Revving up the economy

Revving up the economy

Barrett-Jackson’s impact swells to $160 million

By Shelley Ridenour

While there are hundreds of finely tuned machines at Scottsdale’s auto auctions in January, but perhaps none roars louder than the economic engine of Barrett-Jackson Auction Company.

An analysis prepared in June 2016 shows total economic activity by the company to be an estimated $159.5 million. The bulk of that — $131 million — comes during the nine-day auction itself, staged at WestWorld of Scottsdale. Another $28 million comes from year-round operations, including the showroom in Scottsdale.

The study was prepared by Elliott D. Pollack and Co. of Scottsdale for Barrett-Jackson and Scottsdale.

Last year’s auction drew 350,000 people. Many come from outside Scottsdale, the study shows, meaning that visitors spend money on other activities, including lodging, dining, shopping and entertainment.

Last year’s breakdown showed 296,563 attendees, 2,429 vendors, 38,531 co-signors and 12,477 bidders or guests, according to the study.

A total of 1,502 autos were sold for a collective $101.6 million. That translates to just shy of $12 million in auto sales taxes.

Local residents made 12 percent of the purchases, meaning Arizona sales taxes were paid on those.

Local governments taxed the $8.9 million in gate sales, the $1.3 million in merchandise sales and the $3.3 million in food and beverage sales during the auction.

“Even though we produce collector-car auctions all across the United States, we are proud to call Scottsdale, Arizona, our home,” Barrett-Jackson Chairman and CEO Craig Jackson said. “The auction has become an integral part of Scottsdale’s identity.”

The study demonstrates the long-lasting benefits of Barrett-Jackson, he said.

People spending money during the auction have direct and indirect effects on tax revenue to the city, county and state, the study states. The state was projected to receive $6 million in revenue from people associated with Barrett-Jackson in 2016. That number includes $4.5 million from visitor spending and $1.1 million in direct auction activity.

Maricopa County was estimated to receive $2.5 million. Again, tourism spending is the biggest piece of the pie — $2 million — with another $317,750 coming from the auction itself.

And, Scottsdale’s receipts were predicted at $1.8 million. Nearly all of that — $1.3 million — comes in tourist spending and almost a half a million dollars is direct auction activity.

The study acknowledges that local governments likely incur some costs from providing services to the auction. Those numbers were not evaluated because they were beyond the scope of the study.

“Barrett-Jackson’s positive impact on the community is undeniable,” Scottsdale Mayor Jim Lane said, “both economically and as a sold component of the Scottsdale tourism brand.”

Lane pointed out that the auction and Barrett-Jackson’s showroom also benefit neighboring communities.

The Pollack study defines primary revenue as direct taxes collected. Secondary revenues are taxes paid via the wages of employees supported by the company and the tourism it generates. For example, tourists attending the auction generate primary revenue from their spending. The employees who benefit from that spending in turn spend part of their salaries on local goods and services, including paying taxes, which are considered the secondary revenues.

The ongoing operations of Barrett-Jackson are significant, the analysis shows. Wages are paid to employees, property taxes are paid on the office buildings occupied by Barrett-Jackson and employees pay taxes on their property, income and purchases. Barrett-Jackson also contributes to the state’s unemployment-insurance program, the study points out.

Barrett-Jackson employs 64 full-time equivalent employees with annual wages of $5.6 million. The estimated value of the company’s real property is $6.5 million and the company pays about $600,000 a year in rent.

The 2017 Barrett-Jackson Collector Car Auction is Jan. 14-22.