Anderson Economic Group Work

The Economic and Fiscal Impacts of Fort Custer Industrial Park

Battle Creek Unlimited (BCU) is a nonprofit agency tasked with overseeing the development of Fort Custer Industrial Park in Battle Creek, Michigan. Fort Custer Industrial Park is located on the site of the former Fort Custer military base, and is home to nearly 80 businesses. Development at the park is supported through a TIF district. BCU retained AEG to estimate the economic and fiscal impacts of the industrial park on Battle Creek, the Calhoun-Kalamazoo two-County region, and Michigan. BCU also asked AEG to compare the park to other large industrial parks in the Midwest.

AEG administered a survey of firms in Fort Custer Industrial Park. The survey asked about employment, payroll spending, tax witholdings, and where businesses would locate if Fort Custer Industrial Park did not exist. After collecting survey data, we constructed a model using U.S. Bureau of Economic Analysis RIMS II multipliers to estimate the direct and indirect sales, payroll spending, and employment impacts of the industrial park. 

AEG also measured the fiscal impacts of incremental property, income, and sales tax revenues caused by Fort Custer Industrial Park. We determined these impacts based on survey responses and local government financial statements. We compared current property tax revenue to a scenario in which the park and its TIF district did not exist. We estimated direct and indirect income tax withholdings for Battle Creek and Michigan, and direct and indirect sales tax revenue from employee spending, based on survey responses. Finally, we reviewed online sources to determine the size and scope of the largest industrial parks in the Midwest. We compared key metrics for each park to Fort Custer.

In 2016, Fort Custer Industrial Park firms employed over 13,600 people, spent nearly $700 million on payroll, and had a total combined revenue of $5.0 billion. After accounting for substitution and indirect impacts, we determined that the park supported $3.0 billion in output, $187 million in earnings, and 5,292 jobs that would not exist in the absence of the park.

AEG also found that, despite the park's TIF district redirecting property tax revenue, Fort Custer Industrial Park had a positive net fiscal impact on Battle Creek of $611,000 in 2016 after accounting for increased city income tax collections attributed to the existence of the park. Fort Custer Industrial park is the largest industrial park in Michigan by acreage, and third largest in the Midwest.