HomeMy WebLinkAboutEconomic Impacts of Protecting Rivers, Trails & Greenway Corridors-A Resource Book 1992 ECONOMIC IMPACTS OF PROTECTING
RIVERS, TRAILS AND GREENWAY CORRIDORS
A RESOURCE BOOK
PREPARED BY
RIVERS, TRAILS AND CONSERVATION ASSISTANCE
NATIONAL PARK SERVICE
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ECONOMIC IMPACTS OF PROTECTING RIVERS,
TRAILS, AND GREENWAY CORRIDORS
A RESOURCE BOOK
RIVERS, TRAILS AND CONSERVATION ASSISTANCE
NATIONAL PARK SERVICE
1992
Third Edition
DEC ! 4
U. S. DEPARTMENT OF THE INTERIOR
NATIONAL PARK SERVICE
RIVERS~ TRAILS AND CONSERVATION ASSISTANCE PROGRAM
Rivers, Trails and Conservation Assistance is a program of the National Park Service which cooperates with
states, local governments, and citizen groups to protect and restore river corridors and to establish trail systems.
The goal of this outreach program is to share the expertise of the National Park Service with groups working to
protect their river, trail and greenway resources.
Contents
Economic Impacts of Protecting Rivers, Trails, and Greenway Corridors
Preface
Economics Clearinghouse
Purpose of Resource Book
Intrinsic Values
Resource Book Format
How to Use the Resource Book
Assistance from Local Economists
Acknowledgements
1 Real Property Values
Increased Property Values- Quantified
Increased Property Values Surveyed
Increased Property Tax Revenues
Construction/Development Perspectives
How to Use These Rationales in Your Community
Sources of Information
Considerations in Using These Rationales
References
2 Expenditures By Residents
Leisure, A Spending Priority
Resident Expenditures
Trends and Expenditures by Activity
How to Use These Rationales in Your Community
Sources of Information
Considerations in Using These Rationales
References
3 Commercial Uses
Concessions, Permittees, and Partnerships
Special Events
Filming and Advertising
How to Use These Rationales in Your Community
Sources of Information
Considerations in Using These Rationales
References
4 Agency Expenditures
Level of Expenditures
Local Business Support
How to Use These Rationales in Your Community
Sources of Information
Considerations in Using These Rationales
References
IV
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VII
VIII
VIII
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1-7
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1-13
1-15
1-16
2-3
2-5
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2-9
2-14
2-15
2-17
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3-10
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5 Tourism
The Travel Industry
Natural/Cultural Areas Attract Travellers
Attributing Expenditures to Greenways
Direct, Indirect, and Induced Effects
Multipliers
Economic Impact Models
Marketing Potential
How To Use These Rationales in Your Community
Sources of Information
Considerations In Using These Rationales
References
6 Corporate Relocation and Retention
5-3
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5-10
5-12
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5-19
5-20
5-22
6-3
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Quality of Life Attracts Businesses
Greenways Contribute to Quality ol Life
Greenways Promote Employee Fitness
How to Use These Rationales in Your Community
Considerations in Using These Rationales
References
6-4
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6-9
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7 Public Cost Reduction
Public Service Requirements
Hazard Mitigation
Pollution Control
Health Care Costs
How to Use These Rationales in Your Community
Sources of Information
Considerations in Using These Rationales
References
7-3
7-5
7-6
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7-11
7-12
7-13
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8 Benefit Estimation
Introduction to Benefit Estimation
Assessment Methods
Preservation Values
Benefit-Cost Analysis
Public Expression of Value
How to Use These Rationales in Your Community
Sources of Information
Considerations in Using These Rationales
References
Appendices
8-3
8-5
8-10
8-11
8-12
8-12
8-13
8-14
8-15
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A Correcting for Inflation in Housing Prices
8 Updating Consumer Good Values
C Survey Questions
D Rivers, Trails and Conservation Assistance Regional Offices
A-2
A-6
A-12
A-19
Economic Impacts of Protecting Rivers, Trails, and Greenwa¥ Corridors
What You Need to
Know About this
Resource Book
Contents
Page
EconOmics Clearinghouse IV
Purpose of Resource Book IV
Intrinsic Values V
Resource Book Format V
How to Use the Resource Book VII
Assistance from Local Economists VIII
Acknowledgements VIll
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Preface
Rivers, trails, and greenway corridors (linear open spaces connecting recrea-
tional, cultural and natural areas) are traditionally recognized for their environ-
mental protection, recreation values, and aesthetic appearance. These
corridors also have the potential to create jobs, enhance property values,
expand local businesses, attract new or relocating businesses, increase local
tax revenues, decrease local government expenditures, and promote a local
community. An example which illustrates the range of possible economic
benefits is the Delaware and Raritan Multi-Use Trail, built along an abandoned
railroad and canal in Central New Jersey.
· "Property values adjacent to the park and trail have increased,
according to James Amon, Executive Director of the D&R Canal
Commission. Private businesses have been created in response to
user demand. It is now common to see concessionaires and rental
establishments catering to the many users of the trail and canal. An
historic train station in Lambertville was recently restored into a
restaurant and a hotel was built nearby which profits greatly from its
trail neighbor. New proposals for trail-oriented development are
currently in the works, including a combination canoe and bicycle
rental outfitter" (Railroads Recycled, Rails to Trails Conservancy,
Washington, D.C., 1990).
The Rivers, Trails and Conservation Assistance (RTCA) program of the
National Park Service has produced this Resource Book to help IocaHevel
planners, park and recreation administrators, citizen activists, and non-profit
groups understand and communicate the potential economic impacts of their
proposed or existing,corridor project.
Economic Impacts of Protecting Rivers, Trails, and Greenway Corridors
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Economics Clearinghouse
An Economics Clearinghouse has also been initiated by RTCA to encourage
the exchange of up-to-date information on the economic impacts of rivers, trails
and greenways. This Clearinghouse will be a listing of case studies, economic
impact analyses, and other reference material. Most of these references, as
of 1990, are cited at the end of each section of this Resource Book. For further
information regarding the Clearinghouse, contact the Rivers, Trails and
Conservation Assistance Program at the address listed at the end of this
section.
Purpose of this Resource Book
The aims of this Resource Book are specific and are as follows:
Encourage local professionals and citizens to use economic
concepts as part of their effort to protect and promote greenways
Provide examples of how greenways and parks have benefited
local and regional economies
Demonstrate how to determine the potential economic impacts of
of river, trail, and greenway projects
~Suggest other sources of information
Economic Impacts of Protecting Rivers, Trails and Greenway Corridors is
intended to be acom pilation of the most recent information on this subject area.
Many of the examples, and case studies, and information available focus on
more traditional parks, rather than linear parks, trails, and river corridors.
However, greenways and traditional parks often provide many of the same
amenities. The growing interest in applying economic rationales to support
greenway protection efforts will likely result in more economic analyses and
studies.
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Intrinsic Values
This Resource Book is not intended to diminish the importance of the intrinsic
environmental and recreational benefits of rivers, trails, and greenway corri-
dors. The non-monetary value of open space should continue to be the primary
emphasis in conservation efforts. In some cases, it may be more appropriate
to stress intrinsic environmental benefits rather than spend considerable time
and effort conducting economic analyses. In other cases, especially in
developing areas, clear communication of intrinsic values and potential eco-
nomic impacts will help decisionmakers recognize rivers, trails, and greenway
corridors as vital to the well-being of a community.
Resource Book Format
We endeavored to make this Resource Book "user friendly". It is not intended
to be a definitive textbook on economics. Rather, it is intended to be used as
a framework for understanding potential economic impacts of greenways. We
used a loose-leaf format to make it easier for you to add economic information
about your local project and community.
The Resource Book contains eight sections, each focusing on a different set
of economic rationales, and appendices. The sections included in the Re-
source Bqok are:
Real Property Values
Expenditures by Residents
Commercial Uses
Tourism
Agency Expenditures
Corporate Relocation and Retention
Public Cost Reduction
Benefit Estimation
These sections are summarized in Table 1.
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Table 1
Section
Real Property Values
Expenditures by Residents
Commercial Uses
Tourism
Agency Expenditures
Corporate Relocation
and Retention
Public Cost Reduction
Benefit Estimation
Summary of Resource Book Sections
Descriptions
Presents evidence that greenways and flails may increase nearby property values.
Demonstrates how an increase in property values can increase local tax revenues and help
offset greenway acquisition costs.
Explains how spending by Iooal residents on greenway-related activities can help support
recreation-oriented businesses and employment, as well as other businesses which are
patronized by greenway, dver and trail users.
Describes the potential for concessions and special events within the greenway, which can
boost local business as well as raise funds for the greenway itself.
Describes how greanways, rivers and trails which attract visitors to a community support
local businesses such as lodging, food establishments, and recreation-oriented services.
Greenways may also help improve the overall appeal of a community to visitors and
increase tourism.
Explains how the agency responsible for managing a river, trail or greenway can support
local businesses by purchasing supplies and services. Jobs created by the managing
agency may also help increase local employment opportunities and benefit the local
economy.
Presents evidence that the quality ol life of a community is an increasingly important factor
for retaining and attracting corporations and businesses, and that greenweys, rivers and
trails can be important contributors to the quality of life. Corporations bring jobs to a
corn munity and help support businesses which provide services and products to corpora-
tions and their employees.
Explains how conservation of rivers, trails and greenways m ay help local governments and
other public agencies to reduce long term costs for services such as roads and sewers;
reduce costs resulting from injury to persons and property from hazards such as flooding;
and avoid potential costly damages to natural resources such as water and fisheries.
Describes how the recreational benefits of rivers, trails and greenways can be estimated
in monetary values. Users can be surveyed to estimate the value of a visit to a greenway.
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Preface
How to Use the Resource Book
A good initial step is to skim the entire resource book to understand the range
and scope of the economic concepts and strategies included. Before working
through a specific section, you should prepare a detailed description of your
greenway project, as well as the geographic area within which economic
impacts will be determined. Beth the project and geographic area should be
mapped and described in a narrative. This will ensure you are working from a
consistent information base.
It is also important to address the proposed scale and estimated use of the
project because impacts vary for different greenways. Potential economic
impacts will largely depend upon the amenities offered, the scale and magni-
tude of your project, accessibility, level of projected use, and intended users.
The greater the size or amenities provided by the project and the heavier the
potential use, the greater the potential economic impacts are likely to be. If your
goal is to maximize economic impacts, it is important that you keep these
factors in mind throughout the planning stages of your project.
Once the project and geographic area are clearly identified and you have
reviewed the sections, you should select one or more methods of analysis and
work through each applicable section. We recommend you select sections
which address primary concerns to your community and decisionmakers.
After you select the appropriate section(s), you should read them carefully.
You are encouraged to use references, handbooks, texlbooks, or training
which may help in understanding the concepts and the strategies. Once again,
we remind you that detailed economic studies requiring the services of a
b'ained economist may also be warranted. If an economic issue is likely to be
the key factor in the decisionmaker's evaluation of a project, we recommend a
trained economist be involved as either a volunteer or paid consultant to
evaluate or perform the appropriate analyses.
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Assistance from Local Economists
This Resource Book is not intended as a substitute for more detailed economic
studies, which may be necessary for larger-scale or controversial projects. Our
purpose is to inform individuals and groups working toward corridor conserva-
tion about the usefulness of economics in.conservation planning, introduce
basic economic concepts, and methods of analysis. You are encouraged to
seek help from local professionals who have economic credentials to enhance
the credibility of your findings.
Possible sources of expertise that may help you include:
Economists (banks, marketing firms, large corporations)
Economic consulting firms
University business or economics classes, masters or doctoral
candidates, and their professors
Staff with an economics background
Acknowledgements
The idea for the Resource Book was conceived by Ray Murray, Chief of
Planning, Grants and Environmental Quality for the Western Region of the
National Park Service (NPS). Principal investigative writers and editors for the
Resource Bookwere Western Region River and Trail Conservation Assistance
staff member Kathleen Williams, staff member Susan Harris, and Ray Murray.
We thank all those who have provided valuable input to this project and who
served as our official, hard working reviewers, including Joan Chaplick, John
Crompton, John Loomis, Stuart McDonald, William Penn Mott, Richard
Trudeau, Keith Hay, Alan French, Bill Carle, John Haines, Gary Guthrie, George
Goldman, and Rivers, Trails and Conservation Assistance national and re-
gional staffs. Also, thanks to Eugene Fleming for providing graphics/desktop
publishing and Halstead, who illustrated the cover.
We also thank The Conservation Fund for contributing to the printing of the
Resource Book. The Conservation Fund isa national, non-profit, scientific and
educational organization dedicated to the conservation and wise stewardship
of America's natural heritage.
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The American Greenways Program of the Conservation Fund was established
in 1987 to m eetthe informational and service needs of greenway projects at the
local, state, and national levels. The program includes, among otherthings: the
publication and distribution of the book Greenways forAmerica;in cooperation
with the National Park Service, a monograph entitled The Ecology of Green-
ways; a national greenways data base and referral service that will enable
individuals, organizations, and public agencies to ne~ork with one another;
grants for demonstration projects that are models of innovative approaches to
financing, economic analysis, or other areas related to greenway planning; and
other projects to advance and promote the greenway concept.
National Park Service staff are available to assist in using this Resource Book
to protect and promote rivers, trails, and greenways in your community. Your
comments, suggestions, and additional case studies for this Resource Book
would be greatly appreciated. Please contact the Rivers, Trails and Conser-
vation Assistance Program (RTCA):
Rivers, Trails and Conservation Assistance
National Park Service, Western Region
600 Harrison Street, Suite 600
San Francisco, CA 94107-1372
(415) 744-3975
A list of all RTCA regional offices is included as Appendix D.
Economic Impacts of Protecting Rivers, Trails, and Greenway Corridors
Real Property
Values
Contents
Page
Increased Property Values - Quantified 1-3
Increased Property Values - Surveyed 1-7
Increased Property Tax Revenues 1-7
Construction/Development Perspectives 1-8
How to Use These Rationales in Your Community 1-9
Sources of Information 1-13
Considerations in Using These Rationales 1-15
References
1.-2
1-16
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Real Property Values
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Greenway corridors provide a variety of amenities, such as attractive views,
open space preservation, and convenient recreation opportunities. People
value these amenities. This can be reflected in increased real property values
and increased marketability for property located near open space. Developers
also recognize these values and incorporate open space into planning, design,
and marketing new and redeveloped properties.
Increased Property Values - Quantified
The effect on property values of a location near a park or open space has been
the subject of several studies. Statistical analyses have been a common
method of attempting to measure this effect. These analyses attempt to isolate
the effect of open space from other variables which can affect property values,
such as age, square footage, and condition of homes. Isolating the effect of
open space can be difficult and results have been varied. Nevertheless, many
studies have revealed increases in property values in instances where the
property is located near or adjacent to open spaces. Most studies have
addressed traditional parks or greenbelts (large open space areas), though a
few studies are available for greenways.
· A study of property values near greenbelts in Boulder, Colorado,
noted that housing prices declined an average of $4.20 for each foot
of distance from a greenbelt up to 3,200 feet. In one neighborhood,
this figure was $10.20 for each foot of distance. The same study
determined that, other variables being equal, the average value of
property adjacent to the greenbelt would be 32 percent higher than
those 3,200 feet away (Correll, Lillydahl, and Singell, 1978).
· The amenity influence of greenbelt land on property values also
applies to privately held greenbelt land, according to a study of the
Salem metropolitan area in Oregon. In this case, the greenbelt was
comprised of rural farmland. Greenbelt zoning had been applied to
this prime farmland beginning in 1974 in an effort to contain urban
sprawl and preserve farmland. The study found that urban land
adjacent to the greenbelt was worth approximately $1,200 more per
acre than urban land 1,000 feet away from the greenbelt boundary, all
other things being equal. However, rural land values within the
1-3
Economic Impacts of Protecting Rivers, Trails, and Greenway Corridors
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1-4
restrictive zoning actually decreased in value by $1,700 per acre
(Nelson, 1986).
· A recent study of market appreciation for clustered housing with
permanently-protected open space in Amherst and Concord,
Massachusetts, found that clustered housing with open space
appreciated at a higher rate than conventionally-designed subdivisions.
Appreciation was measured as the percent increase in open-market
sales price. The study compared one clustered development and one
conventional subdivision in each community. The clustered homes
studied in Amherst appreciated at an average annual rate of 22%, as
compared to an increase of 19.5% for the more conventional
subdivision. This translated into a difference in average selling price of
$17,100 in 1989 between the two developments. In both Amherst and
Concord, the homes in the clustered developments yielded owners a
higher rate of return, even though the conventional subdivisions had
considerably larger lot sizes (Lacy, 1990).
· An analysis of property surrounding four parks in Worcester,
Massachusetts, showed a house located 20 feet from a park sold for
$2,675 (1982 dollars) more than a similar house located 2,000 feet
away (More, Stevens, and Allen, 1982).
· In the neighborhood of Cox Arboretum, in Dayton, Ohio, the
proximity of the park and arboretum accounted for an estimated 5
percent of the average residential selling price. In the Whetstone Park
area of Columbus, Ohio, the nearby park and river were estimated to
account for 7.35 percent of selling prices (Kimmel, 1985).
· In the vicinity of Philadelphia's 1,300 acre Pennypack Park,
property values correlate significantly with proximity to the park. In
1974, the park accounted for 33 percent of the value of a plot of land
(when the land was located 40 feet away from the park), nine percent
when located 1,000 feet away, and 4.2 percent at a distance of 2,500
feet. (Hammer, Coughlin and Horn, 1974).
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Real Property Values
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The effects of proximity to open space may not be as simply quantified as in the
above studies. Many studies (Brown and Connelly; Colwell, 1986) have found
the potential for an increase in property value depends upon the characteristics
ofthe open space and the orientation ofsurrounding properties. Propertyvalue
increases are likely to be highest near those greenways which:
highlight open space rather than highly developed facilities
have limited vehicular access, but some recreational access
have effective maintenance and security
· Similar residential properties near a park in Columbus, Ohio, were
compared to determine if proximity to the park affected property
values. Conclusions showed properties where the homes that faced
the park sold for be~een seven to 23 percent more than homes one
block from the park. Those homes that backed up onto the park sold
at values similar to properties one block away (Weicher and Zerbst,
1973).
Some high use areas can actually have a negative influence on adjacent
property, but still contribute to increased value of nearby properties. Lyon
(1972) showed this relationship, as it pertained to traditional parks, graphically
in Figure 1-1 on page 1-6.
One implication of these studies might be that increases in nearby property
values depend upon the ability of developers, planners, and greenway propo-
nents to successfully integrate neighborhood development and open space.
Designing greenways to minimize potential homeowner - park user conflicts
and maximize the access and views of the greenway can help to avoid a
decrease in property values of immediately adjacent properties.
1-5
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Figure 1-1
The upper graph shows tho increase
in property values duo to proximity to
a park. Below that is the effect on
property values due to a highly devel-
oped and used park.
o! F',~ty
Increasing ($)
Value el
Park
1-6
Net Effects Curve for Property Value Increases
Due to Proximity to Parks
Increase in property value
due to proximity to park
Decrease in property value due to proximity
lo highly developed park with nuisance factors
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Real Property Values
Increased Property Values - Surveyed
Survey methodology has also been used to document perceived increases in
property values. Surveys can be less time-consuming, less expensive, and
generally require less specialized expertise than detailed statistical analyses. The
following findings are based upon surveys of property owners and real estate
professionals.
· Inarecentstudy, ThelmpactsofRaiI-Trails, landownersalongthreerail-
trails reported that their proximity to the trails had not adversely affected the
desirability or values of their properties. Along the suburban Lafayette/Uoraga
Trail in California, the majority of the owners felt that the trail would make their
properties sell m ore easily and at increased values. The other two trails stud led
included the Heritage Trail in eastern Iowa and the St. Marks Trail in Florida.
(National Park Service and Pennsylvania State University, 1992)
· A study completed by the Oflce of Planning in Sea[tie, Washington, for the
12 mile Burke-Gilman trail was based upon surveys of homeowners and real
estate agents. The survey of real estate agents revealed that property near,
but not immediately adjacent to the trail, sells for an average of 6 percent more.
The survey of homeowners indicated that approximately 60 percent of those
interviewed believed that being adjacent to the trail would either make their
home sell for more or have no effect on the selling pdce (Seattle Office of
Planning, 1987).
· In asurvey ofadjacent landowners along the Luce Line rail-trail in Minnesota,
the majority of owners (87 percent) believed the flail increased or had no effect
onthe value of their property. Fifty six percent of farmland residentsthought the
flail had no effect on their land values. However, 61 percent of the suburban
residential owners noted an increase in their property value as a result of the
flail. New owners felt the trail had a more positive effect on adjacent property
values than did continuing owners. Appraisers and real estate agents claimed
that trails were a positive selling point for suburban residential property, hobby
farms, farmland proposed for development, and some types of small town
corn mercial property (Mazour, 1988).
Increased Property Tax Revenues
An increase in property values generally results in increased property tax
revenues for local governments. Many arguments made for park and open
space investment claim these acquisitions pay for themselves in a short period
of time, due in part to increased property tax revenues from higher values of
nearby property. A point to remember, however, is that many jurisdiction's
].-?
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assessments of property values often lag behind market value. Furthermore,
in those states which have passed legislation limiting real estate tax increases,
such as California's Proposition 13, property tax revenues also lag behind
increases in market value.
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· California's Secretary for The Resources Agency anticipated that
$100 million would be returned to local economies each year from an
initial park bond investment of $330 million. The returns were to be in
the form of increased value of nearby properties and stimulated
business (Gilliam, 1980).
· A study of the impacts of greenbelts on neighborhood property
values in Boulder, Colorado, revealed the aggregate property value
for one neighborhood was appreximately $5.4 million greater than if
there had been no greenbelt. This results in approximately $500,000
additional potential property tax revenue annually. The purchase
price of the greenbelt was approximately $1.5 million. Thus, the
potential increase in property tax alone could recover the intitial cost in only
three years. In the study, the authors did note that this potential
increase is overstated in part because actual assessments may not
fully capture greenbelt benefits (Correll, Lillydahl, and Singell, 1978).
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Construction/Development Perspectives
Proximity to greenways, rivers, and trails can increase sales price, increase
the marketability of adjacent properties, and promote faster sales. Clustering
the residential development to allow for establishment of a greenway might also
decrease overall development costs and result in greater profits for the
developer.
1-8
· A land developer from Front Royal, Virginia, donated a 50 foot wide I
seven-mile easement for the Big Blue Trail in northern Virginia after
volunteers from the Potomac Appalachian Club approached him to
provide a critical trail link along the perimeter of his second-home
subdivision. The developer recognized the amenity value of the trail
and advertised that the trail would cross approximately 50 parcels. All
tracts were sold within four months (American Hiking Society, 1990).
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Real Property Values
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· Thirbj-five acres was set aside as a protected corridor through a 71-lot
subdivision for approximately one-half mile of the Ice Age Trail in
Wisconsin. The Ice Age Trail Foundation had purchased the parcel when
the land became available for sale and was being considered for
development. Later the Foundation sold the parcel to a subdivision
developer, after placing an easement on the trail corridor. The developer
now touts the easy access to the Ice Age Trail in promotional subdivision
brochures (Pathways Across America, Winter 1991 ).
· Hunters Brook (Yorktown Heights, New York), a cluster
development of 142 townhouse-style condominium units ranging in
price from $170,000 to $260,000, was designed to capitalize on the
amount of open space in the development. The homes were clustered
on 30 acres, preserving 97 acres of natural sloping woods, including
a dense pine forest. Care had been taken to retain local wildlife, thus
adding to the rural setting. One of the developers commented, "it may
not be the woods that bring (buyers) to us initially, but it seems to make
all the difference when they see what it's like" (Brooks, 1987).
· In a 1970 study of a 760 square mile area in Maryland, noted
planner lan UcHarg projected that uncontrolled development would
yield $33.5 million in land sales and development profits by 1980.
Profits resulting from development plans designed to accommodate
the same population level, while preserving desirable open spaces,
would exceed $40.5 million. The resulting additional $7 million
translated into an increase in value of $2,300 per acre for the planned
3,000 acres of open space (Caputo, 1979).
How To Use These Rationales in Your Community
Quote examples. Usethe examplesgiven inthis section in your presentations,
portfolios, letters to elected officials, newsletters to the public, and public
meetings.
Determine whether any studies have been done. Contact the local univer-
sity and relevant agencies to see if anyone has documented the effects of
greenways on property values in your community. If not, maybe someone is
interested in doing so.
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Interview real estate sales people, appraisers, and assessors. These
professionals have a good idea of how open space amenities affect land
values. Askwhether properties near your greenway are easier or more difficult
to sell; whether they sell for more or less than other properties; and whether
agents use proximity to the greenway in their advertisements. Sample survey
questions are listed in Appendix C. If your greenway is planned for a rural or
undeveloped area, ask what effect the greenway will have on the development
potential of surrounding land. In addition to being knowredgeable, these people
can provide valuable community and business support.
Survey local residents. Contact a sample of residents near and adjacent to
the greenway. You may be able to get residents' names and street addresses
from the Assessors Office. The larger the sample, the more reliable the results,
especially if you will be dividing respondents into subgroups.
The information will be easier to synthesize if you construct a standard
questionnaire. Make questions clear and concise, and include the full spectrum
of potential answers. Make sure the questions you ask elicit the exact
information you need. Try to keep interviews to ten minutes or less. Test your
interview on co-workers before you begin and get their suggestions on how to
improve it. Also test your survey on homeowners. Instruct your interviewers on
good interview techniques before they begin interviewing. Take a look at
Appendix C for some examples of survey questions.
The greenway may affect different resident groups in various ways. Thus, you
may wish to categorize responses by condominium owners or single-family
home owners; adjacent property owners versus nearby property owners; long-
term owners versus new residents. Be certain you collect information needed
to categorize the responses. These questions should be listed at the end of the
survey. Summarize the results of the survey by including the total number of
people interviewed and the relative percentages responding to various ques-
tions.
Document how the greenway has changed the design of the neighbor-
hood. Where vacant lots existed, are people now building expensive homes?
Did development orient houses to face the greenway? Has access from nearby
homes changed? Have property owners constructed gate entries to the
adjacent greenway where solid fences existed before? Photographs, slides,
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and videos can be very useful to document these changes. This information
will likely be qualitative but helpful, especially if residents who previously
opposed the greenway now value their proximity to it.
Document developers' use of open space in designing and marketing
their properties. Where have developers incorporated open space into their
design plans? Have they provided access (e.g. a bridge, spur trail, under-
crossing) from developments to a nearby greenway? Ask them about their
perception of the effect of open space on prices, sales or rental time, and the
overall market response to their product. Collect examples where proximity to
open space has been used in sales advertising. Check real estate listings,
magazines, weeklies, and promotional announcements for descriptions of
open space amenities.
Document property sale price increases before and ~er the greenway
was established. Obtain sales records for similar properties in the area from
at least five years before the greenway was established to five years after. Or,
you might contact real estate appraisers for information on property value
increases. Real estate brokers may be able to provide general statements on
property value trends. After correcting for housing inflation (see Appendix A),
comparetrends in nearby property values overaten year period. You mayalso
need to adjust for local housing inflation, which may be higher than the U. S.
city average listed in Appendix A. Contact your local regional office of the U.
S. Department of Labor and Statistics for more detailed consumer price index
information for your community.
Your estimates of property value increases will be more defensible if:
~you compare similar properties and include as many properties as
possible in your sample
Qproperties have resold more than once since the greenway was
established
~the greenway (and not a shopping mall, landfill, etc.) has been
the only major land use change in the ten year comparison period
~estimates are discussed with real estate experts
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Compare assessed values of nearby properties before and after the
greenway was established. Obtain assessed values for nearby properties
five years before the greenway was established and for the same properties
five years after. Assessed values are usually separated into two categories:
improvements and land. Use the land values for comparison and convert to a
dollars-per-acre basis.
Care must be taken with this method because assessed values often lag behind
market values. You may consider discussing the potential of this method with
your Assessor's Office, local appraisers, and real estate specialists familiar
with the history ofthe market. Inflation in housing prices mustalso betaken into
account (see Appendix A and consult your assessor).
Property tax revenue increases may help pay for the greenway. Once
again, your state may have passed legislation limiting property tax increases,
and in many jurisdictions, assessments lag behind market values. Nonethe-
less, in the long-term, increases in property tax revenues may help to offset
greenway costs. The following illustrates how you might estimate increases in
property tax revenues resulting from establishment of a greenway. Please
keep in m ind, this calculation has been simplified for purposes of example only.
(1) Assuming:
a) 50 acres of property is to be acquired at $1,000/acre (also
assessed at $1,000 per acre) to develop the greenway.
b) The municipality will borrow the full acquisition cost at 5%
interest for 20 years.
c) Total acquisition cost, principal, and interest is $80,500.
d) Development of the greenway will increase the value of nearby
properties by 5%.
e) 30 homes (on 1 acre lots) presently valued at $50,000 each, will
be affected by development of the greenway.
f) Property tax rate is $3.00 per $100 in assessed value.
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{2) Increased property tax revenues:
a) Present property tax for 30 homes:
30 x $50,000 = $1,500,000
$1,500,000 divided by $100 = $15,000
$15,000 x $3 = $45,000 per year
b) Increased property tax due to greenway:
$45,000 x 5% = $2,250 per year
c) Taxes lost for greenway property:
50 (acres) x $1000 (assessed value) = $50,000
$50,000 divided by $1 O0 = $500
$500 x $3 = $1,500 per year
d) Net annual increase in property tax revenues upon acquisition of
the greenway:
$2,250 - $1,500 = $750 per year
Commission your own study. If you need specific and highly defensible
information, you might consider commissioning your own study. Many of the
above studies employed multiple regression statistical analysis, which can
require a significant commitment of time and resources. If you have an
economist and statistician on staff, they may be able to perform such a study.
Otherwise, contact a nearby university. The departments of real estate,
resource economics, economics, business, city and regional planning, statis-
tics, or sociology may be able to assist, especially if graduate students need
research projects in these departments. Or, if this resource is not available, you
can hire experienced consultants.
Sources of Information
Planning/Engineering Departments. Zoning maps, available at local plan-
ning departments, will assist you in determining similiar properties. Those
properties within the same zone must comply with the same standards. The
maps may also show public access to the greenway, which will allow the
calculation of the distance to such access from different neighborhoods. Your
planning or engineering department will likely have aerial photos of the areas
adjacent to the greenway. These photos can also be used to identify "like
properties".
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Economic Impacts of Protecting Rivers, Trails, and Greenway Corridors
Real estate agents/local Board of Realtors. These people can be contacted
for historic sales data, in addition to discussion of com parable market areas for
determining 'like' properties. The Board may operate a multiple-listing service
which includes records of sales prices, dates of sale, and housing character-
istics.
City/County Assessor. Your city or county Assessor's office can be an
invaluable contact for qualitative and quantitative data on housing markets,
such as how assessed values correspond to market prices, and how green-
ways and open space affect assessed values. The city or county's Assessor's
Office holds records concerning lot sizes and assessed values of taxable
properties. They also maintain transfer tax records which include a description
of properties which have changed hands, These records are usually attached
to deeds.
Banks, Savings and Loan, and other mortgage institutions. If you are
dealing with a large market area and mortgage institutions have been operating
in the area for a long time, you may be able to access mortgage records for
properties near the greenway. These institutions may be reluctant to release
specific information, but may be able to advise on trends.
Appraisers/Appraisers' associations. The American Institute of Real Estate
Appraisers (AIREA) certifies general appraisers and residential appraisal
specialists. (If you look in the yellow pages under real estate appraisers, many
will show the MAI symbol, denoting certification by AIREA.) Appraisers in your
area may be able to provide historical information, information on appraisal
procedures, and how proximity to open space is reflected in appraised values.
Also, representatives of the association may be willing to discuss property
value impacts at a city council, planning commission, or board of supervisors
meeting. You might choose to enlist a representative for your organization's
board of directors or advisory committee.
Corporate Iocationfirms. Thesefirms helpcorporationstransferemployees
by purchasing a transferred employee's home if the employee is unable to sell
it in a specified period of time. Appraisals for these homes help determine how
much the firm will pay for the house. Get an opinion concerning the greenway's
influence on property values or sales time.
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Real Property Values
Meil end Telephone Surveys: The Totel Design Method. This 1978 text by
Don Dillman is a good reference for constructing and implementing mail and
telephone surveys. Contact your local university library or the publisher, dohn
Wiley and Sons, (201) 469-4400.
Considerations in Using These Rationales
Be careful in constructing your case. Increased property values are more
complicated than proximity to the greenway. It also depends upon the
greenway's character. The studies in this section show the highest increase
in property values occurs in cases where parks highlight open space, with
some recreational access and limited use. Open space zoning, without
access, also increases adjacent property values. While highly developed and
heavily used areas may decrease the value of immediately adjacent property,
usually increases the value of property nearby. This diversity highlights the
need to make reasonable assumptions, carefully justify them, and explain that
your conclusions are only estimates. Talk to as many experts as possible to
construct your case and build support. Numbers will withstand scrutiny if they
are reasonable, supported by sound logic, and good homework.
Measure the real change in values. When calculating changes in property
values, be certain you are measuring those changes that are attributable to the
greenway. This means you must always subtract fluctuations in the general
housing market from fluctuations in values of property near the greenway.
Be careful in trying to outbid development. Deveropers may argue you
should consider property tax revenues which might be generated if the land
were developed with homes rather than open space. This would generate
greater property tax revenues; however, residential development would also
result in a greater demand for public services. The costs to the local
government for providing these services may exceed the property tax reve-
nues collected. Furthermore, developmentofthe property versus perservation
of open space is generally irreversible. (See Section 7, Public Cost Reduction)
Get current information. Recent information will best reflect the character of
the current market. If you are looking at assessed values, or sales prices,
choose only those that have been updated in the last five years.
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References
American Hiking Society. Summer 1990, "Pathways Across America."
Barnwell, Brian. Appraiser. August 1989. Personal communication.
Brooks, Andrea. May 8, 1987. "Cluster Builders' New Enticement: Adjacent
Woods." The New York Times.
Brown, Tommy L., and Nancy A. Connelly. "State Parks and Residential
Property Values in New York." Ithaca, NY: Cornell University, Department of
Natural Resources.
Caputo, Darryl F. 1979. Open Space Pays: The Socioenvironomics of Open
Space Preservation. Uorristown, NJ: New Jersey Conservation Foundation.
Cohee, Melville H. 1974. ImpactofState Land Ownership on Local Economy
in Wisconsin. Madison, WI: Wisconsin Department of Natural Resources.
Colwell, Peter. 1986. "Open Space on Real Estate Values." Proceedings of
the Governor's Conference on the Economic Significance of Recreation in
Illinois. Springfield, IL: Office of the Governor.
Cooper, John D. Director of Parks. Boise, Idaho. 1988, 1989. Personal
communication.
Correll, Lillydahl and Singell. May 1978. "The Effects of Greenbelts on
Residential Property Values: Some Findings on the Political Economy of Open
Space," Land Economics
Diamond, Douglas B. February 1980. "The Relationship Between Amenities
and Urban Land Prices." In Land Economics 56(1 ):21-32.
East Bay Regional Park District. 1978. A Trails Study. Oakland, CA: East Bay
Regional Park District.
Fox, Tom. March, 1990. Urban Open Space, An Investment That Pays.
Monograph published by Neighborhood Open Space Coalition, New York, NY.
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Gilliam, Harold. May 18, 1980. "Our Resources are Being Depleted." San
Francisco Examiner/Chronicle.
Goodenough, Richard D. 1965. "Saving Open Space Saves on Local Taxes." Far
Hills, NJ: Upper Raritan Watershed Association. As cited in Caputo, 1979.
Hagerty, J.K., T.H. Stevens, P.G. Allen, and T. More. 1982. "Benefits from Urban
Open Space and Recreational Parks: A Case Study." Journalofthe Northeastern
Agricultural Economics Council 11 (1):13-20.
Hammer, Thomas R., Robert E. Coughlin and Edward T. Horn IV. July 1974.
"Research Report: The Effect cfa Large Parkon Real Estate Value." Joumalofthe
American Ins~tuto of Planners
Kimmel, Margaret M. 1985. "Parks and Property Values: an Empirical Study in
Dayton and Columbus, Ohio." Thesis. Oxford, OH: Miami University, Institute of
Environmental Sciences.
Lacy, Jeff. August, 1990. "An Examination of Market Appreciation for Clustered
Housing with Permanently Protected Open Space." Center for Rural Massachu-
setts Monograph Series. Amherst, MA: University of Massachusetts.
Land Design Research, Inc. 1976. Cost Effective Site Planning." National
Association of Home Builders.
Lyon, David W. 1972. "The Spatial Distribution and Impact of Public Facility
Expenditures." Ph.D. Dissertation. Berkeley, CA: University of California, Depart-
merit of City and Regional Planning. As cited in Spickard, 1978.
Mazour, Leonard P. 1988. "Converted Railroad Trails: The Impact on Adjacent
Property." A MastersThesis. Manhattan, KS: KansasState University, Department
of Landscape Architecture.
More, Thomas A., Thomas Stevens and P. Geoffrey Allen. August 1982. "The
Economics of Urban Parks." Parks and Recreation.
National Park Service and Pennsylvania University, 1992. The Impacts of Rail-
Trails. Washington, D. C.: Rivers, Trails and Conservation Assistance Program.
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Nelson, Arthur C. 1986. "Using Land Markets to Evaluate Urban Containment
Programs." In APAJoumal. Spring, 1986:156-171.
Nelson, Arthur C. April 1985. "A Unifying View of Greenbelt Influences on
Regional Land Values and Implications for Regional Planning Policy." Growth
and Change.
People for Open Space. Economic Impact of a Regional Open Space
Program for the San Francisco Bay Area. Los Angeles, CA: Development
Research Associates.
Seattle Office for Planning. May 1987. "Evaluation of Burke-Gilman Trail's
Effect on Property Values and Crime." Seattle, WA: Seattle Office for Planning.
Spickard, Steven E. June 1978. "The Economic Benefits Generated for the
East Bay Community by its Regional Park System; A Report to the East Bay
Regional Park District." Berkeley, CA: University of California, Department of
City and Regional Planning.
Weicher, John C. and Robert H. Zerbst. 1973. "The Externalities of Neighbor-
hood Parks: An Empirical Investigation." Land Economics 49(1):99-105.
Wonder, Robert L. 1965. "An Analysis of the Assessed Valuation of Private
Properties in Proximity to Public Parks.' Prepared by Core Foundation intern
for Oakland Parks Department. San Francisco, CA: Core Foundation.
Wright, David. The Value of Urban Open Space. The Trust for Public Land.
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Expenditures by
Residents
Contents
Economic Impacts of Protecting Rivers, Trails, and Greenway Corridors
Leisure, A Spending Pdority
Page
2-3
Resident Expenditures 2-5
Trends and Expenditures by Activity 2-5
How to Use These Rationales in Your Community 2-9
Sources of Information 2-14
Consideralions in Using These Rationales 2-15
References 2-17
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This section explains how expenditures by residents on greenway, river, and
trail-related activities can help support the economy. The section covers overall
expenditures on leisure and outdoor recreation, and how these contribute to
national and state economies. Also discussed, is how resident recreation
expenditures can contribute to a local economy. The last subsection lists
specific expenditure levels for various river, trail, or greenway-related recrea-
tion activities.
This is the first of several sections in the Resource Book which discuss actual
expenditures related to greenways, rivers and trails. The other sections -
Commercial Uses, Agency Expenditures, and Tourism- focus on the impacts
of spending by visitors and the agency(les) which manage(s) the greenway.
The concepts and applications within these sections overlap.
Leisure, a Spending Priority
Leisure is often considered to be discretionary, or free time, away from workand
other responsibilities, where participants choose and control their activities.
Leisure activities can vary from mountain climbing, walking for health, or
watching a football game on television. Outdoor recreation is a major compo-
nent of leisure, usually included in leisure spending figures unless reported
otherwise. Leisure and recreation expenditures can account for a substantial
part of people's discretionary spending. However, depending upon the
strength of the economy, leisure spending may fluctuate. If the economy is in
a recession, leisure spending may decrease.
· In 1982, people spent more on leisure and recreation than the U.S.
Government spent on national defense or housing construction. It is
projected that leisure expenditures will continue to increase as
discretionary (spendable) income increases, much accredited to
increases in two-income families. Leisure expenditures were forecast
to be over $400 billion by 1990, double the level of 1980 (National Park
Service, 1983).
· In 1990, 8.8 million people jogged at least ~ice a week throughout
the year, an increase from 8.1 million in 1987. Nearly $12 million was
spent on athletic footwear in 1990. (U.S. News andWorld Report, April
1, 1991)
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· In Pennsylvania, residents spent approximately $11.8 billion or
12.6 percent of their total personal consumption dollars on leisure
pursuits in 1981. Of this total, over 47 percent (an estimated $5.6
billion) was spent for outdoor recreation activity alone. Leisure was
the third largest item in personal budgets, exceeded only by housing
and food costs (National Park Service, 1983).
· In 1988, recreation and leisure was the third largest industry in
California. More than $30 billion per year is spent by Californians on
recreation and leisure. This amounts to approximately 12 percent, or
one of every eight dollars, of total personal consumption expenditures
in the state (California Department of Parks and Recreation, 1988).
· One study estimated that $620 million is spent annually by California
residents for urban recreation activities (playing sports, visiting parks,
jogging, bicycle riding). This generates an estimated $400 million in
personal income and 22,800 jobs (Loomis, t 989).
How much outdoor recreation and leisure is attributable to the activities
pursued along greenways, rivers and trails? Many outdoor recreation activities
can be observed along a greenway. Patterns vary significantly due to factors
such as proximity, accessibility, weather, recreation opportunities, income, and
educational levels. Greenways are likely to provide increased opportunities for
the more popular outdoor recreation activites. According to Lifestyle Market
Analysts, a new report by National Demographics and Lifestyles Inc., a survey
of households in 212 metropolitan areas revealed overall participation rates for
several related activities:
· 40.4% Walk for health
· 32,8% Pursue physical fitness/exercise
· 14.9% Bicycle
· 13.75% Boat orsail
· 12.4% Run or jog
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Resident Expenditures
You can define your local economy as the area for which you want to quantify
the recreation activity and expenditures related to your greenway project. A
greenway project can attract residents not only to the greenway, but also to
nearby businesses, and encourage residents to purchase recreation-related
equipment and services. These greenway-related expenditures help support
the local economy through generation of employment and income.
Specifically, local residents who use the greenway may spend money to get to
and from the site, on supplies and equipment to pursue their recreation
experience, at on-site concessions and events, and nearby attractions. The
m ag nitude of the i m pact of these expend itu res depends upon the boundary and
character of your local economy and the level of spending by local residents.
If a new resource is created which attracts visitors, or non-residents, then
outside dollars may be brought into your Ioca! economy. River, trail and
greenway resources which attract visitors can stimulate economic activity and
create new jobs and income. These non-resident expenditures are discussed
in the Tourism section of the Resource Book.
Trends and Expenditures by Activity
The following discussion provides information on trends associated with uses
of greenways and provides evidence where spending associated with green-
way-related activities has been quantified. Activities include wildlife-related
recreation, river boating, trail-related recreation, and traditional park pursuits.
Fish and wildlife-related recreation
Fishing
Hunting
Birdwatching
Wildlife photography
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River boating
Rafting
Rowing
Kayaking
Canoeing
Motorboating
Sailing
Sailboarding
Houseboating
Jet skiing
Trail-related recreation
Pleasure walking
Walking for health
Jogging
Hiking
Volksmarching
Bicycling/Horseback riding
Cross-country skiing
Traditional park pursuits
Photography
Camping
Hosteling
Attending special events
Concerts
Festivals
Driving for pleasure
Fish and Wildlife-Related Recreation. Activities associated with fish and
wildlife-related recreation inlcude: fishing, hunting, birdwatching, and wildlife
photography. According to the U.S. Fish and Wildlife Service, 77 percent of the
U.S. population, or 140 million people, take part in wildlife-related recreation
each year. Annual expenditures by these participants in 1985 were $55.7
billion. Of the total expenditures on wildlife-related recreation in 1985, over 74
percentwas spent on hunting and fishing (U.S. Fish and Wildlife Service, 1988).
· Hunting, fishing, and wildlife viewing result in $2.9 billion of annual
spending in California. This generates $1.66 billion in personal
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income to California business owners and employees. Over 100,000
jobs in California are related to wildlife or fishing recreation (Loomis,
1988).
According to the U.S. Forest Service (1989), sport fishing is one of the most popular
outdoor recreation activities in the U.S. A steady increase in fishing has been
occurring nationwide, from 17.6 percent of the U.S. population in 1955 to 25.4 percent
in 1988. The number of anglers doubled in this peded and the days spent angling
increased two and one-half times (Manfredo, 1986). In 1985, nearly 60 million U.S.
anglers spent approximately $28 billion in pursuit of their sport (U.S. Forest Service,
1989). Average angler expendituresperyear have been estimated at approximately
$900 for food, lodging, equipment rental, licences, and subscriptions. Start up
expenditures for fly fishing equipment can range from$500 to $2000. Demand for
fishing is expected to continue to increase.
Viewing wildlife was another rapidly growing recreation activity in the 1980's
and is the most common form of wildlife recreation in California, where nearly
75 percent of state residents participate. As reported by the U.S. Fish and
Wildlife Service, over one-fourth of the total national wildlife-related recreation
expenditures, $55.7 billion in 1985, was related to bird watching and wildlife
photography (U.S. Fish and Wildlife Service, 1988).
· The typical birdwatcher spends $13 per day, with almost half spent
on food and beverages, one-fourth on gas and oil, and most of the
remainder on lodging. Spending by birdwatchers contributed atotal of
$27 million in wages and business income to California's economy in
1987. A total of nearly 2,000 California jobs are supported by
birdwatchers (Loomis and Unkel, 1989).
Interest in wildlife viewing should continue to increase over the next decade in
areas where urbanization, education, and income levels continue to rise.
River Boating. Recreational river boating is one of the nation's most popular
outdoor activities and includes rafting, rowing, kayaking, canoeing, motorboat-
lng, and more recently, jetskiing. In the last two decades a dramatic growth in
whitewater boating has been evidenced (Shelby and Lime, 1986). Use of wild
and scenic rivers in national forests m ore than doubled in the six years between
1976 and 1984 (Feuchter, 1984).
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Economic Impacts of Protecting Rivers, Trails, and Greenway Corridors
· In Colorado, river running brings in more than $50 million annually
to the state's economy and fishing contributes over $1 billion annually
(Finken, 1988).
· Americans purchased approximately 90,000 canoes in 1988, a
fourteen percent increase over purchases in 1985 (Ingrassia, 1989).
Canoeing by residents and visitors contributes $20.1 million per year
to the Arkansas economy. Overall economic impact of outdoor
recreation in Arkansas is $1.5 billion per year (Wilson, 19B6).
it has been forecasted that there will be participation by a wider segment of
society in river boat activities and that there will be increased representation by
familygroups. There is also likelyto be longer participation throughout people's
lifetimes, increased numbers of participants from older age groups, and
increased sport expertise and equipment ownership. These trends are expected
to increase the demand for quality river trips and for challenging whitewater
experiences, technical innovation in creating new river equipment, better skill
and safety instruction, and more sponsored events (Lime, 1984).
Trail-related Recreation, Much of the population enjoys trail-related recrea-
tion such as: walking for pleasure and health, jogging, hiking, volksmarching,
bicyling, horseback riding, and cross-country skiing. Research has shown
! ,.~ walking and hiking have played a significant role in the nationwide growth in
outdoor recreation. There are over 26 million day hikers in the U.S., and over
half the American public says they walk for pleasure (Spitzer, 1988). Also,
running has increased significantly since the early 1960's. According to a
national recreation survey conducted for 1982-1983, over 25 percent of the U.S.
population ran for conditioning during that tim e period (Van Horne, et al., 1985).
· Trail users of three rail-trails generated a total economic impact of
over $1.2 million for each trail, according to the recent study The
Impacts of Rail-Trails. These trails were used mostly by people living
nearby who visited frequently. "Users spent an average of $9.21,
$11.02, and $3.97 per person per day as a result of their trail visits to
the Heritage, St. Marks, and Lafayette/Moraga Trails respectively."
(National Park Service and Pennsylvania State University, 1992).
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In the United States, the rate of participation in bicycling tripled since the early
1960's. As of 1988, bicycling has been one of the most popular and rapidly
growing outdoor sports in America. Over one-third of the U.S. population, or88
million people, are bicyclists; 47 million are adults, 41 million are children.
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Twelve million bicycles were sold in 1987, more than the number of cars sold
that same year. Bicycles are used for commuting to work as well as pleasure
and fitness. There were 2.7 million bicycle com m uters in the U.S. in 1987, m ore
than double the number in 1982. All-terrain bicycle use, or mountain biking, has
increased dramatically from 200,000 in 1983, to 7.5 million in 1989 (Hecker,
1989). Bicycling attracts people of all ages and interest in this activity is retained
from childhood into later years. With the aging of the U.S. population, bicycling
will likely retain its popularity as a "lifetime" activity.
Since the 1960's, participation in horseback riding has been fairly constant, with
a greater number of participants being female. Horseback riding is a very high
expenditure activity.
Another rapidly growing trail-related activity is cross-country skiing which
experienced an 80 percent increase during the period be~een the 1982 to 1983
and 1987 to 1988 ski seasons. Over 50 percent of participants interviewed were
be~een the ages of 25 and 44 and over 50 percent had skied less than five years
(Ski Industries America, Inc., 1988).
How to Use These Rationales in Your Community
Demonstrate how leisure and recreation expenditures are important in
your state, region, or community. Cite some of the examples given to show
how people value recreation and open space opportunities. Gather similar
information for your state, region, or community and present them at meetings
and in publications.
Quote the above examples to show how greenway-related expenditures
are important to other economies. The examples provided focus upon a
variety of aspects of how recreation/open space expenditures support local,
regional, state, and national economies. If appropriate, local examples can be
found and listed. Choose the activities relevant to your planning area; the size
of the economy, and the type of impact.
Calculate the economic impacts of your project. The following are the four
steps you might work through to determine what to calculate, as well as how to
do it. Be sure to use constant dollars. (See Appendix B)
Step 1: Define your economy and your project. An economy can
be a commercial area, a town or city, a region, state, nation, or any
other unit. It is where the majority of users and employees live and
spend their money. Usually, the larger the economic land unit, the
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2-10
greater the economic impact, because more dollars circulate within
the defined economy. Often the economy is defined for political
reasons. If the County Supervisors are the relevant decision-makers,
they will be interested in how the existing or proposed greenway
affects the County.
A project can be an existing greenway, or one that is proposed. You
should be as specific as possible regarding the geographic extent of
the project, the type of recreation activities that occur there, who the
users are and where they come from, and the resources necessary to
construct/maintain it.
Step 2: Determine user expenditures per site visit. An effective
method to determine resident expenditures associated with the
greenway is to hand out a mail-back questionnaire to a random
sample of users. Make certain to provide a map with the survey which
includes the greenway and the boundaries of the economy you have
defined. You may also wish to consider on-site interviews and/or
telephone surveys using staff, volunteers, and/or user groups. Con
tact a local university for examples of questionnaires and assistance
in constructing and analyzing the survey. Test the survey before
conducting the actual survey. When you hand out mail-back surveys,
ask for the name and phone number of the respondents so you can
contact them if the completed survey is not returned promptly.
Examples of survey questions are included in Appendix C.
The survey results should allow you to determine the number of users,
num ber of visits, expenditures per user in the local area, activities they
are participating in, how much of their activity occurs within the
greenway, frequency of use, percentage of residents compared to
non-resident users. From this, calculate local expenditures per day
for each type of user surveyed. Multiply those expenditures by the
number of annual users in each category, then add these together for
an estimate of total annual expenditures associated with your
greenway. If use varies by season, day of the week, or time of day,
be sure your calculations incorporate an annual average. If you are
proposing a greenway, make some assumptions about likely
expenditure patterns. Base your assumptions on sound logic.
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Step 3: Apportion expenditures on recreation equipment,
supplies, and clothing. This survey could include questions
regarding annual expenditures made on equipment, supplies, and
apparel. If so, to assess effects on the local economy, only those
expenditures that were made within the region outlined on the survey
map can be counted. Also, you can only attribute the portion of the
equipment expenditures that relate to the proportion of the total use
that occurs at the greenway. For example, if a person spends $50 per
year on running clothes and half of their running is done at the
greenway, the greenway-related expenditure is $25. If purchases are
made that will last a number of years, divide the expenditures by the
typical life of the equipment, then apportion for annual information.
To make these calculations, calculate the annual amount your users
spent on equipment, supplies, and clothing for their activity.
Determine if the equipment and supplies were purchased from
businesses in your local economy. Find out what percentage of time
they pursue their activity within the greenway. Then multiply this
percentage by the amount spent on the equipment within the local
economy. Table 2-1 can be used to estimate the expenditures for new
entrants into a particular recreational activity.
Make an assumption on how many new entrants could be expected as
a result of greenway, river, or trail protection. Multiply the number of
entrants by the appropriate entry in Table 2-1. Estimates will vary by
community. You may wish to contact local retailers for more
appropriate estimates for your project.
Step4: Show howyour project supports the local economy. Total
the resident expenditures in the region from the preceding steps and
summarize your findings.
Determine the potential impacts of a proposed project. Your project can
stimulate the local economy by increasing the demand for recreation-related
goods and services.To estimate expenditures which may result from establish-
ing your greenway, river or trail project, work through the calculations in steps
1 through 4 listed above. Rather than conduct a survey to determine actual
expenditures, you can forecast the types and number of users your project is
likely to attract. Document your assumptions carefully and thoroughly.
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Table 2-1 Estimated Start-up Costs by Activity
(Per New Enlrant)
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Activity
Bicycling
Hiking
Birdwatching
Cross-country
Skiing
Horseback Riding
Skating
Purchase Low-end Cost Mid-Range
Bicycle $ 300 $ 800
Helmet 50 50
Lock 30 30
Bicycle Rack 25
Bicycle Pack 50
Water Bottle 10
Shoes 45
Clothing 50
Car Rack 150
Total 380 1,210
Shoes/Boots 45 120
Socks 10 15
Daypack 20 40
Water Bottle 5 5
Total 80 180
Binoculars 50 150
Spotting Scope 200
Field Guide 10 50
Camera, lenses, etc 1000
Total 60 1,780
Skis 85 250
Boots 40 90
Bindings 10 30
Poles 15 30
Wax 15 60
Clothing 1 O0
Gaiters 25
Total 165 505
Lessons 250 250
Hard Hat 40 40
Boots 100 100
Crop 15 15
Horse 1,000
Tack 500
Boarding (annual) 2,400
Total 405 4,305
Inline Skates 85 175
Wrist Guards 20 20
Knee and Elbow Pads 40 60
Total 145 255
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Cost
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Activity
Canoeing
Kayaking
Rafting
Fishing
Cold Water
Fishing
WarmWater
Estimated Start-up Costs by Activity
(Per New Entrant)
Purchase
Canoe
Life Jacket
Paddles
Car Rack
Foul Weather Gear
Drybaos
Safety Equipment
Total
Low-end Cost
250
40
100
390
Kayak
Paddle
Dnysuit
Sprayskirt
Helmet
Safety Equipment
Car Rack
Total
7OO
9O
'200
5O
40
1,080
Raft
Frame
Oars
Safety Equipment
Life Jackets (for 4)
Car Rack
Clothing(for 4)
Lessons/Training
Total
1,500
25O
2OO
150
2OO
475
2,775
Rods, reels, line
Flies, lures, tackle
Accessories
Waders
Total
90
60
70
70
290
Rods, reels, line
tackle
Accessories
Total
65
45
70
180
Mid-Range Cost
500
5O
lO0
150
1,000
1800
7OO
9O
2OO
5O
4O
75
150
1,305
3,000
250
200
150
200
100
200
475
4,575
2O0
150
200
150
7O0
150
150
200
500
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Recognize the multiplier effect of greenway expenditures. The effect of
greenway spending is multiplied as local businesses patronized by greenway
users purchase supplies and services from manufacturers and other busi-
nesses. This concept is further discussed in Section 4, Tourism, under the
subsections ~Direct, Indirect and Induced Effects" and ~Uultipliers.'
Compare the economic effects of the greenway to those of another facility
or program. Compare the number of jobs supported or created by your
greenway to those supported by a well-known local employer.
Discuss effects of decisions that could alter visitation. Many activities
such as natural area restoration, fish habitat improvement, increased publicity,
better access, etc, can increase recreational use. If such activities are
proposed, calculate the effects of such a change. Use this information as base
data for illustrating how changes in management (supply) or visitor needs
(demand) affect the greenway's impact on the local economy.
Sources of Information
Recreation and Sports Associations. The National Sporting Goods
Association (NSGA) publishes survey results of participation in 26 sports
throughout the nation. This information includes average prices paid for
equipment, shoes, and clothing. The most recent version, "Sports Participation
in 1988," can be obtained from NSGA, at (708) 439-4000. The results are also
available on a state-by-state basis. There may be fees charged to obtain this
information.
Information can also be obtained from individual recreation organizations. A
partial listing of national organizations, their location, and phone number, is
below. Contact state and local recreation associations in your area for
additional information.
American Hiking Society
Washington, D.C. (703) 385-3252
American Nature Study Society
Homer, NY (607) 749-3655
American Recreation Coalition
Washington, D.C. (202) 662-7420
American Rivers
Washington, D.C. (202) 547-6900
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Heritage Trails Fund (Equestrian and Hiking)
(415) 672-5072
International Mountain Biking Association
Bishop, CA {619) 387-2757
League of American Wheelmen
Baltimore, MD (301) 944-3399
National Organization for River Sports
Colorado Springs, CO (303) 473-2466
The National Recreation Survey. This is a summary of the results of a
national household interview survey conducted in 1982 and 1983. The survey
covered the current participation status of 36 recreation activities. Expected
trends in participation were also covered. Information concerning the survey
can be obtained from the Recreation Resources Assistance Division, National
Park Service. Contact Merle Van Home at (202) 343-3780. It is important to
note, however, recreation activities have changed during the last decade ( i.e.
mountain bicycling has experienced dramatic growth) and that recreation
activities may be different in your area.
Assistance with surveys, The National Park Service social sciences and
reporting programs are located in the Office of the Assistant to the Director,
Science and Technology. This office may provide assistance by explaining
sampling methods and providing copies of tested questionnaires. For further
information contact (202) 343-8123.
Media. Recreation is covered by the news almost daily. Look for feature
articles and relevant information. Review newspapers, periodicals, and
newsletters for information relevant to trends, activities, and expenditures that
could be useful in building your case. Keep a file of related clippings.
Considerations in Using These Rationales
Be cautious. Your greenway may have opposition. If economicsbecome a
point of contention, your analyses may be closely scrutinized. Document all
your assumptions and be able to retrace your calculations upon request. The
best defense is a good offense. Be knowledgeable concerning your method,
results, and potential limitations. This will also put you in a good position to
scrutinize other economic analyses presented by opposing interests.
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Realize the policy implications of your data. This information can be helpful
in setting economic development policy. Knowledge ofwho spends the most,
where these people are from, and what services they desire, can assist in
providing direction for development or changes aimed at increasing the
economic benefits to an area. Bear in mind that more is not necessarily better,
especially in sensitive resource areas, which might be adversely impacted by
overuse. Make protection of the greenway resources your bottom line and
manage use accordingly.
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Re;erences
Arizona State Parks. 1989. "Creative Funding for Trails." Arizona Trail News
Phoenix, AZ: Arizona Hiking and Equestrian Trails Committee, Arizona State
Parks Board. Sue Thomas, Editor.
California Department of Parks and Recreation. June 1988. California
Recreation Plan. Sacramento, CA: State of California.
Davis, John S. 1986. "The National Trail System Act and the Use of Federal
Protective Zoning." Harvard Environmental Law Review10(1):189-255.
Doyle, Thomas B. Letter of April 24, 1989. Director of Information and
Research, National Sporting Goods Association, Mt. Prospectus, IL.
Feuchter, Ray. 1984. "Perspectives on River Recreation in the National
Forests." In Popadic, et al., eds. Proceedings of the 1984 National River
Recreation Symposium. Baton Rouge, LA: Louisiana State University, School
of Landscape Architecture.
Finken, Mary. April 1988. "What It's Worth." River Runner Magazine.
Hecker, Rob. September, 1989. "Land Claims! Are Mountain Bicyclists Getting
Their Share?" California Bicyclist.
I ngrassia, Paul. July 24, 1989. "Today it is Possible to Sail a Freighter and Call
it a Canoe." Wall Street Journal.
Kelly, Timothy J. and Ronald M. Sushak. 1987. "Significance of Water-Related
Outdoor Recreation to the State and Regional Economies in Minnesota." MN:
Minnesota Department of Natural Resources, Division of Watem, Office of
Planning for the Water Allocation Project.
Klar, Lawrence R. and Jean S. Kavanagh. 1986. "Hiking Trail Systems in the
United States." A Literature Review- President's Commission on Americans
Outdoors. Washington, D.C.
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Klar, Lawrence R. and Jean S. Kavanagh. 1986. "Hiking Trail Systems in the United
States." A Literature Review- President's Commission on Americans Outdoors.
Washington, D.C.
Langenau, Ed. 1986. Literature Review. President's Commission on Americans
Outdoors. Washington, D.C.
Lawton, Kate. May 1,1986. The Economic Impact of Bike Trails: A Case Study of
the Sugar River Bike Trail.
Lime, David W. 1984. 'Who Uses Rivers for Recreation and What of the Future?'
In Popadic, et al., eds. Proceedings of the 1984 National River Recreation
Symposium. Baton Rouge, LA: Louisiana State University, School of Landscape
Architecture.
Loomis, John. Summer 1989. "Estimating the Economic Activity and Value from
Public Parks and Outdoor Recreation Areas in California.' Journal of Park and
Recreation Administration.
Loomis,John. 1989. EconomicActivityandVaiueAssociatedwithPublicParksand
Outdoor Recreation Areas in Californi~ Cosponsered by California Association of
Recreation and Park Districts and California Park and Recreation Society. Davis,
CA: University of California, Division of Environmental Studies.
Lcomis, John and Chris Unkel. 1989. "The Economic Contribution of WiJdlife
Viewers." OutdoorCalifomia.
Loomis John, Michael Creel, and Joseph Cooper. October 1989. Economic
Benefits of Deer in California: Hun~ng and Vie~ng Values. Davis, CA: University
of California, Institute of Ecology. Report ~2.
Manfredo, Michael. 1986."Recreational Fishing." A Literature Review- President's
Commission on Ame#cans Outdoors. Washington, D.C.
National Park Service and Pennsylvania State University, 1992 The Impacts of
Rail-Trails, Washington, D. C.: Rivers, Trails and Conservation Assistance
Program.
Nationai Park Service. 1983. Winning Support for Parks and Recreation. State
College, PA: Venture Publishing.
Na~onalWi~life Feder~on. 1988. 1988 C, onseva~on Directory. Washington, D.C.
2-18
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Expenditures by Residents
President's Commission on Americans Outdoors (PCAO). 1986. Hearing
testimony.
Schmidt, Adolph. November 1982. "Equestrians in California and Their
Contribution to the Economy.' Concord, CA: Heritage Trails Fund.
Schwecke, Tim, Dave Sprehn, Sue Hamilton, and Jack Gray. January 1989.
A Look at Visitors on Wisconsin's E/roy-Sparta Bike Trail. Madison, WI:
University of Wisconsin- Extension, Recreation Research Center.
Shelby, Bo and David W. Lime. 1986. "Whitewater River Recreation." In A
Literature Review- President's Commission on Americans Outdoors. Wash-
ington, D.C.
Ski Industries America. 1988.
Southwick, Robert I., and David B. Rockland. October 1989. How to Conduct
an Economic Impact Analysis. Washington, D.C.: The Sport Fishing Institute.
Spitzer, W.T. September 13,1988. Speech to Ninth National Trail Symposium.
Helena, GA.
SportFishinglnstitute. 1988. Tho Economic lmpact of Sport Fishing in the U. S.
Washington, D.C.: Sport Fishing Institute.
U.S. Fish and Wildlife Service. 1988. 1985 National Survey of Fishing, Hunting
and Wildlife Associated Rect:eation. Washington, D.C.: U.S. Department of
Interior, Fish and Wildlife Service.
U.S. Forest Service. March 1989. "Progress Report- Rise to the Future: Fish
Your National Forests." Washington, D.C.: U.S. Forest Service, Wildlife and
Fisheries.
U.S. News and World Report. October 9, 1989. "The Price of Fun.'
Van Horne, Merle. 1987. "Economic Impact of Parks Methods Assessment."
Draft memo. Washington, D.C.: National Park Service, Recreation Resources
Assistance Division.
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Van Home, Merle J., Laura B. Szwak, and Sharon A. Randall. 1985. "Outdoor
Recreation Activity Trends- Insights from the 1982-1983 Recreation Survey."
Proceedings: 1985 National Outdoor Recreation Trends Symposium IL SC:
Clemson University, Department of Recreation and Tourism Management.
Wilson, J. L. 1986. Testimony at President's Commission on Americans
Outdoors.
2-20
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Commercial Uses
Contents
Economic Impacts of Protecting Rivers, Trails, and Greenway Corridors
/
Concessions, Permittess, and Partn(~ships
Page
3-3
Special Events 3-4
Filming and Advertising 3-6
How to Use These Rationales in Your Community 3-6
Sources of Information 3-8
Co~sideralions in Using These Ratioaales 3-9
References
3-2
3-10
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Commercial Uses
Greenways can provide business opportunities, locations, and resources for
commercial activities. These activities may include on-site concessions,
permittees, partnerships be~sen the managing agency and olher groups,
special events, and commercial filming activities. Compatible business ven-
tures can provide a wide range of visitor services and facility improvements.
Documenting and estimating the economic impacts of the commercial uses
associated with rivers, trails, and greenways can be useful in promoting your
corridor project. Demonstrating these impacts might also help to expand a
projector provide information to assist greenway promotion in other
communities.
Concessions, Permlttees, and Partnerships
Concessionaires, permittees, and partnerships are recruited and usually bid
for the right to provide a wide range of on-sits visitor services which a public
agency chooses not to operate. Typical examples include food services,
recreation equipment rentals and sales, lessons, lodging, and convenience
items. These services directly serve and enhance the recreational exparience
of greenway users.
Concessions, permittees, and licensees are usually privately operated enti-
ties, mostly for-profit though sometimes non-profit, that operate on public land
by authorization of the managing agency or group. A partnership is similar, but
most often involves non-profit entities. These activities can have a significant
effect on a local economy.
· Along the lower Colorado River (Arizona), thirteen concossairas
under permit to the Bureau of Land Management generate more than
$7.5 million annually in gross receipts, with a major spinoff effect in the
local economy (Bureau of Land Management, 1987).
· Golden Gate National Recreation Area (GGNRA), a National Park
Service unit in San Francisco, California, has contracts with ten
primary concessionaires. Total 1988 gross revenues for these
concessionaires were over $16 million, over 25 percent of which was
spent on payroll. GGNRA also has cooperative agreements with
non-profit park partners who operate within park boundaries.
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The seven primary partners generated over $6 million in total revenue
in 1988, almost half of which went for payroll, which provided local
jobs (National Park Service, 1989).
Revenues may also be generated through agricultural leases within a green-
way. For example, grazing leases on lands owned by the California State
Department of Fish and Game in Northern California generated net revenues
averaging more than $10,000 par year from 1981 through 1989. Cattle
grazing on a portion of these lands, located at Earl and Talawa Lakes, was
used as a resoume management tool to restore and improve habitat for the
endangered Aleutian Canada Goose. The revenues generated from grazing
were then utilized to improve recreation on the site.
Special Events
Special events not only generate revenues to sponsors and the community,
but promote the greenway itself to residents and visitors.
· Eppie's Great Race consists of a 6 mile run, 12.5 mile bike ride, and
6.35 mile paddle down the American River in California. The
Sacramento County Department of Parks, Recreation and Open
Space sponsors this annual event, held along the American River
Parkway. All proceeds are donated to Adaptive Leisure Services
(ALS). The 1989 Great Race raised $40,000 and race donations to
date total over $260,000. These proceeds have allowed ALS to
expand programs to meet the leisure interests and needs of persons
with disabilities (County of Sacramento, 1989).
· The 12th annual 'Great Race" in Pittsburgh attracted 12,807
runners to the city. Those runnem living outside Pittsburgh, but within
Allegheny County, spant an average of $14.40 on race-related items,
with 54 parcent spant within city limits. Pennsylvania runners
travelling to the race from beyond Allegheny County spent an
average of $28.29 within Allegheny County, 75 pement of which was
spent within Pittsburgh. Not only did the event attract runners to the
city of Pittsburgh, but it is estimated that over 40 percent of all
travelling parties brought at least one non-runner to the event. In fact,
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one estimate showed that those runners living outside city limits
brought over 4,000 spectators to the event.
· Overall, the 1987 Great Race generated an estimated direct
economic impact of $220,000 within Allegheny County. Adding
registration fees paid by race participants, this total exceeds
$330,000. This total does not include spectator expenditures except
for those spectators brought by runners. Thus the overall total
expenditures associatedwith the event would likely be much higher
(Gitelson, et al., 1987).
Special events can also be used to raise money and promote the greenway or
trail itself. Such events can serve as a catalyst to gain support, strengthen
volunteer organizations, and raise public awareness of your project. You
should report this economic activity as testimony of support for your greenway.
· flake a Walk on the Wild Side Ice Age Trail Hike-A-Then', in
Wisconsin, drew over 1,200 hikers and raised $30,000, against
$15,000 in expenses. The Ice Age Trail Council and Ice Age Park and
Trail Foundation sponsored the event to raise money to support the
development and maintenance of the trail, raise public awareness,
and strengthen organizations by providing a rallying paint. Marketing
techniques included distribution of several thousand posters featuring
a "hiking mammoth,' advertisements and a feature article in
Wisconsin Silent Sports, and a steady stream of articles in state and
local newspapers (Pathways Across America, Fall 1988).
· The San Joaquin River Parkway and Conservation Trust in Fresno,
California, organizes a variety of annual events to raise money for the
Trust. One of the most successful events was "Evening on the River,"
which featured dinner and entertainment at $100 per person. This
event raised approximately $10,000. Another popular event is a bike
rally, featuring a variety of distance rides, which raises public
awareness of the Parkway in addition to money. The Executive
Director of the Trust, Donn Furman, stresses the key to successful
events is to get as many sponsors as possible. Sponsors can donate
t-shirts, food, printing, and other services. Sponsors help to defray
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event costs, thereby increasing the amount you raise for the greenway
(Bonn Furman, 1990).
· The Greenway and Nature Center of Pueblo, one of the most active
trail-related organizations in Colorado, sponsors several events
annually, as well as renting bicycles and rafts. One special event is the
Bluegrass Festival and Crafts Fair. This event not only raises public
awareness and money for the Greenway and Nature Center, it also
provides opportunities for local artisans and food establishments ('lqm
Merriman, Executive Director, Greenway and Nature Center of
Pueblo, 1990).
Filming and Advertising
Unique and scenic areas are desirable as location backdrops for movies,
television, and photo sessions for magazine and newspaper advertising. Fees
paid to use these areas, in addition to the money spent locally by film
production crews during filming sessions, are beneficial to the managing local
agency and the local economy. Media exposure of a river, trail, or greenway
can also help to promote the area and attract visitors.
· Full-length motion pictures and commercial filming activities on
public lands in Nevada contribute millions of dollars each year to the
State's economy. Movies and television shows, commercials and
advertisements filmed on BLM Public Lands in Utah have added
income to Moab, Kanab, and other Utah communities (BLM, 1987).
How to Use These Rationales in Your Community
Show how concessions and events have affected other communities.
Use some of the examples given to show how concessions and events have
benefited other communities.
Estircate concession expenditures. If you have concessions at your green-
way, determine the following:
1. How much do they pay in contractual fees to the managing
agency? This amount could be considered a revenue offset that the
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agency would otherwise have to collect in taxes or other means.
2. What is their gross revenue? This is the amount the concessions
collect from greenway visitors which is likely to cycle through the
local economy.
3. What percentage of revenues are likely from non-residents?
When you have defined your 'economy,' ask concessionaires to
estimate what percentage (annual average) of gross revenues is
likely from visitors from beyond the boundaries of the economy.
These non-resident concession expenditures are considered "new
dollars,' and a stimulus to the local economy.
4. How much of the concessionaires' gross revenue goes toward
payroll? How many jobs are provided?
Estimate Impacts of partnerships. If you have cooperative agreements with
non-profit groups who operate in your greenway area, follow the same proce-
dure outlined for concessions to determine their economic impacts.
Estimate the Impacts of special events. If an upcoming event involves ticket
sales, the total number of visitors and their expenditures can be calculated.
Get data on gross receipts es a measure of economic activi!.y. If you have the
opportunity to determine whether ticket buyers live within the economy, you will
be able to determine resident versus visitor expenditures.
If an upcoming event involves a promotion and operating budget, estimate the
percentage of the total budget that is spent in the local economy. Include
expenditures from event sponsors, promoters, and contributors. Add this
amount to the gross revenues realized by concessionaires or non-profit
entities involved.
If the event does not have ticket sales, you may wish to conduct a survey of
visitors. The purpose of the survey is to estimate how much visitors spent while
attending the eventand how much was spent within the local community. You
might also compare resident and visitor expenditures. Suggested questions
for questionnaires are listed in Appendix C. A survey will be easier to conduct
3-7
Economic Impacts of Protecting Rivers, Trails, and Greenway Corridors
if there are only a few exit points. If there are many exit points, interviews can
be conducted within the event area. You should devise a systematic sampling
method to avoid biasing results.
Once you haveconducted asurveyand analyzedthefindings, you can multiply
the average amount spent by the total number of people attending the event.
This will give you an estimate of the total direct economic impact within your
community. This assumes that the dollars spent ara on local businesses. If
event concessions, their employees, and suppliers ara from beyond the local
economy, the local economic effects may be negligible.
If it is not feasible to conduct a survey, you might interview the event sponsors
or promoters about the general characteristics of event participants. They
may be able to give you information you can use as the assumptions neces-
sary for your estimates.
Determine Impacts of filming and advertising. If you have filming activities
on your greenway, estimate permits paid, or donations, and the average
expenditure per employee, per day, in the local economy. Many of these
businesses operate on well defined budgets. Interview firms about their range
of average location shoot costs and the variables involved. Multiply by total
number of employees and total filming and production days in the local
economy for total film and advertising-related expenditures in the local
economy.
Promote greenway events. If you ara not already doing so, use and promote
special events in newsletters, brochures, fliers, and magazines. Remember,
events bring people who will discuss their experience at your greenway with
their family and friends when they re!urn home. Word-of-mouth can be a
powerful and cost-effective means of promoting your greenway.
Sources of Information
Activity and Club Magazines. Magazines such as Walking Magazine, River
Runner, etc., usually have listings and/or advertisements for events related to
these activities and may be interested in covering your event, or publishing a
news release that you provide. Regular review of these magazines may also
give you ideas for events you could plan for your greenway. These magazines
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may also identify clubs and organizations which regularly sponsor special
events. Such groups could be encouraged to promote your river, trail, or
greenway by using it as an event site or staging area.
Operations. Fees paid to public agencies to operate businesses within
greenways are a matter of public record. Contact the appropriate agency.
Annual financial reports of concessionaires, psrmittees, and licensees to
public agencies will provide information on how funds are spent. You might
also contact them directly for more information.
Considerations in Using These Rationales
Develop guidelines for commercial uses. Some areas of your river, trail, or
greenway project may be incompatible with commemial uses. Protection of
the resoume should be your first priority. You should carefully determine which
areas are less sensitive and would allow commemial use. Determine appro-
priate levels of use. Issue perm its based on preferred levels of visitor Use and
type of experiences you want to provide. Attach restrictions to the permit to
ensure adequate protection of the resource.
Use good survey methods. The better the survey method, the more useful
the results will be. Plan your information gathering to best utilize the resources
available. A local community college or university may be interested in helping
with surveys as a class project. (See also "Sources of Information' in
Expenditures by Residents, Section 2).
Be careful. Document your assumptions and calculations, and backthem with
sound logic. Peer review of your calculations is a must. If you have staff
members with some background in economics or finance, their review and
support would be especially important.
Be sensitive. Private businesses may not wish to have their records a matter
of public record as it may be perceived as potentially harmful to their competi-
tive business position. While gross receipts and franchise, contract and permit
fees are usually a matter of public record, levels of profit may not.
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References
Bureau of Land Management. 1987. Racreation2000. Washington, D.C.: U.S.
Department of the Interior, Bureau of Land Management.
County of Sacramento. 1989. 'Sweet Sixteen." In Newsline. Sacramento, CA:
County of Sacramento, Department of Parks, Recreation, and Open Space.
Gitelson, Richard, Frank Guiadagnolo, and Roger Moore. 1987. Tho Great
Race Economic Impact Study. State College, PA: Center for Travel and
Tourism Research, Department of Recreation and Parks, Pennsylvania State
University.
Koeberar, John. May 11,1989. President, Urban Park Concessions. Speech
given to Economics Institute, May 10-11,1989. Sponsored by California Parks
and Recreation Society.
Long, Patrick T. "The Economic Impact of Rural Festivals and Special Events:
Assessing the Spatial Distribution of Expenditures." Boulder, Colorado:
University of Colorado, Boulder.
National Park Service. Mamh 1989. 'Economic Impact Profile - Golden Gate
National Recreation Area, San Francisco, CA." San Francisco, CA: National
ParkService, Western Region, Division of Planning, Grants and Environmental
Quality, and Golden Gate National Recreation Area.
Sheffield, Emilyn and Glenn Weaver. March 25, 1989. Memo to Poplar Bluff
Chamber of Commerce.
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Economic Impacts of Protec~ng Rivers, Trails, and Greenway Corridors
Agency
Expenditures
Contents
Page
Level of Expenditures 4-3
Local Business Suppoa 4-4
How To Use These Rationales in Your Community 4-5
Sources of Information 4-7
Co~sidera/~ons in Using These Rationales 4-7
References 4-8
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Agency Expenditure~s
This section of the Resource Book presents how the expenditures of the
agency responsible for managing a river, trail, or greenway can contribute to
the local economy. Agency expenditures contribute to economic activity,
providing payrolls and support to a myriad of businesses.
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Level of Expend,tures
The managing agency supports the local and regional economy by providing
jobs and purchasing supplies and services to develop, operate, and maintain
the greenway and related improvements. Benefits to the local community are
greater if supplies and services are purchased from local businesses. The
following examples illustrate the level of expenditures which potentially impact
the local community. Expenditures must be reviewed in detail to determine
how much is spent locally.
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· The American River Parkway accounted for over $1 million in
expenditures by the County of Sacramento Parks and Recreation
Department in fiscal year 1989-1990. This 5,000 acre greenway
includes 23 miles of paved trails and over 50 miles of riding and hiking
trails. Approximately $600,000 of the expenditures were made for
services and supplies, and $450,000 for salaries and benefits.
Expenditures on services and supplies range from professional
planning services to paper products (Wright-Woodruff, 1990).
· Boulder Creek Corridor in Boulder, Colorado, is maintained by both
the City Public Works Department and the Parks and Recreation
Department. The Parkand Recreation Departmenrsgroundskeeping
maintenance generates annual expenditures of $6,000 for salaries
and $3,000 for services and supplies per mile. The Transportation
Division of Public Works spends $1,600 in salaries and $850 per mile
for trail maintenance (Barnett, 1990).
· A 1978 study completed for the East Bay Regional Parks District in
California, assumed that for every $1 received by the District in tax
funds, grants or gifts, $3 was returned to the community through
supplies, contracts, equipment, payroll, and transportation (Spickard,
1978).
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· In 1989, the East Bay Regional Park District spent over $27 million
for employee salaries and benefits (Cobb, 1989).
Employment generated by a greenway project can be targeted by the manag-
ing agency to benefit particular needs of the community. For example,
programs may be implemented to employ population segments suffering from
high unemployment.
· In response to community needs for youth employment and job
training, the city of Battle Creek, Michigan, and the Urban League
joined in a program to hire youths to construct the city's Linear Park.
The program provided employment and training for approximately
200 youths over four summer seasons between 1984 and 1987. The
Urban League of Battle Creek was responsible for hiring, while city
staff performed planning and engineering (Kracht, 1990). This
program not only provided employment, but helped the youth develop
work skills and a "sense of Fide in their contribution to the City of Battle
Creek in general and the Linear Park in particular" (City of Battle
Creek, 1985).
· Youth and the environment are also brought together under the
California Conservation Corps (CCC). Each year the CCC employs
approximately 2,000 young adults, 18 to 23 years old, to work on
conservation projects sponsored by local, state, federal government,
and non-profit organizations. This mutually beneficial program not
only provides young adults with employment and the development of
work skills, it also gives conservation-related organizations access to
an affordable labor force. Corps' accomplishments include:
construction or rebuilding 2,500 miles of trails, nearly four million work
hours in park improvement, and more than 900 miles of stream
clearing for salmon and trout migrations (California Conservation
Corps, 1990).
Local Business Support
Agency expenditures are more important to some businesses than others.
Some businesses or contractors may be dependent upon local recreation/
open space agencies for a significant portion of their revenues.
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Asency Expenditures
· In one year, local recreation agencies in Illinois spent $136 million
in a diversity of economic sectors. The top ten sectors were utility
services, insurance, vehicles, sporting goods, lumber and building
materials, legal agencies and service, swimming pool supplies,
chemical lubricant and gasoline supplies, food purchases, and play
ground equipment (Sheffield, 1986).
· A T-shirt printing shop in the St. Louis area estimated that 15 to 20
percent of their 1987 revenues came directly or indirectly from the
area's municipal agencies and that this market was increasing
(Sheffield, 1988).
· The sporting goods manufacturing firm, Wilson, noted that park and
recreation agencies directly or indirectly supported as much as 30
percent of the company's corporate/domestic sales (Sheffield, 1988).
How to Use These Rationales In Your Community
List specific greenway-related expenditures. Determine all agencies and
groups directly involved in managing the greenway. List expenditures for their
greenway-rslated activities. Itemize annual expenditures by activity. Ex-
amples of expenditure categories are: planning, acquisition, development,
operation, and maintenance. Include all annual expenditures for personnel,
supplies, and equipment. For each, estimate the percentage of these expen-
ditures which are made within the local economy. Annual expenditures can be
calculated either for the calendar year or fiscal year. Calculate the total
expenditures made within the local economy and the number of jobs provided.
If your greenway has not yet been implemented, go through the same process,
but project future annual expenditures.
Apportion other greenway.related expenditures. Some agency expendi-
tures will be for administration, personnel, supplies, and equipment that may
be used only partially for the greenway. If this is the case, estimate the
proportion attributed to the greenway and catalogue these expenditures. If
these are annual expenditures, figure the percentage of time staff or equipment
is involved and apportion the expenditures accordingly. For heavy equipment,
or other long-term investments, you need to calculate the annual cost of the
investment. This is also termed'annualizing' and may include calculations for
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depreciation. Askaccounting or finance specialists for the appropriate figures
to convert long-term expenditures to annual costs. Total the annual expendi-
tures that can be attributed to the greenway and add to the costs calculated for
the greenway-specific expenditures given above. This total is the direct impact
of greenway-relatad agency expenditures.
Calculate greenway-related employment. Keep track of the number of
employees necessary to operate the greenway. The managing agency should
be able to provide employment figures. Seasonal jobs should be converted to
full-time, year-round equivalents. For example, three four-month seasonal
positions can be counted as one full-time, year-round position.
Many graenways involve multiple managing agencies since the corridors pass
through different political jurisdictions. Be sure to add up the jobs and
expenditures of all managing agencies and their respective suppliers and
contractors.
If possible, determine which city or countygreenway employees reside. Divide
the total number of employees into percentages based on where they reside.
Since employees typically spend most their paycheck in the community they
live in, this will give a good indication which jursidiction benefits from greenway-
related expenditures.
Determine greenway.<lependent businesses. Talk to businesses that
receive agency expenditures. Determine what proportion these expenditures
comprise of the businesses' total revenue. Keep this information on file.
Communicate results. Use a simple graphic format to show how expendi-
tures and jobs are supported by greenway managing agencies, their suppliers,
and contractors. Computer desk-top graphics can be very effective, particu-
larly for pie-charts and bar-charts. You can also show the distribution of
economic activity by jurisdiction.
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Sources of Information
Public and non-profit agency budgets are a matter of public record.
U,$. Census. Census documents list average incomes for different occupa-
tions, by specific areas. Call your local library's government documents
department for the appropriate volume and location.
Budget and Finance Specialists. Agency budget and finance specialists are
the experts on what and where greenway expenditures are being rnade. These
specialists might also be helpful in case methodological questions arise.
Considerations in Using These Rationales
Interpretation of expenditure information. You may wish to give sttonger
emphasis to the other impacts of your proposed project before discussing
agency expenditures. This information might be used to show how expensive
the greenway will be. The bottom line, however, is that agency expenditures
can help support local businesses and should not be considered a drain on
thelocal economy. This rationale is pest for a greenway that has already been
implemented. It is also good for situations where agency programs are
threatened by cut-backs. Calculate how many jobs would be lost due to
cutbacks.
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References
Barnett, John, Greenways Coordinator. May 11,1990. City of Boulder Public
Works, Transportation Division, Boulder, Colorado. Telephone Communica-
tion.
Bureau of Land Management. 1987. Recreation 2000. Washington, D.C.:
U.S. Department of ~he Interior, Bureau of Land Management.
City of Barde Creek..1985. Annual Report: The Battle Creek Metropolitan
Linear Park.
Kracht, Linn, Recreation Superintendent. May 8, 1990. City of Battle Creek
Parks and Recreation Department, Batlle Creek, Michigan. Telephone com-
munication.
National Park Service. March 1989. 'Economic Impact Profile - Golden Gate
National Recreation Area, San Francisco, California.' San Francisco, CA:
Western Region, Division of Planning, Grants, and Environmental Quality, and
Golden Gate National Recreation Area.
Sheffield, Emilyn. May 1988. "The Economic Importance of Public Sector
Recreation.' Missoutf Municipal Review.
Wright-Woodruff, Lois, Community Relations Officer. May 7,1990. County of
Sacramento Parks and Recreation Department. Telephone communication.
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Economic Impacts of Protecting Rivers, Trails, and Greenway Corridors
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Contents
Page
The Travel Industry 5-3
Natural/Cultural Areas Attract Travellers 5-4
Attributing Expenditures to Greenways 5-5
Direct, Indirect, and Induced Effects 5-7
Multipliers 5-10
Economic Impact Models 5-12
Marketing Potential 5-13
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How To Use These Rationales in Your Community
5-14
Sources of Information 5-19
Considerations In Using These Rationales 5-20 I
References 5-22
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Greanways, rivers and trails which attract visitors from outside the local area
can stimulate the local economy. This section begins with examples stressing
the importance of natural and cultural areas for attracting visitors, followed by
examples showing how rivers, trails, and greenways can contribute to the
travel and tourism sectors. There is a subsection on indirect and direct impacts
and a discussion on how local economic effects of graenway-related spending
can be estimated using computerized input-output models. The last subsec-
tion demonstrates how corridor projects can increase tourism appeal and
marketing potential of a local community.
The Travel Industry
Travel and tourism is the leading employer in several states and has been
predicted to be the leading industry in the United Sates and the world by the
year 2000. Travel is also a leading industry and source of jobs within regions
and local communities, and is increasing in relative economic importance.
Expenditures for travel and tourism impact transportation, lodging, eating es-
tablishments, retail, and service businesses. These expandituras support
jobs, personal income, and government tax revenues.
· Travel industry employment for 1989 increased by nearly 3 million
jobsfrom 1988. This employment includesair transportation,intercity
highway travel, eating and drinking establishments, hotels and
motels, and amusement and recreation services. The travel industry
has continually out-performed the overall economy in creating new
jobs. (U.S. Travel Data Center, 1989, 1990).
· On an average, every $1 million in 1988 travel-generated visitor
expenditures in California generated $25,000 in local taxes, $39,000
in state taxes, 18.5 jobs, and $198,000 in payroll expenditures
(California Department of Commerce, 1988).
For purposes of this section, 'travel and tourism-related expenditures' refer to
those visits that originate fram beyond the boundaries of your local economy.
Typically, these are trips fram at least 50 miles away and any trips which may
involve an overnight stay. Expanditura patterns for visitors are usually higher
than for local users. Spending by residents is discussed in Section 2 of this
Resource Book.
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A greanway, which provides local opportunities and enhances tourist draw,
can be an important asset to your community. Recent trend analyses show
that weekend trips to nearby areas are on the increase, while the traditional
two-week summer vacation is on the decline for today's travellers. This is due
to the job complications of two-income families, limited time budgets, interest
in more specialized recreation experiences, increased mixing of personal and
business travel, and year round schools.
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Natural/Cultural Areas Attract Travellers
Outdoor recreation, natural, historical, and cultural resources are increasingly
important attractions for travellers. Recreational and environmental tourism,
as well as historic and cultural, can be very relevant to greenway projects.
Greenways often link together cultural and natural resources. Environmental-
minded travel or ecotourism, in which the attraction is nature and conservation
has also emerged during the 1980s and is expected to increase during the
1990s.
· A poll commissioned by the President's Commission on Americans
Outdoors found that natural beauty was the single most important
criterion for tourists in selecting a site for outdoor recreation (Scenic
America, 1987).
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· In a recent report, the governors of tive New England states officially
recognized open space as a key element in the 'quality of life' in their
region. They credited 'quality of life' as providing the foundation of a
multi-billion dollar tourism industry and bringing rapid economic
growth to the region (Governor's Committee on the Environment,
1988).
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In 1988, 75 percent of all travel was for pleasure. Outdoor recreation and
entertainment are growing in importance and accounted for 41 percent of
pleasure travel, while 34 percant,was attributed to visiting family and friends.
Business travel amounted for 17 percent of all travel in 1988, with the
remaining 8 percent attributed to personal and other reasons.
Travellers are also increasingly attracted to educational-oriented experiences
provided by cultural and historic sites. One of the fastest growing areas of
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tourism includes cultural and historic community festivals, events, and compe-
titions. This will be a boon to community-based tourism. Greenways and trails
can provide a link between historic and cultural sites. For example, the Azalea
Trail in Mobile, Alabama, serves as a city beautification project and attracts
tourists. Because preservation of these historic sites serves as a stimulus for
tourism, there can also be significant impacts to the local economy.
· In less than a decade, the establishment of Lowell NHS in
Massachusetts, spurred the economic renewal of a repressed
economy. The city of Lowel is prosperous and vibrant today.
Investment by the public sector has totalled $122.7 million (including
$18.7 million from the National Park Service to establish the National
Historic Site.) For every $1 of public investment there has been a total
private investment/return of $7. (Cassandra Walter, Superintendent
Lowell National Historic Park, 1989)
Attributing Expenditures to Greenways
Greenways, rivers, and trails can have varied levels of tourist draw. They can
be travel destinations in themselves, encourage area visitors to extend their
stay in the area or enhance business and pleasure visils. The 'level of tourist
draw' determines the appropriate proportion of the visitor's time and travel
expenditures that can be attributed to the greenway, if visitors extend their trip
an extra night to visit a greenway, the additional night's lodging and meals can
be attributed to the greenway.
· San Antonio Rive~valk is considered the anchor of the tourism
industry in San Antonio, Texas. Tourism is the second largest
economic sector in the the city, accounting for $1.2 billion annually. An
auto survey concluded that the Riverwalk is the second most
important tourist attraction in the state of Texas (Richard Hurd, San
Antonio Department of Parks and Recreation).
· In 1988, users of the Elroy-Sparta Trail in Wisconsin averaged
expenditures of $25.14 per day for trip-related expenses. Total 1988
trail user expenditures were over $1.2 million. Approximately 50
percent of the usem were from out-of-state, and the typical user
travelled 228 miles to get to the trail (Schwecke, et al., 1989).
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· In Montana, an estimated 75,000 visitors to the upper Missouri Wild
and Scenic River, and Lewis and Clark National Historic Trail,
contribute $750,000 annually to the economy of the area around the
149 mile river corridor (Bureau of Land Management, 1987).
· More than 600,000 Americans took a bicycle vacation in 1985.
Touring cyclists, when travelling in a group, spent $17 par day
(camping), and $50 par day (staying in motels). Cyclists travelling
alone spant an average of $22 par day (camping) and $60 par day
(motels) (Moran, Wilkinson, and Fremont, 1988).
· The Gauley River is a high quality whitewater rafting and kayaking
resource in West Virginia. It is growing in popularity and increasing its
economic impact on the surrounding region. Dam releases provide
whitewater opportunities on a 24 mile stretch of the Gauley for 10 to 25
days in the fall. The rafters, during this short season, generate almost
$20 million in economic activity in the region. Every $1 spent par
visitor day generated $2.27 of sales in the state. Each visitor day
generated an average of 1.79 days of employment. Economic
rationale was instrumental in precluding potential additional dam
construction on the Gauley; it was recently designated a National
Recreation Area (Logar, et al, 1984).
· On North Carolina's Nantahala River, raft trip participants
increased approximately 700 percent between 1972 and 1981.
Rafters generated $1.8 million in expanditures in 1 982. (Swain County
Board of Commissioners, 1982).
Tour oparators, outfitters, and guides are also important to local economies
due to the expenditures their businesses generate, the fees they pay to
oparate, and their advertising and promotion of local resources. Some
companies such as'A Day In Nature,' based in San Francisco, which offers a
day in nature complete with a gourmet picnic and door-to-door transportation,
have capitalized on the demand for nature-oriented experiences.
· An Oregon study of guides and packers indicates that in 1986, the
outfitter/guide industry in Oregon (for, river, land, and marine
activities) had a direct economic impact of $42.5 million. This resulted
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in a total economic impact of $300 million (Bureau of Land
Management,1987).
· For every $1 paid to canoeing outfitters, custom ers spent $5 for gas,
groceries, restaurants, campgrounds, and other lodging. 70 canoe
liveries in Florida generate $38.5 million per year (Stout, 1986).
· Commercial river outfitters are estimated to account for $70 million
annually in Colorado. BLM fees for outfitter permits in Colorado
totalled $110,000 in 1986 (Bureau of Land Management, 1987).
~Volkssporting,' 'Votksmarching ,' and other sim ilar types of activities may also
be ideal for attracting tourists to local communities. Volkssporting, meaning
"sport of the people,' organizes non-competitive public events open to all ages.
The events include walking, bicycling, swimming, and skiing. Many partici-
pants travel to events regionally.
· An issue of the American Wanderer advertised volkssport events
on trails in the state of Washington. Sponsored by the Washington
Bed and Breakfast Guild, trail maps and event information are
available from the Guild and local inn owners. (American
Volksspporting Association, 1989)
Direct, Indirect, and Induced Effects
The actual amount spent by greenway visitors, from out of the local area, at
businesses within your local economy represents only a portion of the total
economic activity resulting from this spending. For instance, greenway visitors
pumhase goods and services from local businesses. In turn, these businesses
and their employees purchase goods and services from other businesses,
thereby creating a chain reaction. These purchases of goods and services
between firms occur between different economic sectors, such as manufactur-
ing, agriculture and transportation. Therefore, an increase in visitor expendi-
tures is likely to impact related sectors in the economy.
The total impact resulting from an increase in visitor expenditures can be
described in terms of direct, indirect, and inducedeffects. Understanding these
three levels of effects is important because they show how the initial greenway-
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Figure 5-1
Economic Effects of Greenway Expenditures
DIRECT EFFECTS
Purchases by greenway users
+
INDIRECT EFFECTS
Purchases of supplies and materials by the producers
of greenway-related products and services,
and the purchases made by the producers
of the supplies and materials
+
INDUCED EFFECTS
Purchases of production supplies and materials by producers,
resulting from purchases by households
TOTAL ECONOMIC EFFECTS OF GREENWAY EXPENDITURES
related expenditure generates additional economic activity within your local or
regional economy.
Visitor expenditures that may be attributed to a protected river corridor, for
example, may include food and beverage, fishing equipment, and gasoline for
vehicles and boats. Direct effects result directly from the actual purchases by
visitors. Local businesses meeting the river visitors' demand for goods and
services, must purchase supplies to meet this demand. These pumhases (of
food and beverage supplies, fishing equipment and gasoline, for example,) by
the local businesses, are direct effects. Direct effects are also referred to as
first round purchases in some studies.
Indirect effects occur when the suppliers to these local businesses must
increase their purchases of production materials and services from other
businesses, and those businesses in turn increase their purchases. A chain
reaction is created as each supplier must increase their purchase of inputs.
Each exchange increases the total indirect effects. For food and beverage,
indirect effects are when the local food manufacturers purchase additional
produce from local farmers, and the farmers then purchase additional supplies
in order to grow products necessary to meet the demand. Another example
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might be fishing equipment. For instance, the indirect effects attributed to a
fishing rod would include purchases by the rod manufacturer for graphite and
other materials, and the graphite manufacturers (if local) purchases of local
supplies. Thus, indirect effects extend to sectors of the economy beyond
recreation-oriented businesses, such as agriculture, manufacturing, and
transportation.
The direct and indirect effects of increased spending by greenway visitors can
result in an overall increase in the production of goods and services in the local
economy. This increase in economic activity can also increase jobs and
household incomes within the economy. A portion of the incomes is then spent
on other goods and services.
Consumer purchases resulting from the increased income of business owners
and households set in motion another sequence of expenditures and pur-
chases. The sum of these impacts over and above the directand indirect effects
are the induced effects. For example, the induced effects would include all the
purchases made by households which receive wages from their employment
at the rod manufacturer or local market. Induced effects result from wages paid
to households by both directly and indirectly affected businesses. These
induced effects can be estimated from economic impact models.
If you estimate the direct, indirect, and induced effects of visitor expenditures,
you can show the total economic activity which can result from your greenway
project. For recreation expenditures, thetotal economic effects,whethersales,
jobs or incom e, are often approximately one and a half to three tim es m ore than
the amount of the actual recreation-related expenditures. The magnitude of
direct, indirect, and induced impacts depends on the number of visitors
attracted to the greenway; the amount they spend; the structure and diversity
of the local economy; and the quantity of input supplies purchased within your
local community. If the local businesses purchase all their input supplies from
outside the area, the direct and indirect impacts on the local economy would be
zero. Similarly, if employees reside outsidethe communitytheyare much less
likely to spend their income at local businesses and induced impacts are likely
to be minimal.
,5-9
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Table 5-1
Multipliers
How are the direct, indirect, and induced effects estimated? Economists often
use m ultipliers to estimate whatthese effectswill be. A multiplier is a ratio, which
can be defined as the total effects divided by the direct effect. Multipliers may
also be used for indirect or induced effects only. Multipliers are usually written
in decimal format such as 1.7. The greater the multiplier, the greater the
potential increase in economic activity in the local economy. Multipliers are
derived from rather complex economic models.
To estimate what the total effects (direct, indirect, and induced) will be, you
multiply the direct effect (first round purchases) by the multiplier to obtain the
total effects. Thus, by using multipliers you can show the total amount of
economic activity in your community per dollar of direct effect of greenway
visitor spending. Multipliers can be used to estimate the total or indirect
economic effects in terms of the number of jobs, sales, household income, or
other measures of economic activity. For a greenway project, an economist
could use an employment multiplier to estimate how many jobs would result
from a specific level of greenway-related expenditures. An economist could
also use an income multiplier to predict the additional income which would
result from an increase in greenway-related expenditures.
Table 5-1 presents economic multipliers for recreation spending at five state
parks in Georgia. For this study, the local economic impact region was the
county in which the state park was located. This study found recreational
spending appears to be associated with relatively large m ultipliers. This means
new or expanded recreation facilities within these regions would bring new
dollars into the area, which through multiplier effects, would stimulate consid-
erable economic activity. Multipliers vary by county, in part, because the
structures of the local economies are different.
Local Economic Multipliers for Recreational Spending at
Representative Georgia State Parks
F.D. Oahlonega Little
Economic Indicator Unlcoi Red Top Roosevelt Gold Museum Ocmulgee
Gross Output 1.,56 1.79 1.51 1.48 1.97
Total Income 1.68 2.08 1.68 1.55 2.14
Value Added 1.67 2.06 1.66 1.55 2.12
Employment 1.21 1.23 1.23 1,21 1.32
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Table 5-1 lists four multipliers which are commonly used: gross output, total
income, value added, and employment. The gross output multiplierisgenerally
the highest, however, the other multipliers are generally more useful indicators
of economic activity in your local economy. Definitions of these multiplier terms
are as follows:
Gross output
Value of all outputs produced in the local region; an
indicator of economic activity similar to the gross
national product (GNP) of the U.S.
Total income Wages and salaries paid to employees and property
income
Value added Sum of employee wages and salaries, indirect
business taxes, and property income
Employment The number of people employed by firms and
businesses in the local region
Remembering that the multiplier for totat effects is the ratio of direct effects to
total effects, this table can be used to estimate the total effects (direct, indirect,
and induced) per unit of a direct effect. Using Table 5-1, the employment
m ultiplier for Red Top State Park is 1.52. This means that there will be 1.52 jobs
created in the local economy for every one job resulting from the direct impacts
of recreation spending at Red Top. Therefore, if 10 new jobs resulted from the
direct impacts of recreational spending, 15 total new jobs would eventually be
created. Ten of these 15 would be the result of the direct impacts, and five
additional jobs from the indirect and induced impacts. Remember the direct
impact on employment results from the jobs provided by the recreation-related
businesses themselves. The indirect impact on employment results if the
recreation business buys production materials and services locally from other
businesses, thereby increasing the number of jobs in those businesses.
In another study, total effects were computed for three National Park Service
river sites in the eastern United States. In this study, employment multipliers
ranged from 1.57 to 1.84. The total gross output multiplier was approximately
2 for recreational expenditures at each of the river areas. Similar to the Georgia
State Park study, the authors concluded that recreation expenditures do
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stimulate economic activity. The study also noted that as the local economies
around the river sites diversify and become more self-sufficient, visitor spend-
ing on river recreation will have an even larger effect on the local economy
(Cordell, et al., 1989).
Once again, multipliers are derived from-rather complex economic models.
However, in many cities, counties, and states, multipliers have already been
calculated and may be appropriate for your project. Caution should be
exercised when using or interpreting multipliers. Make certain you know what
the multipliers are describing. To use multipliers correctly, it is bestto workwith
an economist or someone very familiar with their use.
Economic Impact Models
Economists often use computerized input-output models to derive multipliers.
These models are very helpful for understanding the inter-relationships in a
local economy. An input-output model which can be used to estimate the
impacts ofoutdoorrecreation is the USDA Forest Service's IMPLAN. There are
other types of economic impacts analysis models used, such as economic
base and econometric models, but they are not discussed here.
An input-output analysis usually shows the relationships bebNeen industries in
a particular local economy using a matrix or table. This dollar flow table lists all
the sales and purchases made by the different sectors of the economy over a
period of time. For example, in the Georgia state parks study, to construct the
dollar flow table researchers had to determine how recreation expenditures
would be allocated through increased purchases of materials and supplies
across various economic sectors. Recreational spending was determined to
include purchases of gasoline for automobiles, recreational vehicles, and
boats. Thus an increase in purchases of gasoline by park visitors would result
in increased purchases by producers of gasoline, i.e., lubricating oils and
greases, petroleum and coal, etc.
Once the dollar flow table is constructed, another table is then constructed to
derive the multipliers. This final table shows the total dollar amount change in
each economic sector caused by a $1 change in output in any particular sector.
Once again, using multipliers in calculating the direct, indirect, and induced
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economic effects of your project will probably require the expertise of an
economist. However, if this level of analysis is not feasible or warranted, it is
still important to recognize that multiplier effects will be generated in the
economy, even if they cannot be calculated. When multipliers are used, they
can clearly show how attracting new visitor dollars into a region can stimulate
considerable economic growth. Multipliers can also be used to show how a
decline in visitor expenditures results in decreased local economic activity.
· In 1985, purchases assoda~:l with water-related (dyes and lakss)
outdoo~ recreation in Minnesota totalled nearly $1.2 bilion. Ad~ng
~qe multiplier effects of these purchssss brought the total impact to
$1.9 billion. This level of expenc~ was linked to 37,600 jd~s in Ihe
state, or 2.1 percent of t~tal state employment (Kdly and Sushak, 1987).
Marketing Potential
Rivers, trails, and greenways provide unique resources which nearby travel
and tourist-serving establishments, chambers of commerce, and local visitors
bureaus can capitalize on and feature in their advertising. Because a. greenway
is a desired and profitable amenity for these businesses, they may also be
willing to contribute to the funding and development of the greenway.
· As a condition for development, the Campbell Inn (Campbell,
California) was required to provide an easement for the Los Gatos
Trail. Upon realizing the marketing potential of the trail, developers
constructed part of the trail, an additional spur, and now provide rental
bicycles for hotel guests. They also promote the trail in their brochure:
"For fitness and fun, The Campbell Inn offers a jogging/biking trail
connecting to a full series par course which.., runs along a scenic
trail, passing through forests and alongside a stream and two beautiful
lakes." Room rates at the Campbell Inn range from $80 to $275 per
night.
· Implementation of the Yakima Greenway spurred many business
changes in the city of Yakima, Washington. The Rio Mirado motel
credits their almost year-round occupancy to their proximity to the
Greenway. Marti's restaurant built a patio adjacent to the Greenway
and enjoys increased business from trail users and hotel guests.
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Svend's Mountain Sports, a mountain climbing and cms-country ski
shop, now stocks mountain bikes and roller blades due to the
opportunities created by the Greenway. Svend's would like to set up
a rental concession on the Greenway during the summer season.
Even nearby auto dealerships invite people to buy their next car at the
"Greenway Auto Plaza" (Feasey, 1989).
How to Use These Rationales in Your Community
Quote examples. Choose relevant information from the examples provided
to include in newsletters and presentations. Gather your own testimonies from
lodging, restaurant owners, and travel agents in your community. Cite quotes
from their promotional materials and advertisements.
Find out whether any studies have been done in your area. Contact local
university departments of tourism, recreation, business, or economics, to see
if anyone has done research or special projects related to the economic
impacts of tourism in your area. Discuss your greenway with them. Also
contact federal, state, regional, and local agencies to see if there are any
relevant studies. At the state level, try the agencies that govern corn m erce and
tourism. At the regional and local levels, try local convention and visitors
bureaus, chambers of commerce, marketing specialists, and major banks.
There may be current reports on average tourism expenditures in your
community.
Depending upon what studies you can acquire, and their focus, you may be
able to adapt them to your needs. Consult the authors of those studies, or other
specialists, before doing so.
Determine the influence of natural/cultural resources on travel trends,
Determine how natural/cultural greenway-related resources play a part in
determining travel preferences and trends in your area. Cite examples with
which your audiencewillbe familiar. Lookat promotional materials in your area,
including newspapers, brochures, magazines, and phone books to see how
resource-based attractions are being promoted and featured in advertise-
ments. Check with your local visitor information center.
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Get to know your visitors. Find out who your visitors are; where they come
from; why they visited the graenway; how long they ara staying in the area;
what brought them there; and their expenditures while in the area. This can be
accomplished in a variety of ways, ranging from casual conversations with
visitors at the graenway, to intensive phone, mail, and/or visitor interviews at
greenway entrances. It may be pessibie to do surveys of local overnight ac-
commodations and businesses along the greenway. The appropriate m ethnd
will depend upon the desired level of detail and reliability of results.
· A survey of visitors to the Northwoods area in Wisconsin found that
almost 1.5 million non-residents visited this araa in July and August
of 1987. These non-resident guests spent almost $153 million in July
and August of 1987, with an average daily expenditura of $14.66 per
person. Table 5-2 wes generated from this information. Many
tourism expenditure studies focus upon guests staying in commercial
lodging facilities. This study illustrates that those staying in camp
grounds, or with friends and relatives, are also an important part of
total visitor expendituras.
Northwoods Non-Resident Visitors; Type of Lodging, and
Percent of Total Expenditures by Type of Lodging
P~rcent of Total Percent of Total
Lodging Non. Resident Non-resident
Type Visitors Expenditures
Resods 25.8% 39.7%
W'~ Friends and Rela~ves 17.3 10.8
Second Homes 15.2 29.6
Motel/Hotel 8.6 7.1
Campgrounds 16.7 10.4
Day Trip 12.3 1.6
En Route Somewhere Else 3.9 0.8
Source: Gray, Hamilton, and Mistele, 1987.
Table 5-2
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Determine the level of visitor draw of your resource. Is it a destination in
itsalf? If not, would visiting the greenway require people to spend more time,
or the night, in your area? Would it encourage business and pleasure
travellers to patronize businesses near your resource, or pay more to stay,
dine, or shop near iq
Estimate where expenditures are going. Your promotion will have more
impact If you can state who benefits from tourism expenditures. This may
include tax revenues, jobs, and payroll expenditures.
Estimate corresponding expenditures attributable to your resource. The
level of visitation to your project will determine the type and amount of
expenditures that can be attributed it. If your greanway project is a separate
destination in itself, the resource can be credited with all or most of the
expenditures associated with the visit. If a greenway encourages staying
another day in your area, figure the expenditures associated with spending
one night and the following day, and credit the resource with that amount. If
people will pay more to be near the greenway, find out how much, and credit
the resource with that amount. Expenditures in yourareacan include transpor-
tation, food, lodging, entrance fees, outfitter/guide fees, and taxes.
· A survey of expenditures associated with recreational use of the
St. Croix River (Maine and New Brunswick), found that anglers spent
over six times as much per person, per day, in the local Maine
economy as canoeists and over four times as much as general
vacationers. In fact, anglers spent more in the local economy than all
other recreationists combined (Miles, 1987).
Design your visitor surveys to determine what types of activities visitors
participated in; how much each visitor spent per day for food, lodging, retail
products; and other visitor-related services. The survey results would then
provide an estimate of total annual expenditures. Sample survey questions
are listed in Appendix C.
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If you cannot perform a site-specific survey, the expenditure information in
Table 5-3, may be applicable. You should note the year the expenditureswere
calculated for Table 5-3 or any other study findings you may use. Remember
the actual value of money changes each year. You should always be certain
you work with expenditures calculated for the same year, or corrected for
inflation (see Appendix B).
Tourist Expenditures, by Activity
Activit~ Locetion Expenditures Year Source
Sailboarding Columbia Gorge $47 - $85 1987 Povey, et al 1988
(Oregon)
Long distance Elroy-Sparta Trail $25 1988 Schwecke, et al
(Wisconsin) 1989
Cross-country Norlhwoods $17 1978-79 Cooper, et a1,1979
(Wisconsin)
Bicycle touring United States $17- $50 1986 Moran, 1986
River recreation Upper Delaware $20 1989 Ce'dell &
Bergstrom, 1989
General vacation Delaware Gap $52
( New York
Pennsylvania,
Now Jersey)
New Riva' Gorge $24
ONest Virginia)
St. Croix River
(Maine)
New Brunswick $30
Canoeing St. Croix River $15
(Maine)
Angling St. Croix Rivar $42
River Rafting Gauley Riva' $60 - $133
(West Virginia)
1989 Logar, et el, 1984
Note: The above table includes a column for the year these expenditures were calculated.
Because the actual value of money changes each year, always bo certain to work with
expendilures calculated for the same year, or corrected for inflalJon.
5-17
Table 5-3
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Project Impacts Item changes In visitation. If travel trends and/or potential
greenway management changes are expected to alter visitation to your
greenway, you may be able to quantify the economic impacts of this change.
To do this, you need to estimate the increase in expenditures and use relevant
multipliers if available.
Estimate total impacts. If you have economic expertise on your staff or
within your citizen group, you may be able to estimate total impacts. Visitor
expenditures for your project can be estimated by conducting a survey. Once
you have determined the expenditures, you can use appropriate multipliers to
determine the total impacts. Multipliers for your city, county, or state may
already be available.
Commission your own study. The U.S. Travel Data Center is available to
prepare estimates of the impact of travel on communities. A local university
may have graduate students available to conduct such a study. There are also
consultants specializing in travel impact studies. In most large cities, travel-
related businesses pool their funds to commission expenditure pattern stud-
ies. You may wish to coordinate with them to get your greenway on their list of
visitor attractions.
Input-Output Models. Nationally, the two Input-Output models most often
used in recreaUan and tourism analysis are IMP[AN (U.S. Forest Service) and
RIMS-II (Bureau of Economic Analysis). Both of these models allow for deter-
mining multipliers down to a county level. Information on IMP[AN is available
through the University of Minnesota. Contact the Department of Agricultural
and Applied Economics at (612) 625-8246. Use of IMP[AN is available to
representatives of public agencies. Information on the use of RIMS-II is
available from BEA's Regional Economic Analysis Division, at phone number
(202) 523-0594. Fees are associated with accessing either of these models.
Be sure to check that these models are appropriate for the size of your study
area and the level of analysis you need. It is suggested that the above systems
only be used for an analysis of three or more counties.
Some manipulation is necessary to generate multipliers specific to the recrea-
tion/open space sectors of your economy. Someone familiar with economic
modelling should be contacted to provide technical assistance. Before at-
tempting to adapt a national model, we recomm end you first contact your state
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Department of Commerce to determine if an Input-Output model has been
developed that could be applied to your economy.
Promote your resource to the tourism community. Develop a plan for
marketing your greaoway. Be careful the designated name of the project and
any related brochures or information, accurately reflect the nature of the
project and create the image you desire. Combine efforts with tourism
promoters such as the local Chamber of Commerce, hotels, event planners,
travel agents, convention and visitor bureaus, tour guides, and transportation
operators to include promotion of the greaoway in their literature/brochures.
Assist in distributing this information to visitor centers, conference centers, and
other traveller information locations.
Sources of Information
The U.S. Travel Bats Center. The U.S. Travel Data Center (USTDC) is a
national non-profit center for travel and tourism research. The Center pub-
lishes the following reports:
Outlook for Travel and Tourism
Economic Review of Travel in America
National Travel Survey
Survey of Business Travellers
Annual Travel Outlook Forum
According to Center publications, USTDC maintains the only national eco-
nomic model for estimating annual travel expenditure and their economic
impact on cities, counties, and states (USTDC, 1989). The USTDC will
perform research on the economic impact of tourism at various levels. To
determine costs for these services, contact the USTDC in Washington, D.C.,
at (202) 293-1040.
Impact of Travel on State Economies. This publication from the U.S. Travel
Data Center includes information concerning travel spending in each state,
and the employment, payroll, income, and tax revenue generated. Reports are
available for 1984, 1985, 1986, and 1987. The 1987 report, released in April
1989, is available from USTDC for $70.
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Municipal Recreation Economic Impact Model. The Canadian Ministry of
Tourism and Recreation has made this impact model available in both print and
electronic disk versions. The model is intended to help municipal governments
assess the economic implications of municipally-supported recreation activi-
ties, Contact:
Recreation Division Reseamh Program
Recreation Branch
77 Bloor Street West, 8th Floor
Toronto, Ontario
M7A 2R9
Phone: (416) 965-5665
Tourism USA. Published bythe U.S. Department of Commerce, Tourism USA
- Guidelines for Tou#sm Development is a valuable resource for those
interested in any of the following: appraising tourism potential, planning for
tourism, assessing the product and market, marketing tourism, determining
necessary visitor services, and obtaining assistance. It is targeted at local
communities interested in initiating or developing tourism.
Sport Fishing Institute (SFI). This group has recently completod a user-fTiendly
handbook on How to Conduct an Economic Impact Analysis. This guide is
intended to give state fish and wildlife agencies the ability to conduct their
economic analyses of fishing, hunting, and wildlife-related recreation. It pro-
vides a comprehensive explanation on collecting expenditure data and using
RIMS-II multipliers. Although the focus is on the state-level impacts of
recreation expenditures, the document could prove very helpful in understand-
ing economic impact analysis. An appendix in the report lists sources of fishing
activity data available from various state agencies. (Contact Robert South-
wick of SFI regarding availability of this report at (202) 898-0770).
Considerations in Using These Rationales
Use existing information. Make every effort to use available, existing infor-
mation. Generating original economic impact information can be time consum-
ing and expensive. When adapting existing information, list the assumptions
and limitations of your analysis.
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Use good survey methods. Consult with someone experienced in designing
and conducting surveys, and interpreting survey results. Someone on your
staff may have these skills. If not, contact your local college or university. Be
wary about using license plate tallies to determine visitor origin, since a high
percentage of domestic and international tourists use rental cars to explore the
countryside. If possible gather survey information that is comparable to locally
published per person tourism expenditure data.
Be careful in the policy Implications of your results. Be careful in
considering the implications of your analyses and the ~'adeoffs bebveen
tourism/economic development and resource protection. For example, devel-
opment of vacation homes or tourist attractions in the local area may bring
dollars to the economy, but could also completely alter the community and its
ecological character.
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References
Borgstrom, John C., etal. February 1990. 'Economic Impacts of Recreation
Spending on Rural Areas: A Case Study.' Economic Development
Quarterly, Vol. 4 No. 1.
Bonds, Joe and Dr. Thomas Buchanan. 1988. 'State Parks and Wyoming's
Economy, Summary Statistics of the 1988 Visitor Survey." Laramie, WY:
Wyoming Recreation Commission and University of Wyoming.
Bureau of Land Management. 1987. Recreation 2000. Washington, D.C.:
U.S. Department of the Interior, Bureau of Land Management.
California Department of Commerce. March 1988. Regional Economic
Impacts of California Travel 1985 and 1986. Prepared by Dean Runyan
Associates, Sacramento, CA: California Department of Commerce, Office of
Economic Research.
California Department of Commerce. 1989. Number and Characteristics of
Travelersto Califomiain 1988. Prepared by Shulman Research. Sacramento,
CA: California Department of Commerce, Office of Economic Research.
Cooper, Rollin B., P. Sue Sadowske, and Mark D. Kantor. 1979. Winter
Recreation Visitor Study, Wisconsin. Madison, WI: University of Wisconsin-
Extension, Recreation Resources Center.
Cordell, H. Ken and John C. Borgstrom. March 15,1989. Economic Effects of
Rivers on Local and State Economies: National Park Service River System.
Athens, GA: USDA Forest Service, Southeastern Forest Experiment Station,
Outdoor Recreation and Wilderness Assessment Group, and University of
Georgia, Department of Agricultural Economics.
Feasey, Barbara. December 5,1989. Executive Director, Yakima Greenway.
Telephone communication.
Governor's Committee on the Environment. June 14, 1988. 'Report of the
committee on the Environment.' New England Governors Conference, Inc.
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Gray, Jack, Sue Hamilton, and Mike Mistele. December 1987. Wisconsin's
Norlhwoods Area - A Study of Daily Visitors. Madison, WI: University of
Wisconsin Extension, Recreation Resources Center.
Hershel Sarbvin Associates. 1986. Proceedings of the Governor's Confer-
ence on the Economic Significance of Recreation in Illinois. Springfield, IL:
Office of the Governor.
Logar, Cyril M. and Adam Z. Rose. August 1984. Economic Impacts of
WhitewaterBoating on the Gauley River. Prepared for Corps of Engineers -
Huntington District. Morgantown, WV: West Virginia University, College of
Business and Economics, and College of Mineral and Energy Resources.
Miles, LeannaB. December, 1987. The Economic lmpact of Recreationai Use
of the St. Croix River. Masters Thesis. Orono, ME: University of Maine,
Department of Agriculture and Resource Economics.
Mittleider, John F., and Jay A. Leitch. October 1984. Economic Contribution
of State Parks to the North Dakota Economy." North Dakota Agricultural
Experiment Station, North Dakota University, Fargo, ND.
Moran, Catherine, William Wilkinson, and James Fremont. 1986. Literature
review paper for PCAO.
Office of Planning and Research, State of California. 1978. Economic
Practioner' s Manual.
Povey, David, Scott Kiellor, Mike Pruett, and Scott Whyte, July 1988. Colum-
bia River Gorge Sailboard Economics - The 1987 Season. Prepared for: the
Columbia River Ports of Cascade Locks, Skamania, Klickitat, Hood River, The
Dalles; The Columbia River Commission; and We Oregon State Tourism
Division. Eugene, OR: University of Oregon, Community Planning Workshop
Report.
Scenic America. November/December, 1987. "Fact Sheet: Sign Control and
Economic Development." Sign Control News.
Economic Impacts of Protecting Rivers, Trails, and Greenway Corridors
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Schwecke, Tim, Dave Sprehn, Sue Hamilton, and Jack Gray. January 1989.
A Look at Visitors on Wisconsin's Elroy-Sparta Bike Trail. Madison, WI:
University of Wisconsin-Extension, Recreation Research Center.
Stout, Donna. 1986. Testimony at Orlando PCAO hearing.
Swain County Board of Commissioners. April 1982. An Economic Impact
Study of Jhe Whitewater Resource of the Nantahala River Gorge on Swain
County and the Region. Technical assistance provided by North Carolina
Department of Natural Resources and Community Development. NC: Swain
County Board of Commissioners.
U.S. Department of Commerce. Revised 1986. Tourism USA. Prepared by
the University of Missouri, Department of Recreation and Tourism, University
Extension. Washington, D.C.: U.S. Department of Commerce, Travel and
Tourism Administration and Office of Travel Development.
U.S. Travel Data Center. 1989. '1988 Domestic Travel in Review.'
Washington, D.C.: U.S. Travel Data Center.
U.S. Travel Data Center. 1989. "The Economic Impact Model (TEIM) - A Brief
Description of the Products Available from the Model Developed and Operated
by the U.S. Travel Data Center.' Washington, D.C.: U.S. Travel Data Center.
5 -24
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Corporate
Relocation &
Retention
Contents
Economic Impacts of Protecting Rivers, Trails, and Greenway Corridors
Quality of Life Attracts Businesses
Page
6-3
Gmenways Contribute to Quality of Ufe 6-4
Greenways Promote Employee Fitness 6-5
How to Use These Rationales in Your Community 6-6
Considerations in Using These Rationales 6-8
References 6-9
6-2
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Many communities want to attract new, expanding, or relocating businesses to
their area in order to increase their employment and tax bases. Retaining
existing businesses within a community is even more important for economic
stability. This section discusses the importance of quality of life factors in
attracting new and relocating businesses. Greenways, rivers and trails contrib-
ute to quality of life, and their use is a benefit to corporate employees for
exercise and relaxation.
Quality of Life Attracts Businesses
The importance of quality of life in an area is increasingly cited as a major factor
in corporate and business location decisions.
· Quality of life for employees was the third most important factor in
locating a business, according to an annual survey of chief executive
officers conducted by Cushman and Wakefield in 1989. The two most
important factors were access to domestic markets and availability of
skilled labor. The top city for business was Atlanta, which also ranked
first for highest quality of life. Seattle, which ranked as the second best
city for business, also received very high marks for quality of life (San
Francisco Chronicle, July 28, 1989).
· The Joint Economic Committee of the U.S. Congress reports that
a city's quality of life is more important than purely business-related
factors when it comes to attracting new businesses, particularly in the
rapidly growing high-tech and service industries (Scenic America,
1987).
One aspect of quality of life is a location with convenient access to natural
settings, recreational and cultural opportunites, and open space.
· In a recent report, the governors of five New England states officially
recognized open space as a key element in the quality of life in their
region. It is a characteristic responsible for bringing rapid economic
growth to the region, as well as providing the foundation of a multi-
billion dollar tourism industry (Governor's Committee on the
Environment, 1988).
,5-3
Economic Impacts of Protecting Rivers, Trails, and Greenway Corridors
· A survey of 71 economists rated factors for Arizona's attractiveness
as a place to live, work, vacation, retire, and locate future plants and
corporate headquarters. The strongest factors contributing to
Arizona's positive image were climate, job opportunities, and open
space including abundant outdoor recreation opportunities. Seventy
firms relocated or expanded their businesses in Arizona, creating
27,800 jobs and $970 million in indirect salaries and wages. Chief
executive officers of these firms said they chose Arizona for its
"outdoor lifestyle and recreation opportunities" (Valley National Bank,
1980).
Greenways Contribute to Quality of Life
Greenways, rivers, and trails can play an important role in increasing a
comm unity's quality of life, and are attractive to businesses and corporations.
Office site locations adjacent to rivers, trails and greenways are also likely to
be more attractive to prospective tenants than sites lacking such amenities.
Developers and property managers recognize these amenities.
· Forum Properties(developerand property manager)in Beaverton,
Oregon, successfully preserved much of the wetlands in two
development projects in Tigard and Beaverton. The projects were
designed around the existing creeks, making them a focal point. In
developing this new corporate office park, the centerpiece was a
constructed wetlands. The wetlands are appreciated by tenants for
wildlife viewing and other aesthetic values. Many employees keep
binoculars at their desks. (Jeffrey Sackett, Forum Properties, 1990).
· The San Antonio RivenNalk is always used as an example of the
high quality of life and livability of San Antonio, Texas. Site location
teams for prospective relocating businesses generally visit the
Riverwalk itself. The Riverwalk provides a retreat for employees
during lunch and offers a valuable greenspace in the central business
district. A location on the riverwalk is considered very desirable. An
example is the HEB Company, a regional grocer, which relocated its
corporate headquarters to a historic arsenal building, oriented toward
the Riverwalk (Peche, 1990).
6.-4
Corporate Relocation and Retention
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· Pueblo, Colorado, once known mainly as an industrial city, made an
early decision in its highly successful economic revitalization effort.
The decision was made to improve its appearance and amenities in
order to attract new businesses. The resulting investment in trails and
parks along the Arkansas River and Fountain Creek is now credited by
cityfathersas one of the most importantcomponents in turning around
economic decline (Denver Post, January 27, 1990).
· The American River Bike Trail in Sacramento, California, is
included as an important outdoor recreation amenity in the Chamber
of Commerce's publication AII About Business in Sacramento. It is
described as a 30 mile oasis in the heart of the city. The President of
the Metropolitan Chamber of Commerce, Roy Brewer, considers the
trail to be evidence of the high quality of life in Sacramento, as well as
one of Sacramento's treasures. 'At many locations along the bicycle
trail you can wade into the river, cast a line, and not see a single sign
of civilization. The river trails provide abundant salmon fishing and
natural areas for hiking, horseback riding, or biking- a chance to get
away from it all without having to leave the city" (Sacramento
Chamber of Commerce, 1990).
Greenways Promote Employee Fitness
Businesses are realizing the benefits of healthy employees, both in increased
efficiency and decreased hearth insurance claims. Greenways help promote
fitness by providing convenient opportunities for exercise, such as walking,
jogging, or exercise courses.
· A study of a group of employees in San Jose, California, showed
that those who exercised regularly had 14 percent lower medical
claims, 30 percent fewer hospital days, and 41 percent fewer claims
greater than $5,000 (City of San Jose, 1988).
· A 1984 study of the office staff of Houston's Prudential Insurance
Company found that higher levels of employee fitness lower major
medical and disability costs. The study estimated a savings of $1.93
for every dollar invested in the program (Wellness Councils of
America, 1989).
6-5
Economic Impacts of Protecting Rivers, Trails, and Greenway Corridors
I
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Greenways and trails also help reduce firms' employees' commuting costs
because they provide opportunities to commute by foot or bicycle.
· An analysis of 1980 census data by the Northeastern Illinois
Planning Commission (NIPC) showed 7,000 commuters in the
Chicago region use a bicycle to get back and forth to work every day,
weather permitting. During the peak summer months, this figure
climbed to 14,000 commuters. NIPC found most of the commuters
using bicycles to travel to work live near one of the five linear trails
found in the Chicago region. In census zones where these trails exist,
an average of 15.6 percentofthe commuter trips are by bicycle. When
the region is taken as a whole, however, only one percent of the
working population commutes by bicycle. These trails, therefore,
seem to offer an alternative to using congested roadways to get to
work (Eubanks, 1986).
How to Use These Rationales in Your Community
Talk to your local Chamber of Commerce. Talk with staff to see how your
greenway is being promoted to prospective corporations and businesses. If it
is not included in the Chamber's informational materials, provide photos and
descriptive information for inclusion in these packets. For a proposed green-
way, present to the Chamber examples of how greenways and quality of life
have contributed to attracting corporations and businesses to other communi-
ties. Encourage the Chamber to be an active partner in promoting your
greenway.
Talk to commercial corporate location specialists. These people are in
business to help businesses find the best location. Find out how these
specialists analyze a community's quality of life so you can tailor your promo-
tional information accordingly.
Talkto new businesses inthe area. Find out from the Chamber of Commerce
or the Planning Department what new businesses have located in your area in
the last five years. Get employment information and payroll dollars if possible.
Ask if the greenway in particular (or the area's natural resources and recreation
opportunities in general) had any influence in the company's location decision.
Get follow-up contacts at the companies. Document statements and try to get
6-6
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Corporate Relocation and Retention
quantitative information wherever possible. For a proposed greenway, collect
information on a similar project that could apply to your greenway.
Figure out how many businesses are located adjacent to or near a
greenway. Choose an arbitrary radius from an existing greenway and map the
locations of corporations and businesses within that radius. Determine the
proportion of corporations and businesses which selected the location after the
greenway was implemented. Talk to executives and employees about their
perception of the greenway. Ask businesses which have been located in your
community for a long period which factors have kept them in the community.
Determine how many employees use a greenway. Plan to visit a greenway
during commuting hours and count the number of people using the trail to get
to work. If you have the opportunity to do quick interviews, do so. Find out how
often they use the trail, for what distance, and whether the greenway was an
important factor in deciding where they live or work. If you cannot conduct
interviews, count the number of people in work-type clothing. You may miss a
few this way, but it will give you an estimate. Visit the greenway during lunch
time to get a feel for the potential level of use by nearby employees for
picnicking, walking, and jogging. Again, for a proposed greenway, draw some
reasonable conclusions as to how your greenway could provide similar com-
muting opportunities.
Survey local employees. Get permission to survey employees from busi-
nesses in close proximity to a greenway, river, or trail. You may wish to focus
upon businesses new to the area. Have an attractive mail-back postcard
distributed to each employee, asking whether they use the greenway to get to
commute to work, or for exercise during the work day. Ask whether the
greenway and the area's overall quality of life influenced their decision to move
there. You may also be able to get information from the companies' employee
relations or human resource staff about employee commuting, exercise
patterns, turnover, and recruitment.
Scan the media. Review Chamber of Commerce advertisements and real
estate newsletters to see whether the quality of life in your area is being
advertised to potential new corporations and businesses. Look in advertise-
ments, recruitment pamphlets, and annual reports to see how they refer to the
com m unity in which they are located and how it is visually depicted. Scan health
newsletters and magazines to gather information on employee attitudes to-
ward, and use of, river, trail, and greenway resources near their workplace.
6-7
Economic Impacts of Protecting Rivers, Trails, and Greenway Corridors
Considerations in Using These Rationales
Economic growth and conservation must be balanced. If growth is not
carefully planned, it may undermine the quality of life which helped to attract
businesses.
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Corporate Relocation and Retention
References
Eubanks, David M. December 1986. "From Abandoned Railways to Recrea-
tion Trails: Measurement of Community Impact." A report submitted for
completion of research practicum (Public Affairs 262 & 263), University of
Chicago. Chicago, IL.
Governors Committee on the Environment. June 14, 1988. "Report of the
Committee on the Environment.' New England Governors Conference, Inc.
Keiner, Suellen. 1985. "The Contribution of Outdoor Recreation to State
Economic Development." Washington, D.C.: The Council of State Planning
Agencies.
Peche, Robert, Vice President. May 14, 1990. San Antonio Economic
Development Foundation. San Antonio, Texas. Telephone communication.
Scenic America. November/December 1987. "Fact Sheet: Sign Control
andEconomic Development.' Sign Control News.
Valley National Bank. November 1980. "Arizona's Favorable Image Spurs
Economic Growth." Arizona Progress. Phoenix, AZ: Valley National Bank,
Economic Research Department.
6-9
Public Cost
Reduction
Contents
Economic Impacts of Protecting Rivers, Trails, and Greenway Corridors
Page
Public Se~ice Requirements 7-3
Hazard Mitigation 7-5
PollulJon Co~trol 7-6
Health Care Costs 7-8
How to Use These Ra§onales in Your Community 7-9
Sources o~ Infonnalion 7-11
Comidaratioas in Using These RalJonales 7-12
References 7-13
7-2
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Public Co~t Reduction
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Conservation of greenways, rivers, and trails may result in reduced costs to
local governments and other public agencies. By conserving a greenway
corridor rather than permitting intensive development, local agencies may
reduce costs for public services such as sewers, roads, and school facilities.
Establishing a greenway in an area prone to h~7~rds, such as flooding, may
decrease costs for potential damages. Greanways and associated vegetation
can also help control water, air and noise pollution by natural means, resulting
in potential decreased pollution control costs. Greanways and trails may
promote physical fitness, leading to decreased public health care costs.
Public Service Requirements
The choices between retaining undeveloped lands as open space or allowing
residential development must be considered. How this choice effects public
expenditures and the tax base is often the subject of debate. Expansion of the
tax base is not always beneficial in the long term. Expansion almost always
resuits in increased public service requiremants. In many situations, the cost
of providing these services to residential development is much higher than the
revenues to local governments resulting from the expanded tax base. A list of
development costs could include:
Transportation and Utility costs
c} Roads
o Public and private utilities
Q Sanitary sewage
r~ Water
r~ Natural Gas
o Electricity
r, Storm sewage
Facility and Service Costs
o Open space, recreation, and libraries
Q Schools
o Health care
o Police and lira protection
r-, Mail delivery
~ Solid waste collection and disposal
7-3
Economic Impacts of Protec~in8 Rivers, Trails, and Greenway Corridors
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7-4
· According to an American Farmland Trust (1986) study of Loudoun
County, VA, 'over a wide range of development densities.., the
ongoing public costs of new rasidential development will exceed the
(public) revenues from such development.' Of those units analyzed,
annual revenues per thousand dwellings were between $2.7 million
and $2.9 million, while costs averaged between $3.5 and $5.0 million.
The annual net deficit per thousand units ranged from $0.6 million to
$2.3 million (1986 dollars). The greatest predicted shortfallwas for the
lowest-density units, termed by the Trust as "rural sprawl.' The least
shortfall was for medium density development. For all densities,
school expenses were the largest proportion of total costs (American
Farmland Trust, 1986).
· In the City of Boulder, Colorado, the 1988 public cost for maintaining
non-open space, such as developed acres, was estimated to be over
$2,500 per acre, and could be as high as $3,200 per acre when
utilities, flood control, transportation, and subsidiary governmental
entitias' costs are included. The cost for maintaining open space in the
City was only $75 per acre, or less than three percent the cost of non-
open space (Craln, 1988).
· In Culpeper County, Virginia, the average new residential unit can
be expected to preduco a deficit in the County budget of $1,242 (1988
dollars) (Larson and Vance, 1988). According to these authors, this
study addresses the widespread but erroneous perception that
residential growth, in expanding the tax base, somehow contributes to
local fiscal health. Although residential development results in
increased revenues from the real estate tax and other sources, it
simultaneously increases demand for public service expenditures
and generates the need for expanded public facilities.
A companion study concluded that for every dollar of tax revenue
collected from residential land uses in Culpeper County in 1987, $1.25
was spent on county services. For every dollar collected from
industrial/commercial or farm/1orest/open space lands, only $0.19
was spent on servicos (Vance and Larson, 1988).
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Public Co~t Reduction
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Hazard Mitigation
Use of geologically or environmentally sensitive areas for open space or
recreation purposes can reduce potential property damage costs and loss of
life. Hazards which can be mitigated through conservation of open space
include flooding, slope instability, structural fire damage, and earthquake
losses. Many of the available examples focus on flood control.
· Potential multi-million dollar claims for landeiide damages were
avoided in Richmond, California, because property originally
proposed fo~ residential development was purchased for natural
parkland instead. In 1980, a major development was proposed on
hillside land which was prone to instability. The local community
objected to the development, arguing in part that the area was prone
to instability and not suitable for development. The project was denied
and the land, pumhased by the Trust for Public Land, was eventually
transferred to the East Bay Regional Parks District for inclusion in the
Wildcat Canyon Regional Park. After major storms in 1982and 1983,
landslides occured on this property, which would have destroyed
development had it been allowed. The state of California
subsequently passed legislation granting landslide immunity to public
agencies who maintain land in a natural condition. This legislation
may help encourage park districts to acquire property which may be
prone to landsJides (Kent, 1990).
· Leaders in Johnson County, Kansas, expected fo spend $120
million on stormwater control projects. Instead, voters passed a
$600,000 levy to develop a county-wide stroamway park system.
Development of a greenways ne~ork along streambeds will address
some of the County's flooding problems, as well as provide a valuable
recreation resource.
The Federal Flood Insurance Program subsidizes the cost of procuring flood
insurance. Under the Program, a structure repeatedly damaged by floods can
receive damage payments each time. It is often argued that in the long run, it
would be cheaper for the public to acquire repeatedly damaged structures than
fo continue to provide funds to repair or rebuild structures in flood-prone
locations.
7-5
Economic Impacts of Protecting Rivers, Trails, and Creenway Corridors
· In 1958, Gilbert White estimated thatfor every six dollars in potential
damages reduced each year by new flood protection measures, at
least five dollars in additional damages resulted from development in
floodplains. Steve Hanke calculated the same ratio of dollars spent in
fioed control to dollars of damage in 1972. Flooding accounted for
larger annual property losses than any other single geophysical
hazard (Riley).
· Baltimore County, Maryland, acquired 100 homes in several lO0-
year floodplains and resold them to people willing to relocate the
structures to higher ground. At a cost of $27 million, the County will
have cleared thelOO-year flood plain in eight of its most critical
watersheds, with local money saving $85 million in storm damage
assistance costs over the next five years (Caputo, 1979).
Pollution Control
Researchers have found that natural properties of plants and trees help
mitigate water, air, and noise pollution, Greenways which help conserve such
plants and trees provide a valuable contribution toward pollution control.
These natural abilities are described below. Pollution can also be decreased
by establishing trails and greenways which encourage people to walk or
bicycle rather than drive automobiles.
Establishment of a greanway along a river or stream helps maintain water
quality because riparian vegetation helps filter out pollutants. Riparian vege-
tation serves as an effective buffer between a stream and adjacent agricultural
area. The retention capabilities of this vegetation prevents many agricultural
chemicals from polluting the stream. A study of an agricultural watershed and
riparian forest in Maryland (Peterjohn and Correll, 1984, as cited in Risser,
1987) found that if the riparian forest were removed, there would have been
twice as much nitrate nitrogen lost to the stream.
Riparian habitat within a greenway may also serve to keep water temperatures
cool by shading the stream and thereby improve conditions for fisheries.
Restoration of Boulder Creek in Colorado illustrates how a stream restoration
project can not only reduce costs for pollution control, but also provide
opportunities for fisheries.
7-6
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Public Cost R~eduction
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· Boulder, Colorado, reduced potential wastewater treatment costs
significantly by deciding to restore Boulder Creek rather than
construct a nitrification tower. Discharge effluent at the wastewater
treatment plant met water quality standards, however, further
downstream, ammonia concentrations exceeded the allowable level.
Downstream the creek had been previously channelized and
degraded. Through revegetation, terracing, construction of aeration
structures, and other improvements, the stream was restored. The
natural functions of the stream wouid then cool and reaerate the water
to convert the ammonia. Restoration of Boulder Creek would also
improve wildife habitat, particularly fisheries. (John Barnett,
Grasnways Coordinator, City of Boulder, 1990).
Greenways can also help reduce other adverse impacts of urbanization.
Drastic alterations of the ground surface can reduce infiltration. A decrease in
infiltration can cause serious reduction in groundwater recharge. Establish-
ment of greenways can help mitigate these impacts through conservation of
natural surfaces.
Greenways help reduce the impacts of noise in two ways. First, greenways
serve to maintain distance between the noise source and receiver. Secondly,
greenways can include planting barriers, such as tree belts and grassy areas
that have the natural ability to absorb, defiect, and refract sound. The
effectiveness of plants in controlling noise varies, depending upon the charac-
teristics of ~he sound, the type, height, density and location of the planting, and
climatic factors (Robinette, 1972). Although solid sound attenuation walls may
still be necessary to mitigate noise impacts, the distance buffer of greenways
and the natural ability of plants should not be overlooked. Greenways as
buffers may also have a visual and psychological advantage over masonry
wells.
· A forestry study found that sound reductions attributed to wide belts
of tall, dense trees often reached 10 decibels, and soft surfaces such
asgrass or plowed ground adjacent to atree belt, reduced noise levels
by 8 to 12 decibels (National Park Service, 1983).
Greenways also help control air pollution because plants are natural air
cleaners. Plants cleanse the air through the process of photosynthesis, which
7-7
Economic Impacts of Protecting Rivers, Trails, and Greenway Corridors
control air pollution through oxygenation and dilution. Oxygenation refers to the
introduction of excess oxygen into the atmosphere. The ability of plants to
introduce excess oxygen into oxygen-deficient air serves to readjust the
balance. A wide greenbelt along a highway could readjust the air balance in
the area. Plants also act as cleansers by absorbing pollutants directly into their
leaves and assimilating them ( Robinette, 1972). Vegetation can absorb ozone,
sulfur dioxide, carbon monoxide, and airborne particles of heavy metals.
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· Reductions in pollutant concentrations downwind from parks has I
been recorded. In one study, reductions in particulate concentration of
19 percent were recorded in Ohio conifer stands. (Schmid, 1975, and
Dochinger, 1975, as cited in National Park Service, 1983).
· Trees in greenways also provide ambient temperature mediation
and help reduce heating and cooling costs. Trees reduce winter
heating costs by 40 percent in some cases; and summer shading
might provide even greater benefits. A single, isolated tree,
generously supplied with water can transpire energy equivalent to five
average room air conditioners running 20 hours per day. The species
of tree, available moisture, and available soil volume affect the
quantity of water evapotranspired per tree (Newsweek, 1979 and
Federed, 1971).
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Health Care Costs
Active use of a river, trail, or greenway by community residents can help
improve their physical fitness and health. Studies have shown that exercise
can reduce health care costs. These costs savings may be shared by public
health services, employers, and individuals.
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· Recreation activities involving exercise reduce health care costs.
People who exercise regularly have 14 percent lower claims against
their medical insurance, spend 30 percent fewer days in the hospital,
and have 41 percent fewer claims greater than $5,000. These figures
were taken from a Corporate Wellness Study for the city of San Jose,
Department of Recreation, in 1988.
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Public Cost Reduction
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· In 1991, American families paid nearly 12 per cent of average
family income for health care, according to a Families USA Foundation
study. By the year 2000, it was predicted that families will pay over 16
per cent of their income for health care. (U.S. News and World Report,
December 23, 1991)
· Exemise derived from recreational activities lessens health related
problems and subsequent health cam costs. Every year, premature
deaths cost American companies an estimated 132 million lost work
days at a price tag of $25 billion. Finding and training replacements
costs industry more than $700 million each year. In addition,
American businesses lose an estimated $3 billion every year because
of employee health problems (National Park Service, 1983).
How to Use These Rationales in Your Community
Calculate itemized costs for development. Table 7-1 has been adapted from
the 1986 American Farmland Trust study of Loudoun County, Virginia. In this
study, major annual public costs and revenues were projected for comm unities
of varied densities. Table 7-1 shows the net public finance shortfall for medium
density development (2.7 units per acre) is almost $670 per unit.
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Housing Unit Public Cost and Revenue Projections
for Loudoun County, Virginia
(Medium Density Housing)
Public Costs Amount
Public school capital costs $ 243
Public school operating/instructional 2,256
Public school transportation costs 67
Public road maintenance costs 38
Water and sower operation costs 260
Law enforcement costs 165
Fire/rescue sorvice costs 58
Health and welfare costs 295
Government administrative costs 147
Total Average Annual Costs $ 3,528
(per housing unit)
Net Loss per Medium-Density
~ource: American Farmland Trust, 1986
PubliC Revenues
Real property taxes
Personal property taxes
Other local taxes
Other local revenue
Revenue from state
Federal payments and grants
Water and sower revenues
Road maintenance/repair
Total Average Annual Revenues
(per housing unit)
Dwelling = $ 669
Amount
$
Table 7-1
846
24o
276
162
260
37
2,859
7-9
Economic Impacts of Protecting Rivers, Trails, and Greenway Corridors
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Loudoun County, Virginia, is a rapidly growing area, with a present population
of 66,500 and an annual budget of $85 million. Although it is one of Virginia's
best farming communities, Loudoun County is within the Washington D.C.
metropolitan area, and development prossure is high. If your community is
similar to Loudoun County, you may be able to apply these conclusions to your
community. Otherwise, the table illustrates the categories of public costs and
revenues that can be used in determining the public cost/revenue relationship
for your community.
Calculate averege costs for develolxnent. If time or staff is not available to
carry out itemized calculations, you may choose the method used in the city of
Boulder case. In that case, city staff estimated the 1988 average cost per acre
for beth open space and non-open space acreage within the city limits. The
open space operational budget was divided by the number of acres in open
space and the general fund operating budget was divided by the number of
acres in non-open space use. The result was a comparison of public costs
between these two land uses.
Apply the Fitch Formula to understand the costs of development. Accord-
ing to Lyle Fitch, former chief administrator to the City of New York, there are
some cases where it is financially advantageous to acquire land to preclude its
residential development. This point occurs when the municipal cost of
servicing a proposed development is equal or greater than the tax revenues
projected to be generated by development (Caputo, 1979). His formula to
calculate this point is as follows:
la =
ta
Cs
La
t
Lf
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Fitch Formula
is the point at which the municipal costs of servicing
development equaled generated tax revenues
rep'esents the costs of providing public sen, ices to
the development
is any decrease in the assessment resulling from the
acquisition
mlxesents the tax rate
is the cost of acquisition
is the interest rate o~ borrowed money
7-10
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Calculate local expenditures for flood mitigation. If property owners have
filed claims for flood damages, total those claims, and the processing and legal
fees associated with them. For each flood event, find out the magnitude of the
event (e.g. 50-year flood, 75-year flood, etc.) and how many properties were
damaged. Forecastthepotentiallossesandclaimsofal00-yearflood. Com-
pare these costs with ~he expenditures made for flood control measures to
determine whether building in the flood plain is cost-effective.
Talk to the staff of your local Flood Control District to acquire background
information on flood control history, policies, and compensation in your area.
They may refer you to the Federal Emergency Management Agency for
information on the flood insurance program in your area and for maps of the
100-ysar flood plain. Your local district office of the Army Corps of Engineers
is probably involved in flood control studies and hazard analysis in your area,
and can be a valuable some of information.
Compare future storm damage costs to relocation costs. As was done by
Baltimore County, Maryland, calculate the cost involved in purchasing flood
prone structures, and reselling them to persons willing to relocate to non-flood
prone lands. Compare this amount to forecasted flood damage costs and
present this information to decision-makers.
Sources of information
Practitioner's Guide to FiscalknpactAnelysis. This 1980 text by Burchell
and Listokin contains overviews of several methods for projecting direct public
costs and revenues associated with new development. Though a somewhat
technical volume, it provides a good introduction to fiscal impact analysis. It
alse includes summary tables which provide figuros for your calculations. This
text should be available through your city, county, or university litxary.
The Use of Economic Analysis in Valuing Natural Resource Damages.
This 1984 text from the Environmental Law Institute is aimed at illustrating
economic methods to assess damages from toxic substances. It describes
many economic assessment methods in generic terms.
7-11
Economic Impacts of Protecting River~, Trails, and Greenway Corridors
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Considerations In Using These Rationales
Keep all aspects of a situation In perspective. Public fiscal impacts are only
one consideration in land use planning. Other considerations include ade-
quate and affordable housing stock, ability to attract commercial investment,
and local economic conditions.
Dete~ine developer contributions to public service requirements. Many
developers, as part of their proposals, or as conditions for development,
construct public service facilities (sewer, stormwater system s, etc.), or contrib-
ute to service funds. Often, however, these contributions will not cover the
entire public costs of development. Make certain to incorporate developer
contributions into your figures. Be sure to calculate long-term service costs,
not just facility costs.
Update dollar values. If you use dollar values from studies completed in
different years, make sure you convert those values to a common year
(preferably the current year) before using them in calculations. See Appendi-
ces A and B.
7-12
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Public Cost Reduction
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References
American Farmland Trust. 1986. Density. Related Public Costs. American
Farmland Trust, Washington, D.C.
Caputo, DarrylF. 1979. Open Space Pays: The Socioenvironornics of Open
Space Preservation. Prepared in cooperation with the Green Acres Program,
New Jersey Department of Environmental Protection. Morristown, NJ: New
Jersey Conservation Foundation.
Cohee, Melville, Richard Garda, and John Hunt. June 30, 1976. Impacts of
Kentucky State Parks on Local, Regional and State Economies. KY: Office of
the Secretary, Kentucky Development Cabinet.
Crain, James. November 3, 1988. Director, Real Estate/Open Space, City of
Boulder, Colorado, letter to Dr. Albert Bartlett.
Environmental Protection Agency. 1977. Tho Public Benefits of Cleaned
Watec Emerging GreenwayOpportunities. Washington, D.C.: Environmental
Protection Agency, Office of Land Use Coordination.
Fodered, C.A. 1971. "Effects of Trees in Modifying Urban Micro Climates,' in
Trees and Forests in an Urbanizing Environment. Amherst, MA: University
of Massachusetts, Extension Service.
Kent, Jerry. June 6, 1990. East Bay Regional Parks District, California.
Personal communication.
Larson, Arthur B. and Tamara A. Vance. February 1988. "Fiscal Impacts of
Residential Development in Culpeper County, Virginia." Piedmont Environ-
mental Council, VA.
National Park Service. 1983. Winning Support for Parks and Recreation.
State College, PA: Venture Publishing, Inc.
Newsweek. October 8, 1979. 'The Greening of Cities.'
7-13
Economic Impacts o~ Protecfin~ Rivers, Trails, and Greenway Corridors
Peterjohn, W. T. and D. L. Correll. 1984. 'Nutrient Dynamics in an Agricultural
Watershed: Observations ofthe Role of a Riparian Forest. Ecology65:1466-
1475.
Riley, A. L. 1985. 'Riparian Restoration, A Timely New Mission For Federal
Water Development Agencies.' Sacramento, CA: Department of Water
Resources, Urban Streams Restoration Program.
Robinatte, G.O. 1972. Plants, People and Environmental Quality. National
Park Service.
Risser, Paul. 1987. "Landscape Ecology; The State of the Art." Ecological
Studies, Volume 64.
Vance, Tamara and Arthur B. Larson. February 1988. "Fiscal Impact of Major
Land Uses in Culpeper County, Virginia.' Piedmont Environmental Council,
VA.
Yang, Edward J., Roger C. Dower, and Mark Menefee. June 1964. The Use
of Economic Analysis in Valuing Natural Resource Damages. Washington,
D.C.: Environmental Law Institute.
7-14
Benefit
Estimation
:Rivers, Trails, and Greenway Corridors
Contents
Page
Introduction to Benefit Estimalion 8-3
Assessment Methods 8-5
Preservation Values 8-10
Benafit-Cost Analysis 8-11
Public Expression of Value 8-12
How to Use These Rationales in Your Community 8-12
Sources o~ Info~rnalion 8-13
Considerations in Using These Rationales 8-14
Re~nces
8-2
8-15
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Benefit Es~nafion
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Greanways, rivers, and trails provide many benefits which do not have
established market values and are difficult to price and express in monetary
terms. This section introduces techniques of economic analysis which attempt
to quantify these non-market values to ensure a more complete measure of
total benefits associated with rivers, trails, and greenways.
The first subsections present methods used to estimate the benefits of
recreation. Also included, is a discussion of how people may value river, trail,
and greanway resources, even when they may not visitthese areas. Benefit-
cost analysis is also introduced as an economic technique which may be
helpful for some river and grsenway projects.
Introduction to Benefit Estimation
Total recreation benefits are defined as the sum of the maximum amount
individuals are willing to pay to engage in a recreation activity, rather than
forego it (Walsh, 1986). This concept is referred to as willingness-to-pay and
is the method recommended by the Water Resources Council, a U.S. govern-
ment interagency advisory committee, as an appropriate economic measure
of the benefits of outdoor rscreation.
The standard method of illustrating this concept is shown in Figure 8-1. The
downward-sloping line represents the market demand curve (for total visits to
a park, outings on a trail, canoe trips, etc.). The curve illustrates that,
theoretically, the lower the cost of an activity, the m ore likely it is that people will
engage in that activity. At a $2 fee, the greenway will receive 1000 visits. In this
simplified example, the market value of the greanway is the annual number of
visitors times the fee, or $2000, shown by the shaded rectangle APCB.
For some people, the $2 fee is the maximum they would be willing to pay tu visit
the greenway. They would choose other activities if the fee were raised. Many
people, however, would be willing to pay more than the $2 fee. Therefore,
these consumers would be receiving extra benefits for which they don't pay.
This concept is referred to as consumer surplus, as shown by the triangle DPC
in Figure 8-1. The total benefits associated with the greanway is illustrated by
the entire shaded area. If no fee were chargad, visitation would be expected
to increase to E and total benefit would be the entire area under the curve.
8-3
Figure 8-1
Table 8-1
Economic Impacts of Proteclin~ Rivers, Trails, and Greenway Corridors
Demand Curve and Total Benefit
C
A B
lOOO
Source:spid~cl, l~8
E
Quantity
(N. u .n~e.. r
oT v~sits)
Many studies have been conducted which attempt to measure the willingness-
to-pay for recreation activities. A composite table of various study results is
provided below. These values are listed in 1987 dollars and are given to
illustrate the range of willingness-to-pay, depending upon the activity. Willing-
ness-to-pay may also vary depending upon the quality of the resource, or
where the activity takes place.
Average Willingness To Pay by Activity
(in 1987 dollars)
Activity Average Value, Number of
per activity day studies evaluated
Camping $19.05 14
Picnicking 18.26 6
Swimming 24.02 9
Hiking 26.49 6
Non-motorized boating 48.68 11
Cross-courdry skiing 16.76 2
Coldwater fishing 30.72 33
Anadromous fishing 51.52 8
Warm water fishing 29.25 13
Non-consumpbve wildlife 20.06 3
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Benefit Estima~on
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Assessment Methods
Several methods can be used to estimate willingness-to-pay, or the benefits to
users. Three methods are generally considered acceptable for measuring the
benefits of recreation activities: the unit day value, the travel cost method, and
contingent valuation. These methods are somewhat complex and will likely
require the assistance of a specialist in recreation economics. This Resource
Book provides an introduction to these methods. For further explanations, we
suggest you review the texts listed under 'Sources of Information' in this
section.
The unit day value approach is considered appropriate for estimating the
benefits from recreation activities at small sites. This approach relies on expert
judgement to determine benefits to users, or the average user willingness-to-
pay for the opportunity to recreate at a given site. Planners, managers, and
economists have developed a wide variety of unit day value estimation
methods. Methods have been established for unit day values by federal
agencies. Three examples are described in this section: Bureau of Land Man-
agement (BLM), US Forest Service (USFS), and Water Resources Council.
The BLM example is the simplest method to understand (Table 8-2); the USFS
method shows how unit day values vary by location (Table 8-3); and the Water
Resources Council method shows how the unit day values vary depending
upon the quality of the recreation experience (Table 8-4).
Bureau of Land Management Unit Day Values, 1986
Acavity
Camping and Picnicking $14.20
Motorized Travel 6.70
Hiking and Horseback Riding 20,76
Water-Relatnd Acti~ies 20.27
Winter Spods 13.98
~xJrce: Bureau of Land Management, 1987
Table 8-2
8-5
Economic Impacts of Protectin~ Rive~s, Trails, and Greenway Corridors
Using lhe BLM unit day values, and assuming an area received 25,000 user
days of cro~-country skier~ and ~§,000 user days of I:~nicker~ during the
year, the ~onomic benefit~ of recreation would be (~5,000 x $1420) + (~$,000
x $13.98) = $704,500 annually.
Tabte 8-3 shown below, lists unit day values according to USFS adminisb'ative
regions. USFS day values vary by activity and fluctuate region to region. To
determine which Forest Service region your project is in, contact your local
U. S. Forest Service office.
Table 8-3
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U. S. Forest Service Recreation Values
U. S, Forest Se~Z~=e Regions
Camping, picnicking and swimming 4.97
Hiking, horseback~ling, &wa~travel 5.28
W~nter Sm
Nm-censumpl~ve wildlife use
1 2 3 4 $ 6 8 9 10
8.61 8.81 5.60 7.68 7.16 8.06 12.36 423
5.59 5.52 5.20 6.00 5.68 6.99 8.23 5.01
31.09 31.09 31.09 31.09 31.09 31.09 31.09 31.09 31.09
13.05 14.47 12.83 11.43 12.03 9.59 13.12 13.12 13.05
31.96 34.78 40.42 31.96 38.54 46.06 40.42 42.30 31.00
23.00 25.14 19.99 29.61 32.79 24.05 20.95 18.13 9.83
Source: U. S. De~rtment of Ag~ulture, Forest Service, June 1989
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Using the USFS recreation values, or unit day values for camping, 10,000
visitor days of camping recreation in Region 2 would be 10,000 x $8.61 =
$86,100 per year, whereas in Region 10,10,000 visitor days of camping would
be 10,000 x $4.23 = $42,300.
The Other method of computing unit day values has been developed by the
Water Resources Council, a U. S. government agency. In this method, the
quality of the recreation opportunity is rated according to a specific set of
criteria. Table 8-4, Guidelines for Rating Quality of Experience on a 100-Point
scale, shows the ratings for various criteria. The individual scores for each
8-6
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Benefit Estimation
Table 8-4
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Crlteda
Recreation
Tofal Points:
Point Value:
Availability
of Substitutes
Total Points:
Point Value:
Tofal POints:
Point Value:
Accessebility
Total POints:
Point Value:
Envlronnmntal
Quelll~
Total Points:
Point Value:
Guidelines for Rating Quality of Recreation Experience
Quality of Experfance, lO0-polnt Scale
and likely to
interfere with use
some evidance of
other users and
occasional intefEx-
encewith use due
to crowding
Usually little Very Iow evidence
evidence of other of other users,
users, raraly if ever never crowded
3O
0-4
5-10 11-16 17-23 24-30
Several within 1
hour travel time; a
few within 30
minute travel time
Several within 1
hour travel Ume;
none within 30
minute travel time
One or two within 1
hour travel Ume;
none within 45
minute traval time
None within 1 hour
travel time
None within 2 hour
travel time
18
0-3
4-6 7-10 11-14 15-18
Minimum facility
development Ex
public health and
safety
Basic facilities to
conduct ac~vity
Adequate facilities
to conduct without
deterioration of the
resource ~* act~ty
expufienna
Optimum facilities
to conduct
activities at site
pote~al
Ultimate facilities
to achieve intent of
selected alternative
14
0-2
3-5 6.8 9-11 12-14
Limited access by
any means to site
or within site
.q~.,.ality roads to
site; Umi~ed
access within site
Fair access, fak
road to site, fak
access, good roads
within site
Goodaccese, goed Goodaccess, high
roadstosite;fair standard roadto
accesswithinsite sito;goodaccess
within site
18
0-3
4-6 7-10 11-14 15-18
Low aesthetic
factors exist that
signirr, antly lower
quality
Average aesthetic
quality; factors
exist that lower
~to a minx
Above average
aesthelic quality;
any limiting lactors
can be reasonably
rectir~
High aesthetic
quality; factors
exist that lower
quality
Outstanding
aestheac quality;
no factors exist that
lower quality
3-6 7-10 11-15 16-20
8-7
Teble 8-5
Economic Impacts of Prot~cfinff Rivers, Trails, and Greenway Corridors
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Water Resources Unit Day Values by Quality of Experience
Quality of Ex~nce, lO0-Point Scale
Recreation Activities
General recrealion
General fishing and hunting
S .pe;ialized
Specialized fishing and hur~ng
0 10 20 30 40 50 60 70 80 90 100
$1.80$2.16$2.40$2.76$3.16$3.84$4.20 $4.44 $4.80 $5.16$5.40
2.64 2.88 3.12 3.48 3.84 4.20 4.86 4.80 5.16 5.28 5.40
7.32 7.80 8.40 9.00 9.60 10.8012.00 14.40 16.80 19.2021.50
12.6012.9513.2012.5513.9015.2516.55 17.65 18.95 20.3021.50
Source: Walsh, 1986, (Updated to October 1987)
m
m
m
m
criteria are totalled. The maximum score is 100. Tabte 8-5, allows you to
estimate the unit day value based upon the quality of experience score.
For example, a greenway with these characteristics: moderate use and occa-
sional crowding, no similar areas within 50 miles, good access and roads, and
high aesthetic quality, would get a score of 70. Ratings from Table 8-4 which
total 70 are: recreation experience (20); availability of substitutes (13);
carrying capacity (11); accessibility (13); and environmental quality (13). Ifthe
most applicable category for this greenway is general recreation, the daily
value of gresnway use, from Table 8-5, would be $4.44 per visitor day. If you
receive 25,000 visitors per year, the total annual recreation benefits using this
approach would be $111,000, based on 1987 dollar values used in the table.
We now turn our discussion from the unit day value method to the travel cost
method. The travel cost method is based upon assessing travel expenditures
to and from a recreational resoume as a measure of recreational benefit. The
underlying assumption of this approach is the number of trips to a recreation
site will decrease as the monetary and time costs of travel increase. This is an
appropriate approach when ~ing to estimate the demand by the current
population of users. This method involves creation of demand curves to
estimate how many thps would be taken as one-way travel distance to the
recreation destination increases. Walsh's text listed in the"Sources of Informa-
tion' subsection of this section, includes a detailed discussion of how to
establish the demand curves and use this method.
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As opposed to the travel coot method, the contingent valuation me~hoduses a
bidding approach to determine values of recreation resources via hypothetical
market transactions. It can be used to evaluate the benefits of resources to the
general population (users and non-users) and can also be used to evaluate the
impacts from potential changes in resource availability, or quality.
· Daubert and Young (1981) performed one of the first evaluations of
recreational values of instream flow in 1978 to 1979 on the Cache ia
Poudre River in Colorado. Respondents were asked to provide
willingness-to-pay information corresponding to flow levels presented
in a series of photographs. Photographs were supplemented by
hydrologic and fish catch information for each of the flow levels
pictured. Bid curves were then estimated corresponding to flow levels
and socioeconomic characteristics. Results showed that average
willing ness-to-pay for fishing peaked at $30.35 per angler day at a flow
level of 500 cfs. Lower or higher flows were significanfiy less
valuable.
· Loomis, et al. (1986) used a combination of the travel cost method
and contingent valuation method to evaluate the economic losses to
recreational fisheries resulting from hydro development on Henry's
Fork of the Snake River in Idaho. The estimate of net willingness-to-
pay for current conditions on Henry's Forkwas $2.86 million annually,
which would be loot if a dam were to eliminate this river segment. A 50
percent reduction in fish catch would result in a loss of $920,000 in
annual benefits and a50 percent reduction in fish size would result in
a loss in benefits of $1.07 million annually.
The unit day value, travel cost, and contingent valuation methods continue to
be tested and refined. They provide alternatives to assess values of recreation
resources via hypothetical market transactions. One study undertaken by the
University of Wisconsin sought to validate these measures by including actual
cash payment, in addition to the travel cost and contingent valuation methods.
The focus of the case study was the value of goooe hunting permits. In
Wisconsin, goose hunting permits are issued by a lottery system. For this
study, travel cost and contigent valuation surveys were conducted to estimate
permit winners' willingness-to-pay for hunting permits. In addition to asking
8-9
Economic Impacts of Protectin8 Rivers, Trails, and Greenway Corridors
people what they might pay, checks in varied amounts were sent to lottery
winners which could be cashed if the winner's permit were returned. These
checks were sent as a pragmatic test of what actual value the winners placed
on the permit. The results were as follows:
Method Permit Value
Actual cash value $63
Contingent valuation method$21
Travel cost method $11-15
This study shows that people actually ranked the value of the permit higher
than the estimation method revealed. This underscores the limitations and
possible underestimation of hypothetical valuation methods.
Preservation Values
Analysis of economic benefits can also be used to determine the values which
people place on resoumes, even if they do not use them. These non-users
may value the resource for several reasons. The different types of preserva-
tion values and their definitions are as follows:
option value
Knowing there is guaranteed opportunity for
future access to the resoume
existence value
Knowing that a resource has been
preserved in perpetuity, even if no
recreational use is contemplated
bequest value
Knowing that future generations will have
the opportunity to enjoy the resource
Some studies have attempted to quantify these values.
· Walsh, Sanders, and Loomis (1984) used contingent valuation to
evaluate the optimal number of rivers in Colorado that should be
protected under Federal Wild and Scenic designation. This study was
unique in that it incorporated both use and non-use values of rivers.
The authors concluded that optimum benefits of river protection
8-10
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occurred at a level of protection for fourteen Colorado rivers. Use
values were found to only account for approximately 20 percent of the
total willingness-to-pay for river preservation, with the remaining 80
percent attributed to non-use (preservation) values.
· Six percent of the American public uses wilderness areas, yet 60
to 95 percent are willing to be taxed to support preservation of
wilderness areas (Driver, Nash, and Haas, 1986).
Benefit-Cost Analysis
Benefit-cost analysis is a systematic method of identifying and measuring the
economic benefits and costs of a project (Hufschmidt, et al., 1983). The total
benefits are then divided by total costs. If this ratio exceeds one, it may be
assumed that the project will provide a good return, meaning the benefits are
greater than the costs.
· A study of four parks in Worcester, Massachusetts, found that if
park visitors were willing to pay one dollar per visit, the value of this use
would be almost $425,000 annually. This amount is substantially
above the annual $125,000 it costs the city to maintain the parks' 219
acres and results in a benefit to cost ratio of 3.4 to 1 (More, Stevens,
and Allen, 1982).
In the past few decades, there has been increasing interest by researchers to
expand the application of benefit-cost analysis to include valuation of natural
systems and environmental quality. Valuing the benefits of environmental
quality and natural resources in economic terms may be helpful to your justi-
fication for conservation of a river, or establishment of a greenway. Performing
a benefit-cost analysis for your project is likely to require assistance from either
an economist, or staff and volunteers with an economics background. There
are also aspects of environmental quality and natural resources which are
important but still cannot be readily quantified. This may result in Iow benefit-
cost ratios and underestimate the full benefits of your greenway.
8-11
Economic Impacts of Protecting Rivers, Trai]s, and Greenway Corridors
Public Expression of Value
In these times of fiscal resl]'aint, Various non-profit funding initiatives, public
interest oq]anizations, and special interest legislation have emerged. This has
resulted in fundraising drives and ballot initiatives which offer people the
opportunity to con~'ibute to special government funds for causes they value.
Many of these involve resource conservation. The vehicles for these expen-
ditures include donations, special licenses, fees, and tax rebate earmarked to
support these causes.
· Proof of support for conservation programs has been evidenced in
taxpayer donations. In Colorado, state income tax voluntary
contributions to non-game wildlife programs generated revenues of
$350,000, $500,000, and $650,000 during 1978, 1979, and 1980,
respectively. However, in later years these amounts decreased
considerably, perticulariy as taxpayers were given more competing
choices for donations from tax refunds. Nonetheless, several states,
including Oregon, Utah, Minnesota, and Kentucky, have adopted
similar programs. (National Park Service, 1983).
· Surveys of California households reflected a willingness-to-pay
between $42 and $94 annually (per household) to preserve water in
Mono Lake. The cost to preserve the lake by providing replacement
water and hydropower is only $2.64 per year, thus its value as a
natural resource far outweighs the use value of the water (Loomis,
1987).
How to Uss These Rationales in Your Community
Express the value of the resource. Total the willingness-to-pay for your
resource and express this total as benefits gained through establishment of the
greenway. You may wish to contact your local university to see if any students
familiar with recreation economics can assist you in estimating willingness-to-
pay. If assistance is unavailable, you may wish to use estimates for other rec-
reation rasources which are similar toyour project. If your program is threat-
ened by cutbacks, express existing benefits as net losses to the community.
8-12
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Document public support for conservation. Cite examples of bond issues
and tax measures passed by voters, funds, and contributions raised by local
conservation groups, etc.
Sources of Information
Recreation Economic Decisions. This book by Dr. Richard G. Walsh is an
excellent source text on recreation economics, it is available from Venture
Publishing, 1640 Oxford Circle, State College, PA, 16801. Chapter 8 is
especially applicable to benefit estimation.
The Review of Outdoor Recreation Economic Demand Studies with Non.
BarketBenefits, 1968-1988. This will allow you to determine whether specific
demand studies are applicable to your region and resource. It is available from
the Department of Agricultural and Resource Economics, CSU, R. Collins,
CO, 80523.
The Water Resources Council's Economic end Environmental Principles
end Guidelines for Water end Related Lend Resources Implementation
Studies is the third version (1983) of the WRC's 'Principles and Standards.'
It is the most current version of this agency's recommendations for methods to
assess the economic benefits of recreation. This publication is currently out of
print, but may be available at your local university library.
A RevlewofFisherles EconomicEvaluation Methods. This report from the
Sport Fishing institute is a good review of economic valuation concepts and
methods. It also contains an annotated bibliography of available fishery values
calculated via travel cost, contingent valuation, and other methods. Contact
the Sport Fishing Institute at 1010 Massachusetts Ave, N.W., Washington,
D.C., 20001.
If you are specifically interested in literature related to how economics is used
in promoting retention of instream flow, An Annotated Bibliography of Eco.
nomic Literature on Instream Flow (Douglas, 1988) is available from the
U.S. Fish and Wildlife Service, National Ecology Research Center, 2627
Redwing Road, Ft. Collins, CO, 80526-2899. Ask for Biological Report 88(39).
8-13
Economic Impacts of Protecting Rive~s, Trails, and Greenway Corridors
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Amenity Resource Valuation. This 260-page collection of essays is a good
source of indepth discussions of the philosophical and methodological issues
associated with integrating economics and natural resources. The text is
available from Venture Publishing, 1640 Oxford Circle, State College, PA,
16801.
Considerations In Using These Rationales
Numbers are not everything. Remember that estimates of economic im-
pacts and benefits are only one tool available to conservation advocates. As
mentioned earlier, many of the benefits of greenways may still not be quantified
and numbers would underestimate the total value. Rivers, trails, and green-
ways should be promoted using the tools which are most effective. Focusing
on the intrinsic values is most likely to be the most effective tool to begin
building your constituency.
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Benefit Estimation
References
Brookshire, David S. and V. Kerry Smith. May 1987. 'Measuring Recreation
Benefits: Conceptual and Empirical Issues.' Water Resources Research
23(5) :931-935.
Bureau of Land Management. 1987. Recreation 2000. Washington, D.C.:
U.S. Department of Interior, Bureau of Land Management.
Daubert, John T. and Robert A. Young. 1981. 'Recreational Demands for
Maintaining Instream Flows: A Contingent Valuation Approach.' American
Journal of Agricultural Economics 63:666-676.
Douglas, Aaron J. September 1988. Annotated Bibliography of Economic
Literature on Instream Flows. Washington, D.C.: U.S. Department of the
Interior, Fish and Wildlife Service, Research and Development. Biological
Report 88(39).
Jones and Stokes, Alaska Department of Fish and Game. March 1988. 1986
Juneau Area Sport Fishing Economic Study - Executive Summary. Juneau,
AK: Alaska Department of Fish and Game, Division of Sport Fisheries.
Loomis, John. 1987. 'The Economic Value of Instream Flow: Methodology
and Benefit Estimates for Optimum Flows.' Journal of Environmental Manage-
ment 24(2):169-179.
Loomis, John, Cindy Sorg, and Dennis Donnelly. 1986. 'Economic Losses to
Recreational Fisheries Due to Small-Head Hydro-Power Development: A
Case Study of the Henry's Fork in Idaho.' Journal of Environmental Manage-
ment (22):85-94.
National Park Service. 1983. Winning Support for Parks and Recreation.
State College, PA: Venture Publishing.
Peterson, George L., B.L. Driver, and Robin Gregory. 1988. Amenity Re-
source Valuation: Integrating Economics with Other Disciplines. State Col-
lege, PA: Venture Publishing.
8-15
Economic Impacts of Protecting Rivers, Trails, and Greenway Corridors
Ward, FrankA. March 1987. 'Economics of Water Allocation to Instream Uses
in a Fully Appropriated River Basin: Evidence for a New Mexico River.' Water
Resources Research 23(3):381-392.
8-16
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Appendix A
Correcting for Inflation in
Housing Prices Using the
Consumer Price Index
Brief Explanation of the Consumer Price Index
The Consumer Price Index (CPI) is a measure of the average change in prices
over time in a fixed market basket of goods and services. The Bureau of Labor
Statistics publishes CPIs for two population groups: (1) a CPi for All Urban
Consumers (CPI-U) which covers approximately 80 percent of the total
population and (2), a CPI for Urban Wage Earners and Clerical Workers (CPI-
W) which covers 32 percent of the total population. The CPI-U includes, in
addition to wage earners and clerical workers, groups such as professional,
managerial, and technical workers, the self-employed, short-term workers, the
unemployed, and retirees and others not in the labor force.
The CPI is based on prices of food, clothing, shelter, fuels, transportation fares,
charges for doctors' and dentists' services, drugs, and other goods that people
buy for day-to-day living. Prices are collected in 85 urban areas across the
country from about 57,000 housing units and approximately 19,000 retail es-
tablishments-department stores, supermarkets, hospitals, filling stations, and
other types of stores and establishments. All taxes directly associated with the
purchase and use of items are included in the index. Prices of food, fuel, and
a few other items are obtained every month in all 85 locations. Prices of most
other commodities and services are collected every month in the five largest
geographic areas and every other month in other areas. Prices of most goods
and services are obtained by personal visits of the Bureau's Pained represen-
tatives. Some data, such as used car prices, are obtained from secondary
sources.
In calculating the index, price changes for the various items in each location are
averaged together with weights which represent their importance in the
spending of the appropriate population group. Local data are then combined
to obtain a U.S. city average. Seperate indexes are also published by size of
city, by region of country, for cress-classifications of regions and population-
size classes, and for 29 local areas. Area indexes do not measure differences
in the level of prices among cities, they only measure the average change in
prices for each area since the base period.
The indexes measure price change from a designated reference date, 1982-
1984, which equals 100.0. An increase of 7 percent, for example, is shown as
107.0. This change can also bo expressed in dollars as follows: The price of
A-2
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a base period 'market basket' of goods and services in the CPI has risen from
$100 in 1982-84 to $107.
For further details, see BLS Handbook of Me~hods, BLS Bulletin 2285, April
1988, and The Consumer Price Index: 1987 Revision, BLS Report 736,
January 1987.
Calculating Index Changes
Movements of the indexes from one month to another are usually expressed
as pement changes rather than changes in index points, because index point
changes are effected by the level of the index in relation to its base period while
percent changes are not. The example below illustrates the computation of
index point and percent changes.
Index Point Change
CPI 112.5
Less Previous Index 108.5
Equals index p~nt change 4.0
Percent Change
Index point difference 4.0
Divided bylhe previous index 108.5
Equals 0.037
Results multiplied by one hundred 0,037 x 100
Equals pa-cent change 3.7
Source: Bureau of Labor Statistics, U.S. D~parlmeat of Labor, 1990s
A-3
Economic Impacts of Protecting Rivers, Trails, and G~enway Corridors
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Consumer Price Index All Urban Consumers (CPI.U)
U.S. City Average
Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Avg
1967 30.5 30.5 30.5 30.6 30.7 30.7 30.8 30.9 30.9 31.0 31.1 31.2 30.8
1968 31.3 31.5 31.5 31.6 31.7 31.9 32.1 32.3 32.4 32.5 32.7 32.9 32.0
1969 32.9 33.1 33.4 33.6 33.8 33.9 34.1 34.3 34.5 34.6 34.8 35.0 34.0
1970 35.1 35.4 35.8 36.0 36.2 36.3 36.5 36.7 36.9 37.1 37.3 37.5 36.4
1971 37.5 37.5 37.4 37.4 37.7 37.9 38.1 38.2 38.3 38.5 38.6 38.7 38.0
1972 38.9 39.0 39.1 39.2 39.3 39.4 39.5 39.7 39.8 39.8 39.9 40.1 39.4
1973 40.1 40.3 40.4 40.5 40.7 40.8 40.9 41.2 41.6 42.1 42.5 42.8 41.2
1975 43.3 43.7 44.1 44.5 44.9 45.4 45.9 46.5 47.1 47.6 48.1 48.6 45.8
1975 49.0 49.5 49.7 50.0 50.2 50.5 50.7 50.9 51.3 51.5 52.0 52.3 50.7
1976 52.6 52.7 53.0 53.1 53.3 53.5 53.9 54.1 54.4 54.6 54.8 55.1 53.8
1977 55.5 55.9 56.2 53.6 56.8 57.3 57.7 58.0 58.4 58.6 58.9 59.2 57.4
1978 59.7 50.0 50.6 61.1 61.6 62.2 62.8 63.2 63.9 64.5 64.9 65.1 62.4
1979 63.6 66.4 67.0 67.7 68.5 69.4 70.3 71.3 72.2 73.2 74.1 75.0 70.1
1980 76.2 77.1 78.4 79.4 80.6 82.1 81.6 81.8 82.4 33.5 84.3 85.3 81.1
1981 85.9 86.5 87.0 87.7 88.8 98.0 91.5 92.3 93.5 93.5 93.7 94.0 90.4
1982 94.3 94.6 94.4 95.3 ~.6 97.8 98.3 68.6 98.4 98.8 98.2 97.4 98.9
1983 97.9 98.1 98.1 98.6 98.1 99.5 98.9 100.0 100.5 100.6 100.7 100.8 99.5
1984 101.4 101.9 102..1 102.6 103.0 103.5 104.1 104.5 105.1 105.1 105.0 105.1 103.6
1985 105.3 105.8 106.1 106.5 107.3 107.9 108.3 198.7 108.9 109.1 109.3 109.6 107.7
1986 109.9 109.8 108.9 110.2 110.4 111.2 111.3 111.6 112.0 111.8 111.4 111.5 110.9
1987 112.0 112.4 112.8 113.2 113.6 114.3 114.7 115.4 115.6 115.5 115.5 115.6 114.2
1988 116.2 116.6 117.0 117.3 117.7 118.6 119.1 119.5 119.9 119.9 119.9 120.2 118.5
1989 120.7 121.1 121.5 121.6 122.1 122.9 123.9 124.2 124.3 124.4 124.5 124.9 123.0
1990 125.9 126.1 126.8 126.8 127.1 126.3
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Appendix B
Updating Consumer Good Values
Using Consumer Price Index
City Average
Brief Explanation of the Consumer Price index
The Consumer Price Index (CPI) is a measure of the average change in prices
over time in a fixed market basket of goods and services. The Bureau of Labor
Statistics publishes CPIs for two population groups: (1) a CPI for All Urban
Consumers (CPI-U) which covers approximately 80 percent of the total
population and (2), a CPI for Urban Wage Earners and Clerical Workers (CPI-
W) which covers 32 percent of the total population. The CPI-U includes, in
addition to wage earners and clerical workers, groups such as professional,
managerial, and technical workers, the self-employed, short-tarm workers, the
unemployed, and retirees and others not in the labor force.
The CPI is based on prices of food, clothing, shelter, fuels, transportation fares,
charges for doctors' and dentists' services, drugs, and other goods that people
buy for day-to-day living. Prices are collected in 85 urban areas across the
country from about 57,000 housing units and approximately 19,000 retail es-
tablishments-department stores, supermarkets, hospitals, filling stations, and
other types of stores and establishments. All taxes directly associated with the
purchase and use of items ara included in the index. Prices of food, fuel, and
a few other items are obtai,,gd every month in all 85 locations. Prices of most
other commodities and services are collecb~d every month in the five largest
geographic areas and every other month in othe,' areas. Prices of most goods
and services are obtained by personal visits of the ~ureau's a'alned represen-
tatives. Some data, such as used car prices, are obtained from secondary
sources.
In calculating the index, price changes for the various items in each location ara
averaged together with weights which represent their importance in the
spending of the appropriate population group. Local data are then combined
to obtain a U.S. city average. Seperate indexes are also published by size of
city, by region of country, for cross-classifications of regions and population-
size classes, and for 29 local areas. Area indexes do not measure differences
in the level of prices among cities, they only measure the average change in
prices for each area since the base period.
The indexes measure price change from a designated reference date, 1982-
1984, which equals 100.0. An increase of 7 percent, for example, is shown as
107.0. This change can also be expressed in dollars as follows: The price of
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a base period 'market basket' of goods and services in the CPI has risen from
$100 in 1982-84 to $107.
For further details, see BLS Handbook of Methods, BLS Bulletin 2285, April
1988, and The Consumer Pr~e Index: 1987 Revision, BLS Report 736,
January 1987.
Calculating Index Changes
Movements of the indexes from one month to another are usually expressed
as percent changes rather than changes in index points, because index point
changes are effected by the level of the index in ralatJon to its base period while
percent changes are not. The example below illustrates the computation of
index point and percent changes.
Index Point Change
CPi 112.5
Less Previous Index 108.5
Equals index point change 4.0
Percent Change
Index point dilference 4.0
Divided by lhe Ixev'~s index 108.5
Equals 0.037
Results multiplied by one hundred 0.037 x 100
Equals percent change 3.7
Source: Bureau d Labor Statislics, U.S. Depar~ent d [aba-, 1990s
A-7
Economic Impacts of Protecting Rivers, Trails, and Greenway Corridors
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Consumer Price Index, All Items
U.S. City Average
1982-84=100
NI Urban Consumers
Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Avg
1970 37.8 38.0 38.2 38.5 38.6 38.8 39.0 39.0 39.2 39.4 39.6 39.8 38.8
197.1 39.8 39.9 40.0 40.1 40.3 40~6 40.7 40.8 40.8 40.9 40.9 41.1 40.5
1972 41.1 41.3 41.4 41.5 41.6 41.7 41.9 42.0 42.1 42.3 42.4 42.5 41.8
1973 42.6 42.9 43.3 43.6 43.9 44.2 44,3 46.1 45.2 45.6 45.9 46.2 44.4
1974 46.6 47.2 47.8 48.0 48.6 49.0 49,4 50.0 50.6 51,1 51.5 51,9 40.3
1976 52.1 52.5 52.7 52.9 53.2 53.6 54.2 54.3 54.6 54,9 66.3 55.5 53.8
1976 55.6 55.8 55.9 56.1 55.5 56.8 57.1 57.4 57.6 57.9 58.0 56.2 56.9
1677 58.5 59.1 59.5 60.0 60.3 60.7 61.0 61.2 61.4 61.6 61,9 62.1 60.6
1978 62.5 62.9 53.4 63.9 64.5 65.2 65.7 66.0 66.6 67.1 67.4 67.7 65.2
1979 68.3 69.1 69.8 70.6 71.5 72.3 73.1 73.8 74.6 75.2 75.9 76.7 72.6
1980 77.8 78.9 80.1 81.0 81.8 82.7 82.7 83.3 84.0 84.8 85.5 86.3 82.4
1981 87.0 87.9 88.5 89.1 89.8 90.6 91.6 92.3 93.2 93.4 93.7 04.0 90.9
1982 94.3 94.6 94.5 94.9 95.8 97.0 97.5 97.7 97.9 98.2 98.0 97.6 98.5
1983 97.8 97.9 97.9 98.6 99.2 99.5 98.9 100.2 100.7 101.0 101.2 101.3 99.6
1994 101.9 102.4 102.6 103.1 103.4 103.7 104.1 104.5 105.0 105.3 105.3 105.3 103.9
1986 105.5 106.0 106.4 106.9 107.3 107.6 107.8 108.0 108.3 108.7 109.0 109.3 107.6
1986 109.6 109.3 108.8 168.6 108.9 109.5 109.5 109.7 110.2 110.3 110.4 110.5 109.6
1987 111.2 111.6 112.1 112.7 113.1 113.5 113.8 114.4 115.0 115.3 115.4 115.4 113.8
1988 115.7 116.0 116.5 117.1 117.5 118.0 118.5 119.0 119.8 120.2 120.3 120.5 118.3
1989 121.1 121.6 122.3 123.1 123,8 124.1 124.4 124.6 125.0 125.6 125.9 126.1 124.0
1990 127.4 128.0 128.7 128.9 129.2 129.9 130.4
Source: U.S. Deparlment of Labor, Bureau of Labo~ Statistics
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Table of Over-the-Year % Increases
(An Entry for Feb 1982 indicates the percentage increases from Feb 1981 to Feb 1982)
Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Avg
1971 5.3 5.0 4.7 4.2 4.4 4.6 4.4 4.6 4.1 3.8 3.3 3.3 4.4
1972 3.3 3.5 3.5 3.5 3.2 2.7 2.9 2.9 3.2 3.4 3.7 3.4 3.2
1973 3.6 3.9 4.6 5.1 5.5 6.0 5.7 7.4 7.4 7.8 8.3 8.7 6.2
1974 9.4 10.0 10.4 10.1 10.7 10.9 11.5 10.9 11.9 12.1 12.2 12.3 11.0
1975 11.8 11.2 10.3 10.2 9.5 9.4 9.7 8.6 7.9 7.4 7.4 6.9 9.1
1976 6.7 6.3 6.1 6.0 6.2 6.0 5.4 5.7 5.5 5.5 4.9 4.9 5.8
1977 5.2 5.9 6.4 7.0 6.7 6.9 6.8 6.6 6.6 6.4 6.7 6.7 6.5
1978 6.8 6.4 6.6 6.5 7.0 7.4 7.7 7.8 8.3 8.9 8.9 9.0 7.6
1979 9.3 9.9 10.1 10.5 10.9 10.9 11.3 11.8 12.2 12.1 12.6 13.3 11.3
1980 13.9 14.2 14.8 14.7 14.4 14.4 13.1 12.9 12.6 12.8 12.6 12.5 13.5
1~1 11.8 114 10.5 10.0 9.8 9.8 10.8 10.8 11.0 10.1 9.6 8.9 10.3
1982 8.4 7.6 6.8 6.5 6.7 7.1 6.4 5.9 5.0 5.1 4.6 3.8 6.2
1983 3.7 3.5 3.6 3.9 3.5 2.6 2.5 2.6 2.9 2.9 3.3 3.8 3.2
1984 4.2 4.6 4.8 4.6 4.2 4.2 4.2 4.3 4.3 4.3 4.1 3.9 ~3
1985 3.5 3.5 3.7 3.7 3.8 3.8 3.6 3.3 3.1 3.2 3.5 3.8 3.6
1986 3.9 3.1 2.3 1.6 1.5 1.8 1.6 1.6 1.8 1.5 1.3 1.1 1.9
1~7 1.5 2.1 3.0 3.8 3.9 3.7 3.9 4.3 44 4.5 4.5 4.4 3.6
1988 4.0 3.9 3.9 3.9 3.9 4.0 4.1 4.0 4.2 4.2 4.2 4.4 ~1
1989 4.7 4.8 5.0 5.1 5.4 5.2 5.0 4.7 4.3 4.5 4.7 4.6 4.8
1990 5.2 5.3 5.2 4.7 4.4 4.7 4.8
Source: U.S. Department of Labor, Bureau of Labor Statistics
A-9
Economic Impacts of Protecting Rivers, Trails, and Greenway Corridors
Survey Questions
All of the survey questions included in this Appendix were designed for a study
on the economic impact of rail-trails, to be completed by the National Park
Service and Pennsylvania State University in August 1991. The questions
were designed by Dr. Alan Graefe, Dr. Richard Gitelson, and Roger Moore at
Pennsylvania State University.
For further information on these questions or the study, contact Roger Moore
at (814) 865-1851 or Beth Dillon, National Pa~k Service Rails-to-Trail Program
Manager, at (202) 343-3766. (Representatives of federal agencies planning
on conducting a survey of the general public must receive survey approval by
the Office of Management and Budget.)
Questions regarding Property Values
The questions listed below are suggested types of questions. The exact
wording will depend upon the type of project and whether you are interviewing
landowners or real estate specialists. A scale of one to seven is suggested for
some of the questions to get a better understanding of the respondents
pemeptions. Before conducting your own survey, we recommend you get
assistance from someone who has experience devising and conducting
surveys. These questions addressing property values have not yet been
tested.
1. Where is the (trail, greenway) in relation to your property? (Check one)
._~e trail runs through my property
._The trail runs along the edge of my property
._~e trail is near my property but not touching it
_Don't know
2. About how far is the house from the nearest part of the (trail, greenway)?
__F~et or_Miles
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Appendices
3. Which part of the house faces the (trail or greenway)?
_Front
_Back
~Side
4. Did you buy this property beforethe (a'ail, greenway) was opened?
_Yes
_No
If no, how did the presence of the trail affect your decision to buy the
property?
Added to property's appeal Detracted from property's appeal
__1 __2 __3 __4 __5 __6 7
5. If you were to try to sell this property, do you think being near the trail would
make it harderor easierto sell?
Much easier to sell Harder to sell
1 2 3 4 5 6 7
6. How do you think being located near the (a'ail, greenway) has affected the
resale value of this property? (Check one)
~e trail has Ioweredthe value of my property.
._The trail has increasedthe value of my property.
._The trail has no effecton the resale value of my property.
7. How much do you think that being near the trail has raised or lowered the
value of this property?
%
8. What experience or evidence makes you feel the property value has been
affected in this way?
A-13
Economic Impacts of Protecfin8 Rivers, Trails, and Greenway Corridors
Questions regarding Tourism end Local Resident Expenditures
Surveys may be conducted to estimate user spending during typical use, or,
a survey could be conducted during a special event held at your river, trail or
greenway. The questions listed below are designed to estimate the spending
by the group of users rather than individuals within the group. Group expen-
ditures can then be divided by the total number of people to estimate average
expenditures.
We recommend you get assistance from someone who has experience
devising and conducting surveys.
1. How many people from each of the following age categories are in your
group on the (trail, river, greenway) today? (Please include yourself and write
the numbers in the spaces provided)
15 and under 46 to 55
16 to 25 56 to 65
26 to 35 66 and over
36 to 45
2. Is your visit to this trail part of an overnight trip away from home?
Yes No (If no, go to question 5)
a. How many days will you be away from home during this trip?
b. During your stay, how many nights will you be using each of the
following accomodations in this area? (Please write number in space
provided)
Hotel/motel
State campground
Private campground
Rented home or cottage
With friends or relative, s
Other (Please specify)
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Appendices
c. Was visiting (river, trail or graenway) one of the reasons for your trip
to this area? Yes No
(If yes, was it the primary reason? Yes No)
(If no, whatwas the primary reason for this visit?
3. In the spaces below, please list the estimated expenditures mede as a result
of your entire trip to the (river, trail or graenway). If you paid all of your own
expenses and no one elses', report only the amounts you actually spent in
each category. If your group sharedsome or all expenses (group members
made some purchases for one another), please report your estimates of the
amounts spent by the entire group in each category.
Please include all the expenses associated Nth that particular trip
from your preparations before leaving home until your return home. Please
indicate where the expenditures took place by recording the amounts in the
appropriaie columns. Refer to the map on the facing page to help determine
what is included in the local county.
Amount spent in:
(NOTE: You may wish to estimate spending for your local economy only)
Local In state Outside
economy economy economy
Estimated amount spent for: a. Restaurants
(including fast food, sit down, etc.)
b. Food and beverage
(retail)
c. Lodging expenses:
hotel
motel
camping
other
d. Retail purchases
(personal items, souvenirs purchased during trip)excluding durable
purchases for equipment.
^-15
Economic Impacts of Protecting Rivers, Trails, and Creenway Corridors
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e. Auto expenses:
gas and oil
repairs and service
parking and tolls
f. Other transportation costs:
airfare and busfare
public transit, taxis, etc
g. Film and developing
h. Fees for other attractions/entertainment
i. All other expenses for this Irip (program fees, licenses, rental fees
for bikes, skis, etc) please specify
4. During tho last twelve months, what percentage of the total days you par-
ticipated in each of the following activities took place on the (trail, river, or
grsenway? (If you did not participate in a particular activity, please mark an
(NOTE: For your greenway or river project you should list appropriate
activities. The activiites listed below are appropriate for trails.)
% Walking
% Running
% Bicycling
% Cross Country Skiing
% Snowmobiling
% Other activity (please specify
5. Please list any expenditures you made related to this activity during the last
twelve months if the decision to buy the item was influancedby the existence
of the(river, trail or greenway). Only include expenditures for durable items that
ars used for more than one trip and do notinclude items you already accounted
for related to your specific trip.
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(NOTE: You may want to estimate spending for local economy only.)
Amount you spent in:
Local In state Outside
economy economy economy
Estimated amountspentfor:
a. Clothing (clothing, shoes
boots, hats, etc.)
b. Equipment (bicycles, skis,
snowmobiles, trailers, etc)
c. Accessories (bike racks,
water bottles, helmets,
radios, spare parts, cameras,
etc)
d. Books, guides, maps, etc.
e. Memberships/subscriptions,
program fees, etc.
f. Other expenditures for
durables (Please specify):
g.
(NOTE: For your greenway or river project you should list appropriate
durables. The durables listed below are appropriate for trails.)
A-17
.-%
NORTH ATLANllC
BID-ATLANTIC
~fASHINGTON OFFICE
National Park Service Regional Offices
Alaska Region
Planning Division
2525 Gambel Street, Room 107
Anchorage, Alaska 99503
(907) 257-2655
Pacific Northwest Region
Recreation Programs Division
83 South King Street, Suite 212
Seattle, Washington 98104
(206)442-5366
Southwest Region
Planning & Design Division
P.O. Box 728
Sante Fe, New Mexico 87504
(505) 988-6881
Mid-Atlantic Region
Division of Park & Resource Planning
U.S. Customs House, Room 260
Second and Chestnut Streets
(215) 597-1581
Midwest Region
Planning & Environmental
Quality Division
1709 Jackson Street
Omaha, Nebraska 68102
(402) 221-3481
North Atlantic Region
Planning & Design Division
15 State Street
Boston, Massachusetts
(617) 223-5132
Rocky Mountain Region
Recreation Grants & Assistance
Division (PL)
P.O. Box 25287
Lakewood, Colorado 80225
(303) 969-2850
Southeast Region
Planning & Federal Programs
Division
75 Spring Street, S.W.
Atlanta, Georgia 30303
(404) 331-5838
Western Region
Planning, Grants & Environmental
Quality Division
600 Harrison Street, Suite 600
San Francisco, California 94107-1372
(415) 744-3975
Washington, D.C. Office
Recreation Resources Assistance Division
Rivers, Trails and Conservation
Assistance Program
P.O. Box 37127
Washington D.C. 20013
(202) 343-3780