News | January 16, 2019

North System Renewal Project Economic Study Reveals Significant Benefits For JeffCo And Metro Denver

Major system upgrade is one of Denver Water’s largest infrastructure projects

Jefferson County is expected to yield nearly $67M in economic benefit from nearly $208M in construction and spending activities related to the North System Renewal Project — a water infrastructure project that will modernize Denver Water’s north system, according to an economic impact study released recently. Economic benefits for the Denver metro area (including Jefferson County) total $405M, according to the report, https://www.denverwater.org/sites/default/files/north-system-renewal-economic-benefits.pdf

Development Research Partners conducted the study, which was sponsored by the Jefferson County Economic Development Corporation, the West Metro Chamber, the Metro North Chamber of Commerce, the Denver Metro Chamber of Commerce and Denver Water.

With an estimated cost of $600M, North System Renewal is one of the biggest renovation projects in Denver Water history. Work includes installing an 8.5-mile water pipeline through Jefferson County, building the new Northwater Treatment Plant next to Ralston Reservoir in Golden and modifying the Moffat Treatment Plant in Lakewood. Tunneling activity for the new pipeline began in 2017, and pipeline installation is expected to continue through 2022. Construction of the Northwater Treatment Plant began in 2018, with completion slated for 2024.

“The North System Renewal Project is an investment in the future of Denver Water, our customers and the community. It will upgrade components of our system that have served our customers since the 1930s. Water connects us all in many ways, and we’re proud that our work will benefit our customers and community in Jefferson County and the Denver metro area,” said Bob Mahoney, Denver Water’s chief engineering officer.

Highlights from the report:

  • NSR will generate $61.6M in transactions with construction materials suppliers in metro Denver, including $10.2M in Jefferson County.
  • Soft costs of NSR, including project management, design and engineering will yield $105.8M in contracts with metro Denver firms, including $25.4M in Jefferson County.
  • Approximately $7M will be spent by transitory workers for lodging, including $2.8M in Jefferson County.
  • Project construction and associated spending will support an estimated 1,376 workers across the Denver area.

“Water and the necessary infrastructure investment support business development and contribute to economic growth, providing benefits to Jefferson County and metro Denver,” said Kristi Pollard, president and CEO of Jefferson County Economic Development Corporation. “NSR construction not only provides large, short-term benefits, but will positively impact communities by increased spending in construction, retail, dining services, lodging and real estate.

Given construction of the project will affect homes, streets and business in north metro area, it’s good to see our communities will also derive benefit.”

Direct economic benefits to Jefferson County
NSR construction activity will have a total economic benefit of $66.9M in Jefferson County, produced by 389 workers earning $13.9M from 2017 to 2023. The table below outlines the total economic benefits of NSR construction activity in Jefferson County.

“This project creates substantial economic benefits to metro Denver and its northwest suburbs. Water infrastructure projects influence community development patterns and help communities support households and businesses,” said Gregg Moss, president and CEO of Metro North Chamber of Commerce.

West Metro Chamber President and CEO Pam Bales added, “Constructing this project is already creating jobs. It’s estimated that nearly 1,400 workers and support staff will be supported by the project and worker spending will benefit businesses in Jefferson County and across Denver.”

Table 3: Total Economic Benefits of the North System Renewal Project Construction Activity in Jefferson County, 2017-2023
  Direct Impact Indirect & Induced Impact Total Impact
Value of Output ($M) $48.80 $18.10 $66.90
Earnings ($M)   $9.50 $4.40 $13.90
Employment 241 148 389

Source: Development Research Partners, based on multipliers for Jefferson County from the U.S. Department of Commerce, Bureau of Economic Analysis, Regional Input-Output Modeling system (RIMS II), 2007 U.S. Benchmark I-O Data and 2016 Regional Data. Calculation Note: Direct x Multiplier = Total Impact

Total Impact - Direct Impact = Indirect & Induced Impact
Numbers may not add exactly due to rounding.

Direct economic benefits to the Denver metro area
NSR construction activity will have a total economic benefit of $405.1M in the Denver metro area, produced by 1,376 workers earning $63.8M from 2017 to 2023. The table below outlines total economic benefits of NSR construction activity in metro Denver.

Table 2: Total Economic Benefits of the North System Renewal Project Construction Activity in the Denver Metro Area, 2017-2023
  Direct Impact Multiplier Indirect & Induced Impact Total Impact
Construction Spending        
Value of Output ($M) $197.3 1.9576 $189.0 $386.3
Earnings ($M) $29.9 1.9686 $29.0 $58.9
Employment 520 2.29 670 1,190
Transitory Worker Spending        
Value of Output ($M) $10.3 18,303 $8.5 $18.8
Earnings ($M) $2.4 2.0467 $2.5 $4.9
Employment 118 1.5811 68 186
Total        
Value of Output ($M) $207.6   $197.5 $405.1
Earnings ($M) $32.3   $31.5 $63.8
Employment 638   738 1,376

Source: Development Research Partners, based on multipliers for the Denver metro area from the U.S. Department of Commerce, Bureau of Economic Analysis, Regional Input-Output Modeling system (RIMS II), 2007 U.S. Benchmark I-O Data and 2013 Regional Data.

“North System Renewal is an example of what can get accomplished when a water utility, regional municipalities and counties cooperate for the greater good. And it increases water security for Denver Water customers — many of whom live and work in metro Denver,” said Mahoney.

See the complete report.

Source: Denver Water