The University's economic impact on Charlottesville and Albemarle County surpassed $1 billion in 2005. Excluding spending by faculty, staff and visitors, spending solely by the University totaled nearly $790 million in the same year.
For some, these findings of the recent study by the Weldon Cooper Center for Public Service articulated a well-known fact among those in the business community: The University is, by far, the largest and most influential economic force in central Virginia.
"Just driving into the town and spending more than a few hours here, it's very clear that the University of Virginia is the enormous economic engine in the community," said Timothy Hulbert, president of the Charlottesville Regional Chamber of Commerce.
Big spender
Students, as much as any other group of individuals at the University, make up a significant portion of this economic energy. The study states that student spending in the Charlottesville area totaled almost $212 million in 2005. According to Hulbert, local businesses understand the importance of serving this large base of potential customers.
"One of the great things about university communities ... is that youth brings with it a vitality that is not seen in communities that don't have a university," Hulbert said. "Before you get to the dollars, you have the sheer vitality that has its sight set on the future. That's a good thing, and you can feel that vitality in this community all the time."
The study also noted that the University generates more than $600 million from out-of-state sources including out-of-state grants and tuition. On average, the University receives $4.71 of out-of-state funding for every $1 of support from the Commonwealth.
"Look at the state contribution and compare that with the money brought in from out-of-state," said William Shobe, director of business and economic research at the Cooper Center and co-author of the study. "That was a much smaller number that I expected. I didn't think I was looking at the right thing at first."
This disparity in the source of operating funds is a "powerful statistic," according to Hulbert. He said the Commonwealth has decided with such an arrangement that it is going to let the economic marketplace decide the vitality of its universities more so than other states, such as North Carolina, that proportionally provide more direct state funding for their public colleges and universities.
More money, more problems?
While University growth has brought economic benefits to the area, it has prompted a new set of concerns among some members of the Charlottesville community. Many of these, such as increases in traffic and pollution and a negative impact on affordable housing, are not explicitly mentioned in the study.
"If we had taken on a larger sociological view of society and asked questions about [if] we want to have a city where a lower-income person can't afford to live, it takes us way outside our area of expertise," Shobe said. "We'd be beyond what we could say anything about as professional economists. Our tendency is to look at things we can more easily measure."
According to Shobe, skyrocketing land values near Grounds are simply a way of assessing the value of the University and a sign of the very economic advantages the study tries to measure.
"Do you say that an increase in property values around the school are a cost of putting the school there?" Shobe questioned, adding that there is a social adjustment that has to be made when a community becomes prosperous.
John Knapp, senior economist at the Cooper Center and study co-author, echoed a similar sentiment, saying peripheral effects such as rising property values are signs of the University's economic success.
"Of course, when you have an economic driver like the University, it's going to make this an area that people want to move to," Knapp said. "The markets respond to that."
Hulbert said he believes the challenges of economic growth should be welcomed by both local businesses and residents.
"When population grows there are challenges to that," Hulbert said. "The challenges of growth are much more preferable than the problems of decline."
Though Shobe acknowledged that some low-income residents have been priced out of the local housing market because of growth, he pointed out that same growth has brought a number of higher-paying labor jobs to the area. He said both new and long-time residents are willing to pay more to live near the University because of the services it provides. For example, the Medical Center provides a significant amount of indigent care to some local residents, often at little or no cost to those in need.
Hulbert also pointed to student and faculty volunteer efforts as a way of serving the community, using the United Way's annual Day of Caring as an example.
"There will be hundreds of people from various employers, and we'll spend a day helping the community," Hulbert said. "The University is once again the largest player in the field. [It's] contributing to the vitality and tapestry of this community. It's a great photo, all of the orange."
Growth potential
The authors of the study ventured guesses that the University's economic growth will continue well into the future. Shobe, however, suggested that the University's operations might constitute a smaller percentage of economic activity in the region in the coming years.
"Even as the University grows, the community around it is growing faster," Shobe said. "Charlottesville is becoming a very attractive place to live. It's become an attractive place to locate certain kinds of businesses. One has the feeling that it sort of reached the point where this growth is self-sustaining, that it doesn't require more money from the University to boost growth in the community."
Knapp pointed to other measures of restraint, including the Board of Visitors' current cap on student enrollment, which currently rests at about 20,000. He said, however, he does expect the University's research facilities and capabilities to grow extensively both in the medical and non-medical realm. The research facilities, a new source of income and economic development, were not around in 1990.
Though this current study extensively outlines the University's large economic impact on the Charlottesville area and the Commonwealth, Leonard Sandridge, executive vice president and chief operating officer, stated it will not influence the way in which the University works with either entity.
"The report will not affect the way we go about our business, teaching, research and health care activities," Sandridge wrote in an e-mail.
This steadfast approach is good news to some local businessmen, according to Hulbert.
"For the most part, the University has demonstrated over 180 years that it knows what it's doing," Hulbert said. "They're not infallible, but they do know what they're doing, the stewards of the day. The growth of the university brings with it more economic benefits."
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