5.12.2011 Economic Impact of I-73 in South Carolina The existence of I-73 will inject billions of dollars into the I-73 Corridor and South Carolina, and provide tens of thousands of jobs in tourism, retail, service, and warehouse industries. After road completion, annual economic impacts estimated at $2.0 billion will sustain 22,347 jobs in South Carolina in 2030 and beyond. Prepared Northeastern Strategic Alliance (NESA) for Richmond, Virginia Cleveland, Ohio 1309 East Cary Street 1025 East Huron Road Richmond, Virginia 23219 Cleveland, Ohio 44115 804.649.1107 (phone) 216.357.4730 (phone) 804.644.2828 (fax) 216.357.4730 (fax) www.chmuraecon.com Table of Contents 1. Conclusion .............................................................................................................................................................. 4 2. Executive Summary ................................................................................................................................................ 5 3. Introduction ............................................................................................................................................................. 9 4. Literature Review .................................................................................................................................................. 11 4.1. Aggregate National Studies ............................................................................................................................. 11 4.2. Regional Studies .............................................................................................................................................. 12 4.2.1. Evaluating Post-construction Impact ......................................................................................................... 12 4.2.2. Simulating Potential Impact ....................................................................................................................... 13 4.3.3. Studies Focusing on Business Attraction and Generation ........................................................................ 13 4.3.4. Studies on Tourism Development ............................................................................................................. 14 4.3. Economic Impact Study of I-73 in Other States ............................................................................................... 15 5. Economic Overview of the I-73 Corridor ............................................................................................................ 17 5.1. Population ........................................................................................................................................................ 17 5.2. Employment ..................................................................................................................................................... 18 5.3. Income .............................................................................................................................................................. 18 5.4. Industry Mix ...................................................................................................................................................... 19 6. Location, Access, and Traffic Impact of I-73 ...................................................................................................... 22 6.1. Location of I-73 in South Carolina .................................................................................................................... 22 6.1.1. I-73 North Segment Location ..................................................................................................................... 22 6.1.2. I-73 South Location ................................................................................................................................... 22 6.2. Access Points ................................................................................................................................................... 23 6.3. Traffic Projection .............................................................................................................................................. 24 7. Economic Impact of I-73 ....................................................................................................................................... 25 7.1. Travel Efficiency and Cost Savings .................................................................................................................. 25 7.2. Economic Impact of Service Businesses ......................................................................................................... 26 7.2.1. Job Creation in Service Businesses .......................................................................................................... 26 7.2.2. Economic Impact of Service Businesses .................................................................................................. 28 7.3. Development Potential for Distribution Centers ............................................................................................... 29 7.4. Potential Tourism Impact ................................................................................................................................. 30 7.4.1. Direct Impact on Regional Tourism ........................................................................................................... 30 7.4.2. Economic Impact of Increased Tourism .................................................................................................... 33 7.5. Other Benefits .................................................................................................................................................. 34 8. Fiscal Impact ......................................................................................................................................................... 36 8.1. State Fiscal Impact ........................................................................................................................................... 36 8.2. Local Fiscal Impact ........................................................................................................................................... 37 8.3. Potential Payback Period for Investment ......................................................................................................... 38 9. Assessment of Risks ............................................................................................................................................ 39 9.1. Downside Risks ................................................................................................................................................ 39 9.2. Upside Risks .................................................................................................................................................... 39 References ................................................................................................................................................................. 40 Appendix 1: Glossary ............................................................................................................................................... 42 Appendix 2: Interchange Development Categories .............................................................................................. 43 Appendix 3: Economic Impact of I-73 by Segments ............................................................................................. 44 Travel Efficiency ...................................................................................................................................................... 44 Road-Side Services ................................................................................................................................................. 44 2 Distribution Centers ................................................................................................................................................. 45 Incremental Tourism ................................................................................................................................................ 45 Fiscal Impacts ......................................................................................................................................................... 46 Economic Impacts Summary .................................................................................................................................. 47 3 1. Conclusion The proposed interstate system will inject billions of dollars into South Carolina and create jobs in the retail, service, warehouse, and tourism industries. After the completion of I-73, both existing businesses and potential new businesses can benefit from the interstate. For existing businesses in the I-73 Corridor, the interstate can improve travel efficiency and produce cost savings of $120.8 million in 20301 (Table 1.1). The most immediate new businesses associated with the construction of I-73 are the service businesses clustering around interchanges. These service businesses will serve both motorists on I-73 and local residents. They can generate an economic impact of $401.9 million and support 3,205 jobs per year in South Carolina in 2030, most of them being located in the I-73 Corridor. It is likely that I-73 can support a distribution center in the western rural portion of the I-73 Corridor with an economic impact of $31.1 million and