Half of UC Merced’s business spending goes to Merced; not so much in construction

BY THADDEUS MILLER

DECEMBER 21, 2016 6:15 PM

UC Merced has directly contributed more than $1.4 billion to the San Joaquin Valley economy to date, and more than $2.6 billion to the state’s economy, according to a report released Wednesday by the university.

Wages and benefits, construction contracts, research expenditures and the purchase of goods and services are the major drivers of the university’s financial infusion, according to the annual Economic Impact Report.

Campus and city leaders have said the benefits will continue to roll in during the four-year construction of the 1.2 million-square-foot expansion planned in the Merced 2020 Project, an effort to make room for a student population of 10,000 and add hundreds of new faculty and staff positions.

Chancellor Dorothy Leland touted the “undeniably positive effect” the campus has had in the region.

“We are proud to be part of this community and the future is looking brighter than ever,” she said in a statement. “UC Merced is gaining a national reputation for student success, academic distinction, research excellence, sustainability and affordability, and we are enriching the Valley while transforming our students’ lives.”

$1.4 billion        

UC Merced’s contribution to the San Joaquin Valley economy, report says

UC Merced employs more than 3,300 people, according to the report, making it one of the largest employers in Merced. The payroll, which includes student workers, since the campus began operations in July 2000 now totals more than $1.08 billion. Payroll for August 2016 alone was more than $14.31 million, according to the report.

Research conducted by the University of California Office of the President has shown that the UC-related investments generate economic “ripple effects” that typically double or triple the value of the original investment, according to a news release.

The Merced 2020 Project began construction in the fall.

Half of all the money the university spends on business services, or $103 million, has been distributed in Merced County. The next largest chunk, $57 million or 27.9 percent of the business services dollars, has been spent in Fresno County, according to the report. Stanislaus County has seen $23 million.

58          

Percentage of faculty and staff living in Merced County, report says

Forty-six percent ($70 million) of construction contracts have gone to Fresno County companies, the report says, and Merced County has seen 11 percent ($17.5 million). Stanislaus and San Joaquin have picked up 16 percent ($24 million) and 15 percent ($22 million), respectively.

Merced Mayor Mike Murphy, who took the office this week, pointed to the growth of the campus as part of why he’s excited to be leading the city. He said the city and its staff can play a part in helping local businesses pull down more of those contracts and dollars.

“Part of our role at the city is to make sure that our local vendors, and suppliers and laborers are able to participate in this $1.4 billion investment to the greatest extent possible,” he said. “That’s where our focus is.”

The city’s position is “the envy” of other Valley communities, he said, adding it’s up to the city to make sure there is enough housing, better roads and other infrastructure to take advantage of the investment. The city also can help by cultivating a vibrant downtown and helping to beautify the city in general.

Almost 58 percent of the school’s faculty and staff live in Merced County, and 73 percent in the San Joaquin Valley, the report says.

The expansion is expected to add 400 permanent faculty and staff positions, as well as more jobs within the local community, according to plans.

UC Merced is also building a 67,400-square-foot facility in downtown Merced to provide additional space for administrative staff, though it is not considered part of the 2020 Project. The $45 million Downtown Center is scheduled to be ready in late 2017.

The campus has been recognized for its impact on the region’s economy. Merced city and county officials have often touted UC Merced as the “catalyst” for a number of new development projects and downtown renovations.

A December report from Governing Magazine showed that the Merced metropolitan area has experienced the top personal income growth of any region in the nation since 2012.

“One big contributing factor to the region’s growth is the expansion of the University of California’s Merced campus,” the report said. “The school, which opened only a decade ago, continues to add students, faculty and staff. The expansion has further supported new developments around Merced, where long-vacant downtown retail spaces have started filling up.”