OI;y 9 >9 j8CUI MR-T-78-006 c . 3

Q'8 3I >ri>

ASSESSING THE LOCAL ECONOMIC IMPACTS OF PARK ACQUISITION

AND DEVELOPMENT

Abe Cofnas, Peter May, Paul Newacheck, Patricia Weis

Graduate School of Public Pol i cyand

Institute of Urban and Regional Development

Uni versi ty of Cal i fornia, Berkeley

Thi s work is a res ul t of resea rch s ponsored by NOAA, Office of SeaGrant, Department of Commerce, under Grant f04-5-]58-20, project~RIR-3'! . The U. S. Government i s au thori zed to produce and di s tr i-bute reprints for governmental purposes, notwi thstanding any copy-ri ght notation that may appear hereon ~

FINAL REV I EW DRAFT

7 Apri 1 1978.

TABLE OF CONTENTS

EXECUTIVE SU[TIARY

INTRODUCTION

PART ONE: ANALYTIC FRAME'l40RK AND MEASUREMENT

CHAPTER I. A FRAMELJORK FOR ANALYSIS

1.1 State of the Art1.2 Sources of Impact

a. Preemption of existing land usesb. Site development and related activitiesc. Visitor impacts

1.3 Effects of Acquisition and Developmenta. Direct effectsb. Indirect effects

CHAPTER II. I!EASURING DIRECT ECONOMIC IMPACTS

2.1 Preemptiona. Displacement of private useb. Displacement of taxable use

2.2 Developmenta. Changes in property valueb. Changes in employment levelsc. Changes in services and fees

2.3 Visitorsa. Estimating total visitationb. Estimating visit, or expenditurec. Changes in the private economyd. Changes i n the public economy

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CHAPTER II I. MEASURING INDIRECT ECONOMIC IMPACTS

3.1 Multipliers3.2 Economic Base Models3 ' 3 Calculating Multipliers3.4 Base Model and Employment Multipliers3.5 Input-Output Models3.6 From-To Models3.7 Summary

CHAPTER IV. COMBINING ISSUES, IMPACTS AND EFFECTS

4.1 Local Private Economya. Preemptionb. Developmentc. Visitors

4.2 Local Public Economya. Preemptionb. Developmentc. Visitors

4.3 Amenities for Residentsa. Preemptionb. Developmentc. Visitors

PART TRIO' SITE ANALYSIS OF PARK ACQUISITION IMPACTS

CHAPTER V. LAKE EARL SITE ANALYSIS

5.1 The Economic Setting of Del Norte County5.2 Local Private Economy

a. Preemptionb. Devel opmentc. Vis i tors

5.3 Local Public Economya. Preemptionb. Devel opmentc. Vi si tors

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5.4 Ameni ties for Resi dentsa. Preemptionb. Devel opmentc ~ Visi tors

5.5 Summary of Potential Costs and Benefits

CHAPTER VI. LAGUNA BEACH SITE ANALYSIS

6.1 The Economic Setting of Laguna Beach6.2 Local Private Economy

a. Preemptionb. Deve'.opmentc. Visitors

6.3 Local Public Econorqya. Preemptionb. Developmentc. Visitors

6.4 Amenities for Residentsa. Preemptionb. Developmentc. Visitors

6.5 Summary of Potential Costs and Benefits

Appendix A A Selected Review of Impact Studies

Appendix B Annotated Bib1iography of Park Impact Studies

Appendix C References

EXECUTIVE SUMMARY

The California Coastal Zone Conservation Commission in February1975 requested a study be made of the effects of park acquisition onlocal governments. One reason for tliei r i nterest in such i nformationwas the proposed extensive acquisition of land for preservation andrecreational use along the California coast. The Conznission staffmembers believed that the planned acquisi tion policies would meetwith opposition from local governments. Thus, as a response topossible objections to park acquisition, a framework was needed forpinpointing possible benefits and costs. Our research task was todeve'lop and outline methods for assessing the impacts of acquisitionand development, and we believe our study lays the basis for such anassessment by different leve1s of government.

Rationales for Park AcquisitionP

Park acquisition and development have had three types of rationale-economic, social, and environmental. The economic rationale has beenadvanced in asserting that parks provide some kind of dollar impact

Mo an area. The reasoning is that parks create a stimulus to tourismleading to more spending and other benefits in the form of new jobs,increased income for local areas, and more tax revenue for government,The social justification of park development invokes the value ofrecreational acti vi ties to ci tizens. With the trend towards a greateramount of leisure time in this country, one increasingly hears theargument that more parks are needed for outdoor recreation. Finally,the environmental rationale for more parkland entails the argument ofpreserving scarce natural resources.

Loss in Tax Revenue

l3espi te the positive effects of parks underscored by the threeareas of impact, there has been opposi tion to i ncreased conversion ofprivate 1and into public parks. Most County tax assessors' officeswould point to the loss in tax revenue to counties from removal ofland. This opposition on fiscal grounds is within the general con-text of limited revenues to local governments. Thus, when stategovernments support further acquisition of parks, local jurisdictionsperceive state poiicies as bei ng against their i nterests. In a sense,local governments act to maximize their revenues, while state agenci esrecommending park acquisitions have different aims.

The disparity in aims between local and state levels makes itdifficult to assess the impacts of park acquisition and developmentin a way where all parties involved can use a common impact measure.

Local revenues and cos ts:The fiscal consequences of changes resul ting from parkacquisition and development.

Regional economic effect:Included here are the indirect effects of introducinga change i n the local economy. The impact of parkacquisition and development affect primarily the flowof spending in the .local area and region. In turn,there are multiplier effects on local income and jobs,

Differences between Urban and Rural Sites

In our Study we applied our framework to proposed park ac-quisition plans at two California sites; Lake Earl in Del NorteCounty, and Laguna Beach in Orange County. Del Worte is a ruralremote area on the north coast, while Laguna Beach is a suburbanbeach community between Los Angeles and San Diego.

I

Me found that differences in geographic and economic settingare relevant in determining the likely impacts resulting frompark acquisition. Generally, remote rural areas cannot expect newtourist dollars to offset losses in property tax revenues. Sitessuch as l ake Earl are already within a recreation neighborhood.The marginal impact of a new park on bringing tourists to thearea is negligible. A result of this setting is tlie larger thanusual impact of park acquisi ton on local government revenues.IJhen the proportion of privatejpublic land is low, tlie new revenueimpact of acquisition will be high. lie found that for Del IJorteCounty, state action in the form of in-lieu payments and parkfacility development is the most 1ikely method of offsetting locallosses.

In laguna Beach, however, the loss of local tax revenue dueto park acquisition can be largely offset by facility developmentattracting tourist spending. The acquisition site, unlike DelHorte is within a developed tourist area wliere there is a sub-stantial flow of tourists. Acquisition and development of a parkwould attract tourists and raise revenue through spending on userfees and shopping. Generally, where facility development ispossible, there is increased ability to offsetting the revenuelosses attributable to park acquisition. Additionally, when theprivate land values surrounding a park site are high, the relativeimpact on local government revenues is low. In laguna Reach theloss of property taxes p38,000! from park acquisition representsless than lX of the city's revenue, whereas in Del IJorte Countya loss of $19,000 in property tax revenue represents 4X of totaltax revenue.

Conducting Park Aequi si tion Impact Studies

We found that a broad range of information is needed to assessthe full impacts to local governments of converting open spaceland into parkland. At a minimum, the following information isneeded: �! a defined acquisition boundary; �! a detailed landuse plan; �! a clear time frame of development; and �! data ontour~st spending. He have found that often such information isnot available when an assessment of park acquisition impacts isundertaken.

Illustrating the information problems were the cases of DelNorte County and the City of Laguna Beach. Both governments facea lack of data on important economic events in their region. Wefound little reliable information on tourist spending or localemployment. Thus impact assessments in practice often cannot becomplete with the technical and economy tric methods cited in theliterature.

Given the limited funds and information, impact assessmentat the local level will need to rely heavily on local knowledgeand estimates. This can be done by understandiqg the dynamicsof park acquisition costs and benefits. The examination of thedifferent kinds of impacts and levels of effect surrounding parkacquisition and development, discussed in this paper, sets theframework for a site analysis. At the least, local officials gainan understanding of wliat impacts need to be measured, and at bestthe likely outcome in net costs or benefits can be establishedusing available quantitative data combined with reasonable assump-tions and guesswork.

Use of Analysis

!Je hope that the information provided will be useful i n adecision-making context at both the county and state levels. Inliartic«lar, advocates of acquiring more parkland can utilize thisanalysis to lay down policies that reduce local costs where theycannot be avoided. Tliis can be done only by understanding theunderlying economic causes of negative effects and the most effec-tive sources of compensations. For county officials and others op-posed to further park development, our results could be of use ininitiating a process of negotiation and debate based on soundeconomic grounds.

INTRODUCT ION

Parkland acquisition and development is a popular program.Most people want natural vegetation and landforms preserved andwish to see recreational opportunities expanded. Public action atthe Federal, state, and local level is responding to voter prefer-ence for more parks. But acquisition and development of a specificpark appears to impose more costs and bestows more benefits on thelocal citizens than upon the voting population.

Too often, due to lack of attention to local impact issues, thecosts and benefits of park acquisition accruing to 1ocal governmentsare ignored. Anticipation and evaluation of these impacts can stim-ulate project designs to offset costs and enhance benefits.

The California Coastal Pone Conservation Commission recommendednearly 200 sites to be considered f' or acquisi tion for preservationand recreational development. Local governments liave become worriedabout the increasing public ownership of land. This report is aresponse to the staff of the Coastal Commission, who expressed con-cern about this issue.

In this analysis we reviewed the literature on local impactassessment for techniques which had been used successfully. Nedesigned a framework addressing the major issues in order to guidethe use of these techniques in an actual evaluation of impacts.Finally, we applied the framework and appropriate techniques in twocase studies of proposed park projects.

It is our hope that the framework developed here can be usedby any local government or interested party to better anticipate thecosts and benefits of a proposed park development. With this under-standing, projects can be modified so as to reduce or offset costsand enhance benefits.

Part One, Cliapters I tlirough IV, describes tlie framework wedeveloped. Part Two consists of Chapters V and VI and presents twocase studies using the frariework.

I'n our research on impact studies we found three niajor policyissues implicit in all cases: effects on the local private economy;effects on the local public economy; and effects on the amenities ofthe local area for residents.

Three sources of impact stemming from park projects cause theseeffects: pre-emption of existing use, site development and relatedactivities, and the results of visitors coming to the park and thearea.

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PART ONE: ANALYTIC FRAMEWORK AND MEASUREMENT

CHAP1ER I. A FRAMEWORK FOR ANALYSIS

1.1 State of the art

The range of studies we reviewed consistently lacked systematicconsi deration of the costs and benefits to local governments frompark development. Our findings suggest that inattentiveness to theissues, rather than a want of techniques for measuring impacts, wasthe reason for ignoring these costs and benefits.

In order to assess the current state of the art, we gatheredpark impact studies from. the California Department of Parks andRecreation and the National Park Service. He conducted a literaturesearch using the Vniversity of California at Berkeley library system,and contacted fifty state park and recreation departments. Thestudies we selected for review all addressed economic impactsthrough the use of techniques, and did not rely solely on personaljudgments. An annotated bibliography of the twenty studies thatwere selected for review is contained in Appendix B: "AnnotatedBibliography of Park Impact Studies."

Table 1. presents a summary of the techniques employed instudies selected for review. A few studies used more than onetechnique.

Table 1: Techniques Used in Park Impact Studies

Extrapolationof Existing

Trends

Comparisonwith

Other Area

gionalonomic!el s

Surv

Number oStudiesTechniqu

In our research in impact studies we found three major policyissues implicit in a'jl cases: Effects on the local private economy,effects on the public economy, and effects on the amenities of thelocal area for reswents. Three sources of impact stemming from parkprojects cause these effects: pre-emption of existing use, si tedevelopment and related activities and the results of visitors comingto the park and the area.

Within each iesue area each source of impact has directlocal effects and indirect sometimes regional! effects. Figure 1describes this conceptual framework in terms of the following dis-cussion.

We specifically mention amenity changes throughout this paperto assure that this important aspect of park development is notforgotten. We will, however, concentrate our efforts on estimatingthe economic effects of park development -- effects upon the localpublic and private economies.

1.2 Sources of~Im act

The importance of each source of impact will depend upon con-siderations briefly discussed here.

P � P i Prepresents changes brought about by the interruption of activitythat occurred at the site prior to park development, such as openspac'e activity, commercial, or industrial development. The relation-ship between parks and geographical conditions is important in deter-mining the opportunity costs attributable to the development andacquisition of public parks. Alternative uses -- such as privaterecreational development, fisheries, agricultural activity, miningand forestry -- are likely to compete with the government's desireto deve1op a par k.

The conversion of an economic activity to park activitymay not always mean that it is lost to the local private economy.Forgone activities might be displaced to another site within theregion. 1!evertheless, where the activity moves to another region,or where the local business cannot afford moving and new start-upcosts, the activity can be lost to the local community. For ex-ample, in Del Norte County, a nieat processing business was completelylost due to park acquisition when the proprietor could not afford tomove to another location.* In such cases there will be �! a di-rect effect the loss of income and jobs from the pre-empted use!,and �! indirect effects on the pri vate ecc nomy i.e. loss of otheractivities that served or were stimulated by the pre-empted land use!,and �! effects on the local public economy loss of tax revenue!.

There will be effects on the amenity of the area due toremoval of unsightly activities or beautification of open spaceland.

*Information gained through interview with Assistant CountyPlanner, Oel Norte County, 1iay 6, 1975.

FIGURE I: ANALYSIS FRAfiEWORK

5ECTOR OF JIIPACT!ORCE5 OF IMPACTPOTEMTIAI. EFfECTS

sDirect

Indirect

I.ocal Economy

IE-EMPTIOIIDirect

Direct

Local Amenities � Displacement of' existing services--

Shift in demand for service toother areas

I ndirec t

DirectLocal Private EconomyConst. ruction of park on land

I.ocal Economy-Operation of park

fry OIMENT I ocal Public EconomyConstruction of park Construction licenses, permit,etc., revenue.

Direct

Parking meter revenue, entrancefees, etc.

Direct

Operation of parkIndir ect Increase in value of surrounding

property and tax revenue.

Gain in visua'I and recreationservices

D ii'ec'tLoCa'I AmenitieS � OperatiOn Of Coinpleted po rk - �- IndirectProperty value changes

Incur-ased revenue to loca'Ibusiness

Oi 1'ec t

LnCal Private ECOnOn1ySpending in and Indirecta ro Und pa rk

I n c a 1 EcOnomy

Local Public EconrmySpending in and � -- - � -- -- -- � Directaround park

Sales tax revenue, other taxrevenue such as gas and room tax.

J IIDR5

Physical presence inand around park In rease in cost of publicservices due to congestion.

Iocal Amenities Physical presence in Directand ~round parkIncrease in congestion androrsuetition for piibl ic sar vices

J.oca'I Private EconomyDisplarement of industry-on land

Local Publ ic EcononiyDisplacement of taxableactivities

Indirect

Direct

Indi rect

I o s s o f em pl oymen t

Loss to supporting'Ioca'I industries

Loss in property tax revenue

Loss in business tax. etc.revenue

Loss of services, gain invisual amenity if uglyactivity removed.

Gain in temporary employmenti nf IOv1 Of pur Cha S ing farconstruction.

Gain to supporting local industries.

Gain in perma nent employment

Gain to supporting lccal industries.

Pegional reve; beration ofI.ourist dollars spent multipliereffect!, some reduction of touristsat other parks in the region.

b. Site Develo ment and Pe1ated Activities: Theopening of the park itself and the development of any park-relatedfacilities such as concession stands, motels, and boat ramps bothwithin the park and in the surrounding area!, affects the localpublic and private economy. The development of a park and supportfacilities are important sources of regional impact, because theydirectly affect incomes, emp1oyment, and government revenues. Theextent of this impact depends on the type and level of park use.

The quality of a park, as well as the demand for its use, isaffected by the nature of the support- facilities. Often the avail-ability of external support facilities inf1uences visitor use; gasstations, i»ote1s, access routes, restaurants, entertainmentopportunities, and other facilities outside the park site al1 playa part. The development of new support facilities due to parksi te acti vi ties wi 1 1 in turn depend upon the existi ng supply ofsuch activities and upon the expected leve1 of park use.

It is difficult to identify the demand for a particular facilityprior to park development. That being the case, external facilitydevelopment is not likely, at, least until after the park's initialconstruction.

This si tuati on amounts to a reciprocal relationship in whichdemand for parks depends in part upon the external facilities,and development of these facilities depends on park attractivenessand level of use.

The development of internal and externa1 facili'ties affectsthe local public and private economy through constructionexpenditures, employment increases, licenses, and the like.Operation of these facilities also affects employment and spendingin the area.

c. Ltisitors IIyacts: This source represents changesbrought about by the drawing of visitors to the new area. The numberof new visitors, as opposed to transfers from existing parks, willdepend upon the differences in distance from urban areas, thecongestion levels at the parks, the quality of the facilities,and the type of activities offered in each park. Generally, anew park built closer to an urban area will be i»ore appealingthan oIder parks i n poorer locations. Shifts i n demand to thenew si te will eventua11y create enough congestion to offset theadvantage. It is important to distinguish transfers of' visitorswi thin ttie same region f'rom new visitors so that these wi11 notbe counted as a new source of incor»e. A»y 1osses that »iayresult at old sites within the region due to transfers must alsobe considered.

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Dpg~New visitors spend money. This affects the local private

economy by increasing revenues, It affects the local public econ-omy by generating sales tax, property tax and service fees revenues.New visitors al so take up space on roads and at public faci l i ti es,imposing costs on local residents.

1.3 Effects of Ac nisi tion and Oe~veio ment

The sources of impact discussed above create direct- and indirect.effects on the local private economy, local public economy, and theamenity of the area for residents'

a. Direct Effects: Direct effects are changes in employ-ment levels and revenues to the local public and private economyand changes in amenity directly attributed to park development andacquisition. Indirect effects are brought about in a region due tothe respending of tourist dollars and the incomes earned as a resultof changes in employment.

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b. Indirect Effects: Indirect effects also includechanges in amenity resulting from changes brought about by park de-velopment, i.e., more commercial activity near the park.

In order to assess the economic impacts resulting from parkdevelopment and acquisition, quantitative and qualitative measuresof each source of impact. must be developed. The resulting effectsare then estimated. First the direct effects on the public andpri vate economies are estimated, and then through the use of mul-tipli ers i ndirect effects and the reverberations on the regionaleconomies are developed.

Changes i n ameni ty, while not measured, will be discussed ona case-by-case basis. Such changes must be considered when assess-ing the costs and benefits of park acquisition and development tolocal residents.

In Chapters II and III we suggest methods that measure dif-ferent park impacts. These methods range in complexity andaccuracy. A full impact analysis measuring the economic effectsoften requires more information than is available at the local levelsof government. Given the limited funds and time available at locallevels, some of these measures cannot be taken. Usually, local govern-ments have no data with which to assess regional reverberations, and noinformation on property value changes in surrounding areas. Situa-tions may arise where the park is not yet acquired and the acqui-sition boundary or the type and level of activity is undefined.At best, an assessment of the direetio3i and range of impacts ofpark acquis~tion and development can be deve'Ioped. The techniquesinvolved in a limited impact assessment requi re on-site visi ts, adetailed land use plan, data on tourist spending and local employ-ment, and a specified time frame.

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CHAPTER I I. MEASURING DIRECT ECOl'IOMIC IMPACTS

The techniques used to measure the direct effects of parkacquisition and development are discussed in this chapter. Theeffects include: impacts resulting from pre-emption of existingactivities, impacts resul ting from development of the park areaitsel f, and impacts resulting both from new visitors to the areaand from visitor transfers.-

2.1 ~Pre-em tice

a. Dis lacement of rivate use

Determining the impact due to pre-emption for the actualacquisition site requires knowledge of the local area, i.e.,whether the previous use was actually pre-empted or simplydisplaced to another location in the vicinity, the value of theexisting uses of the acquisition site, etc.

It is also ir»portant to measure employment displaced by thepark acquisi tion. This impact will depend on current uses ofproposed park lands and the possibility of transferring the eco-nomic activities to other areas in the region.

of taxable useb.

The local jurisdiction loses property tax revenue when a siteis acquired for park development. Losses are incurred when thelands are purchased by the state or federal government, becausepublicly-owned land is tax exempt. The amount of this loss willdepend upon the types of' uses or potential uses the park displacesGrazing land is less valuable than corrrrrier.cially zoned land. Thetrue value of tire losses is the land's taxable value in its bestalternative uses. Thus, depending upon the land's present use orpossible uses, the losses can vary greatly, Park conversions havegenerally followed three patterns: forestry to park RedwoodNational Park!, agriculture, ranchland, and crop to park PointReyes!; public use, military to park San Onofre!.

The property tax loss as a direct resul t of park acquisitionis generally a permanent loss of annual tax revenues. The grosscost excluding other benefits! to the jurisdiction is the presentvalue, over some years, of the annual tax loss. However, it shou'Ida iso be rioted that, although the lands are tax exerrrpt, some stateand federal agencies provide in-lieu payrirents to compensate forthis tax loss to the local gove! nElcnts.

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2.2 Dev~elo ment

a. Chan es in ro ert value

Several variables influence such property value changes, suchas the size of the park, demand for park use, and distance fromurban areas. tn order to alleviate the problems created by theinterplay of the variables, a regression technique has been devel-oped by Knetsch."* This procedure is used to determi ne the generalpattern of expected land values if the anticipated park is con-structed. A similar technique is used to determine the expectedland values if the project is not completed. The differencebetween the two aggregate values is the park's economic impact.

Specifically, regressions are computed for two geographicareas similar to that of the proposed park: one with and onewithout a park. The regressions express the value of land as afunction of distance from the park, the property's topography,amount of leisure time, nearness to urban centers, type of improve-ments, and other variables incorporating local characteristicsthat are thought to influence property values. A regression isthen computed for the similar area without an existing park withsimilar predictor variables but without, of course, distancesfrori the park. The difference in property values representsthe expected impact of the proposed park.

levelsb. Churl

'Hhen a park is constructed it wi 1 I have three employmenteffects: a! employment of local and nonlocal constructionworkers, b! employment of local and nonlocal park employees, and c! indirect employment effect throughout the local communitythrough spending and re-spending of tourist dollars.

"A Cape Cod study found a 20% increase in property value due topark development. See Appendix.

*The measurement technique developed i n this section is derivedprinlarily from Jack L. I:netsch, "The Influence of PeservoirProjects on Land Values," Journal of Farm Economics, Vol. 06,iIo. 1, February 1964.

Development of a park can increase the value of neighboringproperty due to increased demand for aesthetic or tourist businessuses. This can in turn affect the public economy through i nrreasedproperty tax revenues. Determining the effect that park developmentis likely to have on surrounding property values can be complicated- !any of the studies reviewed show an increase in overall propertyvalues due to the development of nearby parks.*

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Employment of local construction workers will depend upon thepolicies of the park's funding agency. It is reasonable to expectthat construction funded by a local agency will employ primarily]ocal personnel, assuming that the local labor market can providethe necessary skilled labor, For parks funded by federal and statemonies the situation may be different. Often these agencies deter-mine contracts based on competitive bidding from contractorswithin and outside the local region. If the proposed park isre]ative]y large, these contracts are like]y to be awarded to largernonlocal contractors because no pool of large construction firmsexists in most rural areas. Direct employment of park employees,such as gate keepers, attendants, and rilaintenance personnel, isdependent on the policies of the funding agency.

When estimating employment, it is usefu1 to compare emp]oymentin similar parks. As plans for the proposed park become moredeve'loped it will be easier to predict employment levels.

As should be expected, it is difficult to predict these directemployment effects without having detailed knowledge of the localemployment market, of state, federal and local policies and of thesize of the park. Employment estimates may best be made by informedloca] sources such as chambers of commerce or county p1anningdepartments.

rvices and feesC.

Other fisca1 mechanisms must be considered in addition totax revenues and losses attributable to park acquisition or devel-opment. Internal and external park facilities require utilitiesand other support services, including sewage, garbage, utilities,water, roads, fire, police, and general administration, riiany ofwhich are provided by local government or other public agencies.Hook-up fees and monthly service charges for these services willin some cases be greater than the costs, resulting in a net increasein focal governmental income. In other cases, it will cost thelocal agencies more to provi de the servi ces than they recei ve i nincome, resulting in a net loss.

There may also be local fees generated by the park, such asadmission fees, business licenses, building permits, boat licenses,vehicle fines, parking meter col]ections, and other court fines.It is not clear whether, on balance, revenues will be increased asa result of these col] ections. Often the revenue resulting fromcharges for current services, firies, and forfei ts depends not on]yupon the number of people visiting a site, but upon the enforcementlevel of the agency as well. Additioria] costs to local governmentsinclude the loss of sources of revenue s uch as removal of meteredparking spaces or loss of building permits since sites for con-struction may become park lands.

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2.3 Visitor I~macts

Visitor expenditures attributable to parks have an importantdirect impact on the local economy. Me will later see how theseexpenditures also have important additional indirect effects. Inorder to calculate these effects, the total expected vi si tationfor a park must be determined, and estimates of expenditures pervisitor must then be made.

i si tati on

It is difficult to measure the demand for park use prior todevelopment. A number of interrelated factors are involved, in-cluding the population surrounding the park, the types of recre-ational experiences avai lable within the park, the quality of thefacilities, the availabi'lity of other recreational sites, areasocio-economic factors, availability of externa1 support facilities,and the amount of congestion created within the park. Techniquesused to estimate demand include: �! use of data from parks withsimilar attributes, �! various forecasting models, and �! surveysof expected use. In any event, adjustment must be made for possibletransfer of visitation from other existing parks. Estimates shouldalso be made into the future.

"Similar Parks" Method. The Corps of Engineers has useda "similar park" method to estimate the level of recreational usefor reservoir developments.* ! n so doing, the Corps avoids thedifficulty of determining the relationship among factors discussedabove. Its method of estimation entails finding an area with attri-butes similar to the proposed area, measuring its range, and adjustingthe use figures to reflect differences between the area used and theproposed park."* The weakness of this technique is that the re-searcher must find a similar park and determine which adjustmentsref1ect park differences.

"U.S. Army Corps of Engineers, "Fstimating Initial ReservoirRecreation Use," Plan Formulation and Evaluation Studies,Recreation, October 1969.

**For example, a coastal day-use-only facility may be proposed inan area to provide 50 picnic sites. To estimate demand, a similararea is found say, 10 miles up the coast with 100 picnic tables!and a survey is taken of its use. With the results of the surveyshowing an average of 1000 visitor hours per week, and the knowl-edge that the proposed facility wi11 only have 50 tables, use ofthe new facility is estimated to be 500 visitor hours per week,

Forecastin Model s. Modeling techniques have relied uponempirical estimates of the interrelationship of factors influencingrecreation for a given area, along with supply and demand modelsfor the region. Various statistical models using linear regression,such as those used by Brewer et a'I. �968!, have been developed tomeasure the importance of factors influencing recreation.* The use-fulness of the statistical techniques is limited, however, by themechanics of performing the regression. The researcher must findquantifiable measures of use, socioeconomic factors, and otherfactors and must determine which mathematical form best representsthe relationships.

Attempts to design mode1s of recreation systems have centeredon the use of existing visitation patterns to predict future trends.Such models are developed in terms of travel time to recreationsites from urban popu1ation centers and frequency of out-of-statevisi tors. One s uch system is the Parks and Recreation InformationSystem PARIS! used by the California Department of Parks andRecreation.** This system includes travel times ~ to various regions,a breakdown of geographic types for regions geo-pieces!, and thesupply of recreation facilities for each region or geo-piece.

Such systems are limited by their failure to include nieasuresof congestion and quality of the facilities. As a result, they mayprovide accurate relative rankings of hypothetical demand butinaccurate measures of absolute levels of use.

Survives of E~x ected Use. Survey methods- have beensuggested to determine the demand for recreation in a given area.When using such techniques, care should be taken- to include anunderstanding of the "costs" of recreation use. A survey partici-pant may state that he would attend a new facility without fullyconsidering how long i t will take him to travel to the park, orwithout considering how crowded the park will be, etc. l

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Adjustin for Visitor Transf'ers. The process of estimatingthe numbers of visitors that would have attended parks within theregi on but instead use the new faci1 i ty, invol ves the same predic-tive techniques as used in estimating total demand. Three differentprocedures are: f'ind a similar park development and survey thevis i tors to determine preferences; attempt to bui 1 d model s to simu-late such transfers; and survey visitors at existing parks in theregion to determine their expected use of the new facility.

The di fficul ty of finding a similar park in a region with thesame supply of recreational activities often makes this approachimpractical. t

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The survey of visitors jn existing similar parks is a commonlyused technique in the literature surveyed see Chapter 1!. Althoughjt may sometimes be difficult to find an existing similar park,"this technique is usually the easiest and 1east expensive method ifa recently completed expenditure study can be f'ound.

c. ~Chan es in~the rivate econ~oe

The impacts attributable to park deve1opmient depend on thetotal level of use at the new facility and the transfer of use frompreviously existing facilities in the area. By employing estimatesof use, transfer of use, and visitor expenditures, we can calculatelocal income impacts. TIie direct income impact of a new developmentjs less than the tota'l spending by those visiting the new facilitysince 'some of the spending and use! would have occurred elsewherejn the area had the new park not been deve1oped. This is a transferjn demand and does not represent new income; such transfer amountsneed to be subtracted from the total projected income. To do so,additional estimates of park use and expenditures for the area arenecessary before the new facility is developed.

The estimation process is summarized as a series of steps:

l. Estimate use of the new facility and transfer of usefrom old facilities.

2. estimate visitor expenditures for the new facility aswell as average visitor expenditures prior to park devel-opment.

3. Calculate the increase in ~egional income attributableto the new park as: total predicted use x predictedexpenditure level! � prevjous expenditure level x numberof transfers!.

250 visitor days$5.00 per visitor day$2.50 per visitor day100 visitor days

Total predicted use:Predicted expenditures'.Previous expenditure level:Number of transfers:

Ior example, prior to a new park's deve1opment, use and spend-ing are found to be 1000 visitor days per year averaging $2.50 pervisitor day. Use and expenditures at the new facility are estimatedto be 250 visitor days per year averaging $5.00 per visitor day.Of the 250 visitor days, 100 visitor days are estimated to have beencounted in the original 1000 visitor day use estimates; these repre-sent transfers in demand. Park impact is estimated to be:

Direct ~im act = �5D visitor days x $5,DD per visitor day! $2 ~ 50 per visitor day x 100 visitor days!

= $1250 - $250= $1000

This is the direct impact on the local private economy.

d. ~Chan es in the Public E~conom

With an influx of tourist dollars spent by park visitors,p�blic, revenues will i ncrease i n proportion to the local share orpercentage of the sales tax. Increases in revenues will dependupon the types of goods and services that visitors purchase. Somep> oducts are not taxed e. g., groceries! and other i tems are subjectto other taxes e.g., gasoline tax!. The local share of these taxesvaries by area.

Lodging taxes and gasoline taxes can become substantial localrevenue generators. Vany local regions 'levy an ad valorem tax on»otel and hotel guests. This tax is technically known as a transientoccupancy tax, but is»ore commonly called a hotel room tax. Totalincreases in income wi 11 be equal to the number of hotel and motelguests multiplied by the tax rate.

Gasoline or fuel tax revenues are generally di vi ded betweenstate, local, and federal levels. These tax revenues are oftenconfined to hi ghway trust funds earmarked for maintenance andconstruction of new roads. Since fuel use is proportional toadditional road use, these taxes can compensate for increased road»aintenance costs attributable to park use. Nevertheless, it isdifficult to determi ne whether this additional revenue will balanceadditional local costs without a thorough study of local highwaymaintenance and the gas taxes received by the local area.

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References

Boyet, W.E. and Tolley, G.S., "Evaluating Recreation Benefits fromVisitation Prediction Equations: Comment," American Journalof A ricultural Economics, Vol. 5O, No. 2, May 1968.

Brewery, Durwood and Gi llespie, Glenn A., "Effects of NonpriceVariables Upon Participation in Water-Oriented OutdoorR i ." i 8 I fbi dVol. 50, No. l, February 1968.

California Department of Parks and Recreation, PARIS system describedas a result of an i nterview with Willima Emrie on April 4, 1975.

Clawson, Marion and Knetsch, Jack L., Economics of Outdoor Recreation,John Hopkins Press, Baltimore, 1966.

David, Elizabeth L., "The Use of Assessed Data to Approximate SalesValues of Recreational Property," I and Economics, Vol. 44,No. 1, February 1968.

David, E1izabeth L., "Lakeshore Property Values: A Guide to PublicInvestment in Recreation," Water Resource Research, Vol. 4,No. 4, August 1968.

Epp, Donald J., "The Economic Impact of Recreational Water ReservoirDevelopment on Land Use, Business Fnterprises, and Land Values,"Agricultural Experiment Station, Pennsylvania State University,Bulletin 764, June 1970.

Hal1berg, M.C. and Schutjer, W.A., " Impact of Water RecreationalDevelopment on Rural Property Values," American Journal ofFarm Economics, Vol. 50, No. 3, August 1968.

Knetsch, Jack L., "The Influence oF Reservoir Projects on Land Values,"Journal of Farm Economics, Vol. 46, No. 1, February 1964.

U.S, Army, Corps of Engineers, Estimating Initial Reservoir Recrea-tion Use," Plan Formulation and Evaluation Studies--Recreation,Technical ReportP2, October 1969.

CHAPTER I I I ~ I" EASURING IN01RECT ECONOMIC IZPACTS

In two steps, one can estimate t,he magnitude of benefits in termsof taxes, income, and employment. First, the direct benefits of recre-ational development are quantified as discussed in the previous chap-ter. Then, indirect benefits are calculated by multiplying the directincome attributed to the park by an appropriate multiplier. The mul ti-plier concept is developed in this chapter. This concept provides thegroundwork, for three types of economic models that have often been usedin empirical park impact studies: economic base models, input-output>,>Ddels, and from-to models.

3.1 i"Jul tipl iers--Economic theory uses the regional and macro-ecoflomic concepts of imports, exports, savings, and consumption to de-rive a local or community income multipier. This multipier is then usedto calculate the increased income that tourist spending will create inthe economy.

l henever any part of "imported" dollar or, income created from out-side the region of study enters the regions its impact will be grea terthan the dollar itself. To see this, envision a tourist dollar enteringa regional economy. Suppose the dollar first arrives at a local hotel.Part of that dollar, say, 404, goes to pay for items imported into theregion e.g., paint, carpeting, light bulbs, etc.!, but the other 60>tgoes to pay for local employees' labor and local products e.g., lumber,foodstuffs, etc.!. The 404 or 40K! does not help to increase the "localproduct" since that money provides for income outside of the region inquestion. The 40$ portion is thus called a "leakage." But the other60$ is re-spent within the region, as the employees buy food, shelter,clothing, entertainment, etc. Again, some of -this 60't is "leaked" outof the region when purchases of goods imported from outside the regionare made. Suppose that of the 60't remaining, another 60%, or 36't, isspent on local products, again inducing more local income. From thelocal i>icome derived from that 36>' expenditure, another 60% may be re-p»it localIy, that is 60K of 36>t, or 22$. This process continues until

tt>e original dollar dissipates co>»pletely.

From this process of re-spending one can see that the original>'filar has a greater indirect impact than the single dollar spent. Based

dn assLlmption that 60K of each portion of the original dollar is re-on local goods and services, we can calculate the total regional

i pact. That is:

+ 60'X of $1 x 605 of 60' of Sl +

rou>iding to the nearest penny,

100 + .60 + .36 + .22 + .13 i .08 + .05 +

"c' '-». by continuing the above process, is equal to $2.50.

This calculation can be simplified considerably by using a mui «-plier concept. Me can call the proportion of each locally respent d»1«the "marginal propensity to consume local]y" or HPC . Knowing the valueof the MPCL allows us to compute the multiplier, which is defined as'-

- MPCL

In the above example the YiPCL was 60K, or .6, so that the multiplieris:

1 12.5.

Knowing the value of the multiplier we can easi1y calculate the to41regional impact of imported dollars by multiplying the dollars spentby the multiplier. Thus, with a know1edge of the direct income attri-butable to park use, we can calculate the total income effect as thetotal direct income mul tipl ied by the mul tiplier.

But first we need a method of determining the value of the mul ti-plier. This can be determined through the use of the three economic,:models described below: �! economic base theory; �! input-output:-.~dels; and �! from-to models.

i,'hen time constraints or da ta avai1ability prevent the estima tionof a multiplier spec ific to the recreation sector of the local economy,a range of likely effects can be developed by using multi pliers foundin existing studies of other areas. Those studies we reviewed Appen-dix A! which estimated multiplers for recreation sectors found a rangein values from 1.2 to 2.

Recreation mut ti pliers are influenced by the availability ofservices within the local area e.g. gas stations, lodging, restaurants!and the size of the area under consideration The larger the area orthe more services available to tourists and focal residents, thelai'ger the recreation multiplier is likely to be.

3.2 Fconomic Base Models--I rom the brief explanation of' howthe multiplier works it should be clear that calculation of the directeffect {e.g., number of tourist dollars spent! does not fully accountor the economic impact of recreation on the local economy. Calcu-

»tion of the secondary impact income created from the original spend-:ng! requires the construction of income, and where needed, emp1oymentul tipliers. In this section these are estimated by the use of

"conomic base theory.

Cconomic base theory provides a i elatively simple mode1 of the'.':'o "y The model allows one to determine local income and employ-

' t effects created from sources of' income coming from outside of the-':V e.g., tourist spending!. The model is more general, and thus

' -s c'~st1y, than the inore sophisticated input-output and froc-to model s-

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Nore accurately, the total increase in personal incomeattributable to recreation expenditures is determined by:

PTR = K' ~ ~BR

An example of how the process works wi]1 prove useful at thispoint. To simp] ify the par titioning of basic and nonbasic income wefirst divide the economy into independent sectors, such a s agricul-ture, manu fac turing, retail trade, s erv ices, commuting, etc. Thenumber of sectors wi]1 depend on the diversity of the economy. Next,we divide persona1 income for each sector' between basic and nonbasic'Income. Some sectors produce goods for both local consumption nonbasic! and exports basic!. Partitioning the income for eachsector thus requires an informed observer.*

For the purposes of this simp] ified example, we have assumedeconomy has on]y three sectors: agricul tur e, finance, and re-

creation, with to.al income divided as follows:

Ba sic Income Nonbasic Income Total Income

$50, 00010, 00070, 000

$Q10,00050,000

AgrFin

Rec

$60, QQQTot $]30,000

With this data now partitioned we can compute the income multipliers.

70 QQ 1.86 mul ti pl ier 1$130, 000To ta 1 inc me

Tota1 ba s ic i ncome

This multi pl ier is called the "comiiunity multipl ier" because itrepresents the community�' s entire economy the agriculture sector, thefinance and insurance sector, and the service sector all combined! .Wi th this mul tip] ier we can now calculate the estimate of the totalimpact of recreation spepding on the region ' s personal income.

*The most common method for doing so i el ies on the use of "locationquotients.' These methods are developed in both Ticbout and Gani son

I et's assume a new park is built and as a r s 1 t, touri st spending from outside the region! increases by $10,000. To calculate the totalimpact we muti ply ] .86, the mu'I tiplier, by $]0,000, giving us a totalimpact of $]8,600 on the local co~munity.

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3.4 Base Model and lofti lier

The effect of recreation expenditures on local employment mayalso be calculated with the use of multipliers.* The concept be-hind this emPloyment multi Plier does not however, corresPond exactlywith the income multiplier. An extension of the income analysiswould result in calculating the employment multiplier as the ratioof total employment to basic employment. Unfortunately, this willlead to an inaccurate, i f conceptually correct, multiplier. Alarge component of basic income is property income and transfer pay-

in many studies these components make up about 30K of thetotal basic income!, but these sources of income provide for verylittle or no basic employment. Thus, while basic income represents

reasonable measure of the economic base of a region, basic employ-ment does not.

To get around thi s problem we can calculate an employment mul ti-plier as the ratio of basic income export! to nonbasic local! employ-ment. That is.

E=BINE

2 1 r BI dBIwE NE2 - NE1 ~NE dNE

where E is the employment multiplier, BI is basic income, NE is non-basic employment, and AE is the incremental or marginal employmentniultiplier.

The marginal employnient multiplier thus represents the impact ofan additional dollar of basic i ncome i.e., tourist spending! onnonbasic employment- Another interpretation of the multiplier is theamount of basic income that is required to provide one nonbasic job.

The more relevant data available, the easier the study will be tocomplete. The information needed depends on the units of analysis,which can be in terms of employment, sales, value added, or personalincoiiie. Personal income was used in the preceding example and isrecommended. The dollar units are easy to iiiterpret, and once the datais accumulated i t is easy to work with� . Unfoi tunately, this data issometimes hard to collect. State income tax returns would provide

'I or an example of the use of eiil!loymunt Illul tip'liers see the Mt.Painier Olympic National Park Study cited in Appendix A.

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excellent source, but are usually confidential. Hare commonly,surveys are used to determine the income levels and divide industriesbetween the basic and nonbasic sectors.

3.5 In t 0 t t Hodels

In the development of the economic base model, economic unitshave been defined as either basic "exports" or nonbasic "local pro-

While useful, this tends to limit the ~odel to broad clas-sificatiorIs that provide estimates of an average multiplier. Withthe use of an input-output model, o»e cari expand the analysis toseveral sectors, determine their interplay, and derive multipliereffects for the individual sectors as well as the community multi-plier!.

These individual sector multipliers are of particu'lar interestif one defines the sectors to meet rvsearch needs -- in this case arecreation multiplier is derived using a recreation sector. Thus,use of the input-output model provides the analyst with the ability todetermine the impact of recreation development on individual industriesas well as the community as a whol e.

To develop an input-output model one must col lect informationori: those industries or sectors of interest and importance in theregion e.g., recreation, agricul ture, retai1ing, manufacturing,local government, etc.!; the interplay of their services within thecompuriity; the demand for their services from outside the community exports!; and inputs brought into the community imports!.

Once the data is obtained, a dollar-flow matrix is developed toshow the interplay. The columns represent purchases between sectorsand imports inputs! while the rows represent sales between sectorsa»d exports outputs!.

A simple illustration will clarify the method.* In this examplethree sectors represent the economy: agriculture, recreation, andlocal government. Information on sales a»d purchases betwee» thesesectors in the region as well as imports a»d exports for these sectorshas been col'lected and compiled into the dollar-flow matrix as follows:

* Fxample drawn from William A. Strang, Recreation and the Local< onomy, University of Wisconsin Sea Grant Program, 1 970 .

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Agri . Reer. Local TotalGvt. Exports Outputs

1. Agriculture2. Rec rea ti on3. Local Government

130 1910 14

13

Imports 30,Total Inputs 190

]40140

90 20140 l30

This matrix shows chat the agricul tural sector sold 50 units toother agricul tural industries, 10 to rccrea tion industries, and 130units to exports. Reading down, it purchased 50 units of agriculture;�puts, 30 units of recreation inputs, 80 units of local governmentinputs, and 30 units of imports.

The proportion of total output for individual: sectors can bederived from the dollar-flow matrix. This proportion, call ed a tech-nological coefficient, is produced by dividing each sector's purchasesof inputs each cell! by the total dollar input for that sector column total !. Finally, a matrix of direct and indirect coefficientsis derived mathematically by taking the inverse of the technologicalcoefficients -- most simply done using a simple computer algorithm.

In the above simplified example, the inverse of the matrix ofcoefficients is:

1 2

1. Agricul ture2, Recreation3. Local Government

l . 25.40.65

.301.05

.20

.05

.551.40

Total flul tip1ier 2.80 1.55 2.00

Reading the table, one sees that column total s provide estimatesot mul ti pliers for each sector. For every dollar of direct recreationsales tourist expenditures!, the recreation sector receives theoriginal dol'Iar plus an additional 5id due to direct turnover direct»ei efit! while agriculture receives induced benefit of 30' and local'!overnment receives an induced benefit. of 20t. The total mul bit terfor recreation the benefit to the local econolqy for each dollarspent on recreation! is $1.55, the sum of the direct and inducedeffects. The community gains $1.55 for each $1.00 of tourist expend-i «res. The comunity multiplier, as determined in econouiic basetheory above, is a weighted average of the three-industry mul tiplierswi "n weights being the current sales.

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Employment mul tipliers can be developed using average monthly

There are significant differences in the availability of datafor use in the construction of input-output models. An effective~odel requires more detailed information than is usually availableon the fl ow of do 1 1 a rs between sectors . Primary data sources surveys!are often used to develop this information on purchases from andsales ta other sectors. Yet such surveys may be confusing to thosebeing surveyed; they often have some idea of their sales but less ofa notion about their inputs. Personal interviews or follow-up phonecal]s are used to minimize this problem. Vse of surveys .then candetermine fairly accurate information proportions of inputs and outputs

sector. Even so, surveys usually give complete informationon the total volume for the sector. Publ ished information is used todevelop such control total s, supplementing the survey data.

3.6 From-To ltodels

The from-to model is similar to the input-output mode'l butreduces data requirements by following output flows only. It issimp]er than the input-output model and has been successfully used.*

The development of the from-to made'l follows the input-outputmode] closely in the transfer of dollar flows to trade productioncoefficients to multiplier estimates. The main difference, however,

the use of sales data alone to develop the dollar-flow matrix.That being the case, our previous example in a from-to format be-comes:

TotalO~ut ut1 2 3 Exports

Sal es50 10 -- 13030 -- 100 1080 40 10

CD

l. Agricu1ture2. Recreation3 . LOCal GOVernment ~ ~

190

140130

Derivation of coefficients occurs as proportions toa»d direct mul tipliers as colurln totals. total output

Sales impact, income impact, and emp1oyment impact can beP"..animated using relevant data. As in the input-output model, primary

incompl ete information generated in the use of surveys, an estimateof the total sales for each sector is necessary. Such control totals

provided from aggregated secondary sources.

The from-to model has an advantage in that estimates of purchasesare not required. The ~rinc~ia] disadvantage of this formulationis that it eliminates a means of cross-checking row and column totals.

g.7 Summer

ps methods of estimating regional impact, the economic base, ode], input-output, and from-to models can be compared in termsof their assumptions, re1evance to particular needs, data require-ments, cost of development, and technical level.

p]] three mode'ls are susceptib]e to the fundamental problem ofze]ecting the appropriate region. l

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In terms of data requirements and costs, it is seen that theinput-output model and fram-to model rely extensively on surveytechniques to generate the initial dollar-flow matrix and requireaccess to computer facilities to handle the amount of data and toperform matrix transformations.

The comparisons between different techniques can be summarizedas follows;

Economi c base Input-output From-to

Measures CommunityImpact

Yes Yes Yes

Measures IndustryImpact Yes Yes

TechnologicalExpertise Required Moderate High

Cost ! ow High Moderate

It. may often be the case that none of the models discussed canbe applied to develop estimates of recreation multipliers. Prac-tical constraints such as limited time for analysis, lack of funds,or personnel are likely to make it infeasible to apply the techniquesreviewed. In such cases, the best approach is -to use an estimatedrange of multipliers to assess the sensitivity of the results.

8yof the chosen sectors. If such data is not readily avail abl e or taocostly to develop so that mul tipliers from other studies are usedin the development of the model, the specific estimates providefalse accuracy.

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References

From-to Models

l;a] ter, Robert J . and lord, William B., "Measurement of the Impact ofRecreation Investments on a Local Economy," American JournaI ofAgricultural Economics, Vol. 50, No. 2, Nay T968.

yal ter, Robert J., Estimati~nLocal Secon~dar I~macts of Water-BasedRecreation Investment.U~sin Interindostr~Ana]ps is, University'of Wisconsin, Water Resources Center, June 1967.

I�>ut Output ivlodel s

Goldman, George and Makazawa, Anthony T., A Technical Guide to theConstruction of County Input-Output Models: The Santa BarbaraCase, Division of Agricultural Science, University of California,leaflet 8001, November 1974.

,;�lter, Robert J ., Fstimating Local Secondary Irr~pacts of Water-BasedRecreation Investment Using Interindust~r Analysis, Univers ityof Wisconsin, Water Resources Center, June 1967.

Strang, William A., Recreation and the Local Economy, University ofWisconsin Sea Grant Program, 1970.

Base tconom~t

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CHAPTER IV COM8INING ISSUES, IMPACTS AND EFFFCTS

Returning now to our original framework, we will outline theprocedure for cal cul ating the net res ul ts of park aequi si tion anddevelopment. The issue areas, you wi'l l remember, are: effects on the

private economy, effects on the local public economy and effectson the ameni ties of the area for- residents. We have discussed thesources of impact directly and indirectly affecting the issue areas.Since many of these measures" are approximate it is i mportant thatthey be listed plainly for subjective evaluation.

4.1 Local Pri vate Econom~

a. Pre-emption

Di rect effects: Determine if commercial acti vi ty was displaced from thefocal economy. If it was merely relocated within the area, countno effect. If the acti vi ty was lost, est~ mate employee incomes lost.Fstimate direct company expenditures in the local economy lost.

Indirect effects: Apply area multiplier for incomes and expenditures lost.

b. Development

Direct effects: Determine employment effects of' construction workers,and park personnel. Determine total fees expected and total increasesin cost of services.

indirect effects: Deterniine property value changes using regression see page 12!. Apply mul tiplier to employment effects.

c. Ui si tors

Direct effects: Determine visitation and expenditure per visitor,adjusting for transfers.

'-nAirect effects: Apply area multiplier to total visitor expenditures.

4.2 local Public Economy

a. Pre-emption:

Direct effects: Calculate losses of property tax base due to publicpc» chase and mul tiply by the existing or expected tax rate.

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b. Development

Direct effects: Calculate increases in service or hook-up taxrevenue. revenue from construction licenses etc., increases in thecost of providing services due to park development.

indi cnoniic indicators the fiamework deve1olicd here cal >'esi

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-equi re rigorous analytic techniques that, are usual ly not access ibl eto the analyzer . I f these factors are not analyzed ~ a t 1 east theyshould be no ted.

a. Pre-emption:

Direct effects: Subtract for development of open space if local o pinionAdd for removal of commercial ac.tivity which is visually

djsp'leasing.

Devel opment

Direct effects: Subtract for construction noise. Add for beauty ofthe finished park and for use gained by focal residents,

l»direct effects: Add for increased property value due to park development.Visitors

p j I ect f feet s: Subtract for congest ion, jjoi se, etc.

The total impact of park acquisition and development must takeinto account all three sources of irjpact and all levels of iijjpact,as they affect loca1 revenues and costs,

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PART TWO: SITE ANALYSIS Of PARK ACQUISITiON IMPACTS

The four chapters of the first section have reviewed in a generalway the impacts of park acquisition and development. In this section,we illustrate the benefits and costs of park acquisition at the locallevel . The two si tes studied are Lakes Earl and Talawa Del Narte County!and Central Bluff, Laguna Beach Orange County!. Del Norte County is ai-ural, remote area on the north coast, while Laguna Beach is a suburbanbeach community between Los Angeles and San Diego. Map 1 indicatestheir location in California,

The differences in geographic and economic setting are relevant inassessing the impacts of park acquisition because of the di fferent levelsof tourist potential. Oe»erally, remote rural areas cannot expect newtourist dollars to offset losses in property tax revenues. The resul tis that state action, iii the form of in-lieu payments «nd park facilitydevelopment is emphasized as tlie most likely method of offsetting localconomic losses in Del Norte. In ! aguna Beach, however, the 1oss of

local i-evenue due to park acquisition can be largely though not entirely!offset by new tourist spending, after facility development.

Hut the ability to offset loss of revenue from park acquisitionis not only related to the urban-rural nature of a site, or its futuretourist potential, Another key factor is the private alternative landuse at the site. In Del Norte, the liypothetical acquisition of thei akes is not likely to result in development, On the otlier hand, theCentral Bluff at laguna Beach js an attractive site for residentialand commercial development. At both sites the present laiid use isexpected to remain the same in the iiear future.

The site analysis that follows applies the niethodology developedin Part I. We found, liowever, tliat there are severe constraints oninformation about the local private and public economy that prohibita tliorough economic impact ana'lysis. Tiius, the site studies presentediiere illustrate the application of a unified framework for

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I-IAP E: LOCATION OF LAKE EARL and LAGUNA SEACIR CASE STLIOIES

CHAPTER y: LAKE EARL SITE ANALYSIS

The Cal i fornia Coasta] Commi ssion's Plan proposed that LakesEar] and Talawa in Del Norte County be acquired as a wetlands wild-] I fe refuge site. The area for acquisition contains 4,500 acres.The I ake Earl area currently is open space, marshland with farmingand agricu]tura] activity occurring in the adjacent north and north-east areas. To the west. of the lake is a large undeveloped sub-'>vision cal 1 ed Pacific Shores. Al though there have been many PlanSfor development since the Pacific Shores subdivision, the area;s un] ikely to be completely built-out. Future land use at the»te depends upon the status of the lake and the economy of the

IIap 1 shows the I ake site and the surrounding area. Nap 2the boundary of the proposed acquisition.

5 ] The Economic Setting of Del I'~orte Count@

Two aspects of Oe] Norte County's economic situation are im-,,rtant in assessing the impact of further park aCquisition. ]! The] ~'baited acreage of private lands and 2! the importance of tourism.;,t present, 75% of the total acreage of the county is in public land,n,Ier Federal and State jurisdiction. This means that the conversionof ~; ore private 1 and into pub] ic ownership wil 1 reduce the tax baseof the county without greatly altering the recreational attractive-

ss of the area . In short, Oel Norte County already has many parks,b»t lacks a large amount of private land .

The county's remoteness from metropolitan areas and its Iimitedate 1 and use comb inc to produce a r eg i onal economy charac ter i zed

by a dec] ining population and a I imited industrial mix. Tabl e 2i I lustrates the components of the l3e] Norte County Economy. The twor- > jor sources of employment are wood products and tourism.

"AP 2: PROPOSEO AC UISITION BOUNDARY, LAKl S EARL and TALAHA

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Table 2: Sources of Employ!ent in Del Norte County

1940 1950 1960 1go ry

c Industries

total s 672 1 786 3379 28

ther Industries 714 1 280 2841 24

Empl oyment 1 386 3066 6220 52

Del Nor te County water supply and was tewproposal comprehensive pl an.

Another factor affecting the economy of the area is the rol e ofCrescent Ci ty. Crescent Ci ty, with a population of 3000 covering22 square mi 1 es !, is the only incorpora ted area in Del Nor te.* Thec i ty i s at sea 1 evel and borders on the ocea n. I ts cl ima te i s cool�2 degrees mean temperature! and moist. The weather bureaureports that Del Norte and Northern Cal i fornia in general ! i srula t i vely more rai ny and cloudy tha n Southern California . Forinstance, whi 1 e the normal precipi tation in Eureka i s 39. 58 i nches,l.i s Angel es receives 1 2 .04 inches of ra in. A! so, Northern6 il i fornia averages six cl ear days in July, wlii1 e Los Angel es,:i irages tt>elve.

Tlie physi ca 1 se tt ing has certain economic impl i ca i, i ons . Thecl i ",ate, for instance, does not provide a strong incentive for~r cond home or retirement home devel opm< nt. The popul ation 1 evelh ~s remained low because of the city' s isolation and its locationin a remote county. Further, the ri sks of floods and tsunami events~u~ d be expect ed to def] ate interest in 1 i ving there. Crescent Ci ty's devastated by a tsunami foll owing the Alaskan earthquake in 1969.l- >«of migration to the area does appear to be cl osely tied to employ-uut opportuni ties.

'"''cause Crescent Ci ty i s i;he only incurpor a ted jurisdiction 1 ni

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Table 3 shows the demographic trend of a declining populationof the city and county.

Table 3: Population of Crescent City, Del NorteCounty and Cal ifornia, 1940-1976

Crescent City Del Norte County Ca I i fornia

1,36319406,907,387

10,586,2231950

196015,717,204

?1,133,0001976

Source: California Statistical Abstract, 1970.California County Fact Hook, 1976-77

5. 2 Local Pri va te Fco nom~

Although it is possible to quantify the effect on the privateeco[iomy of the area, the da ta i s hard to eva quate. Ci ti zens are,i f fected di fferential ly by tourist do 1 1 ars, etc., counted i n theprivate sector. Me assume that effects in the public sector are every-one's concern. Effects of acquisition and development of t ake Earlon tIie private economy of Del Norte are far I ess significant thanthe effects on the public sector.

a. Preemption: The Lake Farl site is zoned exclu-: ive agricul tural and would probably remain that way if acquisition''R»ot take place. Part of the land is already used for recreation: ld nature appreciation, The remaining area is largely marshlandt ii cate»ed by frequent flooding. The agricultural use dispiaced byp» k development wil1 not have any significant effect.

b. Develndmnent: 7he lake site is now managed by the'""1 "orte County Parks Department. One boat ramp and few facilities

There is limited road access. Potential changes include' road access, more boat ramips, water-fowl nesting sites, and con-

s."sslons.

>~r'-'

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C 0 p

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Q c t e f f e c t s: T h e e s t i m a t e d a mo u n t o f $1 0, 0 0 0 i n p r o p e r t y t a xrevenue lost represents a significant percentage of the to~a~runty property tax base ~ Of the total taxes collected by theunty government, property taxes represent 1 9$ of the total

The expected revenue loss of $4,000 will reduce the'perty revenues by 8~. A larger reduction of 20K would accMPany

of $] 0,000 due to acquisition.

For Del Norte County, the. implementation of the Coastal,---�,ission's acquisition plans is an important economic event.-;«n the depressed economy of the area, there is likely to be", ;stance to further reductions in the public/private land mix;� the county, and possiole reduction in the County tax base.

Given the possibl e costs of acquiring I ake Farl and Tal awa,;t wctu]d benefit both the state and local officials to PinPoint�; re costs are likely to occur and ways of minimizing their effects

the county tax base. The essential question in Del Norte»>ty centers upon how to offset the reduction of reven~e resul ting

;rom the removal of property tax revenue which is certain to occura nd which may require e i ther inc rea ses i n county taxes or i n-1 ieupi>.-,ents by the state government.

combination of pol icies in managing and developing the parkafter acquisition could reduce the above costs of acquisition to;he 1ocal government, Three scenarios below depict the type ofjp] icies that tend to offset park aequi sition costs

Scenario One - Expanded facility development leads to greateroffsetting effects.

With the addition of more boat ramps and new access routes,built by state funds, the lakes become more attractive forvisitation. In turn, the effect on surrounding land use,especially in Pacific Sliores, is improved.

Sc< nario Two - Ful 1 facility development.

Hith full facility development, the lake site can cause asignificant increase in visitation to make private investmentin the lake area more likely. Increased visitation will inturn yield more hunting and other user fees, Concessionsmight become economically attractive and surrounding propertyvalue would increase. Full facility development stimulatescost-reducing effects in the long run.

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scenario Three � Yisitation as the key component of offsettingcosts.

In this case, facility development at the lake site is limitedto the current state of minor access routes and on-site boatramps. Yisitors will be attracted to the lakes only if theyare interested in nature viewing and limited fishing. Presently,the use of the lake is primarily local, and tourists are notfamiliar with the site. fhus, the offsetting effects to costsare 5Illall when visitation is the main source of reducing costs.

b. Development: If facility development at the lakesite is limited to the current state of minor access routes and on-site boat ramps, visitors will be attracted to the lakes only -if they

interested in nature viewing and limited fishing. Presently, theJ eof the 1 ake i spr imar i ly 1 ocal,and tour i stsa re not f ami 1 iar�l,h the site. The effects would be SII!al] .

F> panded faci 1 i ty devel opI lent woul d 1 ead to greater v i s i tati on, !g tjleI-efore more effect on ttle local public economy. With the~ edition of more boat ramps and new access routes buil t by state

the lakes would become move attractive to tourists, making�rivate investment in the lake area more likely.

:> Irect effects: More hunting and other user fee reveliue. Possibl er ionue from concession leases.

t;.direct effects: Increased property tax revenue resuiting from therIse in surrounding property value, especially in Pacific Shores .

c. Visitors: Tourist spending golieral ly helps to~I>:;~>el!sate for the revenues lost by the county. Usually tourist dollarss; eliding is preclII;hid Rue to 1 imi ted tiIile and data.It is, however, reasonable to assuIIIe Ihat in Del f,'orte County thein.i.s Farl and Talawa will be low.

The reason for the low visitation potential of the lakes is'-< -" vlildlife preservation character of cul.relit planning. 7he lake'i

that facility development is not 1 ikely to occur at the intensitynecessary to bring many new visitors to the area. The number oftourists needed to offset the tax base losses of' $4,000 to $10,0001 s very difficult to achieve given the large number of substitutesin the area for recreation.

AIso, most of the recreational uses at the site nature viewingand camping! do not involve much visitor expenditure. Any dollarsI ike1y to be spent in relation to visiting Lake Earl wil 1 probablyoccur in the home area of tourists. Except for food and gas,tourists attracted to Lakes Earl and Talawa do not have manyopportunities to buy goods. In addition, if any shopping activityrelated to visiting Lakes Earl and Talawa does occur, it willprobably be in Crescent City.

An example of the 1imitation of tourism as a source of off-setting revenue can he sc en in the fo11owing estimate. Let usassume iLhat the property tax loss is $1 0,000. The county salestax rate is 1.5%. This means that the amount of taxable touristspending necessary to offset the property tax revenues lost mustbe the Fo] 1owing:

County Sales New Tourist Property TaxTax Rate Spending Revenue Lost

1.55 Se

-4 5-

d Propertynue Lost

Number of

Tourists

0000

19,6047,50

It would be quite difficult for Del Norte County to generatesuch an increase in tourists. In part this is due to the numerousrecreation sites in the county. Other ..tourist spending benefitsmight result, however, if fakes Farl and Talawa beche more attrac-tive to tourists.

In short, the general conditions of the area, its economicstructure, and its numerous recreational facilit.its =ake a newpark in the county unlikely to attract enough new visitors to offsetproperty tax losses.

5.4 Amenities for Residents

Since, as we have seen, it is unl ikely that v 'sitation wi ] 1 besuf f ic i ent to compensate 1 ocal res idents for their 1 oss in taxrevenue, it is important to cons ider other ways t:;=g may be com-pensated. The increase in amenity of an area caus=" by parkdevelopment is a form of compensation. The cost;; his amenity canbe ca I cul a ted the monetarily uncompensated 1 oss -' ax rev enue,etc.! but its value is much harder to determine.

Dcvc 1 opmen t:

Direct effects: Those people who 1 ive near the, - pay cxperie»cegains or losses in perso»al a»ieni ty from the par~ - =.- nding on tIieirattachment to the area as i t cxi st s today.

Indirect eff ects: Pi o per ty owners around i he p; r -,' I 1 proba b] yexperience an eco»omic gain as property values r': = -ue to parkd ev el oj!ment .

a. Preemption: The area be ing cons i de- = for aequis i t ion is now practical ly unimproved ..'ta jor reer=-..i onal develop-ment would preempt the wi1 dl i fe-refuge serv ice th- -. -ea»ow prov ides.Nevertheless, some improvement, such as bl inds fc,:-tter wil dl i feobservation, could e»ha»ce this asp~ ct of the are= . The level ofdevel opment wi l 1 de termi »e whether there i s a 1 os:. -o res i do»t s ofthe existing amenities of the site.

c. visitors:

Direct effects: It is unlikely, as we have discussed, that visita-tion ould increase to the point of reducing amenity for residents.But the more development occurring at the park, the more likely issuch a decrease in amenity.

Indirect effects: It is possible that local residents may benefitfrom road improvements, etc, intended to encourage vis'itation-

5,5 gummar of Potential Costs and Benefits of Park A~c uisit>onin Norte County

Oel Norte County presents a case where the costs of park ace»sition are difficult to offset without state aid . The remoteness ofthe region, its rural character, and low visitation make ~ddition~lrevenue from visitation unlikely. Facility developm nt and upgradedhunting opportunities would improve the prospects of an economicreturn from visitors. In lieu pay»ents by the- state would probablybe necessary to offset the loss of property tax revenues. Table 5depicts the impacts of park acquisition in f.he i.ake Farl area .

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Table 5: The Impacts of Park Acquisition in I ake Earl

Estimated Effects of Acquisiton AlternativesAequi si tionImpacts

Acquisition andfacility development

Aequi si tion and nodeveloprrrent

!On Site Changes

Introduction of boat-ramps and huntingaids

Development andsupportfacilities

No change in presentstatus of lake

Uisitor Demand Visi tation to site

unlikely to i!re! ease

Frtip 1 oyrrien t None

Ititpacts in SurroundingA! eas

Uisitation to lake

area and spendirigrtril ikely to itic! ease

Visitatiori and

tourist spending

Prop rty value . h«!i ges

Data not available ons lie nd! ng !

I 1 i� 'I r e c t I c 0 ll 0!r1 1 cRr ve! hera ti ons

I oca I P even! reExpenditui-esC Iia nrges

St«te iri- Ii! u a~sist«nce.Nei> Revenue.'!it! 'i os

>I!'>,000 iri,; i iuil I jItr.n tyi. ix 1 os�' es .

i IC'iv Reve!i!tie

I osses

No s i gri! f ! ca!it el! «!ige,s 'I i r~ h t, i n c rr. «s e i nassr ss d value of 1 mdrvi th view of lake or Ii! ect access to park.

Vi s i ta ti on l.i kelyto increase onlyafter improved hunt-ing opportunities

Small c Ii a!i ge s i n em-p1oyr!tent at si te dueto nerr supervisorype r s o!in el

Vis!tat!Orl to 1«kearea arid spendingunlikely to inciease-shopping and spendingare rtsrtal ly horttet>ased for huntirig andnature vieiving activi-ties

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Ref erences

Assembly Bill No. 2133, Assemblyman Keene, Z'Berg and Craven,April 22, 1975.

Assessment Roll, pages 74-79, 115, 275-278e Del Norte County.Bio1ogical Reconnaissance of: the Lake Earl Area, Del Norte County, Ca.

Edward T. Helley, Robert Averett, U.S. Dept. of Interior,Geological Survey Water Resources Divis~on, Hen1o Park.

Communi tg Economi c Prof i 1 e for Del Nor te County and Crescent Ci ty,Calif. prepared by the Del Norte County Chamber of Commerce,'JuTy 1 974, 4 pages pamphlet.

Del Norte County Chamber of Commerce, De'l Norte County Pointsof Interest, pamphlet.

Del Norte County Services Area No. 1, Birtsch-Ocean View ImprovementDistrict, Environmental Impact Report, Sewaje Facilities Plan,February 1975, Winzler add It'e1ly, Consul ting Engineers andI abora tori es, Fureka, Cal i f'ornia, 39 pages.

Draft Environmental Impact Report on Re~iona] Transportation P'lanfor Del i!or te C~ount, County of Del !lorte Local Trans-portation Commission, 134 pages, January 1975.

Final County Budget Del Norte County Fiscal Year Ending June 30,1975.Geology and Groundwater Features of the Smith River Plain, Oel

I'/orte County, Cal ifornia, U.S. Geo1ogica1 Survey, Water SupplyPaper 1254, B. Williams.

I'natural Resources of I ale Farl and Smith R~ver Delta, State ofCalifornia, Dept. of Fish and Games, Coastal Wetlands SeriesHo. 10, March 1975.

Preliminary Assessment, Recommendation and Report on Activity,pertinent t~oetting building permits in Pacific SI>ot esSubdTvision, Del Norte County, done by the Pacific ShoresProperty Owners Association Plalters Engineering, Civi 1Engineering Consultants, Suite 250, Reno, ltevada 89503!.

Rl'giona1 Transportation Plan for Del Norte County, Del NorteCounty Toca1 Transporta ti on Commi ss ion, with Ca 1 tra ns,District 1, W.Z. Ilegy, District Director, Apri1 1, 1975,130 pages.

Revised Overall Economic De~yelp ment Plan, Del Norte County,March 1 975, 269 pages.

Shorelines, Pacific Shores Proger~t Owners Association SummerI' ewsletter 1975, Editor, Robert Hatley, 4 pages.Soi1s of Coastal Del Norte Coun~t , California, J . NcCaughlin,

Rank Hannaders, U.C. Davis, Dept. of Soils and Plant Nutrition'1966.Taxable Sa1es in California Sa1es and Use Tax, State 8oard of

Equalization, Sacramento Statistica1 Research and CoastalDivision, 1974.

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CHAPTER VI: I AGUNA BFACH SITE ANALYSIS

6.1 The Economic Set~tin of~la ona Reach

Laguna Beach is an urban beach area 45 miles south of «sAngeles. The Pacific Coast Highway traverses the length of t"ecity. In the main beach area of the City of Laguna Beach is asite containing 5 acres of privately-owned land adjacent to thebeach. Generally known as. the Beach Bluff, the site is recommendedfor possible acquisition.~ h4p 3 illustrates the Reach Bluff acqu>-sition site relation to the City of Laguna Beach. The parcels to beacquired are depicted in /tap 4.

Laguna Beach is an attraction for tourists. A recent studyof tdurist use of Laguna Beach notes that:

Laguna Beach is highly patronized during the warm sui»i»ermonths by persons utilizing the new beach recreationalfacilities. The close proximity of downtown shopping areasto the beach make the entire downtown area compl etely acces-sible to beach users.**

The sane study indicates that 3,800 to 4,200 persons used thebeachfront during a peak weekend,

Three important annual events attract addi tionaI tourists toIaguna Beach. These are �! the Festival of the Arts, �! the SawDust Festival and �! the Art Fair. The Festival of Arts has anattendance of 250,000 persons per year with average daily attendanceof 5,500 persons. 10,000 persons were recorded on the peak day.The total attendance at the Sawdust FE stival reaches 297,000 persons,and the Art Fair attracts 60,000 persons.

Alttiough tourism is important to Laguna Beach, its prnciseitipact in costs and benefits cannot be ascertained with the limiteddata available at the city offices or the I aguna Beach Chai»ber ofCol»merce. Only a general characterization of the iniportance oftourism i s ava i 1 a bl e.

The popu1arity of ! aguna Reach contributes to local revenueswhile imposing costs of congestion on residents. A recent surveyi n Laguna Beach indi cated that a la rge proportion of touri sts. shoprather than just play while in 'Laguna, contributing to local publicand private economies. Sixty percent of loca] parking was found tobe of non-resident origin.

*From California Coastal 7one Conservation Co»i»ission, "Reco~>mendedCoastal Properties for public reci cation." �976!

"* Laguna Reach Parking Study, Hi lbur Si»ith 5 Associates, 1975.

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PAP 3. BRACH BLUFF dC UISITIGN IN lAGUflA P,F ' ~

l'AP 4: PP,RCELS CONSIDEREO EOR AVQUISII ION IN LAGUNA BEACH

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Revenue data does show a seasonal variation. Three revenuesources--sales tax, transient occupancy tax, and parking meterrevenues--show large seasonal variation in receipts, as shown inTable 6.

Tabl e 6: Seasonal i ty in Laguna Beach Revenues

qua r ters 1 975-76 Sea so na 1 i ty

24K 244-21.3X

37

16

18

TOTAl REVENUES 5 633, 53 7 $21 0,1 61 f 87, 605

Source: Finances Office, City of Laguna Beach.!

The table illustrates that the July to September quarter hasthe greatest amount of seasonal i ty for the three tax sources 1 isted.The difference between peak periods and off-p, ak periods representsapproximately the degree of i!!ipact tourists liave on that revenuesource. Based on this method, touri sts contribute 175 of the sal estax revenues, 64K of the Transient Occupancy Tax and 46$ of theparking meter tax rove!iues.

T!ie analysis of the parking in I aguna Beach also found that adeficiency of almost 100 spaces exists within tlie 5 commercia]blocks fronting Pacific Coast. llighway zones 5, 6, 9, 10!."This lack of space causes traffic buildup, congestion, and otherdisadvantages such as the loss of tour ism and rev! nues. The lossof spending resul ts from the inability of a percentage of travelerspassing through Laguna Beach to stop, l.ark, and shop, It is sig-nificant that the proposed park acquisition site is locatedadjacent to the congested area

"Hil liam Smith and Associates, page 31

April 1 to June 30

July 1 to Sept 30

Oct 1 to Dec 31

Jan I to f larch 3l

Transient Occu- Parking MeterSales Tax pancy Tax Revenue

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In contrast to the Lake Earl site in Del Norte County, the I, p~acquisition process in Laguna Beach involves several acquisitionand development alternatives. Based on interviews with local govern-ment officials in the Laguna Beach area and our own evaluation ofthe site, the most 1ikely acquisition a1ternatives appear to be-'�! park acquisition with no deve1opment and �! park acquisitionwith commercial-recreation development.

Alternative �! involves acquiring the area and convertingthe bluff into an open space site with little deve1opment. Thegoals of such an alternative would be 'to preserve the naturalvegetation and extend the visual and pedestrian access of theLaguna Coast.

-Alternative �! entails public acquisition fo11owed by smallcommercial shops operating on public 1and through lease backarrangements. An important li»iitation to commercial developmentis the 1ocal zoning law prohibiting structures Iiigher than 36 feet.

If acquisition does not occur, the most likely direction ofprivate land use at this site is e~ther a! status quo privatehousing or b! commercialization e.g., smal1 shops, restaurants,i»ixed with private housing!. This analysis uses the status quo asthe basis of »Ieasuring the opportunity cost of' park acquisition,{i.e., the income the local government would be giving up to havea park at the site!. The effect of this method is probably to under-estimate the revenues the City of Laguna Beach could be receivingin the future if' no park acquisition occurred. Such underestima-tion is due to the tendency of assessed value of homes to increaseover time.

The categories and range of impacts likely to result from theacquisition alternatives wi11 be further discussed in the twofollowing sections .

6.2 Local Private I:.conomy

a. Preemption: The current use of ttie acquisiI,ionsi te is res ident ia I . Publ i c purchase woul d reduce the hous ingstock of the area by several units. Tiiere would be no ei»ploymentor expenditure eff'ects on the 1ocal economy»y.

b. Developiietit: The impact of park development andoperation on 'Iie private economy depends on which design al ter-native is selr.-ctr-d,

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Py~ Direct effects: It is possible that open space use wi11 requiredemo1ition of structures by a 1ocal contractor. No other invest-ment and little maintenance would be required.