in related spending (indirect impact). The employees working in the new or expanded operations will use their income to make personal purchases, which will increase spending (induced impact) in other industries not related to their employment. The indirect plus induced effects are combined into the multiplier effect.

This impact study was conducted using IMPLAN® software developed by MIG Inc. The Chamber of Commerce of Huntsville/Madison County provided the data and list of announcements from which this study was performed. Multi-Regional Input Output analysis was conducted where appropriate.

The impact region for this analysis is comprised of the Alabama counties of Madison, Limestone, Morgan, Marshall, Jackson and Lincoln County, Tennessee. The major cities for which impact estimates are calculated include Huntsville, Madison, Athens, and Decatur. It is important to note that economic estimates are made possible by defining a set of assumptions for the analysis. Results of this and any economic impact analysis should be viewed in light of the assumptions used2.

2

See page 59 for the statement of assumptions in this analysis

COMMISSIONED BY THE CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY

page | 24

Economic Impacts of Economic Development Announcements 2013-2015

Executive Summary The Huntsville Metropolitan Statistical Area (MSA), one of the Metropolitan Statistical Areas (MSAs) in United States, had a 2014 population of 441,086. It ranked as the 118th largest MSA in the U.S1.

It is arguably the economic center of north Alabama with business activities easily extending beyond the county of Madison and the state of Alabama. Performing regular analysis of the economic impacts of this community’s economic development announcement activities can provide insight useful to the community, its leaders, and other interested stakeholders. The economic impact of a specified geographic range, which includes the surrounding regions are compiled in this report.

The estimated economic impacts for the combination of economic development projects for 201315 in the region include: • $4.2 billion expansion of the region’s economy • 15,200 operations-related jobs • $989 million in additional annual payroll

The impact region for this study is defined as Madison County and the contiguous counties of Jackson, Limestone, Marshall, Morgan, in Alabama and Lincoln County, Tennessee. The study also analyses the impact on the major cities of Huntsville, Madison, Athens, and Decatur. Economic development announcements by the Chamber of Commerce of Huntsville/Madison County for the years 2013, 2014, and 2015 were used for the analysis.

• $1.46 billion impact from capital investments (building, equipment, etc.)

Economic impact can be defined in various terms such as jobs, economic activity (output), payroll, and tax generation among other measures. The impacts are typically shown through components of direct and multiplier impacts over one or more years. Projects announced include sites in Madison County inside and outside of the corporate limits of Huntsville City and Madison City as well as the City of Huntsville in Limestone County.

• $52 million in net local taxes (sales, property and other taxes)

• 11,300 capital investment related jobs • $567 million in capital investment-related payroll • $128 million increase in net annual taxes generated (employment, state, local) ∏ $30 million in local sales taxes ∏ $21 million in local property taxes ∏ $1 million in other taxes

1

January 2016

UAH: Economic Impacts – Executive Summary

Data from U.S. Census

COMMISSIONED BY THE CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY

page | 25

Impacts by Major Industry Sector

The top twenty-five sectors most impacted by the 2013, 2014, and 2015 economic development project announcements are shown in Table 3 and Table 4. Economic output, and employment effects are shown for each sector. Economic output dollars represent the value of all the potential direct plus multiplier transactions in the industry sectors present in the specified region. Note that the estimated economic impact value should be viewed as the size of the opportunity for the industries in the local region to provide products, services, and workforce to the new project(s).

The sector rankings may differ between tables due to the Output-per-Job differences by sector. Note there are additional sectors impacted beyond those listed here.

Table

3

Potential Economic Output Impacts for Top 25 Sectors

Industry Sector Description

Economic Opportunity 3 Year Total

Small arms ammunition manufacturing Aircraft manufacturing Construction of new manufacturing structures Construction of new commercial structures, including farm structures Scientific research and development services Wholesale trade Motor vehicle gasoline engine and engine parts manufacturing Owner-occupied dwellings Architectural, engineering, and related services Wired telecommunications carriers Real estate Business support services Guided missile and space vehicle manufacturing

January 2016

UAH: Economic Impacts – Executive Summary

$719,068,455 $589,389,184 $563,624,118 $454,414,899 $175,088,961 $172,666,435 $122,865,197 $106,125,025 $75,076,408 $70,836,318 $64,638,337 $56,854,514 $56,552,719

Industry Sector Description

Economic Opportunity 3 Year Total

Breweries $48,531,077 Telephone apparatus manufacturing $41,191,145 All other industrial machinery manufacturing $37,068,091 Retail - Motor vehicle and parts dealers $36,846,120 Broadcast and wireless communications equipment manufacturing $34,302,519 Search, detection, and navigation instruments manufacturing $32,709,956 Monetary authorities and depository credit intermediation $29,771,279 Offices of physicians $28,583,767 Other computer related services, including facilities management $25,518,679 Truck transportation $23,371,468 Limited-service restaurants $22,158,509 Other local government enterprises $21,903,383

COMMISSIONED BY THE CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY

page | 26

Table

4

Potential Employment Impacts for Top 25 Sectors

Industry Sector Description

Economic Opportunity 3 Year Total

Construction of new manufacturing structures 7,325 Electroplating, anodizing, and coloring metal 2,025 All other transportation equipment manufacturing 1,702 Business support services 989 Construction of new commercial structures, including farm structures 959 Scientific research and development services 814 Wholesale trade 788 Aircraft manufacturing 595 Employment services 536 Architectural, engineering, and related services 500 Real estate 417 Limited-service restaurants 408 Full-service restaurants 408

January 2016

UAH: Economic Impacts – Executive Summary

Industry Sector Description

Economic Opportunity 3 Year Total

Aircraft engine and engine parts manufacturing Retail - Motor vehicle and parts dealers Retail - General merchandise stores Offices of physicians Motor vehicle gasoline engine and engine parts manufacturing Services to buildings Other computer related services, including facilities management Wired telecommunications carriers Truck transportation Retail - Food and beverage stores Monetary authorities and depository credit intermediation Guided missile and space vehicle manufacturing

COMMISSIONED BY THE CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY

300 289 243 207 190 184 178 161 160 150 140 135

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Economic Impacts of Economic Development Announcements 2013-2015

Table

5

Economic Impacts of Announcements 2013-2015 (Thousands except Jobs*)

REGION Direct Multiplier Total Ops Impact Capital Investment Sales Taxes Property Taxes Other Taxes

MADISON COUNTY Direct Multiplier Total Ops Impact Capital Investment Sales Taxes Property Taxes Other Taxes

January 2016

2013 Jobs Payroll 1,686 $142,925 1,628 $73,841 3,314 $216,766 4,073 $206,796

Jobs 1,578 1,499 3,077 3,049

2013 Payroll $139,116 $69,183 $208,299 $154,791

Output $480,161 $214,174 $694,335 $533,397 $6,908 $4,864 $218

Output $467,135 $195,474 $662,609 $404,254 $6,711 $4,710 $212

UAH: Economic Impacts – Executive Summary

Jobs 3,591 2,929 6,520 3,258

Jobs 3,591 2,649 6,240 3,194

2014 Payroll Output $346,159 $1,305,061 $130,554 $407,694 $476,713 $1,712,755 $161,731 $422,836 $13,879 $9,812 $444 2014 Payroll Output $346,159 $1,305,061 $117,953 $353,892 $464,112 $1,658,953 $158,357 $411,015 $13,569 $9,564 $433

Jobs 2,905 2,479 5,384 4,001

Jobs 509 1,899 2,408 986

2015 Payroll Output $193,725 $1,461,503 $105,206 $366,599 $298,931 $1,828,102 $198,595 $505,944 $9,569 $6,178 $324

Cumulative 2013-­‐15 Jobs Payroll Output 8,182 $682,809 $3,246,725 7,036 $309,601 $988,467 15,218 $992,410 $4,235,192 11,332 $567,122 $1,462,177 $30,356 $20,854 $986

2015 Payroll $37,869 $77,620 $115,489 $44,143

Cumulative 2013-­‐15 *Shown in 2015 Constant Dollars Jobs Payroll Output 5,678 $523,144 $1,881,646 6,047 $264,756 $812,919 11,725 $787,900 $2,694,565 7,229 $357,291 $949,997 $29,467 $20,218 $957

Output $109,450 $263,553 $373,003 $134,728 $9,187 $5,944 $312

COMMISSIONED BY THE CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY

page | 28

The economic impacts will be realized over the period of years required to complete the announced projects. The impact estimates in this report are stated in 2015 constant dollars. Tax abatements have been used in the calculations to determine the net tax impacts. The cumulative impact estimates by county and major city are shown in Table 1.

Table

1

Economic Development Impacts 2013-2015*

Madison County Limestone County Morgan County Marshall County Jackson County Lincoln County

Region Total Huntsville City Madison City Athens City Decatur City

ANNUAL OPERATIONS (Recurring) Labor Income Economic Jobs ($000) Output ($000) 11,725 $787,900 $2,694,565 3,067 $186,172 $1,460,005 246 $10,987 $49,740 48 $2,087 $9,857 68 $2,776 $12,985 64 $2,488 $8,040 15,218 $992,410 $4,235,192 9,766 942 300 118

$662,139 $42,329 $14,113 $5,249

$3,074,418 $131,420 $50,540 $23,763

CAPITAL INVESTMENTS (One time) Labor Income Economic Jobs ($000) Output ($000) 7,229 $357,291 $949,997 3,958 $203,336 $488,821 59 $2,354 $8,304 21 $1,545 $4,233 34 $1,439 $6,645 31 $1,157 $4,177 11,332 $567,122 $1,462,177 8,592 390 211 28

$425,632 $18,874 $10,840 $1,125

$1,092,159 $53,248 $20,669 $3,967

*Shown in 2015 Constant Dollars

Local taxes collected as a result of new and expanding industries are important considerations in economic development. Recruiting projects is costly. Tax impacts are important measures of the return on investment. Local taxes include sales taxes, property taxes, and other business taxes and fees. Table 2 shows the annual impacts on local taxes for each year’s economic development announcements.

Table

2

Annual Local Tax Impacts*

Sales Taxes Property Taxes Other Taxes

Regional Total

2013 Projects ($000)

2014 Projects ($000)

2015 Projects ($000)

TOTAL ($000)

$6,908 $4,864 $218

$13,879 $9,812 $444

$9,569 $6,178 $324

$30,356 $20,854 $986

$11,990

$24,135

$16,071

$52,196

*In the year all projects are fully realized

January 2016

UAH: Economic Impacts – Executive Summary

COMMISSIONED BY THE CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY

page | 29

The economic impacts on the North Alabama region from the economic development project announcements in 2013, 2014, and 2015 are tremendous. This economic development production has created opportunities in the region for 15,200 new jobs, a $4.2 billion annual expansion of the regional economy, and $52 million in additional annual local taxes. These charts show estimated impacts for a ten-year period starting with the year project construction begins.

Figure

1

Cumulative Impacts of Economic Development Announcement 2013-2015

*Shown in Current Dollars

January 2016

UAH: Economic Impacts – Executive Summary

COMMISSIONED BY THE CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY

page | 30

The impacts from 2015 announcements are depicted in the Figure 4 graphs. The total job creation from capital investment is about 4,000 jobs. The total operating jobs grow from about 2,460 jobs in 2016 to over 5,300 jobs in 2025. The total economic output due to capital investment in 2015 is approximately $506 million, and the total economic output impact rises from $840 million to $2 billion in 2025. The total impact of taxes ranges from $7 million in 2016 to more than $15 million by 2025.

Figure

4

Impacts of Economic Development 2015 Announcements

*Shown in Current Dollars

January 2016

UAH: Economic Impacts – Executive Summary

COMMISSIONED BY THE CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY

page | 31

The impacts for the announcements made in 2014 are shown in the Figure 3 graphs. The capital investment employment impacts total 3,258 capital investment jobs. The total job creation increased to more than 6,500 jobs by 2023. The economic output impact in terms of capital investment was $423 million. Operations related economic output grows from about $580 million in 2015 to approximately $1.9 billion over ten years. Total local tax impacts rose from roughly $8 million in 2015 to $24 million in ten year period.

Figure

3

Impacts of Economic Development 2014 Announcements

*Shown in Current Dollars

January 2016

UAH: Economic Impacts – Executive Summary

COMMISSIONED BY THE CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY

page | 32

The graphs for 2013 shown in Figure 2 depict the impact assessments for employment, output, labor income, and local tax for the announcements made in 2013. The employment impacts of the announcements made in 2013 indicate an impact of 4,073 capital investment related jobs in 2014. The operations related jobs impact is estimated at 1,537 in 2014, and growing to 3,314 by 2015, and would continue at this level over the 10-year period shown. The economic output impact for the announcements made in 2013 indicate a total impact of over $533 million from capital expenditures, and a total output impact from about $322 million in 2014 growing to about $787 million by 2023. The Labor income impact from the 2013 announcements totals $100 million in 2014 growing to about $246 million by 2023. The impact on local taxes from the 2013 announcements is expected to be about $5.6 million in 2014, and grow to about $12 million after 2015.

Figure

2

Impacts of Economic Development 2013 Announcements

*Shown in Current Dollars

January 2016

UAH: Economic Impacts – Executive Summary

COMMISSIONED BY THE CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY

page | 33

256-824-5326 • uahcmer.com

Chamber of Commerce of Huntsville/Madison County 225 Church Street NW, Huntsville, AL 35801 256-535-2000 • hsvchamber.org

Researchers Brinda Mahalingam, Ph.D., Economist Jeff Thompson, Project Director Karen Yarbrough, Editor

Questions regarding the analysis and report should be directed to: Jeff Thompson, Project Director 256.361.9065 | jeff.thompson@uah.edu 2016-2017

Huntsville Regional Economic Growth Initiative

CHAMBER OF COMMERCE OF HUNTSVILLE/MADISON COUNTY

page | 34