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

SLIDE 1

Co Constru structing cting a T Term rmina inal l Gr Groi

• in

n on

• n Ho

Hold lden en Be Beach ch at t Loc Lockwoods

• ods Folly
• lly In

Inle let: t: A A Fi Fiscal scal Persp spect ectiv ive

An Andy Co Coburn, urn, Resear earch/ h/Gradua Graduate Faculty lty Associ ciate e Dir irect ector

• r,

, Progra gram m fo for the Study dy of f Developed loped Shorelines elines (PSDS) Western ern Ca Carolin

• lina

a Univ iversit sity

April

ril 29, 2016

SLIDE 2

• Applied

ied co coas astal al envi vironmen

• nmental

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

• nsible

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

Prog

• gram

am for for th the e St Study udy of

• f De

Devel eloped

• ped Sh

Shor

• relines

elines (P (PSD SDS): S):

SLIDE 3

SLIDE 4

SLIDE 5

SLIDE 6

So,

• , wh

why y a t term rmina inal l gr groi

• in

n in Ho Hold lden en Be Beach? ch?

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.

• - HOLDEN BEACH

CH EAST END ND SHORE RE PRO ROTEC ECTION TION ENVIR IRONM NMENT ENTAL AL IMPACT STATEM TEMENT 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.

• - HOLDEN BEACH

CH EAST END ND SHORE RE PRO ROTEC ECTION TION ENVIR IRONM NMENT ENTAL AL IMPACT STATEM TEMENT 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…What’s That Go Gonna’ Get You?

SLIDE 9

Co Coas astal al eco cosyst ystems ms provi vide de a va a vari riet ety y of

• f g

goo

• ods

ds an and d serv rvices ces th that at cr creat ate real al eco conom

• mic

ic va value lue vi via a co contr tributions butions to h

• human

man well ll‐being being. . Th These se incl clud ude e th the prot

• tect

ction

• n of
• f coas

coastal al real al estat ate e an and d tou

• uri

rism sm as as w well ll as as se servi rvices es th that at imp mpac act t non

• n‐mark

market et goo

• ods

ds an and d servi rvices es such ch as as ae aesthe thetic tics, s, hab abitat at provi visi sion

• n an

and d

• p
• ppor
• rtu

tunit nities ies for for recr creat ation. ion. Quanti antifying ying th the as associ

• ciat

ated ed be benefits fits to p

• peop
• ple

le from

• m th

these e goo

• ods

ds an and d serv rvices is ces is th the do doma main n of

• f eco

conom

• mic

ic va valu luation ation. . Co Coas astal al eco cosyst ystems ms provi vide de a va a vari riet ety y of

• f g

goo

• ods

ds an and d serv rvices ces th that at cr creat ate real al eco conom

• mic

ic va value lue vi via a co contr tributions butions to h

• human

man well ll‐being being. . Th These se incl clud ude e th the prot

• tect

ction

• n of
• f coas

coastal al real al estat ate e an and d tou

• uri

rism sm as as w well ll as as se servi rvices es th that at imp mpac act t non

• n‐mark

market et goo

• ods

ds an and d servi rvices es such ch as as ae aesthe thetic tics, s, hab abitat at provi visi sion

• n an

and d

• p
• ppor
• rtu

tunit nities ies for for recr creat ation. ion. Quanti antifying ying th the as associ

• ciat

ated ed be benefits fits to p

• peop
• ple

le from

• m th

these e goo

• ods

ds an and d serv rvices ces is is th the do doma main n of

• f eco

conom

• mic

ic va valu luation ation. .

SLIDE 10

Ec Economic

• nomic Val

alua uation: tion: Th The Dam e Damag age e Avoida idance nce Ap Approach

• ach
• Ascr

cribes bes esti timat mates es of

• f co

costs ts to n

• not
• tions
• ns of
• f va

valu lue

• Th

The co cost t of

• f r

replacin lacing g co coas astal al prop

• pert

rty y is us used d to

• esti

timat mate th the be benef efits its de deri rived ed from

• m act

activi vitie ties s th that at prot

• tect

ct th that at prop

• pert

rty While le th this s ap approa

• ach

ch ma may seem m lo logi gica cal l from

• m a p

a prop

• pert

rty y

• wner’s perspective, value does not provide an

ac accu curat rate e me mean ans s of

• f u

unde derst rstanding anding de deri rived ed be benefi fits ts

SLIDE 11

Ec Economic

• nomic Val

alua uation tion Doesn’t Work Isn’t Really Fair Because…

• Th

The va valu lue e of

• f a p

a prop

• pert

rty y ac accr crues es al almo most t ex excl clusiv sively ely to t

• the prop
• pert

rty y owner er

• Co

Coas astal al prop

• pert

rty va valu lues es ar are oft

• ften inflat

lated ed by p publ blic ic pol

• lici

cies es an and d pri rior

• r publ

blic c ac acti tion

• ns

s such ch as as subsi bsidized dized prop

• pert

rty/f y/flood lood insura uranc nce, e, be beac ach h nou

• urish

rishment ment an and d th the co construc tructio tion n of

• f t

term rminal al gr groi

• ins

ns

SLIDE 12

Economic Valuation Leads To…

1) 1) An An o

• vervaluati

rvaluation

• n of
• f vu

vuln lnerable erable co coas astal al dev developm lopment ent 2) 2) An An ex exag aggeratio eration n of

• f pot

potenti tial al eco conom

• mic

c imp mpac acts ts to

• co

coas astal al mu municip icipaliti alities es an and d co countie ties s resul ulting ting from

• m

prop

• pert

rty y da dama mage e an and/ d/or

• r prop
• pert

rty lo loss 3) 3) An An overst stat atem ement ent of

• f pot

potenti tial al negat ativ ive e eco conom

• mic

c imp mpac acts ts as assoc

• ciat

iated d with th prop

• pert

rty y lo loss 4) 4) An An in inflat lated ed perception tion of

• f th

the eco conom

• mic

c be benefi fits ts of

• f

shor

• reline

line prot

• tect

ction

• n effort

forts

SLIDE 13

As a Result…

Us Using ng th the va valu lue e of

• f co

coas astal al prop

• pert

rty as as an an esti timat mate e for th for the be benef efits its of

• f a sh

a shor

• reline

eline stab abiliz ilizati ation

• n proj
• ject

ct of

• ften le

lead ads s to

• th

the co concl clusio usion n th that at highly ghly dev develop loped ed be beac aches ar hes are wor

• rth

th mo more th than an unde develope eloped d be beac aches, es, or

• r th

that at th the be benef efits its of

• f

prot

• tect

cting ng dev developm lopment ent ex exceed d th the co cost. t. From

• m a

a publ blic/ ic/soc societ ietal al (HA HA, co comm mmunity ity, , co county ty or

• r st

stat ate) ) perspect ectiv ive, e, however er, , th the op

• ppos
• sit

ite is al almo most st al always ys tr true.

SLIDE 14

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

• pment

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

• pment

ent ma makes es to mu munic nicipal, ipal, co count nty y and nd st state e ec econo nomie mies s me measu sured ed by th the e ad valor lorem em (prope pert rty) y), ,

• ccu

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

• pment

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 publ blic ic be bene nefits its of shoreline “protection”/management strategies.

SLIDE 15

SLIDE 16

2010 2010 2016 2016

30 30-yr yr Risk Risk Line ine

SLIDE 17

Municipality: Holden Beach Inlet: Lockwoods Folly County: Brunswick 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 Brunswick County Tax Base: $22,920,451,666 FY 2015-16 Brunswick County Tax Rate: (State Ave: .6554 Coastal Ave: .7003) 0.4850 FY 2015-16 Brunswick County Property Tax Revenue: $109,348,481 FY 2015-16 Holden Beach Accommodation Tax Revenue: $1,712,878 FY 2015-16 Brunswick County Accommodation Tax Revenue: $1,275,000 FY 2015-16 Holden Beach Sales Tax Revenue: $131,081 FY 2015-16 Brunswick 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 * * Est

Estima imate inc include ludes s mun municipa icipal l and cou county y ad valor valorem, m, occupancy y and sales sales tax

** Using a discount rate of 3% and price appreciation rate of 5%

2016 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 * * Est

Estima imate inc include ludes s mun municipa icipal l and cou county y ad valor valorem, m, occupancy y and sales sales tax

** Using a discount rate of 3% and price appreciation rate of 5%

SLIDE 22

All All IRPs 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 * Est

Estima imate inc include ludes s mun municipa icipal l and cou county y ad v valor lorem, m, occupancy y and sales sales tax

** Using a discount rate of 3% and price appreciation rate of 5%

SLIDE 23

NPV NPV Cost Cost of

• f Building

Building a T a Ter erminal minal Gr Groin:

• in: $27,425,647

$27,425,647

NPV IRP Tax Revenue Protected: $1,159,868 NPV All Tax Revenue Protected: $5,261,446

SLIDE 24

A f A fisca cal l an analysis alysis of

• f f

fifteen n Nor

• rth

th Ca Carol

• lina

ina co coas astal al co counti ties es an and d co comm mmuni nitie ties s indi dicat cates s th that at: : 1) 1) Th The co contr tributi bution

• n at

at-ri risk k co coas astal al dev devel elopm

• pment

ent ma makes s to

• North Carolina’s coastal economy is mi

minor

• r

2) 2) Th The imp mpac act t of

• f lo

losing ng prop

• pert

rties es at at-ri risk k to s

• shiftin

fting g inle lets ts is mu much ch le less s th than an perceiv ived d (inco consequ nsequenti ential) al) 3) 3) A A stra trategic gic an and d equ quitable able pol

• licy

cy th that at proa

• act

ctivel ely y remo moves es vu vulnerable lnerable dev developm lopment ent is li likely ly to b

• be th

the mo most t eco conom

• mically

cally an and d envir nvironm

• nment

entally ally sust stainable ainable

SLIDE 25

Pub ublic lic pol

• licies

icies an and d man anag agement ement strat trategies gies th that at ca can n

• ver

ercome come co common mmon ec economic nomic misper ispercep ceptions tions will ll provide vide prop

• perty

erty own wners, ers, stat ate e an and d lo loca cal l pol

• licy

icy mak aker ers s an and co coas astal al man anag agers ers with th a s a sus ustainable ainable an and eq equit uitable able strat trategy gy th that at co concurr ncurrently ently ad addr dresse esses s th the e ec econ

• nomic
• mic,

, envir environme

• nment

ntal, al, le legal al an and political litical problems/issues

• blems/issues

facing the nation’s developed shorelines.

SLIDE 26

In In or

• rder

der to as

• assess

sess th the e fai airness rness an and d ef efficacy icacy of

• f a p

a pub ublicl licly- fun unded ded shor hore e protection ection project ject - such uch as as a t a ter erminal minal gr groi

• in

n - it t is cr critical itical to

• ide

dentify ntify th the e soci

• ciet

etal al be bene nefits, fits, as as wel ell l as as th the pri e primary mary be bene neficiaries ficiaries of th that at project.

• ject.

On Only ly th then en ca can n th the e fol follo lowing wing que uestions stions be be an answer ered: ed: 1.

• 1. Is

Is th this is proj

• ject

ect rea eall lly y wor

• rth

th do doing? ng? 2.

• 2. Is

Is th ther ere e something mething el else e th that at will ll work rk be bett tter? er? 3.

• 3. Wh

Who

• sho

hould uld pay?

Sum ummary: mary: