SAN RAFAEL – The decision by Lucasfilm to withdraw advanced plans for a new digital movie studio in San Rafael’s Lucas Valley will reverberate throughout the Marin County economy for many years and result in the loss of hundreds of potential jobs and tens of millions of dollars to the regional economy, according to a recent study and those familiar with the project.
“This loss affects the economy deeper than can be measured at this moment. The long-term loss to our economy affects tax revenues, home buying, retail, schools, community. … It’s a trickle-down effect that will be felt for a long time,” said Klif Knoles, executive director of the Marin Builders Association.
Several professional firms had been contracted to work on Lucas's Grady Ranch project during its development, providing services such as environmental consulting and architectural planning. Including the indirect economic activity for restaurants and other local businesses, the two-year construction phase was expected to add nearly $134 million per year into the local and regional economy, according to an impact study released last month by the Marin Economic Forum.
That phase was also expected to generate 690 new jobs in Marin County during construction, and nearly $5 million in combined annual state and local tax revenue, according to the study.
Yet with the announcement on April 10 that George Lucas and his real estate company, Skywalker Properties, would no longer proceed with the project, the possibility of direct and indirect economic stimulus for the region’s economy has evaporated.
“These indirect firms ripple the initial effects out into the broader community; they are the bridge between the project and the total economic impacts, which were large and vast in this case for Marin and the North Bay,” said Dr. Robert Eyler, interim CEO and chief economist of the Marin Economic Forum.
Much of the future work would likely have gone to local firms, Mr. Knoles said. Past Lucasfilm projects have utilized member contractors and engineers, and required services would have included site work, infrastructure, engineering, building and a number of subcontractors, he said.
Many local firms had already contributed services to the project or have been involved in design and construction since the purchase of the land in 1985, said Tom Forster, a spokesman for Lucasfilm.
"We are very proud of the local firms on our consulting team. They did great work on a very complex and challenging project, and we would not hesitate to work with them again,” Mr. Forster said.
Professional service vendors contacted for this story declined to comment on the impact of the project’s discontinuation. Yet Dr. Eyler said that there were currently no other companies whose projects would have a similar economic effect in the region, with the closest comparison in scale being recent expansion by BioMarin Pharmaceutical.
The impact report describes an enduring economic benefit for the county that would have continued into the operation of the 270,000-square-foot studio. For every 100 employees who were directly impacted by hiring, Marin County businesses would generate $82 million in new revenue and $3.8 million in combined state and local taxes.
The indirect benefit of increased local spending would have also generated the “induced” benefit of improving the general economic climate, which could encourage a swath of positive activity, according to the report.
“New schoolteachers, new restaurants, new soccer teams, new baseball coaches, more engaged people in the community and an increase in demand for local businesses across many industries,” Dr. Eyler said.