A conservative economic analysis was prepared to analyze the economic benefits of increased river related use. Two primary sources of economic input were considered: increased out-of-town visitations and recreational expenditures that would otherwise be made outside the Reno/Sparks area. The analysis contains two principal parts:
A description of use and benefits based on communities that have whitewater and river related events
An evaluation of potential economic impacts and financial return on the initial investment for whitewater and river related improvements along the Truckee River.
The principal focus of the analysis was centered on boating and the development of a whitewater park and other river enhancements for the Truckee River. Although secondary benefits from the project may result from an increase in activities such as fishing, day use, bicycle riding, and walking, it is debatable whether or not such uses would in themselves draw visitors to the Reno/Sparks area or result in a reduction in the leakage of recreational expenditures by area residents. Such activities may not yield a sizable net economic benefit for the area’s economy but rather improve the overall quality of life for area residents.
This project focuses primarily on improving the waterways for boating related uses. Therefore, the analysis considers two general categories of boating activities, (1) event related uses, and (2) non-event uses.
Event related uses include competitive whitewater events such as downriver races, rodeos, slalom courses, and river related festivals. Organized whitewater events have the potential to create a visitor destination for the Reno/Sparks area. Based upon information collected from other communities, organized river events can and do draw overnight visitors.
Specific events included in this analysis are:
Competitive whitewater events with a river festival
Single competitive whitewater events.
There are two principal types of non-event use evaluated in this analysis:
Commercial whitewater rafting by visitors and local residents, and
Casual use of the whitewater park by overnight visitors.
Use by local residents is included because whitewater rafting is currently a recreational activity that does not exist in the Reno/Sparks area and local residents must travel to other destinations to participate in these types of activities. There is evidence that suggests that visitors are likely to come to the Reno/Sparks area on vacations or weekend trips for non-event use of the whitewater park.
A whitewater park on the Truckee River is ideally located. It is near major population centers (western Nevada, Central California, and the San Francisco Bay Area), and it is surrounded by other outdoor recreation opportunities. Additionally, its location and access to major transportation facilities (I-80 and U.S. 395) is ideal for attracting rafters and kayakers who are moving throughout the western United States during the summer months.
Estimated annual non-event use for whitewater parks varies tremendously based upon factors such as the length of season, flow rates, quality and design of course, and proximityy to population. It is reasonable to expect 10,000 to 50,000 users annually at a developed whitewater park on the Truckee River.
Sixty percent of the participants in the annual Truckee River Races are from out-of-state. A study completed by the Minnesota Department of Natural Resources expected about 30 percent of users to be visitors from out-of-state. In a nearby location on the St. Louis River, which held the international slalom event circuit, out-of-state visitor participation ranged between 55 percent and 48 percent. Since the discontinuation of the event, annual out-of-state visitation has dropped to around 35 percent.
Across the United States there are approximately 20 whitewater parks. The earliest (Wausau, WI) was constructed in 1974. Recent additions include a number of parks in Colorado. The 1996 Olympic Games at Atlanta, Georgia utilized a natural river enhanced park on the Ocoee River in Tennessee. This was the first time that whitewater boating was an officially sanctioned Olympic event.
According to the Outdoor Recreation Coalition of America (ORCA), there were 17.5 million people (age 16 or older) canoeing, 5 million people kayaking (flatwater/touring/whitewater), and 9 million rafting in 1999. Kayak and canoe sales totaled over $99 million in 1996 (Outdoor Recreation Coalition of America, 1997). Participation in kayaking increased by 1.4 million people from 1995 to 1999.
Whitewater enthusiasts tend to be young, averaging between the ages of 35-54. Seventy percent of whitewater enthusiasts are also married, 65% hold at least a four-year college degree, and average $75,000 to $125,000 in total household income. This age group is of special interest to the outdoor-sales industry and is targeted as a major marketing group because they may be better established financially and thus better able to afford specialized equipment and services. For enthusiasts, those who fall within the top 15% of participation levels in the past twelve months, equipment purchases can include multiple boats, paddles and other equipment for diverse boating experiences (American Whitewater, 2000).
An increasing number of women are participating in all forms of outdoor recreation as well. As equipment becomes lighter in weight and improves in performance, more women are likely to participate in activities currently dominated by men. Men and women are rafting enthusiasts in almost equal numbers. According to ORCA, kayaking experienced a 39% increase and rafting a 7.7% increase in women participants in 1999.
It is important to note that other recreational pursuits that can occur along the river corridor such as fishing, riding bicycles, running, walking, and swimming rank among the top recreational pursuits enjoyed by Americans. According to the National Sporting Goods Association exercise walking and swimming were the top two sports in terms of total participation while fishing and bicycle riding ranked 5th and 6th in total participation in 1999.
The development of whitewater parks and river-enhanced features are often utilized for officially sanctioned events. With human-powered outdoor recreation on the increase, many areas have built whitewater courses that offer canoeing, kayaking, and rafting opportunities. These have served as a tremendous economic boost for the areas surrounding the parks.
Many whitewater parks have improved fish habitat and ultimately resulted in the construction of walkways and bike paths to improve overall opportunities. These improvements in turn increase housing values, promote community involvement, and attract and retain employees to local businesses. In some cases, businesses have opened near whitewater parks to support and promote the water sports venues (American Whitewater, 2000).
The economic effects of recreational spending on the local region are estimated by using the U.S. Forest Service IMPLAN model. This analysis focuses on overnight visitors to the Reno/Sparks area. Expenditures by local residents were included in this analysis, particularly those related to commercial whitewater rafting. Local residents travel outside the area to raft rivers such as the American, Yuba, Truckee (Lake Tahoe to Truckee), and the Feather, exporting dollars. The availability of local river recreational opportunities will impede the amount of recreational dollars spent outside the local economy.
Whitewater events typically occur throughout much of the year. In general, the peak season of use is late March through July. However, whitewater parks and river enhanced areas can be designed to extend the seasonal use of rivers. It is not uncommon for parks to operate at flows as low as 100 cubic feet per second (cfs). There are generally fewer events towards the end of summer due to lower stream flows. There are two general categories of events held at whitewater parks. They include:
River Festivals and Competitive Events (Combined Events)
Sanctioned and non-sanctioned whitewater events-professional and or amateur.
National organizations sanction whitewater events. Some of the more active groups include American Whitewater’s National Organization of Whitewater Rodeos (NOWR), American Canoe Association (ACA), the United States Canoe and Kayak Team (USCKT). Officially sanctioned events are commonly held at constructed whitewater parks throughout the country. Examples of officially sanctioned whitewater events include:
| Event | Affiliation |
|---|---|
| U.S. Team Trials-Rodeo | NOWR |
| U.S. Team Trials-Slalom | NOWR |
| U.S. Junior Team Trials-Slalom | NOWR |
| U.S. National Championships-Slalom | NOWR |
| Open Canoe Slalom National-Slalom | ACA |
| Open Canoe Downriver Nationals | ACA |
| U.S. National Championships-Wildwater | USCKT |
| U.S. National Team Trials-Wildwater | ACA |
| World Cup Series |
There are 33 officially sanctioned events by American Whitewater this year. There are more than 70 slalom, 30 wildwater and 30 rodeo events held at the local and regional level each year. Annually, about 25 whitewater festivals or double headers host multiple kinds of events simultaneously including sanctioned events by national organizations. Depending upon volunteer support and the growth of the sport in the region, the proposed whitewater park could host as many as four regional or local major competitive events (i.e. championships) annually. Local associations provide critical support for winning and staging events. Paddling clubs, particularly those with national and international affiliations, are able to market their venues within the sport to draw competitions and recognition to their venue (Minnesota Department of Natural Resources, 1999).
Currently, there is one local paddling club in northern Nevada: Sierra Nevada Whitewater Club. The club has approximately 100 members and they host one two-day annual event on the Truckee River. There are ten American Whitewater affiliate paddling clubs in California. Eight are located in the northern California area including Grass Valley and Auburn areas.
Events and river festivals generally occur over a period of 2 to 4 days with a maximum of 7 days. Some of the larger organized events such as the Subaru Gorge Games, Oregon Cup, Kern River Festival, 53rd Annual FIB Ark Boat Race and Festival, Potomac Whitewater Festival, and Gauley River Festival occur over a period of 4 to 7 days. World Cup Events, U.S. National, and Olympic Team Trials typically occur over a period of three to five days. It is not uncommon for communities to have more than one river related event over the course of the boating season. Several communities hosted three and four events, annually. Smaller whitewater festivals, regional and local events typically do not exceed 2 days.
The level of use and participation at river festivals and community events varies widely. The Sierra Nevada Whitewater Club’s annual event on the Truckee River draws 60 to 100 participants and 500 to 2,000 spectators. This event is not advertised. The Boulder Creek Festival in Boulder Colorado, on the other hand, attracts nearly 300,000 local and non-local participants and spectators each year. This is one of the larger river festivals in the country and is organized by a full-time coordinator. Most whitewater events and river festivals, however, typically draw between 100 to 200 participants and 2,000 and 5,000 spectators.
Vail, Colorado has scheduled its first organized whitewater event for Memorial Day weekend 2001. Event organizers have received commitments from 16 of the world’s best paddlers to attend their Teva Whitewater Festival. According to Joe Blair, event manager for the VVTCB, “The Teva Whitewater Festival at Vail will put us on the map as a paddling destination and establish us as a true whitewater mecca by highlighting our new, cutting edge whitewater park, as well as the big-water thrills of Dowd Chute” (Vail Valley Tourism and Convention Bureau, 2001).
The type of whitewater event also influences the level of participation. Officially sanctioned events such as a championship series, Olympic team trials, the World Cup, and U.S. Nationals draw more participants. Also the availability of prize money and the size of a purse can help to attract international and national competition. One of the larger purses, $32,500, was recently announced for the Subaru Gorge Games with a portion of the funds to be divided among three other events (Ocoee Whitewater Games, Animas River Days, and the Potomac Whitewater Festival).
Whitewater events draw participants from outside of the state. Participants for the Sierra Nevada Whitewater Club whitewater competition on the Truckee River come from western Nevada, Central California, and the Bay Area. Approximately 60 percent of the participants at the Truckee River event are from California with the majority (85 percent) coming from the Bay Area and Sacramento Valley. Two other participant lists were obtained, one in Montana and the other in Colorado, and both events draw participants from surrounding states. In Montana, the Big Fork Whitewater Festival drew participants from Idaho, Canada, Colorado, Utah, Oregon, and Wyoming. The Animas River Days in Colorado drew participants principally from Utah, Arizona, Montana, New Mexico, and Colorado. It is important to note that larger events with professional level competition can draw participants from around the United States and foreign countries. Table 1 provides estimates of attendance, participation, duration of the event and available purse for several of the larger events in the United States.
The current supply of white water paddling opportunities is not meeting the demands of local paddlers. Swift water rescuers and recreational paddlers currently travel from an hour to more than eight hours in order to train and gain experience on white water venues (Minnesota Department of Natural Resources, 2000).
Local Chambers of Commerce in communities with river events were contacted to obtain information of hotel/motel availability. All reported that early reservations are needed for local area hotels/motels and campgrounds due to the influx of event spectators and participants. Nearly all reported 100 percent occupancy over the time period events were held.
There are no permanent whitewater parks west of the Rocky Mountains. Whitewater parks in the Reno/Sparks area would be the first of their kind. As such, the Reno/Sparks river improvements would attract casual boaters as well as national caliber athletes and Olympians.
In the West, Oregon, Washington and Colorado have the greatest number of river related events. In California only two organized event locations were identified, Kern River and the Trinity River. There are no engineered or artificially developed whitewater parks in California, Nevada, Oregon, Washington, or Idaho. Colorado has several engineered or artificial parks.
| Event | Location | Attendance | Participants | Duration | Purse |
|---|---|---|---|---|---|
| Gauley River Festival | NC | 3,500 | NA | 3 days | $15,000 |
| Potomac River WW Festival | MD. | 3,000 | 150 | 2 days | $5,000 |
| Animas River Days | CO | NA | 200 | 3 days | $5,000 |
| Big Fork Whitewater Fest | MT | 2,500 | 200 | 3 days | NA |
| Kern River Festival | CA | 2,000 | 200+ | 3 days | $2,000 |
| Subaru Gorge Games | WA | NA | NA | 5 days | $17,000 |
| Ocoee Whitewater Games | TN | NA | 300+ | 4 days | $5,000 |
| FIB Ark Festival | CO | 5,000+ | 200+ | 3 days | NA |
| Clear Creek WW Festival | CO | 800 | 100 | 2 days | NA |
| Boulder Creek Festival | CO | 300,000 | NA | 3 days | NA |
| Source: American Whitewater and local event sponsors. NA = not available. |
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Non-event use includes whitewater rafting and causal water park use by visitors and residents. The whitewater park and river rafting is likely to draw day-trip visitors from surrounding areas. A conservative approach to the economic impact analysis for commercial rafting is to assume that such use on the Truckee River does not generate overnight or destination visitors. It is possible given the quality of experience that future users will come to the area primarily for the whitewater experience and stay over night. Casual non-event whitewater park use is expected to generate overnight visitors in the Reno/Sparks area.
Table 2 includes some of the popular rivers in the United States, their level of use and total economic impact derived from commercial rafting use. An average of the economic impacts generated by commercial rafters is $154 per user in total economic activity. This average listed in Table 7-2 includes a wide range of river trips such as multi-day or single day trips. Thus the average economic impact for a day trip would likely be less, perhaps around $100 per user.
The total impact per user includes direct and induced spending in the local economy. A 1990 study on the economic effects of river recreation on local economies (Cordell, 1990) found that regional economic multiplier for total gross output was around 2.00. Thus, in order to generate $154.60, a whitewater rafter would have to spend $77.50 per day. Food, lodging, transportation, and rental fees are the primary expenditures for whitewater rafting.
The number of users on the Truckee River section below the Lake Tahoe Dam was recently estimated by Placer County. Raft counts revealed an average of 100 commercial trips and an additional 45 private rafting trips per day. Assuming average raft occupancy of 4 people yields 28,500 commercial rafting participants over a ten- week period, and 12,600 private boaters for a total of 41,000 users. Four outfitters provide services on the Truckee from Boca to Floriston, California. In 2000 there were approximately 1,172 commercial boat trips and 5,444 customers.
| River | Commercial Annual Users | Total Economic Impact Direct, Indirect, Induced | Impact Per User |
|---|---|---|---|
| American River | 156,000 | $19.3 million | $124.00 |
| Gauley River | 65,400 | $20.9 million | $319.00 |
| Nantahala River | 250,000 | $26.0 million | $104.00 |
| Ocoee River | 300,000 | $40.0 million | $133.00 |
| Arkansas River | 275,000 | $55.6 million | $205.90 |
| Total Use and Average Impact | 1,046,400 | $161.8 million | $154.60 |
| Source: American Whitewater, 2000, Placer County Truckee River Monitoring Project, 2000, and Nevada County 2000 Summary Report. |
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The number of non-local visitors can vary dramatically and is dependent on several factors such as the distance of major urban populations to the river, and the quality of the experience. In a study of the economic effects of river recreation on the Delaware River, and the New River, approximately 75 percent were non-local residents (Cordell, 1990). The Truckee River could see relatively high non-local use due to the large number of visitors coming to the area to gamble, and to visit Lake Tahoe and surrounding areas. It is likely that permanent residents or visitors from surrounding areas would travel up to an hour or more to utilize the river.
A recently completed environmental impact report for the South Fork of the American River at Coloma, California suggests that 1 to 3 hours driving time from major population centers is reasonable for whitewater use (El Dorado County River Management Plan, 2000). It is also important to note that the same report identified the Truckee River from Boca Reservoir to Floriston, California as having, “characteristics common to the South Fork of the American River.” The report goes on to state, “In future years, the Truckee, Mokelumne and Middle Fork of the American may be of increasing interest to boaters and river managers alike.”
This section describes operating conditions, and level of use at several artificially and naturally enhanced whitewater parks for non-event use.
With the Southeast area containing the highest number of recreationalists in the country, corresponding to the highest level and growth in retail sales for the outdoor enthusiast, there was little hesitation to build the Ocoee Whitewater Course in the early 1980’s as an Olympic course. The course operates on weekends March through May and September through November, and weekdays June though August. The course saw over 100,000 paying customers annually in the first few years. By 1998 over 303,000 people canoed, kayaked, and rafted down the 5-mile run and another 700,000 visitors came to the area just to watch the boaters. During the Olympic Games, the Ocoee course hosted more than 42,000 people over three days (American Whitewater, 2000).
Many cities have now started to contemplate opening whitewater parks in their urban centers. Minneapolis is considering building a whitewater course on the east bank of the Mississippi River. The park is estimated to attract over 50,000 paying visitors per year and generate an economic impact of $2 to $2.5 million annually. The city of Minneapolis is also expecting this course to generate 30% of its income from out of state visitors. This course is expected to create a sense of stewardship, heightened awareness of wildlife and natural settings, and also could be a catalyst for economic revitalization to the St. Anthony’s Fall area. Impact analysis of the course also shows that on going operations, programs and events could generate jobs and businesses year-round both directly and through increased spending and investment in the surrounding area (Minnesota Department of Natural Resources, 1999).
The Golden Whitewater Course for kayaking and canoeing is located at the Clear Creek Whitewater Park in the City of Golden. Construction of the course was completed in 1998. It provides valuable recreational opportunities. The course is currently 1/4 mile long with trails and stair-step rock that provides seating for viewing. The park is capable of use year-round although most use occurs from April to October. Total non-event use was estimated at 13,170 in 2000. The park hosts approximately four events annually. Total event use by participants is estimated to be approximately 500 per year. In the summer of 2000 the park held the CSM Spring Ice Breaker, the Clear Creek Whitewater Festival, Eddie Bauer Championship, and U.S. Olympic Team Qualifying. The park attracts users from outside the Golden area. Estimates of visitor use are not available (Evaluation of Beneficial Value, Golden Colorado, 2000).
The Vail Valley Whitewater Park was completed in the summer of 2000. The course is a naturally enhanced river that is approximately 200 yards long and was completed for an estimated cost of $165,000. The Town of Vail provided funding for the course. Its first event will be held on Memorial Day and is expected to draw 16 of the world’s best athletes. The course is expected to provide increased utilization by visitors and local residents bringing additional business to Vail Village during the summer months. Indirectly, course construction has provided improved fisheries habitat and improved fishing opportunities. There are no management fees or costs associated with the course (Personal Communication with Ian Anderson).
The East Race in South Bend, Indiana is an artificial whitewater course constructed in 1982. It diverts water from the St. Louis River and is approximately 1,900 feet long. The raceway routinely hosts national and world-class whitewater slalom races. It also provides training opportunities for search and rescue teams. The total user days is estimated to range from 12,000 to 15,000 annually not including event days. The course charges for admission and is generally open 4 days a week. The course requires minimal maintenance and has never had a liability claim in nearly 20 years of operation. The waterway was the cornerstone of downtown redevelopment project. It was originally constructed through an older dilapidated section of the city. Since its construction more than $50,000,000 of investment has occurred along the raceway (Personal Communication with Paul McMinn).
One of the greatest economic contributions of the river enhancement project is the ability to create uses that either import dollars and or minimize the loss of local dollars to other communities for similar activities. Although the whitewater park and river enhancements will provide benefits in terms of improved quality of life, no attempt is made to value such benefits. Instead this analysis focuses on river recreation expenditures.
Based upon the information gathered from several whitewater parks and river communities throughout the country, a use scenario has been developed in order to evaluate the potential economic impact of the whitewater park use and river enhancements (See Tables 3 and 6).
Most communities hosting an organized river event hold one major festival per year. It is not uncommon for whitewater parks to host 2 to 4 organized events per year. The duration of events is in most cases 3 to 5 days (2 to 4 nights). Larger events can extend up to 7 days. The expected number of event participants can range from 75 to more than 200. Most of the participants (60-75 percent) are non-local residents. The number of spectators varies significantly. Combined whitewater events with a river festival can draw as few as 500 and as many as 300,000. Organized events alone typically draw between 250 to as many as 5,000 spectators. The scenario used to evaluate the economic impacts assumes that only 30 percent of spectators are out-of-town visitors traveling to the area for the primary purpose of attending the event. IMPLAN model inputs are included in Table 3. They represent a reasonable level of development and use that can be expected within the first two to three years of operation.
| Model Inputs | Festival & Organized Event | Organized Event | Total |
|---|---|---|---|
| Number of Annual Events | 1 | 1 | 2 |
| Event Participants | 100 | 100 | 200 |
| Overnight Visitors (60%) | 60 | 60 | 120 |
| Event Spectators | 3,000 | 1,500 | 4,500 |
| Overnight Visitors (30%) | 900 | 450 | 1,350 |
| Visitor Nights Per Event | 2.5 nights | 2.5 nights | 2.5 nights |
| Avg. Daily Per Capita* Expenditures-Gaming |
$286 | $286 | $286 |
| Avg. Daily Per Capita* Expenditures-W/O Gaming |
$104 | $104 | $104 |
| *RSCVA Visitor Profile | |||
Average daily per capita expenditures for visitors was obtained from the Reno/Sparks Visitors and Convention Authority’s 1999 Visitor Profile. Because it is assumed that overnight visitors are coming to the area primarily for river related events, the economic impact analysis is performed with gaming expenditures and without gaming expenditures in the overnight visitor budgets. Definitions of some terms used for the economic impact analysis follow.
Direct effects are the initial impacts to a given economic sector from the purchase of goods or services.
Indirect effects are the impacts caused by the iteration of industries purchasing from other local industries as a result of the initial purchase.
Induced effects on the local economy are caused by the expenditures of new local household income generated by the direct and indirect effects.
Combined indirect and induced effects make-up what is commonly known as the multiplier effect of the initial (direct) expenditures in the local economy.
Direct effects along with indirect and induced effects result in total economic output or total economic impact for the region.
The analysis also shows the amount of employment and labor income generated by direct, indirect and induced economic activity.
Using the model inputs contained in the Table 7-3 yields the following economic impacts in Table 7-4. Total overnight out-of-town participants and spectators for Whitewater Park events equaled 1,470. Table 4 shows the impacts of event visitors (participants and spectators) with gaming expenditures. A total economic output of $1.5 million, 24 new jobs, and $99,000 in taxes would be realized.
| Category | Direct | Indirect | Induced | Total |
|---|---|---|---|---|
| Total Economic Output | $925,416 | $263,347 | $309,361 | $1,498,124 |
| Employment | 16.4 | 3.6 | 4.1 | 24.2 |
| Labor Income | $368,539 | $107,223 | $120,264 | $596,026 |
| State and Local Government Revenues | $98,944 |
Table 5 shows the overnight event visitor impacts without gaming expenditures. A total economic output of $400,000, 7 new jobs, and $29,000 in taxes would be realized.
| Category | Direct | Indirect | Induced | Total |
|---|---|---|---|---|
| Total Economic Output | $256,566 | $68,696 | $83,255 | $408,517 |
| Employment | 5.5 | 0.9 | 1.1 | 7.5 |
| Labor Income | $100,983 | $27,053 | $32,365 | $160,401 |
| State and Local Government Revenues | $29,356 |
The willingness of overnight visitors to gamble makes a significant difference in the overall economic impact of the project.
The ability to raft the Truckee River is a net economic benefit because it keeps recreational dollars in Reno and Sparks instead of going out of state. In addition to the economic impacts from organized events at the whitewater park, there are also economic impacts that result from non-event use. Those uses include:
Commercial whitewater rafting
Non-event whitewater park use
Table 6 summarizes the non-event use model inputs. The model inputs are conservative based upon information collected from other communities and river related uses. Commercial whitewater rafting expenditures by visitors and local residents are included in the analysis. Expenditures by local residents for whitewater rafting are considered in the impact analysis because residents must currently travel to out-of-town locations to enjoy whitewater rafting.
It is likely that commercially available rafting on the Truckee River will increase the number of day-trip visitors to the area from surrounding communities. People from surrounding communities and summertime vacationers staying at area campgrounds, motels, and other vacation facilities may choose to participate in a whitewater rafting experience on the Truckee River. Average daily per capita expenditures for commercial whitewater rafting was set at $45.00 for the model input. This includes $25/day for rafting fee, $10 for food and $5.00 for transportation.
| Activity | Annual Level of Use | Average Daily Expenditures Per capita |
|---|---|---|
| Rafting | 20,000 | |
| Commercial Users | 16,000 | $45.00 |
| Private Users | 4,000 | $15.00 |
| Whitewater Park | 10,000 | |
| Local Use (85%) | 7,500 | $15.00 |
| Overnight Visitor Use (15%) | 2,500 | $104-$286 Avg. stay 1.5 nights |
Based upon information gathered from other communities concerning non-event whitewater park use, it is reasonable to expect that the availability of this type of facility may draw overnight visitors to the area. Non-event visitor use at the whitewater parks could be as high as 50 percent of total use. However, conservative estimates of non-event use from overnight/out-of-town visitors (15 percent), average daily expenditures ($15 per person per day), and total non-event use at the proposed whitewater park was used for the model inputs. Total annual use could ultimately range from 10,000 to as many as 50,000 or more users. Expenditures by overnight visitors are the same as shown in the RSCVA visitor profile.
Table 7 shows the impacts of 2,500 non-event whitewater park overnight visitors with gaming expenditures. The analysis assumes visitors will stay approximately 1.5 nights in the Reno/Sparks area.
| Category | Direct | Indirect | Induced | Total |
|---|---|---|---|---|
| Output | $946,159 | $269,261 | $316,301 | $1,531,721 |
| Employment | 16.8 | 3.7 | 4.2 | 24.7 |
| Labor Income | $376,802 | $109,634 | $122,961 | $609,367 |
| State and Local Government Revenues | $101,156 |
Table 8 shows the impacts of 2,500 non-event whitewater park overnight visitors without gaming expenditures. As with Table 7, the analysis assumes visitors will stay approximately 1.5 nights in the Reno/Sparks area.
| Category | Direct | Indirect | Induced | Total |
|---|---|---|---|---|
| Output | $263,523 | $70,597 | $85,535 | $419,655 |
| Employment | 5.7 | 0.8 | 1.2 | 7.7 |
| Labor Income | $103,731 | $27,810 | $33,252 | $164,793 |
| State and Local Government Revenues | $30,134 |
Table 9 shows the impacts of 7,500 local users of the whitewater park. There are no gaming expenditures or overnight stay.
| Category | Direct | Indirect | Induced | Total |
|---|---|---|---|---|
| Output | $57,390 | $14,312 | $17,684 | $89,386 |
| Employment | 1.5 | 0.2 | 0.3 | 2.0 |
| Labor Income | $21,904 | $5,293 | $33,252 | $34,072 |
| State and Local Government Revenues | $6,713 |
As discussed earlier in this analysis, there is expected to be 16,000 users of commercial rafting annually along the Truckee River. Based on this assumption, commercial rafting related expenditures are shown in Table 10.
| Category | Direct | Indirect | Induced | Total |
|---|---|---|---|---|
| Output | $602,480 | $146,451 | $193,210 | $942,141 |
| Employment | 11.4 | 1.7 | 2.6 | 15.7 |
| Labor Income | $239,863 | $57,271 | $75,110 | $372,245 |
| State and Local Government Revenues | $53,167 |
The total economic output for commercial rafting use is $59 per user. As seen in Table 2, the total economic impact from other rivers in the United States was $154 per user. As a result, economic impacts from Truckee River commercial rafting use could be much higher. Using the higher per capita economic impact, Truckee River total economic impact from commercial rafting could be as high as $2,464,000 annually.
The economic impacts from approximately 4,000 private river rafting/kayaking are shown in Table 11.
| Category | Direct | Indirect | Induced | Total |
|---|---|---|---|---|
| Output | $30,620 | $7,636 | $9,435 | $47,691 |
| Employment | 0.8 | 0.1 | 0.1 | 1.0 |
| Labor Income | $11,687 | $2,824 | $3,668 | $18,179 |
| State and Local Government Revenues | $3,582 |
Table 12 shows the total economic impact from all river related uses. Variations in economic impact are due to gaming and non-gaming expenditures levels used in the analysis.
| Category | Direct | Indirect | Induced | Total |
|---|---|---|---|---|
| Annual Output | $1,210,579 to $2,562,065 |
$307,693 to $701,007 |
$389,119 to $845,991 |
$1,907,392 to $4,109,063 |
| Employment | 24.9 to 46.9 | 3.7 to 9.2 | 5.2 to 11.2 | 33.8 to 67.3 |
| Annual Labor Income | $478,167 to $1,018,794 |
$120,251 to $282,244 |
$151,270 to $328,878 |
$749,688 to $1,629,916 |
| State and Local Government Revenues | $122,952 to $263,562 |
The economic impact analysis focuses on river related recreation expenditures that result in an inflow of dollars to the community and or a reduction of expenditures made by local residents in other communities for similar activities. Two important factors not included in this analysis that could change the results are:
Whether or not gambling related visitors will increase their overall travel/trip budgets due to the availability of improved river recreation. According to the RSCVA 1999 Visitor Profile Study, expenditures for recreation and sightseeing have declined substantially since 1990.
Whether or not day trip visitors for river related activities to the Reno/Sparks area will choose to gamble and make other expenditures in the local economy. Additional spending by this segment of people could substantially increase the overall economic impact of the project.
Based on a survey of communities that have whitewater parks (artificial waterways or river enhanced features), annual maintenance costs are either nonexistent or minimal. Naturally enhanced rivers do not require liability insurance. As a result, the primary outlay would be for the initial capital costs.
Officially sanctioned or sponsored events do incur costs. Based upon information collected for various events from Golden and Vail Colorado and from Wausau, WI, major events particularly those held in conjunction with river festivals can range from $40,000 to $80,000. The cost to operate events can be offset by sponsorships, volunteer organizations, event fees, donations, fees on concessions, and charges on all whitewater commercial use. Fees for event participants generally range from $10 to $100 per event. One potential uncompensated cost is professional staff time for the planning and coordination of a combined competitive event and river festival that could require a third to half-time equivalent (approximately $30,000 annually).
Improvements to the Truckee River would pay for themselves quickly. There are two ways to view whether or not expenditures for Truckee River enhancements create a net economic benefit for the region. The first method compares total economic output over a specified number of years to the initial capital costs and any subsequent operational costs. The second method is of more importance to government agencies and is the ability of the investment to generate new tax revenues as a means to evaluate the benefits of the project.
The estimated cost of river improvements is approximately $2.8 million. As shown in Table 13 the estimated overall economic impact has the potential to range from $1.9 million to $4.1 million in the first year. Holding this use scenario constant for 10 years yields $18.2 million to $39.3 million in total economic output. This amount is sufficient to repay the project costs in one to two years of full operation with two competitive whitewater park events, commercial river rafting, and non-event use by overnight visitors.
As shown in Table 13, the net present value of the total economic impact discounted at 6 percent over a period of 10 years is expected to yield between $7.2 million and $15.6 million in total economic output, roughly 3-5 times the initial investment of $2.8 million. The net present value is the inflation adjusted annual economic impact over ten years discounted back at 6 percent to reach present value.
| Year 1 | Years 1-10 | Estimated Payback | |
|---|---|---|---|
| Total Economic Output | $1,907,392 to $4,109,063 |
$18,250,613 to $39,317,032 |
1-2 years full operation |
| Net Present Value @ 6% | $1,907,392 to $4,109,063 |
$7,173,296 to $15,595,650 |
River related events and use would generate state and local taxes. The total amount of taxes generated from river related use is expected to range from $122,952 to $263,562 annually (Table 14). The net present value of state and local taxes generated annually over a ten-year period and discounted at 6 percent is expected to yield between $1.8 million and $2.5 million. Total payback with state and local taxes only is expected to be 10 to 15 years with the level of use described in Tables 3 and 6.
| Year 1 | Years 1-10 | Estimated Payback | |
|---|---|---|---|
| Total Tax Revenues | $122,952 to $263,562 |
$1,574,747 to $3,375,658 |
10-15 years full operation |
| Discounted-NPV | $122,952 to $263,562 |
$1,176,452 to $2,521,866 |
The use scenario for the Truckee River developed in this analysis is conservative in terms of total use and recreational expenditures. There is a significant amount of upside development potential that could substantially increase the level of economic benefit to the Reno/Sparks area. It is possible, for example, to increase the number of organized events to 4 per year instead of 2. Increasing the number of events could potentially add another 800 to 1,000 overnight visitors. Several communities routinely host four events each year including national and international venues. It is also very possible that future water park use could be well in excess of 10,000 users annually. For example, twenty thousand annual whitewater park users may yield 5,000 to 6,000 overnight visitors. And finally, there is significant upside potential for whitewater rafting and increasing the number of overnight visitors and day trip visitors as well as the level of expenditures made in the local economy. Recall that the analysis assumes no overnight visitors for whitewater rafting and a level of daily expenditures that is significantly less than expenditures made at other whitewater rafting rivers.
Increasing the level of use beyond the initial scenario described in this section will depend upon a number of factors such as the willingness of the community to promote events and river use and the quality of the experience, particularly compared to other similar activities in the region. The potential upside increase in use may yield an overall economic impact that is three to five times the levels shown in Tables 12, 13 and 14.
Other factors that support increased use include:
There are no other enhanced or artificially developed facilities in the Far West (Oregon, California, Washington, Nevada, Utah, and Idaho.). There are few organized whitewater events in California.
Interest in whitewater sports, particularly kayaking, has increased substantially over the last decade.
Reno and Sparks are located within reasonable driving distances from large population centers and are located within an area (Sierra Nevada Range) that already draws visitors for outdoor recreation.
River recreation provides yet another opportunity to hold an off-season special event to draw visitors to the area. May and early June are well suited for a major river event in the Reno/Sparks area.
A competitive event requires a relatively small purse to draw nationally and internationally known participants. Purse amounts tend to be less than $20,000 per event.
The whitewater park and rafting will have instant national exposure from visitors coming to the area, by those going to Lake Tahoe and surrounding communities, and by travelers on major highways.
The potential for economic benefits, improved quality of life for local residents, and the potential to improve the quality and length of stay for tourist to the area, should make a compelling argument for the river related improvements along the Truckee River.