Logan's Impact to Area Economy Put at $7.6 Billion

Mar. 8--In many cities where new airports have been built 20 miles outside downtown, such as Dallas and Denver, their economic impact is impossible to miss, as office buildings, restaurants, and rent-a-car shops have sprung up to serve airport traffic.

One of the most dramatic examples is Dulles, Va., the Washington exurb that got its name from the nearby airport and has become home to a dense "edge city" passel of high-tech and consulting firms.

In Boston, where Logan International Airport sits just 2 miles across the harbor from the financial district, the airport's economic effect is less visible.

But a new study being released today estimates that Logan supports, directly and indirectly, more than 82,000 jobs and $7.6 billion worth of annual economic activity. That's equivalent to one in every seven jobs in Boston.

The study, by the Massachusetts Port Authority and the Greater Boston Chamber of Commerce, found that the airport and other Massport waterfront and shipping facilities employed 18,462 people as of 2004, the most recent data available. That's slightly more people than worked at the four biggest high-tech employers in Greater Boston, or at all 20 of the area's top 20 biotechnology companies, according to the study.

Today's report is the first Massport has conducted in 13 years aimed at quantifying the economic effects of Boston's port complex, although it uses different statistical models that prevent apples-to-apples comparisons to the 1993 report. Massport officials say they have no agenda in the report beyond trying to get up-to-date quantitative data on how the port complex fits into the regional economy.

Economic impact studies can be notoriously bullish about their sponsors, but chamber president Paul Guzzi said, "In terms of economic impacts, if anything, this one is conservative."

Massport chief executive Craig P. Coy said, "You can start to spin these things up -- is this real or not real? But there are some important facts in here that show how critical these facilities are to the economy of this region."

The $7.6 billion Logan economic impact figure counts wages paid to people who work at the airport, for Massport, airlines, and other companies; people who work in Greater Boston tourism industries that serve people who come to the region through Logan; and additional economic activity "induced" when those workers spend their money elsewhere on goods and services. The sum includes $559.4 million in state and local taxes.

Logan's overall yearly economic impact is equal to about 2.6 percent of the total personal income of Massachusetts residents, according to the Commerce Department's Bureau of Economic Analysis, although some of its benefits extend into New Hampshire and Rhode Island.

Around the country, several airports have commissioned economic impact studies in recent years. Many have made much more aggressive claims than the Massport-Chamber study, although no two studies use the same economic assumptions or models.

In June, for example, the Connecticut Department of Economic and Community Development issued a report saying that Bradley International Airport in Windsor Locks -- which served 7.4 million passengers last year, compared to 27 million at Logan -- supports 140,000 jobs, or 70 percent more than Logan. Connecticut officials said the Bradley study looks beyond just airport operations and visitor spending to account for how the airport "enables Connecticut to compete in the global economy."

Other studies in the last five years at airports closer in passenger volume to Logan also claimed more significant advantages. A Denver International Airport economic study put that facility's benefits at $16.8 billion and 193,000 jobs, a Minneapolis study said that city's airport supported 153,000 jobs, and a Phoenix airport study 123,000 jobs, according to a University of Memphis report last May.

Boston Mayor Thomas M. Menino, who has reviewed the study, said it helps illustrate how the "central location" of Logan just minutes across the harbor from downtown "gives you easy access to some of the greatest minds in the world" and helps the city's economy thrive.

Boston neighborhood residents have chronically complained about traffic, noise, air pollution, and other harm from Massport operations, and East Boston groups battled for three decades against a new sixth runway that is only now finally being constructed and will open later this year.

Menino said in recent years, though, Massport has become "a better partner with the city of Boston. There will always be issues between Massport and the city, but not to the degree we had in the past."

As part of the study, consultants Leigh Fisher Associates also studied economic effects of Massport maritime facilities, including shipping terminals in Charlestown and South Boston, which the firm said support 2,247 direct jobs and another 1,751 through vendors, suppliers, and spinoff economic benefits, altogether worth nearly $450 million annually.

Coy said the report gives him confidence Massport should press ahead with efforts to keep expanding shipping facilities, including a $50 million project now underway to add capacity at the Conley Terminal in South Boston.

"We're just coming out of a 10-year modernization project at Logan Airport. Our next focus, I think, should be on the waterfront, on the maritime side," Coy said. Like all East Coast ports, Boston imports more on ships from China than it exports, but in total traffic, Boston's port now has a higher percentage of total exports to China, including fish and forestry products. That represents a key base to build on, Coy said.

"Our ability to sustain the port is a challenge. We're getting to the point where it's break-even at the operating level, but it doesn't generate enough cash to support the capital investments that we need to make," Coy said. "We have some opportunities to invest to make this a more viable port."