Loc Lockwoods oods Folly olly In Inle let: t: A A Fi Fiscal - PowerPoint PPT Presentation

Co Constru structing cting a T Term rmina inal l Gr Groi oin n on on Ho Hold lden en Be Beach ch at t Loc Lockwoods oods Folly olly In Inle let: t: A A Fi Fiscal scal Persp spect ectiv ive Andy Co An Coburn, urn, Resear earch/ h/Gradua Graduate Faculty lty Associ ciate e Dir irect ector or, , Progra gram m fo for the Study dy of f Developed loped Shorelines elines (PSDS) April Western ern Ca Carolin olina a Univ iversit sity ril 29, 2016

Prog ogram am for for th the e St Study udy of of De Devel eloped oped Sh Shor orelines elines (P (PSD SDS): S): • Applied ied co coas astal al envi vironmen onmental al ma manag agement/ ment/scien cience ce resear earch ch center ter • Es Establi ablished shed in in 1 1985 5 at at Du Duke Univ iver ersi sity/Mo ty/Moved ed to to WCU in in 2006 • Id Identify tify an and develop elop responsi onsible ble sci cience ce-based based co coas astal al ma manag agemen ment t stra rategie gies s that at promot mote the long- term sustainability of our nation’s developed eloped shorelines lines

So, o, wh why y a t term rmina inal l gr groi oin n in Ho Hold lden en Be Beach? ch? 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 OLDEN B EACH -- H OLDEN B EACH -- CH E AST E ND CH E AST E ND ND S HORE ND S HORE RE P RO RE P RO TION E NVIR TION E NVIR AL I MPACT S TATEM AL I MPACT S TATEM ENT ENT ROTEC ROTEC ECTION ECTION IRONM IRONM NMENT NMENT ENTAL ENTAL TEMENT TEMENT

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…What’s That Go Gonna ’ Get You?

Co Coas Coas Co astal astal al eco al eco cosyst cosyst ystems ystems ms provi ms provi vide vide de a va de a va a vari a vari riet riet ety ety y of y of of g of g goo goo oods oods ds an ds an and and d serv d serv rvices rvices ces ces that th th that at cr at cr creat creat ate real ate real al eco al eco conom conom omic omic ic va ic va value value lue vi lue vi via via a co a co contr contr tributions tributions butions to h butions to h o human o human man man well well ll ‐ being ll ‐ being being. being. . . These These Th Th se incl se incl clud clud ude ude e th e th the prot the prot otect otect ction ction on of on of of coas of coas coastal coastal al real al real al estat al estat ate ate e an e an and and d d on ‐ mark on ‐ mark tou tou ouri ouri rism rism sm as sm as as w as w well well ll as ll as as se as se servi servi rvices rvices es th es th that that at imp at imp mpac mpac act act t non t non market market et goo et goo oods oods ds ds an and and an d servi d servi rvices rvices es such es such ch as ch as as ae as ae aesthe aesthe thetic thetic tics, tics, s, hab s, hab abitat abitat at provi at provi visi visi sion sion on an on an and and d d oppor oppor op op ortu ortu tunit tunit nities nities ies for ies for for recr for recr creat creat ation. ation. ion. ion. Quanti Quanti antifying antifying ying th ying th the as the as associ associ ociat ociat ated ated ed be ed be benefits benefits fits to p fits to p o peop o peop ople ople le from le from om th om th these these e e goo goo oods oods ds an ds an and and d serv d serv rvices is rvices ces is ces is th is th the do the do doma doma main main n of n of of eco of eco conom conom omic omic ic va ic va valu valu luation luation ation. ation. . .

Ec Economic onomic Val alua uation: tion: Th The Dam e Damag age e Avoida idance nce Ap Approach oach • Ascr cribes bes esti timat mates es of of co costs ts to n o not otions ons of of va valu lue • Th The co cost t of of r replacin lacing g co coas astal al prop opert rty y is us used d to o esti timat mate th the be benef efits its de deri rived ed from om act activi vitie ties s th that at prot otect ct th that at prop opert rty While le th this s ap approa oach ch ma may seem m lo logi gica cal l from om a p a prop opert rty y owner’s perspective, value does not provide an ac accu curat rate e me mean ans s of of u unde derst rstanding anding de deri rived ed be benefi fits ts

Ec Economic onomic Val alua uation tion Doesn’t Work Isn’t Really Fair Because… • Th The va valu lue e of of a p a prop opert rty y ac accr crues es al almo most t ex excl clusiv sively ely to t o the prop opert rty y owner er • Co Coas astal al prop opert rty va valu lues es ar are oft often inflat lated ed by p publ blic ic pol olici cies es an and d pri rior or publ blic c ac acti tion ons s such ch as as subsi bsidized dized prop opert rty/f y/flood lood insura uranc nce, e, be beac ach h nou ourish rishment ment an and d th the co construc tructio tion n of of t term rminal al gr groi oins ns

Economic Valuation Leads To… 1) 1) An An o overvaluati rvaluation on of of vu vuln lnerable erable co coas astal al dev developm lopment ent 2) 2) An An ex exag aggeratio eration n of of pot potenti tial al eco conom omic c imp mpac acts ts to o co coas astal al mu municip icipaliti alities es an and d co countie ties s resul ulting ting from om prop opert rty y da dama mage e an and/ d/or or prop opert rty lo loss 3) 3) An An overst stat atem ement ent of of pot potenti tial al negat ativ ive e eco conom omic c imp mpac acts ts as assoc ociat iated d with th prop opert rty y lo loss 4) 4) An An in inflat lated ed perception tion of of th the eco conom omic c be benefi fits ts of of shor oreline line prot otect ction on effort forts

As a Result… Us Using ng th the va valu lue e of of co coas astal al prop opert rty as as an an esti timat mate e for th for the be benef efits its of of a sh a shor oreline eline stab abiliz ilizati ation on proj oject ct of often le lead ads s to o th the co concl clusio usion n th that at highly ghly dev develop loped ed be beac aches ar hes are wor orth th mo more th than an unde develope eloped d be beac aches, es, or or th that at th the be benef efits its of of prot otect cting ng dev developm lopment ent ex exceed d th the co cost. t. From om a a publ blic/ ic/soc societ ietal al (HA HA, co comm mmunity ity, , co county ty or or st stat ate) ) perspect ectiv ive, e, however er, , th the op oppos osit ite is al almo most st al always ys tr true.

We Believe… A mo A more e accu curat ate e me measu sure e of ho how w mu much ch co coast stal al devel elopm opment ent at- ri risk sk to sh shif ifting ting in inlet ets s is is wort rth h to so soci ciet ety y (t (the he publ blic) ic) is is th the e co cont ntributio ribution n th this is devel elopm opment ent ma makes es to mu munic nicipal, ipal, co count nty y and nd state st e ec econo nomie mies s me measu sured ed by th the e ad valor lorem em (prope pert rty) y), , occu cupancy pancy and nd sa sales es tax x reven enue e th they gen enerat erate. e. Subs bsequ equently ently, , from m a publ blic ic policy icy per ersp spec ectiv tive, e, me measu surin ring g ch chang nges es in in tax reven enue e gen eneration eration res esulting lting from m act ctio ions ns th that t se seek ek to protect ect or r rem emove e at-risk risk co coast stal al devel elop opment ment rep epres esent ents s a pragmatic ragmatic tool l for for ass sses essing sing th the e publ blic ic co cost sts s and nd potential ential its of shoreline “protection”/management strategies. publ blic ic be bene nefits