Center will draw cash to region

City and University officials have projected a substantial direct economic benefit from the Yale-New Haven Cancer Center, but these officials and leading economists say the center’s indirect contributions to both the city and the state will be far larger — eventually.

The cancer center, which received the go-ahead for construction two weeks ago after a year of heated negotiations, is expected to pump a total of $1.1 billion into the New Haven County economy by 2012, according to a study performed by the Connecticut Economic Resource Center in 2004. More than 1,200 jobs will be added in that same time period, 1,100 people will move into the county, and $515 million will be added to the total personal income of Connecticut residents. But some Yale officials said the economic impact of the center has been blown out of proportion, and CERC economists warn that its more sweeping effects may be a long time in coming.

Although the cancer center’s direct economic impact is expected to be significant, it does not represent a groundbreaking departure from past economic development in the city, Yale Associate Vice President for New Haven and State Affairs Michael Morand said. The cancer center is slated to bring $100 million to the regional economy in construction costs, but Yale alone has spent $1 billion on construction in the last decade.

“Yes, it’s a big deal,” Morand said. “Has the revolution arrived? No. … No one project will do everything. But the best way to create economic strength is not to try and hit grand slams but to consistently hit enough singles to get runs on the board. The cancer center itself is a solid triple.”

CERC Senior Economist Dale Shannon, the chief economist on the CERC study, said the cancer center’s immediate contributions to New Haven will be concentrated largely in the city and will not drastically affect the surrounding regions. As a whole, the county and state will not feel a large direct economic impact, he said.

“Relative to the total economy in New Haven [County], it’s small,” Shannon said. “The county is a big county, and even $1.14 billion is not going to be that enormous, [but] it’s significant, and it will definitely have a good positive effect to the area closest to the hospital.”

Still, the cancer center will have important indirect impacts on the regional economy in the long term, Shannon said. Yale-New Haven is already considered a regional leader in cancer research, he said, and a perception that Connecticut fosters a thriving health industry will bring more businesses to the area.

John Soderstrom, the managing director of Yale’s Office of Cooperative Research, said the cancer center will be a boon for the biotech industry in New Haven. The 30 biotech companies currently located at 300 George St. have generated more than $2 billion in equity capital for New Haven, he said, and oncology is an increasingly popular field of research.

“Cancer is one of the areas which is seeing a tremendous amount of private-sector investment,” Soderstrom said. “[Having the cancer center] would create a much stronger and deeper base for science that would rival places like [New York City's Memorial] Sloan-Kettering [Cancer Center].”

A stronger research base would produce medical inventions that could become the basis for new biotech companies, Soderstrom said.

Morand said the construction of the cancer center also reflects a shift by both the city and the region away from a manufacturing-based economy and toward services that include education and health care. But Shannon said that although New Haven’s economic landscape is undergoing a rapid “restructuring,” entry-level jobs will still be available for city residents, especially in the health care sector, where human service cannot be replaced by machines. Entry-level positions are necessary in New Haven, he said, where many workers do not have the education required for more specialized, higher-paying jobs.

“This cancer center is going to provide … a significant source of employment and income for a person who doesn’t have high earnings potential and high educational attainment,” Shannon said. “It doesn’t solve the problem, but it does give a continued existence.”

Ward 5 Alderman Jorge Perez said the Hill community will benefit most from the new center, as the availability of additional jobs may improve the economic situation of many families. The hospital agreed two weeks ago to hire 100 residents in the Hill neighborhood into entry-level positions and to provide job training for 50 current employees to help them advance in their fields.

Perez said both tenets of this employment agreement offer area residents a chance to move beyond what Shannon called “continued existence.”

“We’ve never had any companies that have put into writing that they would do this, not at least in the 30 years I’ve been here,” Perez said. “Job training … is very critical and will provide opportunities for people working entry-level positions, [who] will have an opportunity to move up. That has a long-term economic impact. That ladder movement is going to have impact for life.”

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