Federal Agencies Provide Economic Boost for Downtown Districts

Federal Agencies Provide Economic Boost for Downtown Districts

Need an economic boom in your town? Hiring big business consultants and experts may not be necessary. In fact, all it may take is to bring in the federal government.

According to the General Services Administration, the mere presence of federal agencies in downtown areas provides considerable economic benefit for the downtown in the form of purchases by visitors, agency rent payments and purchases and service procurements.

“Government buildings play a prominent role in the cities in which they are located, and these findings provide significant tangible evidence of the positive financial benefits of this role,” said F. Joseph Moravec, Commissioner of GSA’s Public Buildings Service. “But this research is not only confirmation of the importance of existing buildings, it will also serve as an important foundation document in our attempt to be a good neighbor for future projects.”

Conducted by GSA’s Office of the Chief Architect and the National Trust for Historic Preservation’s Main Street Center, the study’s findings are summarized in the report “Measuring the Economic Impact of Federal Facilities on Central Business Districts.”

Conducted in Athens, Ga.; Baltimore, Md.; and Springfield, Ill.; the study measured direct annual spending by agencies, visitors, and federal workers, but did not consider economic impacts derived from the building or renovating of federal facilities or the ‘multiplier effect’ of spending as it trickles through the local economy, each of which is thought to be significant. According to the study, visitors to federal facilities in urban areas spend an average of $18.58 in the district per visit.

“Federal agencies play an important role in strengthening the economy and vitality of downtowns,” said National Trust President Richard Moe. “They rent space from downtown property owners and purchase services and supplies from downtown businesses. Their workers shop and often live downtown, and they attract visitors as well. By locating federal facilities in central business districts, GSA is giving a great boost to America’s downtowns — and demonstrating that Uncle Sam can be a good neighbor.”

In Athens, the study estimated that federal agencies attract about 30,000 visitors to downtown each year and more than 70 percent of federal workers there reported buying lunches from downtown restaurants, while federal agencies reported procuring goods and services from downtown businesses.

In Baltimore, a large city with several thousand federal workers and more than 250,000 annual visitors, the study estimated that the presence of federal agencies generated nearly $50 million annually.

In Springfield, a much smaller city with fewer than 200 federal workers, the study estimates that federal agencies and visitors account for more than $1 million in annual downtown purchases.

The study extends the work of GSA’s Urban Development/Good Neighbor program, the mission of which is to help GSA projects support community development goals as they meet federal agency needs.

About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters on federal human resources. Follow Ralph on Twitter: @RalphSmith47