Running Head: Les Bois Park Page 1. Les Bois Park Economic Impact Analysis November 24, 2015

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1 Running Head: Les Bois Park Page 1 Les Bois Park Economic Impact Analysis November 24, 2015

2 Les Bois Park Page 2 Rationale for Economic Impact Analysis Les Bois Park attracts participants from both the local racing community and from outside of the region. The operation of the track and the spending of these participants, primarily the non-local owners, trainers, and jockeys, have an impact on the economy of the Treasure Valley, supporting jobs and bringing new money into the region. In 2015: Les Bois Park had 285 full-time and part-time employees with an annual payroll of $2,778,450 and paid $2,068,000 in taxes It is estimated that during the racing season: o $449,650 was spent on horse feed and $1,349,081 for trainers o $898,500 was spent on local veterinarian services o $175,500 was spent on transportation provided by local suppliers o $187,188 was spent on local farrier services o $328,440 was spent on lodging by the non-local owners, trainers, and jockeys o and they spent $899,640 on food o and $107,100 on miscellaneous retail purchases o Treasure Valley owners, trainers, and jockeys shared a purse of $698,200 (See Appendix A for more information about spending) The economic tool of Input-Output Analysis is able to show how a single event or project can impact the greater community. In the case of Les Bois Park, the State has given permission to the company to offer racing events. These racing events attract owners, trainers, jockeys, and spectators from around the country for the racing season. These participants then spend money in the local community for lodging, food, veterinarian and farrier services, horse feed, and miscellaneous retail purchases. This is spending that supports jobs and income of local residents Economic Impact Analysis Results The results of the Input-Output model show that annually the operation of the Les Bois track supports: full-time and part-time positions $9.9 million in employee compensation (which includes fringe benefits) $5.1 million in other forms of income, i.e. interest, rent, and profits, and some taxes $35.1 million in increased sales of all goods and services in the community These results can be broken into three components.

3 Les Bois Park Page 3 The direct effects showing the immediate impact on employment, income and output of the affected industry The indirect effects showing how the suppliers to the affected industry are impacted, i.e. inter-industry effects The induced effects showing the impact of employee (household) spending When added together these components measure the total amount of employment, employee compensation, other forms of income, and sales that are directly and indirectly supported by the operation of Les Bois. Figure 1 Number of Employees Total Employment Direct Effect Indirect Effect Induced Effect Figure 1 shows the total effect that Les Bois Park has on employment for the entire Treasure Valley. In 2015, there will have been a total of 536jobs in the region that are supported by the operation of Les Bois. Close to 383 of these positions are directly tied to the racing facility. This includes the 285 positions at Les Bois plus the veterinarians, farriers, etc. This means that an additional 98 positions are supported in the community. Dividing the 534 by 383 gives us the employment multiplier of 1.4. Every 10 positions that are directly associated with the racing program support an additional 4 positions. Another way of calculating the employment multiplier is to view the 285 Le Bois employees as the base and to include the employment of veterinarians, farriers, etc. as being induced by the operation of the track. Dividing the total employment of 536 by the Le Bois employment of 285 yields an employment multiplier of 1.9. Every 10 positions at the track supports an additional 9 positions throughout the community.

4 Les Bois Park Page 4 Remember! The employment numbers are reported as headcount and include full and part-time positions. They are not reported as full-time equivalents. Figure 2 Total Employee Compensation $15 Millions $10 $5 $2.15 $3.16 $9.98 $0 $4.67 Direct Effect Indirect Effect Induced Effect Figure 2 shows the total effect that Les Bois has on employee compensation for the Treasure Valley. Over $9.98 million was paid to employees in the form of wages and benefits, with about $4.67 million being paid to employees directly associated with the operation of Les Bois. The remaining $5.31 million was associated with the spending of Le Bois suppliers and households throughout the Treasure Valley. The employee compensation multiplier is calculated by dividing $9.98 by $4.67 which is 2.1. For every $1,000 paid to an employee directly associated with Les Bois Park an additional $1,100 is paid to other employees throughout the community. Figure 3 Millions $20 $15 $10 $5 $0 Total Value-Added $3.69 $4.49 $6.89 Direct Effect Indirect Effect Induced Effect $15.07

5 Les Bois Park Page 5 In Figure 3, total value-added is the difference between the gross output (sales or receipts and other operating income, plus inventory change) and the value of the intermediate inputs (goods and services purchased from other industries) (Day, 2015). It is a measure of the value of local production. Therefore, total value-added includes total employee compensation and payments of interest, rent, and proprietors income. Les Bois Park s impact on the Treasure Valley accounted for a total value-added of more than $15.07 million, with around $6.89 million being generated by activities directly associated with Les Bois. The remaining $8.18 million was generated through Les Bois suppliers and the household spending of all those involved. By dividing $15.07 by $6.89 the value-added multiplier is calculated at Every $1,000 of production directly attributable to Les Bois activities supports an additional $1,190 in production by other companies in the Treasure Valley. Figure 4 Total Output $40 Millions $30 $20 $6.30 $8.46 $35.10 $10 $20.34 $0 Direct Effect Indirect Effect Induced Effect Figure 4 shows the total effect that Les Bois Park has on total sales of goods and services for the Treasure Valley. The total sales represent the gross value of industry production (Day, 2015) and is measured as the sales of the company minus changes in its inventory. For the 2015 season, Les Bois operations impacted the Treasure Valley by supporting a total of $35.1 million in sales. It is estimated that $20.34 million was contributed by activities directly associated with Les Bois. The remaining $14.76 million in sales resulted from the spending of suppliers and households. Dividing the $35.1 by $20.34 gives the sales multiplier of For every $1,000 in sales directly related to Les Bois operations an additional $730 in generated elsewhere in the Treasure Valley. Conclusion At the request of Les Bois Park, an analysis of the economic impact was completed to show how the race track affects the Treasure Valley community. The results from the analysis showed that each year Les Bois Park supports employment of 536 people and employee compensation of $9.98 million. The loss of Les Bois Park would adversely affect the local economy.

6 Les Bois Park Page 6 Works Cited Crompton, J. L. (1995). Economic Impact Analysis of Sports Facilities and Events: Eleven Sources of Misapplication. Texas. Retrieved from : Day, F. (2015). Principles of Impact Analysis & IMPLAN Applications. Retrieved from IMPLAN Group LLC: Duff & Phelps. (2008, October 8). Amce Co., Inc. Economic Impact Analysis. Retrieved from _Materials/M.%20Press%20Article%20Economic%20Impact%20Report.pdf Gas Buddy Boise. (2015, September 21). Retrieved September 21, 2015, from

7 Les Bois Park Page 7 Appendix A Table A1 and A2 was information that was provided by Les Bois Park, but Table A3 was created on estimations and assumptions based on the local area. The amount spend on lodging was based on the price of the RV park nearest Les Bois Park because that s where a large majority stay during their visit. Also, there were 273 total racing individuals with 204 who were non-locals and had to stay somewhere. Since these people were staying for a few weeks at a time, the assumption that they would bring their family/significant other was put in place. So, on average, for every two trainers there would one guest, bringing the total visitors to 306. For food an average of $30 per person per day was put in place with the assumption they would spend around $10 a meal. Finally, the miscellaneous factor included everything else outside of the race track that the visitors would spend their money on such as gas, entertainment, tobacco, etc. This amount was based on a monthly budget of $100 per person because an average 15 gallon tank of gas would have cost about $45, leaving about $55 for personal spending (Gas Buddy Boise, 2015). Table A1: Fixed Factors Item Food & Employment (full, Payroll (includes Purse to Total Beverage Sales part, temp) benefits) Owners Taxes Total $1,095, $2,778,450 $698,200 $2,068,000 Table A2: Factors Based on Data Item Trainer Fees Horse Feed Veterinarian Fees Transportation Farrier Fees Total $1,349,081 $449,650 $898,500 $175,500 $187,188 Table A3: Non-Fixed Factors Item Lodging Item Food Item Misc. Non-local Racers 204 Total Guests 306 Total Guests 306 RV Cost ($)/Month 460 Days 98 Months 3.5 Total $328,440 Dollars/Day 30 Dollars/Month 100 Total $899,640 Total $107,100

8 Les Bois Park Page 8 Appendix B Table B1 is the results from the Input-Output model for the Treasure Valley, and Table B2 shows the total impact that Les Bois Park has on the top ten industries in the Treasure Valley based on employment. The first industry, spectator sports companies, is affected the most because Les Bois holds racing events. The next industry is the food services and drinking places, which makes sense because the non-local participants are going out to eat during this season. The veterinary services industry is had another big impact for the employee compensation and sales. They paid out a total of $516,977 to their employees and received $950,223 in sales. Table B1 Treasure Valley Impact Summary ImpactType Employment Employee Compensation Value-Added Output Direct Effect $4,673,248.6 $6,888,356.9 $20,335,973.7 Indirect Effect $3,156,256.2 $4,485,682.5 $8,464,668.9 Induced Effect 52.4 $2,146,934.0 $3,691,864.5 $6,301,187.1 Total Effect $9,976,438.8 $15,065,903.9 $35,101,829.7 Table B2 Treasure Valley Top Ten for Employment Description Total Employment Total Employee Compensation Total Value-Added Total Output Spectator sports companies $4,273,652.7 $6,125,728.3 $17,764,501.1 Other support services 21.5 $24,260.1 $525,706.7 $2,144,011.2 Promoters of performing arts and sports and ' agents for public figures 14.9 $251,823.7 $332,041.2 $850,229.3 Veterinary services 14.3 $516,976.8 $526,407.1 $950,223.7 Food services and drinking places 10.2 $216,163.8 $298,709.8 $589,223.4 Real estate establishments 8.3 $83,102.8 $523,692.3 $788,463.4 Employment services 7.1 $203,107.2 $221,138.0 $275,308.0 Support activities for agriculture and forestry 6.4 $219,043.1 $144,570.0 $226,084.3 Retail Stores - Food and beverage 5.8 $169,164.9 $224,994.6 $330,720.0 Grain farming 5.4 $112,014.9 $107,650.4 $461,417.0

9 Les Bois Park Page 9 Appendix C Similar to Appendix B, Appendix C is showing the results from the Input-Output model for the entire state of Idaho. Table C1 is showing the total statewide impact from Les Bois Park operating during the 2015 season. Statewide a total of about four jobs, $144,000 in additional employee compensation, and an extra $262,000 in additional income were generated outside of the Treasure Valley. The total sales generated outside the Treasure Valley was an additional $596,000. Comparing the statewide and Treasure Valley results, the tables shows that the majority of Les Bois Park s impact is restricted to the Treasure Valley Table C2 lists the top ten industries impacted outside of the Treasure Valley based on employment. The industry most affected was the promoters of performing arts and sports, but they only had increased sales of about $42,000. The industry with one of the largest increases outside the Treasure Valley for sales was the telecommunications industry, with an increase of about $103,000. Table C1 ImpactType Employment Employee Compensation Value-Added Output Direct Effect 0.0 $0.0 $0.0 $0.0 Indirect Effect 3.0 $100,041.3 $178,656.3 $423,194.0 Induced Effect 1.2 $44,053.7 $83,160.6 $172,995.5 Total Effect 4.2 $144,095.1 $261,816.9 $596,189.5 Table C2 Statewide Impact Summary Statewide Top Ten for Employment Description Total Employment Total Employee CompensationTotal Value-AddedTotal Output Promoters of performing arts and sports ' 0.8 $10,758.6 $14,940.8 $41,913.2 ' and agents for public figures Scenic and sightseeing transportation and ' support activities for transportation 0.4 $16,250.7 $16,476.5 $37,428.8 Telecommunications 0.2 $9,370.4 $47,326.2 $102,842.1 Food services and drinking places 0.2 $3,148.0 $4,552.1 $9,489.7 Insurance agencies, brokerages, and ' ' ' ' ' related activities 0.1 $5,369.2 $7,081.2 $15,131.2 Animal production, except cattle and 0.1 $2,257.0 $5,271.0 $9,635.5 Real estate establishments 0.1 $827.5 $6,285.1 $9,582.3 Transport by truck 0.1 $3,913.3 $4,942.1 $11,037.6 Grain farming 0.1 $1,978.3 $2,055.1 $8,808.7 Employment services 0.1 $1,765.3 $1,963.0 $2,552.8

10 Les Bois Park Page 10 Appendix D This appendix summarizes the results of increasing the number of horses in the live racing season by 300. This would require additional veterinarian and farrier services and there would be more spending by the non-local owners, trainers, and jockeys. The assumptions are straightforward extensions of the assumptions used in the base model. The results, summarized in Table D1, show that, for Ada and Canyon counties, the additional 300 horses would create 88 jobs, $2.8 million of employee compensation, $4.1 million in all forms of income (which would include employee compensation, interest, rent, and profit), and $7.5 million in sales. Table D2 shows which sectors are impacted most. Table D 1 60% Increase Impact Summary Impact Type Employment Employee Compensation Value-Added Output Direct Effect 57.6 $1,614,668 $2,209,934 $4,216,910 Indirect Effect 15.3 $575,386 $865,018 $1,556,028 Induced Effect 14.7 $600,291 $1,032,238 $1,761,841 Total Effect 87.6 $2,790,345 $4,107,190 $7,534,779 Table D 2 60% Increase Top Ten for Employment Sector Description Total Employment Total Employee Compensation Total Value-Added Total Output Other support services 20.2 $643,342 $1,114,780 $2,015,704 Spectator sports companies 18.6 $349,270 $443,916 $907,819 Veterinary services 8.2 $296,195 $301,598 $544,418 Support activities for agriculture and forestry 3.8 $130,258 $85,971 $134,445 Grain farming 3.2 $66,990 $64,379 $275,946 Retail Stores - Food and beverage 3.1 $89,283 $118,749 $174,549 Food services and drinking places 3.1 $64,540 $89,185 $175,923 Other accommodations 2.4 $60,640 $95,866 $197,092 Real estate establishments 2.4 $23,714 $149,442 $224,997 Employment services 2.3 $64,851 $70,608 $87,904