CUED
Center
for Urban Economic Development
University of Illinois at Chicago
Alternative Employment Impacts of the Proposed McCormick Place Expansion
Project Number: 335
Report Date: June 1991
Author(s):Virginia Carlson
The Ad-Hoc McDome Coalition asked the University of Illinois at Chicago Center for Urban Economic Development (CUED) to do an assessment of the proposed Metropolitan Pier and Expansion Authority's (MPEA) employment estimates for the proposed McCormick Place Expansion project. A study (entitled the Long Range Marketing Study) conducted for the MPEA by KPMG Peat Marwick estimated that without the expansion, 2,000 Cook County jobs could be expected to be lost from a slowdown in activity at McCormick Place. However 6,000 jobs would be added, if the expansion is undertaken, due to new tradeshow and convention activity. The total employment impact of the proposed project was thus estimated by KPMG Peat Marwick at 8,000 jobs.
CUED's assessment, contained in this report, first questions the accuracy of the Long Range Marketing Study's claim that 2,000 jobs would be lost without the expansion project. A check of recent tradeshow relocations from McCormick Place indicates that the reason these shows moved was due to high hotel costs and other factors, and not due to a lack of space at McCormick Place. Secondly, by using an economic base model much like that employed by KPMG Peat Marwick, CUED estimates the job gain from the proposed expansion itself at 3,335 jobs instead of the 6,000 contained in the Long Range Marketing Study. Thus, while the MPEA attributes 8,000 jobs to the proposed project, UICUED's estimate is thus 58% lower, at 3,335 jobs.
In addition, CUED considered the negative impacts from a loss of jobs at both the R.R. Donnelly printing plant, expected to relocate from Cook County if the proposed expansion occurs, and from hotel and car rental tax increases, suggested as a way to finance the expansion. When these two factors are taken into account, the actual job change due to the proposed expansion drops to a net loss of 348 jobs annually in Cook County.
Finally, the proposed expansion of McCormick Place fosters the development of service sector employment at the expense of manufacturing jobs, through an expansion of McCormick Place and a relocation of the industrial activity which surrounds it. Such a development policy, in essence, sets a higher priority on low-wage, potentially part-time service employment than on better paying, full-time employment more characteristic of manufacturing jobs.
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