Construction of Sound Transit East Link To Cost Bellevue More Than $1.4 Billion in Lost Revenues Due to Business Disruption

Construction of Sound Transit East Link to cost Bellevue more than $1.4 billion in lost revenues due to business disruption

Bellevue, Wa. – Construction of the East Link will result in an economic impact of more than $1.4 billion over a four-year construction period, according to Hebert Research. A recent survey of 606 Bellevue businesses and 611 individuals who work or live in Bellevue indicates consumer behavior will be affected in three major business sectors

The economic impact research indicates that one in three businesses will see annual revenues decrease as a result of construction.

Furthermore, nearly one-third of Bellevue residents surveyed report they will visit the Central Business District less frequently to shop, dine, enjoy entertainment or use professional services. The net effect is a potential decrease of more than $229 million annually during construction to CBD businesses, the report notes.

The research was commissioned by Fast Forward Eastside, a pro-transit forum founded by Alex Smith, an Eastside property owner and CEO of Kaye-Smith Enterprises. “I invite everyone to consider the real costs of East Link in order to debate the benefits and quantify the economic harm to the City of Bellevue and the region overall,” Smith said. 

Hebert Research of Bellevue, Wa., surveyed 606 Bellevue businesses and 611 individuals to determine the impact of construction of the Sound Transit project on business revenue, operations and consumer purchasing behavior. The research was conducted between Sept. 19 and Oct. 12. The research focused on the economic impact during a four-year period of construction for each surveyed business sector; Sound Transit’s website indicates construction will take up to eight years, from 2015 to 2023.

One in 13 (7.7%) businesses surveyed in the Central Business District said they would close or relocate during construction due to traffic congestion.  With 1,300 businesses reported by the city of Bellevue in the CBD, the survey indicates 100 businesses could close or move during construction.  Of the businesses who indicated a move or closure, nearly half (46.4%) anticipate a staff decrease of up to 50 percent and one in five (21.5%) predict a staff cut of more than 50 percent.

“It’s important to look beyond the merely assumed benefits of a project to quantify the economic impacts costs associated with the period of construction,” noted Jim Hebert, president of Hebert Research. “This research utilized the same methodology employed in our research on replacement of the Alaskan Way viaduct. This modeling provides the best known method to determine total economic impact associated with a project of this magnitude.” 

Hebert Research used a computer-based economic impact assessment modeling process to assess the ripple effects caused by increasing and decreasing expenditures in various parts of the economy. The analysis indicates a total employment effect of 7,239 lost jobs over four years due to deceased revenue and moved/closed businesses. Tax losses of $751,332 annually are anticipated due to decreased collection of sales tax and business & operating tax.  Over four years the tax effect is projected to total more than $3 million.

Fast Forward Eastside is led by Alex Smith, the CEO of Kaye-Smith Enterprises, headquartered in Bellevue, Wa., with manufacturing facilities in Renton, Wa. and Portland, Or. Mr. Smith is a graduate of the University of Washington, a member of the Bellevue Rotary Club, The Seattle Chamber of Commerce Trustee Board, the Renton Chamber of Commerce, the Bellevue Chamber of Commerce and the Bellevue Downtown Association. He serves on the board for The Marsha Rivkin Center for Ovarian Cancer Research and for The Tateuchi Center. Alex also is the manager of The Lester & Bernice Smith Foundation.

Fast Forward Eastside has posted a summary of the economic impact research on its website: www.fastforwardeastside.com.

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Therese Beale

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