The economic benefits generated by the state’s largest ocean science and technology park are highlighted in a new study published less than two weeks after the state auditor issued a report critical of management practices at the facility.
The direct and indirect economic impact of spending by businesses at the Natural Energy Laboratory of Hawaii’s tech park at Keahole Point on Hawaii island was an estimated $87.7 million statewide in 2010, according to the study released today by the University of Hawaii Economic Research Organization.
The 32 tenants at NELHA’s Hawaii Ocean Science and Technology Park spent $81 million in 2010, about $50 million of which stayed in the state, UHERO reported. The ripple effect of that spending translated into $87.7 million in economic benefits, $4.5 million in tax revenue and 583 jobs, according to UHERO.
NELHA’s HOST Park is the main producer of one of the state’s top exports: desalinated drinking water. It also accounts for 70 percent of Hawaii’s aquaculture production. NELHA’s main revenue sources are lease rents from tenants and seawater pumping fees.
The UHERO data "validate the vision and decisions of state policymakers, Legislature and the NELHA board of directors over the past 30 years to develop and support the technology park," said John DeLong, chairman of the NELHA board of directors.
The UHERO study comes on the heels of a management audit published May 31 that focused on transparency and accountability problems within the NELHA organization. The audit reported that NELHA began taking steps to implement reforms after a new administration took over management of the agency in June 2011.
Among the early actions taken by incoming Executive Director Gregory Barbour was commissioning the UHERO study to provide the public with a better picture of NELHA’s role in the state’s economy.
The report’s information illustrates "the importance of our current operations and will be used to guide future growth at HOST Park," Barbour said.
Because much of facility’s infrastructure, such as roads and deep-seawater intake pipes, is already in place and paid for, NELHA’s financial health "will only get better over time," he said.
"Our efforts are now focused on generating new alternative revenue streams while maintaining our mission and increasing the efficiency of our operations to lower costs for businesses that locate in the park," Barbour said.
NELHA became self-sufficient in 2010 and generates all of its operating revenue. While it receives no state tax dollars to fund its operations, NELHA does receive state support for capital improvement projects, an amount that has averaged $2 million annually over the past 10 years.
UHERO conducted the economic impact study using "standard empirical" research methods. Researchers relied on a combination of data from surveys of businesses, data from NELHA and UHERO. The data were plugged into an economic model developed by the state Department of Business, Economic Development and Tourism to determine the economic impact for direct, indirect and induced spending across 11 categories.
"One way to look at the state’s return on these expenditures is to consider what the state’s investment has provided in terms of the net impact from NELHA," said Carl Bonham, UHERO executive director. "Every dollar of state expenditures on NELHA results in $42.80 of output generated in the Hawaii economy," he said.
