Tanglewood's high note: $104 million impact on Berkshire economy
That's the current, overall economic impact of Tanglewood on the Berkshire County economy each year, as reported in a new study by Williams College Economics Professor Stephen C. Sheppard and the college research center that he directs.
The preliminary results from 1,700 just-completed surveys and related studies compare to the $60 million injected into the region's economy annually a decade ago, when Sheppard compiled similar data for a project conducted by Mount Auburn Associates. That report was issued in 2008, based on information gathered during the two previous years.
What's more, the Boston Symphony Orchestra's investment in its summer home is growing by another $30 million when construction of its four-building complex to house the new Tanglewood Learning Institute and to support the orchestra's Tanglewood Music Center academy beginning this fall is completed by spring 2019.
Sheppard's full report commissioned by the BSO will be released this summer and will include the orchestra's economic impact on Boston and the rest of the state. The 2006 data put that figure at $166 million a year. The highlighted results on how Tanglewood helps drive the county's hospitality and cultural sectors were issued by the BSO over the weekend.
Inflation accounts for about $13 million of the $43 million, a 70 percent increase in spending since 2007, Sheppard stated.
"We believe this great news underscores the ideal relationship between a festival and its surroundings," said BSO Managing Director Mark Volpe. "Where Tanglewood thrives so abundantly in large part is due to its setting in the beautiful Berkshire hills, while at the same time strengthening and enhancing the community it is so privileged to know and serve."
According to Sheppard, director of the Williams College Center for Creative Community Development, the increase in Tanglewood's annual economic impact on the county since 2007 stems from growth in the festival's overall attendance; an increase in the amount people spend per visit and the length of time people stay in the area per visit, and a growing perception of Massachusetts, in general, and Berkshire County, in particular, as a vibrant tourist destination.
In an interview on Friday, Sheppard emphasized that the data is fresh, with 1,700 survey responses from Tanglewood patrons received within the past few weeks. Audited budget and payroll data is from the BSO's most recent fiscal year.
"The study underscores the surprisingly very big Tanglewood operation," Sheppard said. "It's the largest single cultural destination in the Berkshires and this puts some actual hard numbers to describe that impact."
"It tells us not only is this a large and important part of the local economy, but it's growing," he added. "If the 2008 numbers had just tracked with inflation, the total current impact would be $73 million. But analysis indicates it's nearly $104 million, so that's telling us there's been real growth in the contribution of Tanglewood to the Berkshires economy.
"Does that fix every problem?" Sheppard asked rhetorically. "Obviously not, but we'd be in much worse shape if it wasn't here, and if it wasn't growing and investing."
He also pointed out that the upcoming building project overlooking Ozawa Hall will boost the BSO's total Tanglewood impact to $127 million annually in 2018 and 2019.
"We're fortunate to have a successful world-class operation here for the long run that's investing in its operation, and the investments are generating real growth for the region," Sheppard asserted.
In addition, he said, "the project is helping fuel a construction boom in Berkshire County." During the past year, building costs have increased by about 10 percent, on average.
Highlights of the study's findings:
- Attendance at Tanglewood now averages about 356,000 each summer, with 84 percent of the audience from outside Berkshire County and half of the listeners from out of state. Sheppard described the increase since 2007, when annual attendance averaged 320,000, as a "hallmark of national and international interest in Tanglewood and the Berkshires as a destination."
- The typical visitor to Tanglewood spends nearly four days in the Berkshires.
- Total visitor spending injects more than $43 million directly into the county's economy, and second-home owners attracted to the area primarily by Tanglewood pay more than $13 million in residential property taxes, a major revenue source for local towns, particularly Stockbridge and Lenox.
- Tanglewood's total operations account for a $60.6 million impact on the county, including payroll and other expenditures.
- Tanglewood visitors also patronize other area arts institutions. About 14 percent of the summer festival's patrons also visit the Clark Art Institute in Williamstown, while just over 13 percent tour the Norman Rockwell Museum in Stockbridge. More than 8 percent patronize Jacob's Pillow Dance Festival in Becket, nearly 7 percent take in theater at Shakespeare & Company in Lenox, and close to 6 percent journey to North Adams for contemporary art and performances at Mass MoCA.
- The BSO's summer home generates between 930 and 1,100 jobs, representing a payroll of $35 million to the region's labor income. During the construction of the new building project starting this fall, that figure should increase to about $45 million by adding at least 400 jobs for a total of nearly 1,400.
The report states that the jobs "increase labor income directly through payroll outlays and the purchase of goods and services but also indirectly as vendors and their employees themselves spend their incomes making local purchases."
Details of the funding sources for the $30 million four-building complex will be unveiled this summer. The project ranks as the largest single one-time investment in the Tanglewood property since it opened in 1937, and it's among a handful of the county's most costly cultural development projects.
"The investment the BSO has made in Tanglewood has increased its importance as an economic entity within the county," Sheppard said.
He also countered "a natural concern people raise about cultural tourism, that it brings in mainly service sector jobs. This analysis indicates that while it's true there are a number of jobs in the county that are at modest wage levels, the presence of Tanglewood supports a very wide range of employment positions in sectors not normally associated by residents with Tanglewood."
As Sheppard put it, "the economy is hooked together in complicated ways. There are a number of jobs paying more than $70,000 a year indirectly supported by Tanglewood." His examples include hospitals, physician services, banking and business administration.
Volpe, the orchestra's managing director, stated that "it is deeply gratifying to all of us at the Boston Symphony Orchestra that our investment in the future of Tanglewood — with the construction of a new four-building complex for the Tanglewood Music Center and the new Tanglewood Learning Center — will make such a significantly increased contribution to the surrounding area."
He described as "quite remarkable that during the construction phase of this project over the next two to three years, Tanglewood's economic impact will rise to $127 million, providing an increased workforce to the region, along with other benefits essential to the area's success as one of the country's leading summertime tourist destinations and premier places for art and culture."
The BSO's endowment is $451 million, as of Dec. 31, 2016, and its current annual operating budget is $97 million. The organization spends $2 million annually to market Tanglewood.
BSO.org, which also hosts tanglewood.org, is one of the largest and most-visited orchestra web sites in the world, according to the orchestra, attracting about 10 million visitors annually and generating over $128 million in revenue since its initial launch in 1996.
Reach correspondent Clarence Fanto at firstname.lastname@example.org or 413-637-2551.
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