Con onstruc ucting a a Term rminal Gr Groi oin on on Hol - - PowerPoint PPT Presentation

SLIDE 1

Con

• nstruc

ucting a a Term rminal Gr Groi

• in on
• n Hol

Holde den n Be Beach at t Lock

• ckwoods
• ds Folly I

Inlet et: A Fisc scal al P Persp spec ectiv ive

And ndy C Cobu burn, R Rese search/Graduat ate Fac aculty Associate Director, Pr Program for r th the S Stu tudy o

• f D

Developed S Shorelines (PS PSDS) We Western Carolin ina U Univ iversit ity

April 29, 29, 20 2016 16

SLIDE 2

• Appl

pplied co coas astal al e envir viron

• nme

mental man manag agement/scie ience ce r resear arch center

• Estab

ablis ished in d in 1985 at at Duke Univer ersi sity ty/Mo /Moved ed to W

• WCU i

U in 20 2006

• Identify

fy and d develo lop p responsib ible s scie cience ce-ba based co coas astal al man manag ageme ment str strategies th that p t prom

• mote th

the lon

• ng-term s

m sustain ainabil ilit ity o

• f our n

nat atio ion’s ’s develo loped s shoreli lines

Program for r the the Stu tudy of De Develo eloped ed Sho horel elines (P (PSDS DS):

SLIDE 3

SLIDE 4

SLIDE 5

SLIDE 6

So, why why a terminal minal gr groin in in Holden en Beach? h?

The Town of Holden Beach (Town) is seeking federal and state permits to allow the construction of a 30-year shoreline protection project that would serve to mitigate chronic erosion experienced along the eastern portion on the Town’s oceanfront shoreline so as to protect and secure public infrastructure, roads, homes, businesses, beaches, recreational assets, and protective dunes.

• - HOLD

LDEN BEACH EAST END ND SHORE PROTECTION ENVI NVIRON ONME MENTAL IMPACT STATEM EMEN ENT

The Town of Holden Beach (Town) is seeking federal and state permits to allow the construction of a 30-year shoreline protection project that would serve to mitigate chronic erosion experienced along the eastern portion on the Town’s oceanfront shoreline so as to protect and secure public infrastructure, roads, homes, businesses, beaches, recreational assets, and protective dunes.

• - HOLD

LDEN BEACH EAST END ND SHORE PROTECTION ENVI NVIRON ONME MENTAL IMPACT STATEM EMEN ENT

SLIDE 7

Cost of Intermediate Groin (Preferred

Alternative) w/ Periodic Nourishment

Discount Rate: 0.03 Price Appreciation Rate: 0.05 Initial Sand Volume: ~150,000 cy Groin Construction + Fillet Cost: $5,000,000 Periodic Nourishment: ~150,000 cy/4 years

Year Annual Flow NPV $5,000,000 $5,000,000 1 $0 $0 2 $0 $0 3 $0 $0 4 $5,000,000 $4,442,435 5 $0 6 $0 $0 7 $0 $0 8 $5,000,000 $3,947,046 9 $0 $0 10 $0 $0 11 $0 $0 12 $5,000,000 $3,506,899 13 $0 $0 14 $0 $0 15 $0 $0 16 $5,000,000 $3,115,835 17 $0 $0 18 $0 $0 19 $0 $0 20 $5,000,000 $2,768,379 21 $0 $0 22 $0 $0 23 $0 $0 24 $5,000,000 $2,459,669 25 $0 $0 26 $0 $0 27 $0 $0 28 $5,000,000 $2,185,384 29 $0 $0 30 $0 $0 NPV = $27,425,647

SLIDE 8

So…

• …Wha

What’s ’s T That Gonna nna’ Ge ’ Get Y t You? u?

SLIDE 9

Coas

• astal ecos
• systems p

provi vide de a a vari variety ty of

• f goods
• ods an

and s d servi rvices th that c at creat ate real e al econ

• nomi
• mic val

value vi via c a con

• ntri

tributi tions t to

• huma

man we well‐being. . Thes hese i inc nclude t the he prot

• tecti

tion

• n of
• f c

coas

• astal

al real al estat ate an and d tou

• uri

rism m as as well as ll as serv rvices th that at imp mpac act t non

• n‐ma

market g t goods

• ods

an and d ser ervice ces s suc uch as as ae aesthetics, h hab abitat provi vision an and d

• ppo

pportunities for r

• r recreati

ation. Qua uantifying t the a he associated benef enefits t to peo eople f e from thes hese goods

• ods an

and d servi rvices i is th the domai domain of

• f econ
• nomi
• mic valu

valuati tion. . Coas

• astal ecos
• systems p

provi vide de a a vari variety ty of

• f goods
• ods an

and s d servi rvices th that c at creat ate real e al econ

• nomi
• mic val

value vi via c a con

• ntri

tributi tions t to

• huma

man we well‐being. . Thes hese i inc nclude t the he prot

• tecti

tion

• n of
• f c

coas

• astal

al real al estat ate an and d tou

• uri

rism m as as well as ll as serv rvices th that at imp mpac act t non

• n‐ma

market g t goods

• ods

an and d ser ervice ces s suc uch as as ae aesthetics, h hab abitat provi vision an and d

• ppo

pportunities for r

• r recreati

ation. Qua uantifying t the a he associated benef enefits t to peo eople f e from thes hese goods

• ods an

and s d servi rvices is is th the dom domai ain of

• f econ
• nomi
• mic valu

valuati tion. .

SLIDE 10

Econ

• nom
• mic

c Valuation: ion: The The Da Damage e Avoidance e Ap Approach

• Ascr

cribes bes esti tima mates of

• f cos
• sts

ts to

• noti
• tions of
• f valu

value

• The c

he cost of

• f repla

lacing c g coas

• astal

al prop

• perty

rty is us used ed t to es estimate t e the he benefi fits d deriv ived fr from a activ ivit itie ies that pr protect t that pr prope perty While th this ap approac

• ach may seem logi

m logical f al from

• m a

a prop

• perty

rty

• wn

wner’s pe perspe spective, v value does n s not pr provid ide a an ac accurat ate me mean ans of

• f unders

rstandi ding de deri rived b d benefits

SLIDE 11

Econ

• nom
• mic

c Valuation ion Do Does esn’t Work rk Is Isn’t Rea eally lly Fair r Bec ecause…

• Th

The valu value of

• f a

a prop

• perty

rty ac accru rues alm almos

• st e

exclu lusively to the pr prope perty o

• wn

wner

• Coas
• astal p

prop

• perty

rty valu values ar are of

• ften i

infla lated d by p publi lic poli

• licies an

and d pr prio ior pu public ic a actio ions suc uch a as sub ubsidized pr prope perty/fl flood insur uranc nce, e, be beach n ch nour urishm hment ent and t the con

• nstr

tructi tion

• n of
• f termi

rminal gr groi

• ins

SLIDE 12

Economic Valu luation Lea Leads To…

1) 1) An overv rvaluati tion of

• f vu

vuln lnerable c coas

• astal de

al develop

• pme

ment t 2) 2) An exag aggerati tion

• n of
• f pot
• tenti

tial e econ

• nomi
• mic i

imp mpac acts ts t to

• coas
• astal

al mu municipalities an and d co counties es resu sulting from

• m

prop

• perty

rty damag damage an and/o d/or r pr prope perty l y loss ss 3) 3) An overstateme ment of t of pot

• tenti

tial n negati ative e econ

• nomi
• mic

imp mpac acts ts as assoc

• ciated w

with th pr prope perty l loss ss 4) 4) An inflat ated p d perception of

• f th

the e econ

• nomi
• mic b

benefits of

• f

shor

• reline p

prot

• tecti

tion

• n eff

fforts

SLIDE 13

As a a Result ult…

Usin sing t the value o

• f

f coast stal pr prope perty a y as s an est stim imate f for the benefits ts of

• f a

a shor

• reline stab

abili lizat ation p proj

• ject

t of

• ften le

leads ads to

• th

the c con

• nclu

lusion

• n th

that h at highly ly de develop

• ped b

beac aches ar are w worth

• rth

mor more th than an u undevelop

• ped

d beac aches, or

• r th

that th at the b benefits ts of

• f

prot

• tecti

ting de develop

• pme

ment t exceed ceed t the he cos

• st.

t. From

• m a

a publi lic/s /soc

• cietal (HA

HA, c commu

• mmunity

ty, cou

• unty or
• r stat

ate) ) perspect ective, h e, however er, t , the oppo pposi site is is almos almost alw t always tru true.

SLIDE 14

We B e Beli elieve… e…

A mo more accu curate me measur sure of ho how w mu much ch co coast stal developme pment t at- ri risk sk to shi shifti ting inl nlets ts is s worth rth to so soci ciety ty (the the publ blic) c) is s the the co contri ntribut ution thi this s developme pment t ma makes s to mu muni nici cipa pal, co county nty and nd st state eco cono nomi mies me measur sured by the the ad valorem (prope perty) y),

• ccu

cupa pancy cy and nd sa sales tax revenu nue the they gene nerate. Subse bseque uently, from m a publ blic c policy cy perspe spect ctive, me measu suring cha chang nges s in n tax revenu nue gene neration resu sulti ting from m acti ctions tha that t se seek to protect t or r remo move at-ri risk co coast stal development represe sents ts a pragmatic t tool for a asses essing the the p publ blic costs a and potential publ blic c be bene nefits ts of sho shoreline “protect ction” n”/management str strategies. s.

SLIDE 15

SLIDE 16

2010 2016

30-yr Risk Line

SLIDE 17

Municipality: Holden Beach Inlet: Lockwoods Folly County: Brunsw ick FY 2015-16 Holden Beach Tax Base: $1,186,384,884 FY 2015-16 Holden Beach Tax Rate: (State Municipal Average = 0.4345) 0.150 FY 2015-16 Holden Beach Property Tax Revenue: $1,731,885 FY 2015-16 Brunsw ick County Tax Base: $22,920,451,666 FY 2015-16 Brunsw ick County Tax Rate: (State Ave: .6554 Coastal Ave: .7003) 0.4850 FY 2015-16 Brunsw ick County Property Tax Revenue: $109,348,481 FY 2015-16 Holden Beach Accommodation Tax Revenue: $1,712,878 FY 2015-16 Brunsw ick County Accommodation Tax Revenue: $1,275,000 FY 2015-16 Holden Beach Sales Tax Revenue: $131,081 FY 2015-16 Brunsw ick County Sales Tax Revenue: $18,823,443

SLIDE 18

At-Risk Properties: 150 Total Assessed Value: $14,627,880 % of Municipal Tax Base: 1.23% % of County Tax Base: 0.06% Total Annual Tax Revenue* : $128,450 NPV Tax Revenue Over 30 Years* * : $5,261,446 * Estimate includes municipal and county ad valorem, occupancy and sales tax * * Using a discount rate of 3% and price appreciation rate of 5%

2016

SLIDE 19

It is highly unlikely that an intermediate terminal groin structure will benefit all 150 properties.

SLIDE 20

SLIDE 21

Imminent Risk Properties: 32 Total Assessed Value: $3,120,614 % of Municipal Tax Base: 0.26% % of County Tax Base: 0.014% Total Annual Tax Revenue* : $27,403 NPV Tax Revenue Over 30 Years* * : $1,159,868 * Estimate includes municipal and county ad valorem, occupancy and sales tax * * Using a discount rate of 3% and price appreciation rate of 5%

SLIDE 22

All IRPs Properties: 150 32 Total Assessed Value: $14,627,880 $3,120,614 % of Municipal Tax Base: 1.23% 0.26% % of County Tax Base: 0.06% 0.014% Total Annual Tax Revenue Loss* : $128,450 $27,403 NPV Tax Revenue Loss Over 30 Years* : $5,261,446 $1,159,868 * Estimate includes municipal and county ad valorem, occupancy and sales tax * * Using a discount rate of 3% and price appreciation rate of 5%

SLIDE 23

NPV Cost of Building a Terminal Groin: $27,425,647 NPV IRP Tax Revenue Protected:

$1,159,868

NPV All Tax Revenue Protected:

$5,261,446

SLIDE 24

A fiscal an al anal alysis of

• f fifteen N

North

• rth C

Car aroli

• lina coas
• astal

al c cou

• unti

ties an and d com

• mmu

munities i indi dicates th that: at: 1) 1) The he contrib ibutio ion a at-ri risk c k coas

• astal

al de develo lopment t mak makes t to

• North
• rth C

Car aroli

• lina’

a’s c coas

• astal

al econ

• nom
• my is mi

minor

• r

2) 2) The he im impa pact of f losin sing pr prope pertie ies a at-risk isk t to sh shif ifting inlet ets is muc uch l h les ess tha han perceived ( (inco cons nseq equent uential) 3) 3) A str trat ategi gic an and d equ quitab able le p poli

• licy th

that p at proac

• acti

tively ly removes es v vulner nerabl ble e de develop

• pment i

is li likely ly to

• be th

the mos most t econ

• nomi
• mically

ly an and d environ

• nmentally

lly sustai ainab able le

SLIDE 25

Publ blic p poli licies a and nd m mana nagement s str trategies tha that t can n

• vercome

me c commo mmon economi mic mispe spercept ptions will provide property erty o

• wner

ers, s , state e and nd lo local p poli licy m makers ers and nd c coastal m mana nagers rs with th a sustainable a e and nd eq equitable e str trategy tha that t concur ncurrent ntly ly addresses the the ec econo nomic, en environmen ental, l, le legal a l and nd p poli litical problems ms/issues s facing the the na nati tion’s devel eloped sho horel elines.

SLIDE 26

In In order er to assess the f the fairness and nd ef efficacy o

• f a public

licly ly- funde ded s d shor

• re p

protect ction ion project - such as a term erminal l groin - it t is cri ritical to ident entify the the societal l benef benefits, as well a ell as the the pri rimary benef beneficiaries of tha that p proje ject. Only Only then then can n the the follo llowing ques estions be be ans nswered ed: 1.

• 1. Is

s this proj

• ject real

ally wor

• rth doin

doing? 2.

• 2. Is

s there som something else se that at wil will wor

• rk better?

3.

• 3. Who should

uld pay?

Summa mary: y: