Economic Impact Study

BIODISTRICT
NEW ORLEANS
Economic Impact Study
October 29, 2010

EXECUTIVE SUMMARY
BioDistrict New Orleans has proposed a plan to diversify and augment the growth of the New
Orleans economy. The overarching goal of creating a new pillar of the New Orleans economy—the
biosciences—has become particularly urgent in light of recent economic events. The massive Gulf
oil spill in the spring and summer of 2010 and the subsequent temporary moratorium on drilling
activity have threatened the viability of a number of southeast Louisiana’s core industries.
Furthermore, the recently announced closure of the Avondale shipyards could eliminate 5,000 well
paying jobs and thousands more jobs that are indirectly related to Avondale. In this context, the
need for a dynamic, growth oriented sector of the regional economy could not be clearer.
The core objective of BioDistrict New Orleans is to create an environment in which major medical
services, medical research grants and contracts, new and emerging medical products, and other
technological innovations can be generated by New Orleans institutions. The plan will utilize the
resources of current medical schools and research centers as well as the proposed Veterans
Administration (VA) Hospital and University Medical Center (UMC). Ultimately, the economic
development plan will encourage other technology-related institutions to locate in the New Orleans
area.
Construction Activities and Their Economic Impact

The evolution of an economic development district
such as BioDistrict New Orleans always begins with
a major investment in new and dynamic facilities.
Some of this investment will be public, such as the
investment in the VA Hospital by the United States
Government; some will be the result of mixed
funding, such as the University Medical Center
(partially funded by the federal government through
the Katrina reimbursement process, partially
through a commitment by the state, and partially
through private sources). Some will be
public/private initiatives, with the public sector
providing a variety of tax credits and other
subsidies with the hopes of engaging private Construction activity alone will provide an immediate and
investment. Finally, there will also be private significant jolt to the New Orleans economy. In the first
five years, BioDistrict construction will generate nearly
investors who recognize the potential for a high 5,500 jobs and an economic impact of over $2.5 billion.
rate of return on their investment and who are
prepared to assume some financial risk.
It is estimated that over $1.25 billion will be invested in buildings and structures in the BioDistrict
during the first five years1, almost $100 million over the next five years, and approximately $250
million during the final ten years. Over twenty years it is estimated that almost $1.6 billion in
buildings and structures will be invested. There will be a surge of economic activity related to
1This figure excludes the sizable budget that is expected for equipment purchases—a portion of the overall project
budget that will not generate local construction jobs.
Prepared by Dr. James A. Richardson Page 1

and Mr. Roy L. Heidelberg
construction during the first five years of development. Construction alone during this period will
lead to overall economic activity of over $2.5 billion with personal earnings of approximately $850
million and net new state and local tax collections adding up to over $110 million. Over the first five
years, net new jobs in the New Orleans region will average almost 5,500 per year.
From years six through ten, it is estimated that net new construction spending will total nearly $100
million with total economic activity amounting to almost $200 million and personal earnings of close
to $65 million. For years 11 through 20, it is projected that net new construction spending will be
approximately $240 million resulting in total economic activity of over $480 million, personal
earnings of almost $160 million and state and local tax collections of over $21 million.
Estimated Permanent Economic Impacts Associated with

BioDistrict New Orleans
Adding the VA Hospital and the University Medical Center, as well as other projected developments
in the BioDistrict, will create or save approximately 5,500 permanent jobs in the first five years of
operations. These 5,500 direct jobs will lead to nearly 9,700 total jobs (5,500 direct jobs and
approximately 4,200 indirect jobs). Personal earnings of over $350 million will be created and/or
saved, infusing the state with over $25 million and local government agencies with nearly $22 million
in annual tax collections2.
Over a ten-year period, once the
projects are fully operational, the
total jobs created or saved that are
directly related to BioDistrict
investments are estimated to total
7,600. These direct jobs will create
an additional 5,800 indirect jobs for
a cumulative employment impact of
approximately 13,400 jobs. After 20
years it is estimated that 9,800 net
new jobs will have been directly
created or saved in the BioDistrict.
This implies an economic impact of
over 17,200 new or saved jobs The number of permanent jobs associated with BioDistrict New Orleans will
(including the nearly 9,800 direct continue to grow through year 20. A conservative economic impact analysis
jobs and more than 7,400 indirect suggests that over 17,000 jobs will be associated with BioDistrict New Orleans
by year 20. If research and development activity and the commercialization of
jobs). technologies gain momentum, the employment impact could be even greater.
Finally, it should be emphasized that
these long-term employment and economic impact estimates are fundamentally cautious. If research
and development activity, venture capital investment, and the commercialization of medical
technologies blossom—as they have in a number of other medical districts around the country—the
employment and economic impacts could be substantially greater.
2 These figures represent the annual increment in taxes by year five of the BioDistrict.

Economic Impacts in Other Medical Districts

Medical economic development districts in
Chicago, Memphis, Houston, Birmingham,
Cleveland, and LaJolla have paid off
handsomely. But these payoffs did not come in
a day or two—rather they have been the result
of long-term and sustained commitments. In
Chicago and Memphis it is estimated that the
medical centers have created and continue to
support over 50,000 jobs in the respective
metropolitan areas. In Houston the Texas
Medical Center is estimated to have created
and to currently support over 145,000 jobs in
the Houston Metropolitan Area. In
Birmingham, a much smaller city and region,
the overall medical complex is estimated to The BioDistrict hopes to catalyze in New Orleans the same
support over 54,000 direct and indirect jobs in kind of sustained economic and employment growth that other
the Birmingham Metropolitan Area. Finally, in cities have generated through their investments in the
biosciences.
Cleveland it is estimated that the Cleveland
Institute of Medicine creates and supports over 70,000 jobs. The Scripps Institute in LaJolla,
California is unique in terms of the number of new businesses that have sprung up in and around
the research centers. Over 300 biotechnology companies are located in close proximity to Scripps
and the other major research institutions in the LaJolla area.
These case studies from a wide variety of metropolitan areas provide compelling evidence of the
beneficial economic impacts of a long-term, sustained commitment to the biosciences—the same
commitment that the BioDistrict brings to the city of New Orleans.

INTRODUCTION
Health care providers that are service oriented do not independently lead the economic development
process. Government agencies or investors do not build a new clinic, physicians’ office, or hospital
because the economy needs a stimulus. Health care providers create facilities in a given parish or
community because the community needs essential healthcare services. From this perspective health
care providers serve an important support role. As the community develops, health care providers in
the region hire trained personnel to deliver the necessary medical services, and the providers develop
commercial relationships with other businesses in the region. In this way, health care providers
become a major economic influence within the community after certain initial development
benchmarks have been achieved.
From another perspective, health care providers can function as major economic drivers in a
community when they focus on research and development, significant medical services not provided
in other areas, experiments in medical treatment, and other medical-related services that are
financially supported by dollars from outside the community. For example, if a health care agent in a
community produces a significant health care product or health care research, this product is then
exported throughout the country and even internationally; it is not merely consumed within the
given community but brings in substantial outside dollars.
New developments in medical education such as more residency, teaching, and medical school
opportunities can also generate an economic stimulus in the community. Additionally, a vibrant
medical complex tends to attract other industries such as pharmaceutical companies, light industrial
activities, and an entirely new line of professionals from patent attorneys to scientists, medical
engineers, and other medical professionals.
BioDistrict New Orleans has suggested that a principal means to diversify and augment the New
Orleans economy is to provide the human and physical capital necessary to support major medical
research grants and contracts, to develop state-of-the-art medical services and products, and to
foster other medical-related commerce and other technologies in the Greater New Orleans area
centered in downtown New Orleans. The AECOM team, with the assistance of GCR and
Associates, are in the process of assembling a master plan for the long-term development of
BioDistrict New Orleans.
The purpose of this report is to focus on the economic impact that can be reasonably projected if
the major medical research programs and other technological enhancements and products can be
developed in the BioDistrict. The economic impact estimates are tentative at this time but represent
the magnitude of the economic ripples that can be achieved if the biosciences development can be
initiated and sustained. This report includes the following foci:
(1) The significance of health care research within the federal government
(2) Medical research and medical-related commercial activities in other communities
(3) Estimates of the economic, employment, and fiscal impact of initiating and sustaining
the biosciences industry within the BioDistrict
(4) Summary and final comments on medical-related research and product development in
the Greater New Orleans area.

SIGNIFICANCE OF HEALTH CARE RESEARCH IN THE

UNITED STATES
The significance of health care research can be documented in several ways: first, by evaluating the
size and significance of health care research dollars within the budget of the federal government as
compared to other types of research; second, by noting the communities that are major providers of
health care research and examining their economic vitality.
Health Care Research and the Federal Government

The RAND Corporation provided a thorough analysis of all federal research and development funds
provided to U.S. colleges and universities in 2002.3 The following are some of the conclusions
reached by this analysis:
 U.S. medical schools received 45 percent of all federal research and development
funds provided to U.S. colleges and universities in 2002
 The nation’s 126 medical schools received $9.6 billion of the $21.4 billion in federal
research and development funds
 The U.S. Department of Health and Human Services provided two-thirds of all
federal funding going to higher education institutions for research and development
 The U.S. Department of Health and Human Services received sizeable funding
increases, notably for the National Institutes of Health (NIH).
These conclusions suggest that a strong emphasis upon health- and medicine-related research
accounts for a substantial share of the overall research and development funds made available by the
federal government.
The National Institutes of Health (NIH) provides another comparative metric for the importance of
health care research and development. The organization allocated almost $22 billion in new grants,
continuing grants, and supplements to existing grants in 2009, $20.4 billion in 2007, and $20.2 billion
in 2005. These dollars were divided between new awards within the year (about $3 to $4 billion each
year), funding for project continuation (about $15 to $17 billion each year), and approximately $2
billion in supplements or other categories of research and development. NIH provided research
funds to institutes of higher education, including medical schools, as well as private and non-profit
research institutions.
The RAND Study documented what researchers at colleges and universities already knew. The
federal government has put a high priority on health care related research, and research projects are
allocated across explicit research centers as well as medical schools affiliated with institutes of higher
education.
3“Vital Assets: Federal Investment in Research and Development at the Nation’s Universities and Colleges,” Rand
Corporation, April 2004.

Will Heath Care Research Remain Significant?

Health care research will remain a major focus of the federal government because of demographics
and the related expenses of maintaining an aging population. According to the U.S. Census in 2000,
just under 40,000,000 persons were 65 years of age and older; by 2040 this number is projected to
nearly double and by 2100, the size of this age cohort will be approaching 140,000,000 Americans.
This is an enormous change in the number of persons in an age category that typically requires
substantial medical attention.
At the same time that the demographics are changing, health care costs have also risen substantially
over the last forty years. Health care costs in 1965 amounted to less than $100 billion per year. By
2010 health care costs are approaching $2.5 trillion per year: 31 percent going to hospital care, 21
percent going to physician services, 10 percent to pharmaceuticals, 8 percent to nursing homes, 7
percent to administrative costs, and 23 percent to other categories that include diagnostic laboratory
services, pharmacies, and medical device manufacturers.4 Health care costs presently account for
about 16 percent of total gross domestic product.
Health care enhancements have made significant contributions to the U.S. economy. Kevin Murphy
and Robert Topel, both economists at the University of Chicago, state that “over the last half
century, improvements in health have been as valuable as all other sources of economic growth
combined.”5 The outcome of health care research has been positive. American citizens expect such
research to improve their quality of life, and in turn political leaders will support health care
research. Health care research will continue to focus on improving the quality of life for all citizens
in an affordable way. These factors will drive the federal government as well as philanthropic
foundations and private entities to devote more resources to health care research over the next fifty
years.
Cities with Significant Health Care Research and Development

Table 1 provides a list of the top thirty cities in terms of the dollar value awards issued by the
National Institutes of Health. Two cities receive more than $1 billion in NIH grants: Boston and
New York. Two cities near Louisiana, Houston and Birmingham, rank in the top thirty cities with
respect to NIH funding. There indeed seems to be a strong correlation between success in drawing
funds from the NIH and the presence of a university/research environment – many of the top thirty
cities have vibrant, successful university systems coupled with research districts that drive their
population and economy, such as Madison, Wisconsin; Rochester, Minnesota; New Haven,
Connecticut; and Ann Arbor, Michigan. This factor is by no means surprising: these areas have
taken advantage of the research opportunities offered by local universities and the potential for
expanding research possibilities.
4 U.S. Department of Health and Human Services, Centers for Medicare and Medicaid Services.
5 Statement in Value of Medicine, a presentation put together by PHRMA.

It should be noted that New Orleans is currently ranked

fifty-fifth in the country in NIH dollars, having dropped six
spots since 2004 and 12 spots since fiscal year 2005.
In 2004 Louisiana received $157.2 million in NIH grants
with $65.3 million going to Tulane $38.1 million going to the
LSU Medical Center in New Orleans, and $11.9 million
going to Xavier University. New Orleans received over two-
thirds of the NIH grants going to Louisiana. In 2009 the
Tulane Medical Center received about $45 million in NIH
funding while the LSU Medical Center received about $25
million of NIH funding and Xavier University received
about $6 million. Other NIH funding may come through
other entities such as Tulane University (not the College of
Medicine or the School of Public Health), the University of
New Orleans, Dillard University, or some other institution
within the city. In 2009 Louisiana received almost $127
million with New Orleans receiving just over $82 million in
NIH grants or about 65 percent of the total NIH grants
received by the state of Louisiana.
Since 2004 New Orleans has experienced a reduction of $35
million in NIH grants. This implies a reduction in jobs
related to the research grants of just over 500 jobs and wages
and salaries in the New Orleans area of approximately $27 million. The significance of health-care
related research grants, and technology in general, will be evaluated as we examine certain prominent
health care centers around the country.

NEW ORLEANS: ITS INSTITUTIONS AND PLANS

To appreciate the economic impact of any major proposal affecting a metropolitan area, one must
appreciate the existing demographic and economic conditions of the metropolitan area,
characteristics of the industry that the proposal may affect, and the details of the proposal itself.
Greater New Orleans Area

The Greater New Orleans Metropolitan Area is made up of seven parishes, including Jefferson,
Orleans, Plaquemines, St. Bernard, St. Charles, St. John the Baptist, and St. Tammany. The
population in this region was profoundly impacted by the hurricanes of 2005. Immediately after the
storm, the city of New Orleans lost roughly two-thirds of its population while surrounding parishes
such as St. Tammany and East Baton Rouge witnessed remarkable infusions of residents. The
Greater New Orleans Community Data Center in partnership with Brookings has issued a series of
reports on the recovery of the city and the region since Hurricane Katrina. The most recent report,
issued in August 2010, discusses the challenges faced by the region in the shadow of three disasters:
Hurricane Katrina, which devastated the city’s population and institutions, the Great Recession,
which stalled a vibrant path to recovery, and the Deepwater Horizon disaster, the consequences of
which are yet to be known.
The New Orleans Metro Area is closely tied to the resilience and health of its core city. New Orleans
is undoubtedly the economic engine that drives the region, and the health of its population and
economy determines the economic potential of the nearby parishes. For many years New Orleans
has been losing population and evolving into a city of in-commuters as residents of nearby parishes
work in industries located within or tied closely to the core of New Orleans. However, there are
many reasons to believe that the city is on a well-established path to recovery, but the recovery
remains tentative given the challenges faced by industries that have become the focus of the New
Orleans economy, such as tourism and the oil and gas industry.
Signs of Recovery coupled with Significant Remaining

Challenges
New Orleans has enjoyed great progress in a variety of areas, including knowledge-based industries,
education, wage and income growth, and overall quality of life. Over the past five years, wages have
increased rapidly to nearly match the national average, a remarkable feat given that since the mid-
1980s (roughly the time of the oil bust that pushed Louisiana into a generation-long downturn),
average wages have been markedly lower than the national average. Moreover, entrepreneurship,
measured by the number of individuals starting businesses, has spiked well above the national
average, a strong indication of the resilience of the region in light of the many disasters it has faced.
Median income has risen in the area while, nationally, the median income has declined in the midst
of the national recession6.
Yet despite this increase in median income, New Orleans still has a median income that is lower
than the national median. The local economy depends upon industries that are either in the throes
of long-term declines in the area, such as oil and gas; industries that are searching for ways to
6 The sources of these data are the Greater New Orleans Community Data Center and GCR and Associates.

revitalize themselves such as shipping; or industries that are heavily dependent upon macro-level
trends in the national and regional economies, notably tourism.
New Orleans was, before the storm, a city in decline. Educational attainment, measured by the share
of the population with a bachelor’s degree or higher, had dipped below the national level and has
stagnated since 2000. This presents a challenge in terms of workforce development and attracting
industry. Since Katrina, housing has become prohibitively expensive even in the midst of the
national housing crisis – over half of the population pays more than 35% of their income on
housing in the city, and nearly half of the population of the metropolitan region exceeds this cost
threshold. Even while quality of life improvements are lauded, crime remains a persistent quality of
life challenge.
What many economic development experts agree upon is that New Orleans, while needing its
historical industries to maintain employment in the short-term, cannot and should not depend upon
the institutions and policies of its past to seek future growth. Health care research and the
development of health care services can benefit from the rising presence of a strong middle-class
both within the city and the entire New Orleans region. Young professionals are bucking previous
trends by seeking to live in the city, and these young professionals bring high levels of creative
energy and educational attainment.
Development is generally a great challenge because economies have the difficult conundrum of
attracting the very workforce that is needed to develop the industries that would more efficiently
attract the workforce. In the case of New Orleans, it is presented with the challenge of breaking
from the confines of old industries and seeking to establish an employment sector that builds upon
the cutting-edge research that will likely drive much of the national and global economies in the next
hundred years. The old industries are significant players in the region’s economy because they will be
needed to provide support and employment as the new industries develop, but new industries will
add diversification and growth to the New Orleans economy. One of the core components of this
innovation-economy is health research/services/products and other technological developments.

HEALTH CARE RESEARCH IN OTHER CITIES IN THE

UNITED STATES
In this report, we focus on health care related activities since these industries will be the most
prominent initial focus of BioDistrict New Orleans. Health care research has blossomed in certain
cities. Three cities have been selected to illustrate the development of medical research as a major
industry within a local community and to illustrate the economic importance of the industry to the
community. The medical centers that were selected are the University of Alabama at Birmingham
Health System, the Baylor College of Medicine in Houston, Texas, and the Cleveland Institute of
Medicine in Cleveland, Ohio. In addition, the activities of the Scripps Research Center are also
noted since this institute offers an alternative health care model. These three
academic/research/clinic oriented medical centers plus the Scripps Research Institute provide
contextual example of how a medical complex comes together to become a legitimate and
substantial economic force within the community. Additionally, as they are cited within the master
planning documents that the AECOM planning team is preparing for the BioDistrict, the most
salient characteristics of two other major medical districts—the Illinois Medical District and the
Memphis Medical Center—are also cited within this report.
Illinois Medical District (IMD) – Chicago, Illinois

The Illinois Medical District (IMD) is a 560-acre site on Chicago’s Near West Side (illustrated in
Map 1) and is home to over 40 medical, educational, and technological institutions. The IMD is one
of the largest urban medical districts in the world. This section provides a brief overview of the
major institutions and the overall economic impact of the District.
Member Institutions
Although the IMD hosts over 40 member institutions, the following four are the primary medical
institutions:
 John H. Stroger, Jr. Hospital of Cook County. The county operates Cook County
Hospital, a teaching facility with one of the busiest emergency services in the Midwest and
nationally;
 University of Illinois at Chicago. UIC’s Colleges of Medicine, Pharmacy, and Dentistry
are located in the District and UIC’s main campus is located just east of the IMD. UIC
College of Medicine is the largest medical school in the world;
 Rush-Presbyterian-St. Luke’s Medical Center. The medical center is a private medical
research and educational hospital;
 VA Chicago Healthcare System. This is one of the largest VA facilities in the nation.
The district’s other member institutions are a mix of public and private institutions, ranging from
private companies to professional associations. According to the IMD Commission, the IMD
creates 50,000 direct and indirect jobs and upwards of $34 million in local taxes, making it an
important economic engine for the city of Chicago.

Map 1. Illinois Medical District

Memphis Medical Center – Memphis, Tennessee

The Memphis Medical Center is an approximately 800-acre district located between downtown and
midtown Memphis, Tennessee as illustrated in Map 2, and is home to many medical and biosciences
research facilities. It is located within walking distance of historic downtown Beale Street, the state’s
top tourist attraction, and the famous Peabody Hotel.
Member Institutions
The main medical institutions that are included in this case study are:
 St. Jude’s Children’s Research Hospital. One of the world’s premier pediatric cancer
research facilities;
 Regional Medical Center at Memphis. “The Med” is a major regional healthcare
provider and one of the largest medical and surgical teaching hospitals for the University of
Tennessee Health Science Center;
 VA Memphis Healthcare System. Services nearly 200,000 veterans living in a 53-county
area near Memphis;
 Le Bonheur Children’s Medical Center. Teaching children’s hospital that is completing a
$340 million 610,000 square foot new hospital;
 Methodist University Hospital. The largest and most comprehensive hospital in the
Methodist Healthcare System;
 Memphis Mental Health Institute. A recently opened 103,000 square foot facility replaces
the original 1962 outdated building.
The Memphis Medical Center provides a good reference for the BioDistrict, as there is a similarly
coordinated effort by major stakeholders in the area to catalyze growth in the biosciences industry in
the area. The Memphis Metropolitan Area also connects counties in three states—Arkansas,
Mississippi, and Tennessee—so the economic impact spreads over state boundaries.

Map 2. Memphis Medical Center District

University of Alabama in Birmingham Health System

The University of Alabama in Birmingham Health System received nearly $200 million in NIH
grants in 2009, twenty-seventh most among all 2,605 institutions that received funds from the NIH
for research. The UAB Health System consists of the following components:
 UAB School of Medicine
 UAB Hospital – a 900-bed facility offering primary and specialty care services
 Kirklin Clinic – The Kirklin Clinic is a specially designed center for outpatient care housing more
than 700 physicians in 35 specialties.
 Kirklin Clinic at Acton Road – This clinic provides the same services as the Kirklin Clinic, but is
located in the southern part of Birmingham.
 Callahan Eye Foundation Hospital – This hospital offers a 24/7 eye emergency room. This
hospital became part of the UAB health system in 1997 and offers an ophthalmology residency
program and participates with the UAB Medical School in the research of eye diseases.
 UAB Spain Rehabilitation Center – The Spain Rehabilitation Center provides comprehensive
rehabilitation care for every aspect of a patient’s rehabilitation, including physical, social and
psychological health.
 UAB Highlands – UAB Highlands is a general acute care facility located in the Medical Center
District – physicians on staff cover a full range of general, medical and surgical specialties.
 UAB Health Centers –Eight health centers provide health care in a clinical setting for patients
around the state of Alabama with centers in Hoover, Hueytown, Huntsville, Inverness, Montgomery,
Mood, Selma, and Tuscaloosa.
 UAB Health System affiliated with Baptist Health – Baptist Health has one hospital, two
medical centers, one surgical center, and a network of primary and emergency care centers in
Montgomery. The hospital, Prattville Baptist Hospital, is an 85-bed community hospital. The medical
centers, Baptist Medical Center South and Baptist Medical Center East, are licensed facilities with 454
beds and 150 beds, respectively.
UAB is a school of medicine with hospitals, clinics, specialty medical facilities, and major research
activities on the same campus as noted in Map 3 and Maps 3a, 3b, and 3c. UAB also reaches across
the state with clinics and affiliations with other hospital systems. The contiguous environment in
which the medical complex is located contributes to the overall ability of the hospitals and research
units to work together.

Map 3. UAB Medical Center District Map

Map 3a. UAB Medical Center District Map (section A from Map 3)
Map 3b. UAB Medical Center District Map (section B from Map 3)

Map 3c. UAB Medical Center District Map (section C from Map 3)

Texas Medical Center in Houston, Texas

Baylor College of Medicine is located in Houston, Texas within the Texas Medical Center, a 1,000-
acre complex with 46 independent institutions. The College itself has 25 departments and more than
90 research and patient-care centers.
The departments of the College include:
Anesthesiology; Biochemistry and Molecular Biology; Dermatology; Family and Community Medicine; Immunology;
Medicine; Molecular Physiology and Biophysics; Molecular Virology and Microbiology; Molecular and Cellular Biology;
Molecular and Human Genetics; Neurology; Neuroscience; Neurosurgery; Obstetrics and Gynecology; Ophthalmology;
Orthopedic Surgery; Pathology; Pediatrics; Pharmacology; Physical Medicine and Rehabilitation; Psychiatry and
Behavioral Sciences; Radiology; Surgery; and Urology.
Clinical research studies done by the College cover subjects such as:
autism; bipolar disorder/depression; brain, spinal cord, nervous system; breathing/asthma/lung conditions; cancer;
children’s health; cholesterol; diabetes; digestive system; eye/vision; healthy volunteers; heart conditions; high blood
pressure; infectious diseases/immune system; men’s health; mental health; skin; substance abuse; urinary tract; and
women’s health.
Affiliated with the Baylor College of Medicine are the following eight teaching hospitals:
 St. Luke’s Episcopal Hospital – St. Luke's Episcopal Hospital delivers primary and tertiary health
care to patients in its 888-bed nonprofit hospital. Annually, St. Luke’s cares for more than 30,000
inpatients and 220,000 outpatients. St. Luke's is a teaching hospital with a medical staff of nearly 600
physicians. Sixty percent of the hospital's active staff holds faculty appointments.
 Texas Children’s Hospital – Texas Children’s Hospital is licensed for 639 beds. Its physicians treat
infants, children, and adolescents, and its units specialize in the diagnosis and treatment of rare
disorders. Facilities include the Gordon Emergency Center, 22 pediatric surgery suites, a 31-bed
Pediatric Intensive Care Unit, a 12-bed Cardiac Intensive Care Unit, and a 76-bed Level III Neonatal
Intensive Care Unit. The Texas Children's Cancer Center, housed at the hospital, is one of the largest
cancer research treatment centers in the country and includes a 36-bed inpatient unit and a 15-bed
bone marrow transplant unit.
 Memorial Hermann – The Institute for Rehabilitation and Research – This is a 116-bed
rehabilitation hospital that focuses on providing care to individuals who have experienced
catastrophic injuries or illnesses.
 Menninger Clinic – The Menninger Clinic serves adolescents and adults with severe psychiatric
disorders. It is licensed for 159 beds and offers six specialty treatment programs, as well as
professional assessments. Treatment programs include: Adolescent Treatment Program, Compass
Young Adult Program, Eating Disorders Program, Hope Adult Program, Obsessive-Compulsive
Disorder Treatment Center, and Professionals in Crisis. Since its founding, Menninger has provided
treatment for more than 250,000 patients.
 Methodist Hospital – The Methodist Hospital is one of the nation's largest private, non-profit
hospitals with 1,269 beds. The hospital records approximately 40,500 inpatients each year, and
another 327,000 outpatients are cared for annually.
 Michael E. DeBakey Veterans Affairs Medical Center – This VA Medical Center has 319 acute
care, medical, intermediate medicine, and surgical beds and a 120-bed nursing home.
 M. D. Anderson Cancer Center – The physical plant of M. D. Anderson includes an in-patient
pavilion with 475 beds, clinical research building, outpatient clinic building, a faculty office building,
and a patient-family hotel. Annually, more than 70,000 persons with cancer receive care at M. D.
Anderson, and about 26,000 of them each year are new patients. More than 11,000 patients
participated in clinical research exploring novel therapies and diagnostic tests in 2004.

 Ben Taub General Hospital – Ben Taub is a 650-bed medical and surgical hospital with acute care
facilities that have psychiatric and pediatric emergency centers, and 12 operating rooms, at more than
730,000 square feet of space. Annually, the trauma center sees more than 108,000 patients, while its
outpatient clinics see more than 184,000 patients. In 2004, staff delivered more than 5,065 babies,
performed 10,855 major surgical procedures, and took care of more than 26,000 hospital admissions.
All told, this means that the Baylor College of Medicine is affiliated with hospitals that together have
4,635 beds servicing a population of over 4 million people. Additionally, the College has 12
cooperating patient care institutions.
The Baylor College of Medicine received just under $170 million in grants from the NIH in 2000
and over $202 million in NIH grants in 2009 Its ability to get grants from the NIH and other
providers of medical research opportunities is related to its recruitment of outstanding personnel to
work in its many clinics, hospitals, and research laboratories and the nature of the facility—the
hospitals, clinics, and research offices are contiguous as illustrated in Map 4a and Map 4b.

Map 4a. Baylor College of Medicine in Houston, TX

Map 4b. Baylor College of Medicine Campus

Cleveland Clinic
The Cleveland Clinic has a main campus that includes a hospital, an outpatient clinic, cancer center,
eye institute, research institute and supporting labs and facilities. Connected to the Cleveland Clinic,
there are also 13 family health centers that are staffed with primary care physicians and medical and
surgical specialists. The Clinic also has a number of outpatient surgery centers.
The Lerner Research Institute (LRI) at the Cleveland Clinic (located on its main campus) is the
center for all laboratory-based research. The LRI has 741,000 square feet of research space and
roughly 1,100 scientists and support personnel. The LRI is comprised of the following eleven
departments of research:
Biomedical Engineering; Cancer Biology; Cell Biology; Genomic Medicine; Immunology; Molecular Genetics; Molecular
Cardiology; Neurosciences; Patho-biology; Quantitative Health Sciences; and Stem Cell Biology and Regenerative
Medicine.
The LRI also includes eleven centers of research that cover the following areas:
anesthesiology research; cerebrovascular research; hematology and oncology; molecular therapeutics; ophthalmic
research; orthopaedic research; space medicine; structural biology; surgery research; thrombosis and vascular biology;
translational research; and urological research.
In 2005, the Cleveland Clinic had almost 2.9 million patient visits, more than 53,500 admissions,
roughly 69,000 surgical cases, and employed 1,700 researchers and scientists. As of 2005 there were
850 residents and fellows in training at the Cleveland Clinic and 470 medical students. The
Cleveland Clinic also received over 200 NIH grants in 2005 for almost $84 million. In 2009 the
Cleveland Clinic received just under $73 million in NIH grants.
Map 5 displays the campus as located within blocks of each other in a neighborhood in Cleveland,
Ohio. The Cleveland Clinic has outreach programs and international programs, but the researchers
have access to clinical tests, a major factor in applying medical research to the very persons who
ultimately will benefit from this research.

Map 5. Cleveland Clinic, Cleveland, Ohio

The Cleveland Clinic comprises nine community hospitals and three affiliate hospitals. Additionally,
the Clinic has a Cleveland Clinic Florida located in Weston, Florida, that incorporates a 150-bed
hospital, an outpatient clinic, and education facilities. Similarly, the Clinic has a Cleveland Clinic
Canada Health and Wellness Centre in Toronto, which has a 25,000 square-foot facility providing
physicians, surgical specialists, and wellness programs. The Cleveland Clinic is currently in the
process of opening a Cleveland Clinic Abu Dhabi that will incorporate a multi-specialty tertiary
center and clinic. The Cleveland Clinic Abu Dhabi is scheduled to open in 2010.
Scripps Research Institute

The Scripps Research Institute is the world’s largest biomedical research facility. It was founded in
1961 and now has more than 1,000,000 square-feet of research space and a staff numbering 2,800
with almost 300 faculty members, over 800 postdoctoral fellows, 235 graduate students, and 1,500
professional, technical, and administrative personnel. Much of the research at Scripps is basic
research—that is, aimed at gaining fundamental knowledge. Principal research areas include health
related improvements for stroke and heart disease, cancer, neurological disorders, viral diseases,
alcoholism, diabetes, autoimmune diseases, and kidney dysfunction.
In 2009 Scripps received over $206 million from the NIH. The Scripps Research Institute is located
on 35 acres of land in La Jolla but is also in close proximity to the campus of the University of
California, San Diego and to San Diego’s scientific community, which includes the Salk Institute and
the Burnham Institute. In addition, there is a concentration of over 300 biotechnology companies in
close proximity to these research institutions.

Economic Significance of Health Care Research Programs

The economic significance of these medical-related research and development programs in these
cities is summarized in Table 2. In Houston the Texas Medical Center is estimated to have created
and to support over 145,000 jobs in the Houston Metropolitan Area. In Birmingham, a much
smaller metropolitan area, the overall medical complex is estimated to have created and to support
over 54,000 direct and indirect jobs in the Birmingham Metropolitan Area. Finally, in Cleveland it is
estimated that the TABLE 2: Estimated Economic Significance of Medical Centers
Cleveland Institute of In Selected Cities with Major Medical Research Programs
Medicine has created and
supports over 70,000 City Jobs Supported Metro Area
Medical Complex
jobs. The economic Direct and Indirect Labor Force
impacts enumerated in Birmingham, AL UAB Medical Center 54,000 jobs 540,900
Table 2 clearly show the Houston, TX Texas Medical Center 145,000 jobs 2,568,300
direct and indirect effects
Cleveland, OH Cleveland Clinic 70,000 jobs 1,082,000
that can be related to the
economic activity Chicago, IL Illinois Medical District 50,000 jobs 3,571,000
associated with major Memphis, TN Memphis Medical 50,000 jobs 555,000
medical complexes. Source: Studies of institutions within last five years
The presence of research companies, as described above in the profile of the Scripps Research
Institute, may represent an even larger economic impact on the overall economy, well above and
beyond the direct economic effects of the research grants. Health care related research institutions
draw private companies that see the potential for commercial application of the research being
completed at the health care centers and related institutions. This type of accumulation of private
companies will not occur within a short period of time, but over time these private investments will
be made if the focus on the biosciences district is sustained.
Current Economic Significance of Health Care in the New

Orleans Regional Economy
In the coming years, BioDistrict New Orleans is expected to significantly increase employment in
health care and health care-related fields in the New Orleans area. If New Orleans experiences the
explosion of research activity and the commercialization of research that other cities have witnessed,
the ultimate effect could be similar to the tens of thousands of jobs generated by medical districts in
other cities.
At present, it is worth noting that health care already comprises a substantial share of employment
and earnings within the New Orleans metropolitan area. It has been estimated that health care
spending accounts for over 16% of the Gross Domestic Product of the United States7. Thus, the
fact that a major metropolitan area such as New Orleans has a significant health care employment
cluster should not be surprising. To more precisely quantify the relative size of this cluster in the
metropolitan economy, data on employment and average annual pay were examined. The Bureau of
Labor Statistics’ Quarterly Census of Employment and Wages (QCEW) provides employment
estimates and average annual pay data down to the level of individual counties (parishes). These data
can be disaggregated by the industry code of employers. Based on these data, health care
7 Source: The Henry J. Kaiser Family Foundation (kaiseredu.org)

employment and earnings were compared to three other stalwarts of the New Orleans economy: oil
and gas, trade, and tourism.
While the QCEW data are some of the most authoritative data on employment and wages, there are
some limitations to the data. Disclosure rules prevent a complete inventory of employment by sector
as, for example, some government health care jobs are not disclosed. Thus, some of the employment
figures cited below could better be understood as minimum employment figures for a particular
industry in the metro area. Also, defining the employment parameters of an industry can be
challenging. For instance, many of the jobs in New Orleans’ restaurants are tied to the tourism
industry, but disaggregating those restaurant jobs from jobs at a neighborhood-serving restaurant is
all but impossible. Presented below are two distinct employment figures for the tourism industry:
one that excludes restaurant and bar employment and another, more liberal figure that does include
restaurant and bar jobs.
TABLE 3: Employment and Average Annual Pay by Industry In the New Orleans Metropolitan Area (2009)
Tourism Tourism
All Industries Health Care (not including (including all Transportation Oil and Gas
restaurants/bars) restaurants/bars)
Total Employment
501,727 57,360 23,320 67,352 23,447 16,258
(2009)
Average Annual
$45,121 $45,423 $36,459 $23,746 $54,744 $96,163
Pay (2009)
Industries Included n/a Health Care and Arts, Entertainment, Also includes Food Transportation and Mining, Quarrying,
(with NAICS code) Social Assistance and Recreation (71); Services and Warehousing (48-49) and Oil and Gas
(62); Testing Scenic and Drinking Places Extraction (21);
Laboratories Sightseeing (722) Petroleum and
(54138); Physical, Transportation Coal Products
Engineering, and (487); Manufacturing
Biological Accommodation (324); Chemical
Research (54171) (721) Manufacturing
(325); Plastics and
Rubber Products
Manufacturing
(326)
Source: Bureau of Labor Statistics, Quarterly Census of Employment and Wages
In spite of these limitations, a number of observations can be made about the present-day
significance of health care to the regional economy. First and foremost, its share of the regional
economy is enormous, relative to other sectors. Health care employs over 3.5 times the number of
people directly employed in the oil and gas industry and between 2.4 and 3.8 times the number
directly employed in trade and transportation related industries8. If restaurants and bars are excluded
from the inventory of tourism jobs, health care employs 2.5 times the number of individuals in
tourism related industries such as hotel accommodations and arts, entertainment, and recreation.
Data on annual pay from the Bureau of Labor Statistics show that health care jobs within the New
Orleans region have wages that are slightly above average and that are substantially higher than in
the tourism industry. While health care wages are lower than those in transportation-related jobs and
well below average earnings in oil and gas, they could trend higher in future years as a medical
research sector begins to emerge and as private investment in the biosciences gains momentum. It
8 These figures are for direct employment impacts only, and they exclude the indirect employment impacts of these jobs.

should be noted that employers in the health care field employ a wide range of individuals to fill a
wide range of jobs—from secretarial positions to doctors and medical technicians. While the average
annual health care wage is slightly above the regional average for all industries in New Orleans, there
are many jobs in the health care industry that are substantially more lucrative.
Based on the data presented above, it is clear that there is a substantial foundation of health care
employment and economic activity within the New Orleans region. Presently, health care employs
many more people throughout the region than many of the other mainstays of the New Orleans
economy, and wages tend to be substantially higher than in the tourism sector and slightly higher
than the average annual wage overall.

ECONOMIC IMPACT OF CONSTRUCTION PHASE OF

DEVELOPMENT OF BIODISTRICT NEW ORLEANS
The evolution of an economic development district such as BioDistrict New Orleans always begins
with a major investment in creating new and dynamic facilities. Some of this investment will be
public, such as the investment in the VA Hospital by the United States Government; some will be
mixed funding, such as the University Medical
Center, with some of the investment coming
from the federal government as part of the Key Conclusions – Construction
Katrina reimbursement process, some from the Impacts
commitment of the state, and some from
 The BioDistrict will witness especially
private or other such sources. Some will be
significant construction impacts
public/private activities with the public sector within the first 3 – 4 years as the VA
putting up a variety of tax credits and other and UMC hospitals are built
subsidies with the hopes of inducing private
investment. Finally, there will also be private  Construction activity will generate
investors who sense a chance to make a high 7,600 jobs per year within the first 3
rate of return on their investment. All of these years
activities are essential to the long-term
 There will be substantially less
development of any region. Public investment,
construction activity in years 5 – 20 as
by itself, can initiate the process and provide ancillary facilities and uses are
the economic environment so that private constructed
investors sense the opportunity to make a
profitable investment; but public investment,  In years 6 – 20, on-going construction
by itself, cannot permanently sustain a growing activity will continue to generate 400
economy. Private dollars must be invested in – 550 new jobs per year
the city in order for the growth to be sustained
and permanent.
The intense construction activity in the first three to four years will create a very visible surge in the
economy. Economic impacts related to the projected construction activity over the next twenty
years are illustrated in Tables 4 and 5. We have decided to focus on the first three years since this is
the time period in which the VA Hospital will be built and the first four years since this is the time
period of construction for the University Medical Center. We then focus on projected private
activities occurring in the next twenty years. Other facilities will be built during this time period as
well, though these projections are not quite as assured as the expenditures on the hospital facilities.
We also had to assume how much of the direct construction spending will be spent on the
construction of the facility and how much on equipment within the hospital facilities. It is estimated
that just around 60 percent of the total spending would be direct construction spending in the New
Orleans region. The other 40 percent, we estimate, will be spent on equipment and other hospital
features that will be constructed out-of-state.
New construction activity during the first three years will produce over 7,600 jobs per year in
construction, services, trade, financial services, manufacturing, and other such sectors. About 42
percent to 45 percent of the jobs will be in the construction sector. Over the first three years the
economic activity associated with the new construction will create approximately $700 million of

personal earnings in the New Orleans Metropolitan Area and approximately $95 million in net new
state and local taxes. In the fourth year of construction, employment related to the construction
activity will drop to approximately 4,200 since the VA Hospital will have been completed by this
time. But the construction activity will still make a major contribution to the economic success of
the New Orleans region. In the fifth year of construction the net new construction jobs will drop to
100 - 150 since at that point we expect that both the VA Hospital and University Medical Center will
have been completed. This level of employment of 100 – 150 persons is associated with other
facilities being constructed within the District.
Over the first five years of construction activity, over $1.25 billion will be invested in buildings and
structures in the BioDistrict New Orleans, a figure that does not include major equipment
purchases. This will lead to overall economic activity of over $2.5 billion with personal earnings of
approximately $850 million and net new state and local tax collections adding up to over $110
million. Over this five-year period net new jobs in the New Orleans region associated with the
construction of these facilities will average almost 5,500 per year.
TABLE 4: Projected Construction Activities in the BioDistrict and Their Economic Impact
Direct State and
Economic Personal
Construction Local
Transactions Earnings Jobs
Spending Revenues
(millions) (millions)
(millions) (millions)
Individual Activities Occurring by Year (activities including, VA Hospital, University Medical Center, and Other Construction)
VA Hospital (3 years) $160 $321 $106 3,475 $14
University Medical Center

$188 $376 $124 4,073 $17
(4 years)
Other Construction
$6 $12 $4 130 $1
Spending (first 5 years)
Other Construction
$20 $39 $13 423 $2
Spending (years 6-10)
Other Construction
$24 $48 $16 522 $2
Spending (years 11-20)
Summation of All Activities (dollars are summed over the time period; employment is an average for each year)
Total, Years 1 to 5 $1,260 $2,526 $834 5,473 $113
Total, Years 6 to 10 $98 $196 $65 423 $9
Total, Years 11 to 20 $240 $481 $159 522 $22
Note: All estimates are based on preliminary data; in spite of the detail contained within these estimates, all figures are preliminary,
as data inputs and assumptions may change somewhat in the coming months/years
In year 6, when private and other activity are projected to increase, the level of employment related
to construction activities is estimated to be 400 - 450 new jobs per year, and this level is expected to
be sustained through the tenth year. Net new construction spending is estimated to nearly $100
million over this five-year period with total economic activity amounting to almost $200 million and
personal earnings of approximately $65 million over this time period. For years 11 through 20 it is
projected that new construction activity will create between 500 and 550 new jobs each and every
year. Net new construction spending during this ten-year period is estimated to be $240 million

resulting in total economic activity of over $480 million, personal earnings of almost $160 million
and state and local tax collections of over $21 million.
The construction activity is temporary in the sense that the VA Hospital and University Medical
Center will only be built once. This is also true for the other facilities that would be constructed in
the BioDistrict. However, if the BioDistrict is a major success, it would be normal to witness new
construction each and every year. The continued new construction would not reach the same level
of expenditures as in the early years, but it would be consistent and sustained.
TABLE 5: Construction Activities of VA Hospital, University Medical Center, and

Other Projected Investments in BioDistrict, 2011 through 2030
(all dollars in millions)
Impact on
Impact on
Direct Total Impact on Direct,
State and
Construction Economic Personal Indirect, and
Local Tax
Expenditures Transactions Earnings Per Induced
Collections
Per Year Per Year Year Employment
Per Year
Per Year
2011 $354 $709 $234 7,678 $32
2012 $354 $709 $234 7,678 $32
2013 $354 $709 $234 7,678 $32
2014 $194 $388 $128 4,203 $17
2015 $6 $12 $4 130 $1
Projected ANNUAL Activity During Five- or Ten-Year Span
2016 - 2020 $20 $39 $13 423 $2

2021 - 2030 $24 $48 $16 522 $2
Note: All estimates are based on preliminary data; in spite of the detail contained within these estimates, all figures are
preliminary, as data inputs and assumptions may change somewhat in the coming months/years

ENDURING ECONOMIC IMPACT OF BIODISTRICT

NEW ORLEANS
Of even greater interest than the economic impact of construction activity is the lasting, on-going
economic impact of major investments, such as the VA and University Medical Center hospitals.
Whereas construction activity is fundamentally temporary, the emergence of a true biosciences
cluster within the New Orleans region could exert
major, lasting changes within the metropolitan
Key Conclusions – Enduring
economy. It should be noted that the employment Economic Impacts
and economic impact projections presented within
this report are fundamentally conservative. They  By year 5, planned investments in
account for employment associated with the VA and the District will create or save
UMC hospitals, employment associated with ancillary approximately 5,500 direct jobs and
economic activities such as research and development 9,700 total jobs in the metro area
and medical manufacturing, as well as indirect
employment resulting from these primary economic  By year 10, planned investments will
create or save approximately 7,600
activities. If a major research and development cluster direct jobs and 13,400 total jobs in
were to emerge within New Orleans, attracting the the metro area
kind of research dollars that other biosciences
districts throughout the United States are attracting,  By year 20, planned investments will
the economic and employment impacts would be create or save approximately 9,800
even greater. direct jobs and 17,200 total jobs in
the metro area
One of the intrinsic economic strengths of
BioDistrict New Orleans is that it already contains a  These employment projections are
considerable inventory of major research institutions. fundamentally conservative, as the
The BioDistrict includes the LSU Health Sciences commercialization of medical
Center, the Tulane University Medical School, the technologies and other advances
could yield even greater
Tulane University School of Public Health, Xavier
employment impacts
University with its College of Pharmacy, the
BioInnovation Center, the Louisiana Cancer Research  Over 20 years, the District will
Center, the proposed site of the new VA Hospital, generate an additional $595 million
and the proposed site of the University Medical in local tax collections and $700
Center. It also includes other employment centers million in state tax collections
such as the New Orleans government complex and
some retail and restaurant establishments. The focus  Over 20 years, the New Orleans
region will experience $9.6 billion in
of this economic impact analysis is to estimate the
personal earnings as a result of
jobs that will be saved or created due to the major investments in the BioDistrict
development of BioDistrict New Orleans over a
twenty-year time horizon.
It is estimated that the BioDistrict currently has between 26,000 and 34,000 employees in a wide
variety of jobs9. These jobs include work in the medical-related institutions, city government, and the
judiciary, as well as jobs in food service, retail, personal services, and other jobs that support the
community’s well-being. Over 14,000 of the current jobs within the BioDistrict are provided by
9 Sources: Dun and Bradstreet business data (2010) and Census Bureau Local Employment Dynamics Estimate (2008)

major institutional employers within the District, such as the LSU Health Sciences Center, New
Orleans City Government, and Xavier University. The economic impact analysis is focused on the
jobs that will be created and/or saved due to the upcoming major developments in the BioDistrict,
including the creation of the VA Hospital and the University Medical Center.
The economic impact of this projected development is summarized in Table 6. We examine the
projected new employment after 5 years, 10 years, and 20 years. The estimated direct employment
will include jobs in the VA Hospital and the University Medical Center as well as other newly
created jobs in the biomedical industries and other new start-ups related to the development of the
hospitals. Indirect jobs created due to the expansion of the hospitals will be within the New
Orleans area, but not necessarily in the BioDistrict itself. This net new employment includes the
economic activities at the VA Hospital and the University Medical Center as well as other
developments that are projected to locate in New Orleans—these new developments may be
medical-related or just technology-related. The jobs resulting from spinoff medical and technology
activity are anticipated to be in three major employment/industry categories: research and
development, medical services, and manufacturing (particularly medical/pharmaceutical
manufacturing). In Table 7 we show the aggregation of personal earnings and state and local tax
collections over the first five years, the first ten years, and the first twenty years of operations.
TABLE 6: Economic Impact BioDistrict,

Including VA Hospital, University Medical Centers, and Private
Developments
(on annual basis, 2010 dollars)
ANNUAL IMPACT
as of as of as of
YEAR 5 YEAR 10 YEAR 20
Estimated Direct Employment 5,500 7,600 9,800
Estimated Direct and Indirect

9,680 13,400 17,250
Employment
Estimated Direct and Indirect
$353 $490 $630
Personal Earnings (millions)
Estimated State Taxes (millions) $26 $36 $46
Estimated Local Taxes (millions) $22 $30 $39
Note: All estimates are based on preliminary data; in spite of the detail contained within these
estimates, all figures are preliminary, as data inputs and assumptions may change somewhat in the
coming months/years
Adding the VA Hospital and the University Medical Center plus the associated private
developments will create or save an estimated 5,500 jobs in this economic development district.
These 5,500 direct jobs will lead to nearly 9,700 total jobs in the metropolitan area (including the
5,500 direct jobs). The activity will also spur an increase in personal earnings of over $350 million as
well as infuse state tax collections with over $25 million and local tax collections with nearly $22

million. It is expected that as the enhanced medical facilities secure additional NIH funding or other
sources of grants, generate new medical facilities, and create various businesses, these activities will
also add to the direct jobs, personal earnings, and state and local tax collections. We have assumed a
very modest increase of 2,100 new jobs over a ten-year horizon– this is a number that must be
examined and re-examined carefully. If major health care services are being offered in New Orleans,
if major research projects are ongoing, and if there is a critical mass of health care professionals,
private investment in companies will follow. This is a piece of the puzzle that must continue to be
examined very closely. At this time we are estimating 2,100 net new jobs based on employees per
square foot of expected building types (i.e. research and development, medical office, and
manufacturing)10.
Over a ten-year period, once the projects are fully operational, the new and saved jobs related to
BioDistrict New Orleans investments are estimated to be 7,600 direct jobs resulting in an additional
5,800 indirect jobs for a total employment impact of 13,400. After 20 years it is estimated that 9,800
direct jobs will have been created or saved in the BioDistrict. This suggests an economic impact of
over 17,200 jobs including both the 9,800 direct jobs and more than 7,400 indirect jobs throughout
the metropolitan area.
In Table 7 the summation of personal earnings, state tax collections (including sales, personal
income taxes, corporate taxes, excise taxes, and the array of other state collections) and local tax
collections (including primarily property and sales taxes) are presented for the first five years of
operations, the first ten years of operations, and the first twenty years of operations. The New
Orleans area will be boosted by net new personal earnings of nearly $1.8 billion within the first five
years of the operations of these facilities, over $3.9 billion within the first ten years, and $9.6 billion
within the first twenty years of operations. Net new state tax collections will add up to
approximately $130 million over the first five years of operations, $290 million over the first ten
years, and over $700 million over the first twenty years of operations. Finally, local tax collections
will add up to $110 million over the first five years of operations, over $245 million over the first ten
years, and over $595 million over the first twenty years of operations of the developments within
BioDistrict New Orleans.
TABLE 7: Aggregation of Personal Earnings,

State Tax Collections,
and Local Tax Collections
Over 5 Years, 10 Years, and 20 Years
(in millions of 2010 dollars)
Summation of Summation of State Summation of Local
Cumulative Benefits
Personal Earnings Tax Collections Tax Collections
After 5 Years $1,767 $129 $110
After 10 Years $3,944 $288 $245
After 20 Years $9,617 $702 $595
Note: All estimates are based on preliminary data; in spite of the detail contained within these estimates, all figures are
preliminary, as data inputs and assumptions may change somewhat in the coming months/years
These building estimates were prepared by AECOM and CB Richard Ellis as a component of the BioDistrict New
10
Orleans Master Plan.

SUMMARY AND CONCLUSIONS
A potential path to diversify and augment the New Orleans economy is to create an environment in
which major medical services, medical research grants and contracts, and new and engaging medical
products can be generated by New Orleans institutions. These include the current medical schools,
the research centers, the proposed VA Hospital and University Medical Center, and other existing
and potential institutions within BioDistrict New Orleans. There will be a surge of economic activity
related to major construction projects during the first five years of development with the number of
net new jobs averaging nearly 5,500 over this time period. It is fully anticipated that there will be
further construction activities as new businesses locate in the BioDistrict. Clearly, the ultimate focus
is on the permanent economic activity that will be forthcoming once the facilities are constructed.
The VA Hospital and the University Medical Center, as well as other projected developments in the
BioDistrict, will create or save an estimated 5,500 permanent jobs in the first five years of
operations. These 5,500 direct jobs will lead to nearly 9,700 total jobs, including both direct and
indirect employment. Personal earnings of over $350 million will be created and/or saved infusing
state tax collections with over $25 million and local tax collections with nearly $22 million.
Over a ten-year period, once the projects are fully operational, the new or saved jobs related to
BioDistrict New Orleans investments are estimated to be 7,600 with these net jobs creating an
additional 5,800 indirect jobs for a total employment impact of 13,400 jobs. After 20 years it is
estimated that 9,800 jobs will have been created or saved in the BioDistrict. This suggests a regional
economic impact of over 17,200 total jobs, including both direct and indirect employment.
Even more compelling than the employment projections presented within this report are the case
studies of other biosciences districts around the United States. The employment and economic
impact projections within this report are fundamentally conservative. In communities such as
Houston, Birmingham, Cleveland, and LaJolla, research activity and accompanying private
investment have resulted in even greater employment and economic impacts. In these other cities,
their initial investment in the biosciences has paid off handsomely. But this payoff did not come in
a day or two—rather the manifold economic benefits that they have witnessed have been the result
of long-term and sustained commitments.

Prepared For: Prepared By:
BioDistrict New Orleans GCR & Associates, Inc.
P 504.593.6443 P 504.304.2500
134 LaSalle Street 2021 Lakeshore Drive, Suite 500
New Orleans, LA 70112 New Orleans, LA 70122
www.biodistrictneworleans.com www.gcrConsulting.com

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BIODISTRICT

October 29, 2010

Construction Activities and Their Economic Impact

Prepared by Dr. James A. Richardson Page 1

Estimated Permanent Economic Impacts Associated with

Prepared by Dr. James A. Richardson Page 2

Economic Impacts in Other Medical Districts

Prepared by Dr. James A. Richardson Page 3

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SIGNIFICANCE OF HEALTH CARE RESEARCH IN THE

Health Care Research and the Federal Government

Prepared by Dr. James A. Richardson Page 5

Will Heath Care Research Remain Significant?

Cities with Significant Health Care Research and Development

Prepared by Dr. James A. Richardson Page 6

It should be noted that New Orleans is currently ranked

Prepared by Dr. James A. Richardson Page 7

NEW ORLEANS: ITS INSTITUTIONS AND PLANS

Greater New Orleans Area

Signs of Recovery coupled with Significant Remaining

Prepared by Dr. James A. Richardson Page 8

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HEALTH CARE RESEARCH IN OTHER CITIES IN THE

Illinois Medical District (IMD) – Chicago, Illinois

Prepared by Dr. James A. Richardson Page 10

Map 1. Illinois Medical District

Prepared by Dr. James A. Richardson Page 11

Memphis Medical Center – Memphis, Tennessee

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Map 2. Memphis Medical Center District

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University of Alabama in Birmingham Health System

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Map 3. UAB Medical Center District Map

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Texas Medical Center in Houston, Texas

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Map 4a. Baylor College of Medicine in Houston, TX

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Map 4b. Baylor College of Medicine Campus

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Map 5. Cleveland Clinic, Cleveland, Ohio

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Scripps Research Institute

Prepared by Dr. James A. Richardson Page 24

Economic Significance of Health Care Research Programs

Current Economic Significance of Health Care in the New

7 Source: The Henry J. Kaiser Family Foundation (kaiseredu.org)

Prepared by Dr. James A. Richardson Page 25

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ECONOMIC IMPACT OF CONSTRUCTION PHASE OF

Prepared by Dr. James A. Richardson Page 28

VA Hospital (3 years) $160 $321 $106 3,475 $14

University Medical Center

Prepared by Dr. James A. Richardson Page 29

TABLE 5: Construction Activities of VA Hospital, University Medical Center, and

Projected ANNUAL Activity During Five- or Ten-Year Span

2016 - 2020 $20 $39 $13 423 $2

Prepared by Dr. James A. Richardson Page 30