Student Corner: The Economic Impact of Downtown Courthouses

Community and Economic Development – Blog by UNC School of Government

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Student Corner: The Economic Impact of Downtown Courthouses

By CED Program Interns & Students

Published December 10, 2015

In 2013, the 11-story, $119 million Durham County Courthouse opened. This 320,000 square foot structure is located on 510 South Dillard Street and is right next to the Durham Bulls Athletic Park and the Durham Performing Arts Center in downtown Durham. Government offices, homes, and businesses are traditionally found in city and town centers. In fact, courthouses like the Durham County Courthouse often represent an important downtown asset and landmark site in many city centers. Although the dependence on cars and the increasing cost of land in city centers leave fewer reasons for governments to keep offices downtown, both the National Main Street Program and the American Planning Association have documented recent increases in downtown revitalization and vitality.

According to a study by Place Economics, downtown workers spend between $2,500 and $3,500 annually in their downtown economies. With a central location, government offices are more accessible for employees and travelers and are near supporting businesses such as pharmacies and restaurants. In a University of Wisconsin-Extension study, the researchers concluded that county seats:

• have 8.4% more businesses;
• 4% more retail businesses; and
• 25% more professional businesses in downtown compared to downtowns without county offices.

While these studies document the economic impact of public buildings in downtown, the following cases specifically address the economic impact of downtown courthouses.

Economic Impact of Historic Preservation in Texas

In 1999 the Texas Legislature created the Texas Historic Courthouse Preservation Program to provide funding for the renovation of historic county courthouses. Since 1999, Texas has spent $403 million to fund 91 courthouse restoration projects. The average amount spent annually on courthouse projects through this program is $31 million. This program on an annual basis generates the following economic impact:

• 599 jobs
• $32 million in labor income
• $560,000 in state taxes
• $1.8 million in local taxes
• $41 million in state GDP

One particular project, the Denton County Courthouse has spurred over 130 revitalization projects in the courthouse square since its renovation in 2002.

Miami-Dade County Children’s Courthouse

In April 2015, the Miami-Dade’s Children Courthouse opened. This 14-story, 375,000 square foot courthouse in downtown Miami features over 18 courtrooms. Prior to the construction of this courthouse, the City of Miami commissioned The Sharpton Group to conduct an economic impact analysis. To project the economic impact, jobs, wages, and total output were projected during and after development. Output incorporates employees’ spending on local businesses such as food, recreation, entertainment, and transportation. To calculate the output, The Sharpton Group used a multiplier of 1.8792 that was obtained from the Dade City Planning Department. This multiplier indicates that for every $100 spent in Miami, $187.92 is reinvested in Miami. The wages and jobs created refer specifically to the development and operation of the courthouse. While these are projected figures, this study provides a method for determining the economic impact of a downtown courthouse. If another study is completed on the impact of this courthouse, there could be stronger evidence to suggest the importance of downtown courthouses.

While county seats have more downtown businesses than downtowns without county offices, the case for downtown courthouses having a greater economic impact over other uses remains unclear despite the cases above.

Omar Kashef is a second-year graduate student seeking a dual-degree in Public Administration and Information Science and is currently a Fellow with the Development Finance Initiative.