john l. crompton university distinguished professor and regents professor texas a&m university...

Parks Can Increase Your Bottom Line and Quality

of Life

John L. CromptonUniversity Distinguished Professor and Regents ProfessorTexas A&M University

Texas Municipal LeagueHouston

October 2014

Benefits Related to Economic Prosperity

Attracting tourists Attracting businesses Attracting retirees Reducing taxes Enhancing real estate values

Business Travel

Recreation and Park Attractions in a Jurisdiction

Tourism

Opportunities for Local Residents

Visiting Friends and Relatives – Personal Business

Conference and

Convention Travel

Pleasure Travel –

Sphere of Interest

Segments of Travel and their Inter-relationship with Parks and Recreation

Recreation and park attractions NOT operated

by a public agency

POPULATIONAbility to TravelInterest in Travel

TRANSPORTATIONINFORMATION

AND PROMOTION

ATTRACTIONS

Arts Theaters, Art Galleries, Museums, Performing Groups, Music Concerts

Heritage Places Ethnic Cultural Places, Shrines/Churches, Historical Sites and Structures, Educational Instructions, Industry Factory Tours

Parks National, State, Regional, Local, Beaches, Theme Parks

Recreation Events and Festivals, Aquatic and Coastal Areas, Outdoor recreations (e.g. camping, fishing, hunting), golf, tennis, skiing, sailing, softball), Fitness and Wellness Centers

Arenas College Sports, Professional Franchises, Concerts and Exhibitions

Other Gambling Places, Cruise Ships

A Taxonomy of Tourist Attractions

POPULATIONAbility to TravelInterest in Travel

TRANSPORTATIONINFORMATION

AND PROMOTION

ATTRACTIONS

Tourism is a public/non-profit sector driven business.

AN ATTRACTION IS NOT, IT BECOMES

IT NEEDS A TOURISTA SIGHTA MARKER which provides

information about a sight

A MARKER could be a guidebook, slide show, information tablet, travelogue,

etc.

David E. Colp

Context1810 players on 133 teams participated in the tournament. All were from out-of-town. Because it was an elimination tournament, the length of time that the teams stayed in the community varied from 4 to 7 nights. 697 players’ parents were interviewed.

Financial DataIncome: Entry fees $300 x 133 $39,900Tournament costs and staff time $119,617

Net loss ($79,717)Economic Data

Total expenditures in the local area by the 1810 players and their family/friends $2,039,000Economic impact on sales $3,731,000Economic impact on income $1,162,000

Return on investmentFor each dollar invested, residents’ income increased by $14.58 (1,162,000/79,717). Facility cost $12 million; payback period to residents is 10 tournaments of this size.

A comparison of the Financial and Economic Returns to a City from an Amateur Softball Association Girls 18 & Under Class A National Softball Championship Tournament

The Conceptual Rationale For Undertaking Economic Impact Studies

FINISH START

For community residents who pay

taxes

Community residents & visitors pay

taxesTo a city council

Which uses them to subsidize

development of recreation

programs and facilities

That attract out-of-town visitors

Creating income and jobs in the

community

Who spend money in the local economy

Inflow of Revenues

Outflow of Funds

The Dallas Cowboys Football Stadium

“The stadium would generate $238 million a year in economic impact in Arlington and $416 million a year in Tarrant County.” (City of Arlington: ERA)

“A new Cowboys Stadium would bring in $346 million a year to Dallas County.” (A property development company)

“The City of Irving, if a new stadium were built, would see an annual economic impact of approximately $51 million.” (City of Irving; Turnkey Sports)

“The best outcome Arlington can expect is that it will lose $290.5 million as a result of the building of a new stadium for the Cowboys…The loss for arlington could be as high as $325.3 million.” (Those opposed to public funding for the stadium; Rosentraub and Swindell)

The Dallas cowboys Football Stadium

Supporters’ Budget $10,000,000

Referendum Outcome


◦ Plus In-Kind Services

Referendum Outcome



Opponents’ Budget $45,000

Referendum Outcome



Opponents’ Budget $45,000

◦ Passed 53% - 47%

Referendum Outcome

Consultants protect their reputation by1. Extensive Caveats

We have not audited or verified any information provided to us and as such will take no responsibility for the accuracy of the information which was provided by third parties…Some assumptions inevitably will not materialize and unanticipated events and circumstances may occur; therefore actual results achieved during the analysis period may vary from those described in the report, and the variations may be material

How Can This Be?

Consultants protect their reputation by2. Using assumptions needed to get the desired

result It should be noted that the analysis utilizes

assumptions that were developed based on our market analysis, surveys with comparable arenas, hypothetical lease terms, and conditions and assumptions provided by the City and the developer.

How Can This Be?

Park Name County Total missing UsableUsableLocal

Usablenon-local

Usablenon-local

day visitor

Usablenon-local

overnight visitor

Balmorhea Reeves 119 9 110 1 109 19 90

Big Bend Ranch Presidio & Brewster 230 32 198 4 194 41 153

Brazos Bend Fort Bend 459 42 417 99 318 194 124

Caprock Canyons Briscoe 279 17 262 1 261 102 159

Choke Canyon Live Oak 359 102 257 18 239 125 114

Daingerfield Morris 514 35 479 89 390 130 260

Davis Mts./Indian Lodge Jeff Davis 496 117 379 1 378 84 294

Dinosaur Valley Somervell 531 13 518 2 516 433 83

Eisenhower Grayson 573 44 529 68 461 71 390

Enchanted Rock Gillespie & Llano 1,335 109 1,226 16 1,210 967 243

Fort Richardson Jack 425 12 413 8 405 30 375

Galveston Island Galveston 322 28 294 16 278 129 149

Garner Uvalde 1,511 189 1,322 10 1,312 200 1,112

Goliad Goliad 475 16 459 7 452 310 142

Hueco Tanks El Paso 333 21 312 149 163 112 51

Inks Lake Burnet 454 107 347 18 329 46 283

Lake Bob Sandlin Titus 269 7 262 21 241 39 202

Lake Corpus Christi San Patricio 493 59 434 36 398 82 316

Lake Livingston Polk 125 8 117 7 110 13 97

Lake Mineral Wells Parker 503 61 442 90 352 83 269

Lake Ray Roberts Cooke & Denton 851 92 759 250 509 227 282

Lake Somerville Burleson & Lee 363 26 337 26 311 95 216

LBJ Gillespie 418 75 343 2 341 341 N/A

Martin Dies Jasper 284 19 265 7 258 8 250

Palo Duro Canyon Armstrong & Randall 449 25 424 78 346 202 144

Pedernales Falls Blanco 538 32 506 2 504 135 369

Seminole Canyon Val Verde 271 17 254 11 243 81 162

Tyler Smith 607 37 570 115 455 123 332

WOB Washington 61 12 49 2 47 47 N/A

Total 13,647 1,363 12,284 1,154 11,130 4,469 6,661

Number of surveys collected at each park

Park name

Appropriate decisions Inappropriate decisions% by which inappro-priate decisions ex-

ceed appropriate de-cisions

Per person per dayexpenditures

AnnualExpenditures

Per person per dayexpenditures

Annualexpenditures

Daingerfield $11.24 $332,750 $19.03 $933,897 181%

Dinosaur Valley $12.61 $1,434,940 $23.70 $2,696,704 88%

Enchanted Rock $25.13 $6,215,438 $60.73 $15,020,018 142%

Garner $33.55 $13,339,963 $77.76 $30,923,109 132%

Goliad $13.37 $593,784 $21.27 $944,367 59%

Lake Corpus Christi $20.82 $1,344,096 $31.31 $2,021,173 50%

Lake Ray Roberts $16.98 $11,811,373 $151.19 $105,141,261 790%

Pedernales Falls $19.66 $2,954,198 $270.83 $40,689,600 1,277%

Tyler $31.13 $3,486,834 $57.31 $6,419,026 84%

The Cumulative Impact of Three Erroneous Decisions on Both Day and Overnight Visitors’ Expenditures

Number of day visitors <69,000 Number of day visitors >69,000

Local ratio of day visitors

<10.5%

Group (1)Big Bend Ranch ComplexCaprock CanyonChoke CanyonDavis Mountains/Indian LodgeGoliadSeminole Canyon

Day visitors : $23.40Overnight visitors : $15.39

Group (2)BalmorheaDinosaur ValleyEnchanted RockGarnerInks LakePedernales FallsRay Roberts complexWashington on the BrazosDay visitors : $28.03Overnight visitors : $12.63


>10.5%

Group (3)Eisenhower State ParkDaingerfieldFort RichardsonHueco TanksLake Bob SandlinLake LivingstonLake Mineral WellsMartin Dies, Jr.Day visitors : $16.22Overnight visitors : $11.88

Group (4)Brazos BendGalveston IslandLake Corpus ChristiLake SomervilleLyndon B. JohnsonPalo Duro CanyonTyler


Table. Classification of 29 parks by local ratio and number of day visitors

Table. Classification of 61 parks by local ratio and number of day visitors

Number of day visitors <69,000Number of day

visitors >69,000


<10.5%

Park name

Caprock Canyons & TrailwaysColorado BendDevil's River

Devil's SinkholeFort Leaton

Kickapoo CavernLake Tawakoni

Lost MaplesOld Tunnel

Possum Kingdom

Estimated per person per day expenditure


Day visitors : $28.03

Overnight visitors : $12.63


>10.5%

Park name

AbileneAtlantaBastropBlanco

BonhamCaddo Lake

CleburneCooper Lake

Copper BreaksFairfield Lake

FalconFort BoggyFort Parker

Franklin MountainsGoose Island

Government CanyonHill Country

Lake ArrowheadLake Brownwood

Lake Colorado CityLake LivingstonLake Whitney

LockhartMartin Creek Lake

Meridian Mission Tejas

Monahans SandhillsMonument Hill/Kreische Brewery

Mother NeffPalmetto

Purtis CreekSan Angelo SP

San Jacinto Battleground and MonumentSea Rim

Sheldon LakeSouth Llano River SP

Stephen F. AustinVillage Creek

WBC/Bentsen-Rio GrandeWBC/Estero Llano GrandeWBC/Resaca de la Palma

Wyler Tramway

Battleship TexasBig SpringBuescherCedar HillGuadalupe

River/Honey Creek

HuntsvilleLake Casa Blanca

McKinney FallsMustang Island

Estimated per person per day expenditureDay visitors : $16.22

Overnight visitors : $11.88

Day visitors : $35.80Overnight visitors :

$15.74

Parks attract non-resident visitors to the area

These visitors spend money in the local area

This new money creates income and jobs for area residents

State Parks as “Economic Engines”

Mustang Island State Park

(145,711 visitor days)

Salaries and operating expenses $809,500

Revenue $632,000

Net Loss $177,500

Example of a Park as an Economic Engine

BUT49% of visitor days (i.e. 71,566) are from outside the county and on each visitor day they spend $9.76 each outside the park but inside Nueces County i.e. &678,500

BUT49% of visitor days (i.e. 71,566) are from outside the county and on each visitor day they spend $9.76 each outside the park but inside Nueces County i.e. &678,500

New money into the county:$809,500 + $698, 500 $1,508,000

Impact on sales (1.71):$1,384,000 + $1,190,000 $2,574,000

Impact on personal income:$753,000 + $631,000 $1,384,000

Impact on employement:25 jobs + 21 jobs 46 jobsAverage pay for each job is $30,088

So

Every $1 of net state funds invested in Mustang Island State Park yields $7.83 in income for Nueces County residents ($1,384,000/$177,500)

The cost to the state of each job created is $3,850 ($177,500/46 jobs)

Analogous to retail stores Investment in services and amenities

More Visitors

More Per Capita Expenditures

More Jobs and Income to Local Residents

Economic Success Depends on What Happens Inside a Facility


Attracting tourists Attracting businesses

Write down the place you would like to live, given your druthers (i.e., your preferred place, ignoring practical concerns such as a job, family, language, and heritage).


Write in one sentence, why you picked that place.


Write in one sentence, why you picked that place.

More than 80% of participants will cite some park, recreational, cultural, or environmental ambiance dimension in their responses.

Business Relocation Context

More than 10,000 economic development groups are competing to attract businesses.

Footloose Industries “Information Factories” whose main

asset is highly educated professional employees.

Drivers

Beyond a threshold salary level, people are persuaded to relocate by quality of life factors rather than money.

Drivers


No matter how “quality of life” is defined, parks, recreation, and open space are part of it.

Drivers



There are no great cities in this world that do no have a great park (recreation and culture) system.

Drivers



There are no great cities in this world that do no have a great park (recreation and culture) system.

“Disamenity compensation” – companies located where there is only mediocre quality of life have to pay higher wages to attract the same quality work (and vice-versa).

Comparison of the Perceptions of the Relative Importance of General Elements in Location Decisions Between Decision Makes in Large and Small Companies

Elements Small CompanyMeans(n=38)

Large CompanyMeans(n=42)

Government Incentives 3.9 14.2

Quality of Life 33.3 14.7

Labor 10.3 24.0

Proximity to Customers 28.4 11.6

Operating Costs 17.2 24.3

Transportation 6.7 7.7

Comparison of Perceptions of the Relative Importance of Quality-of-Life Elements in Location Decisions in Large and Small Companies

Elements Small CompanyMeans(n=38)

Large CompanyMeans(n=42)

Primary/Secondary Education

19.4 18.0

Recreation/Open Spaces 26.4 12.1

Cost of Living/Housing 23.0 34.5

Personal Safety/Crime Rate

12.9 13.2

Cultural Opportunities 10.6 9.5

Health/Medical Services 7.1 9.2

Significance

Most new business growth comes from small companies.

90% of businesses in the U.S. employ 10 or fewer people.

Small business owners often “satisfice” rather than “optimize” their profit potential.

People working in high tech companies are used to there being a high quality of life in the

metropolitan areas in which they live. When we at Dell go and recruit in those areas, we have to be

able to demonstrate to them that the quality of life in Austin is at least comparable or they won’t

come. It’s not just about salary. It’s about what’s the community like where I’m going to live.

- Vice President, Dell Corp., Austin

Parks and Recreation: An Indicator Species

American Heritage Dictionary:

“The presence, absence, or relative well-being in a given environment is indicative of the health of its ecosystem as a whole.”


Attracting tourists Attracting businesses Attracting retirees

Target Market

Growing number of Retired Active

Monied People In Excellent Shape

Target Market

Growing number of Retired Active

Monied People In Excellent Shape

G.R.A.M.P.I.E.S.

Economic Impact

Annual inflow of 100 retired households with $40,000 annual income = a new $4 million annual “payroll”

“You are what you were, yesterday.”

GRAMPIES Are an Appealing Economic Target Market Because:

Social Security and Private Retirement incomes are stable – not subject to the vicissitudes of economic business cycles

“Positive” taxpayers i.e., generate more tax revenue than the cost of serving them (e.g., schools, criminal justice)

Contribute to development of the health care industry

Volunteer pool – active in churches, service organizations, and philanthropic organizations

Stimulate housing and retail, but do not put pressure on local job markets or social services

Key Requirement

Amenity rich community especially recreation: socialization; active lifestyle

Survey: 270 Recently Relocated GRAMPIES in the Lower Rio Grande Valley Top 3 out of 40 reasons for moving away

from the previous residence were: Desire to live in a more recreationally

enjoyable area Desire to get away from cold weather Desire to live in a place where recreation

opportunities are plentiful


Attracting tourists Attracting businesses Attracting retirees Reducing taxes

The Cost Efficiencies of Parks and Open Space

Conventional wisdom is that development is the “highest and best use” of vacant land for increasing municipal revenues.

Developers claim their projects “pay for themselves and then some” BUT

The Cost Efficiencies of Parks and Open Space

Conventional wisdom is that development is the “highest and best use” of vacant land for increasing municipal revenues.

Developers claim their projects “pay for themselves and then some” BUT

If a private company had a business plan that looked only at revenues and ignored costs, it would be quickly out of business. Why should the public tolerate such one-sided accounting by local governments?

However:

Fiscal impact analyses frequently demonstrate that the public costs associated with new residential development exceed the public revenues that accrue from it. BECAUSE

The people who reside in developments require services. IN CONTRAST

However:

Fiscal impact analyses frequently demonstrate that the public costs associated with new residential development exceed the public revenues that accrue from it. BECAUSE

The people who reside in developments require services. IN CONTRAST

Natural parks and open space require few public services – no roads, no schools, no sewage, no solid waste disposal, no water, and minimal fire and police protection.

Fiscal Impact Analysis Stages

1. Allocate total municipal expenditures into service categories and assign them to selected land use categories (Residential, Commercial/Industrial, Farm/Forestry/Open Space)



2. Categorize municipal revenues by sources and allocate them to the selected land use categories



2. Categorize municipal revenues by sources and allocate them to the selected land use categories

3. Compare revenues to expenditures for each land use category

Median Cost to Provide Public Services to Different Land Uses per Dollar Revenue Raise (n=98 communities)

$1.40

$1.20

$1.00

$0.80

$0.60

$0.40

$0.20

$0.00Commercia

l & Industrial

$0.27


$1.40

$1.20

$1.00

$0.80

$0.60

$0.40

$0.20

$0.00Commercia

l & Industrial

Farm/Forest Open Space

$0.27$0.35


$1.40

$1.20

$1.00

$0.80

$0.60

$0.40

$0.20

$0.00Commercia

l & Industrial

Farm/Forest Open Space

Residential

$0.27$0.35

$1.16

Tax Myth

For years residents have been assured by growth boosters that the solution to a community’s tax problems is to increase the tax base. Most accept this and believe that growth is the basis of prosperity.


Attracting tourists Attracting businesses Attracting retirees Reducing taxes Enhancing real estate values

Pebble Creek Development Costs

1,300 acres total150- acres for a golf course

Cost of golf course development = $4 million




College Station sub-division lots = $30,000

Pebble Creek averages 3 lots per acre

Golf course replaced 450 lots450 lots at $30,000 = 13.5 million




College Station sub-division lots = $30,000 Pebble Creek averages 3 lots per acre

Golf course replaced 450 lots 450 lots at $30,000 = 13.5 million

Total cost of the golf course - $17.5 million

Revenues

Pebble Creek lots = $40,000 on average

($10,000 more per lot because of golf course)

Revenues

Pebble Creek lots = $40,000 on average

($10,000 more per lot because of golf course)

1,150 remaining acres X 3 lots per acre = 3,450 lots

3,450 x $10,000 premium = $34.5 million

John Nash

Central Principle

Nash established as the central principle of his plan: “that the attraction of open Space, free air and scenery of Nature, with the means and invitation of exercise on horseback, on foot and in Carriages, shall be preserved in Marylebone Park, as allurements or motives for the wealthy part of the public to establish themselves.”

Central Principle

At Regent’s Park, Nash brought to the urban landscape the principles of picturesque landscapes that had been developed by Capability Brown in country estates half a century earlier, and his erstwhile partner Humphry Repton

john l. crompton university distinguished professor and regents professor texas a&m university...

Documents

public agency slide

segments of travel

business travel recreation

local residents

residents income

promotion attractions

recreation recreation

park attractions