Con onstruc ucting a a Term rminal Gr Groi oin on on Hol Holde den n Be Beach at t Lock ockwoods ods 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 of D Developed S Shorelines (PS PSDS) We Western Carolin ina U Univ iversit ity April 29, 29, 20 2016 16
Program for r the the Stu tudy of De Develo eloped ed Sho horel elines (P (PSDS DS): • Appl pplied co coas astal al e envir viron onme 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 o 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 omote th the lon ong-term s m sustain ainabil ilit ity o of our n nat atio ion’s ’s develo loped s shoreli lines
So, why why a terminal minal gr groin in in Holden en Beach? h? The Town of Holden Beach (Town) is seeking federal and The Town of Holden Beach (Town) is seeking federal and state permits to allow the construction of a 30-year state permits to allow the construction of a 30-year shoreline protection project that would serve to mitigate shoreline protection project that would serve to mitigate chronic erosion experienced along the eastern portion on chronic erosion experienced along the eastern portion on the Town’s oceanfront shoreline so as to protect and secure the Town’s oceanfront shoreline so as to protect and secure public infrastructure, roads, homes, businesses, beaches, public infrastructure, roads, homes, businesses, beaches, recreational assets, and protective dunes. recreational assets, and protective dunes. -- -- H OLD -- H OLD -- LDEN B EACH E AST E ND LDEN B EACH E AST E ND ND S HORE P ROTECTION E NVI ND S HORE P ROTECTION E NVI MENTAL I MPACT S TATEM MENTAL I MPACT S TATEM NVIRON NVIRON ONME ONME EMEN EMEN ENT ENT
Year Annual Flow NPV Cost of Intermediate Groin (Preferred 0 $5,000,000 $5,000,000 1 $0 $0 Alternative) w/ Periodic Nourishment 2 $0 $0 3 $0 $0 4 $5,000,000 $4,442,435 Discount Rate: 0.03 5 0 $0 Price Appreciation Rate: 0.05 6 $0 $0 7 $0 $0 Initial Sand Volume: ~150,000 cy 8 $5,000,000 $3,947,046 Groin Construction + Fillet Cost: $5,000,000 9 $0 $0 Periodic Nourishment: ~150,000 cy/4 years 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
So… o…Wha What’s ’s T That Gonna nna’ Ge ’ Get Y t You? u?
Coas Coas oastal ecos oastal ecos osystems p osystems p provi provi vide vide de a de a a vari a vari variety variety ty of ty of of goods of goods oods an oods an and s and s d servi d servi rvices rvices that c th that c th at creat at creat ate real e ate real e al econ al econ onomi onomi omic val omic val value vi value vi via c via c a con a con ontri ontri tributi tributi tions t tions t to to o huma o huma man man well ‐ being. well ‐ being. we we . . Thes Thes hese i hese i inc inc nclude t nclude t the the he prot he prot otecti otecti tion tion on of on of of c of c coas coas oastal oastal al real al real al estat al estat ate an ate an and and d d on ‐ ma on ‐ ma tou tou ouri ouri rism rism m as m as as well as as well as ll as serv ll as serv rvices th rvices th that that at imp at imp mpac mpac act act t non t non market g market g t goods t goods oods oods and an and an d ser d ser ervice ervice ces s ces s suc suc uch as uch as as ae as ae aesthetics, h aesthetics, h hab hab abitat provi abitat provi vision an vision an and and d d oppo oppo pportunities for r pportunities for r or recreati or recreati ation. ation. Qua Qua uantifying t uantifying t the a the a he associated benef he associated benef enefits t enefits t to peo to peo eople f eople f e from thes e from thes hese hese goods goods oods an oods an and and s d servi d servi rvices is rvices i is th is th the domai the dom domain of domai ain of of econ of econ onomi onomi omic valu omic valu valuati valuati tion. tion. . .
Econ onom omic c Valuation: ion: The The Da Damage e Avoidance e Ap Approach • Ascr cribes bes esti tima mates of of cos osts ts to o noti otions of of valu value • The c he cost of of repla lacing c g coas oastal al prop operty 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 oach may seem logi m logical f al from om a a prop operty rty own wner’s pe perspe spective, v value does n s not pr provid ide a an accurat ac ate me mean ans of of unders rstandi ding de deri rived b d benefits
Econ onom omic c Valuation ion Do Does esn’t Work rk Is Isn’t Rea eally lly Fair r Bec ecause… • Th The valu value of of a a prop operty rty ac accru rues alm almos ost e exclu lusively to the pr prope perty o own wner • Coas oastal p prop operty rty valu values ar are of often i infla lated d by p publi lic poli olicies 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 onstr tructi tion on of of termi rminal gr groi oins
Economic Valu luation Lea Leads To… 1) 1) An overv rvaluati tion of of vu vuln lnerable c coas oastal de al develop opme ment t 2) 2) An exag aggerati tion on of of pot otenti tial e econ onomi omic i imp mpac acts ts t to o coas oastal al mu municipalities an and d co counties es resu sulting from om prop operty 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 otenti tial n negati ative e econ onomi omic imp mpac acts ts as assoc ociated w with th pr prope perty l loss ss 4) 4) An inflat ated p d perception of of th the e econ onomi omic b benefits of of shor oreline p prot otecti tion on eff fforts
As a a Result ult… Usin sing t the value o of f coast stal pr prope perty a y as s an est stim imate f for the benefits ts of of a a shor oreline stab abili lizat ation p proj oject t of often le leads ads to o th the c con onclu lusion on th that h at highly ly de develop oped b beac aches ar are w worth orth mor more th than an u undevelop oped d beac aches, or or th that th at the b benefits ts of of prot otecti ting de develop opme ment t exceed ceed t the he cos ost. t. From om a a publi lic/s /soc ocietal (HA HA, c commu ommunity ty, cou ounty or or stat ate) ) perspect ective, h e, however er, t , the oppo pposi site is is almos almost alw t always tru true.
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), occu 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.
2010 2016 30-yr Risk Line
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: 0.150 (State Municipal Average = 0.4345) 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: 0.4850 (State Ave: .6554 Coastal Ave: .7003) 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
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