On November 8, 2007, in collaboration with the Missoula Area Chamber of Commerce, MAEDC released the Bitterroot Resort Economic Impact Analysis composed by ECONorthwest.
Since posting the analysis on the two organizations' websites on the morning of November 8, a total of 2,089 users have downloaded the document.
Public input regarding the study was encouraged. MAEDC received over 80 formal responses to this call for input, which are all posted on our website. (click here)
The following excerpt from an email between Independent reporter Jessie McQuillan and ECONorthwest Vice President Terry Moore, helps to shine some light on issues of concern raised by public comment:
Impacts estimated for the construction industry and on tourist spending
You said: “The study's estimates for construction jobs resulting from the destination resort represents about 1/3 of total construction jobs in both counties, according to figures from the MT Dept. of Labor. Similarly, the study's estimate for $110 million of tourist spending represents about 1/3 of total tourist dollars in both counties, according to the UM Institute for Tourism and Recreation Research. Some say this estimate seems too high, and don't buy that the resort would account for that high of a percentage of construction jobs and tourist dollars. Can you address this concern and how you arrived at these figures?”
We used numerous Montana-based resources to look at local construction and tourism statistics, including those sources you reference in your question (see Appendix B).
Construction: The total construction impact will be high due to the large scope of the project. A high construction impact is not inconceivable for an area that is largely state and federally-owned undeveloped forest land. The Resort scope calls for the development of: sewer and road infrastructure, skiing facilities and supporting structures, almost 3,000 housing units, two golf courses, a hotel, and buildings designed for retail and commercial uses. It is unlikely that the area has seen a project of such magnitude since the bulk of the University of Montana or the St. Patrick Hospital and Health Science Center facilities were built.
Our report states a caveat regarding construction jobs on pages 23 and 38: these employment figures do not consider the size or duration of the job. Therefore, a welder (or carpenter, etc.) who has a specialty of some kind might be brought in to work for a week or two. That counts as one construction job; these are by no means full-time equivalents (FTEs).
Note further that the comparison you are making is to current levels of construction, not future levels. If the two-county area grows (as it will), perhaps substantially (as it might), then the percentages you note would decrease, all other things equal.
We compared Resort construction jobs with the total in the area to lend some perspective, but the comparison unfortunately requires a lot of fine print to be correctly interpreted. For the reasons above, the likely impact will be less than the 1/3 you cite in your question. A better, but less quantified, interpretation, is that the Resort as proposed would be a very large development with large construction impacts relative to historical construction levels.
Tourism: The scope of the project suggest tourism impacts high relative to any individual venue and the two-county totals. Based on our research of area tourism, most visitors engage in hiking, hunting, fishing, and other outdoor recreation activities, in addition to little skiing. In terms of visitor expenditures, these are generally low-impact activities. For instance, a hiker or a fisher may come to the area for a couple of days, stay in a hotel (or camp), and may eat at a couple of restaurants. Other expenditures may include maps and snacks. After a couple of days, these visitors may move to another area in Montana or near Yellowstone National Park to further engage in these activities.
Compare that to a family who travels to the Resort. Not only would such a family stay at hotels and eat at local restaurants, but would spend money on lift tickets, other skier services (lessons, rentals, etc.), other entertainment, and shopping. Even if the hiker / hunter /fisher were interested in spending money for resort-style amenities, they would currently not have the option to do so in Missoula.
On a side note: many claim (and rightly so) that the impact of the Resort on local infrastructure (the highway, the sewers, the schools, etc.) will be large. However, such claims also imply that the impact of non-local visitors will be large as well.
We arrived at the tourism figures using ITRR data and data from Vail Resorts, Inc. (a corporation that comprises five resorts in the U.S. West). Construction estimates were derived from the IMPLAN process, which takes into account job impacts at comparable resort facilities in the U.S. It also utilizes U.S. Bureau of Labor Statistics and U.S. Census data.
Wages
You said: “Table 12 of the report lists total net economic impacts, and in terms of the destination resort, lists $85.6 million in wages and 4,672 jobs: that's $18,321 per job. Other parts of the report (page 20) say that average wages at the resort would be $24,000. Can you help me reconcile these differences? Am I mistaken in my math or is there perhaps a factor I'm not considering?”
If your concern is “wages paid,” the correct place to look for Resort wages is not in the "total net economic impact" section. Some of the jobs listed in TABLE 12 would NOT be Resort jobs: they are secondary jobs (e.g., at restaurants in Missoula, at a car rental company at the airport, etc.). These secondary jobs are listed in TABLE 10. Note that most of these jobs would be in the service and retail sectors, and would be primarily (but not exclusively) relatively low-paying. They would be created due to the Resort's presence, but the wage would be set by the other businesses conducting the hiring.
The place to look for total employment at the Resort is TABLE 5. But dividing these jobs by the total direct wages in TABLE 7 will not, unfortunately, give you an accurate estimate of yearly wages at the Resort. On page 19, we write that the employment figures include part-time and seasonal workers. Therefore, jobs in TABLE 5 (and TABLE 12) are not FTEs. The average yearly wage would be higher than the one you would find by dividing the direct wage (TABLE 7) by the direct employment (TABLE 5). Similarly, you cannot divide wages by employment in TABLE 12 to find an average yearly wage.
We estimated the $24,000 yearly wage figure from payroll data supplied by the Resort (which we adjusted—see footnote 22) and our own estimates of seasonal and part-time workers.
Measurement of other impacts
You said: “Any general comments about what the study is able to analyze and estimate and what it's not? Many people point out that there are so many other impacts--infrastructure, environment, etc--that aren't calculated by a study like this.”
The short answer: the quantitative impact estimates on infrastructure and the environment are important, are not quantified in our study, and were not part of our scope of work.
The report is clear about what, exactly, is being estimated and what is not. Many impacts are very hard to measure monetarily. The state or implies in several places that there will be other impacts and community members should weigh these when discussing the merits of the Resort.
We explore some of these issues through a qualitative analysis in the report. We add some of our expertise to these areas but state that we haven't fully evaluated the full range of costs and benefits to the Missoula area (see the second to last paragraph on page 39). Our report is one piece of many that people should consider when evaluating the Resort. We believe that the impacts we were charged to measure, though approximate, but defensible.
During the approval process that will accompany the Resort's application to use Forest Service lands, an environmental impact study will be required. Such a study would go more deeply into issues that our report only briefly discusses. At the meeting I was at, on person commented that water on the resort site was scarce and that the developers were overestimating the ability of their water rights to handle the water demand. We did no research on that issue, and do not have an opinion on it.
Another comment was that climate changing (warming) and gas prices (increasing) would increase costs of and reduce demand for resort services. That may be, but the magnitude of those changes and their effects on visitor days (relative to all the other factors affecting visitor days) is uncertain. Our point is that the Resort developer has no incentive to ignore those variables: they are risks to his bottom line.
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Terry Moore
ECONorthwest
Also, ECONorthwest recently submitted a formal response to public input. To read this response, click here.
MAEDC would like to thank Terry Moore for his comprehensive presentation, and also to thank all those in the community who attended the event. It is in the mission of MAEDC to inform the public concerning issues that have the potential to affect the region’s economy, and we feel that this project has done just that. As stated in the study itself, by MAEDC, and by Terry Moore during the presentation, we recognize that the economic impacts of this proposed resort are not the only piece of information that should be carefully considered before forming an opinion. This information was made available for the education of the public at large.