Saturday, March 14, 2009

A New Look at the Numbers for Destination Resorts

Central Oregon LandWatch has come out with a detailed study of the fiscal impacts of destination resorts, and resort developers and advocates aren't going to

Posted By on Sat, Mar 14, 2009 at 9:22 AM

Central Oregon LandWatch has come out with a detailed study of the fiscal impacts of destination resorts, and resort developers and advocates aren't going to like it one bit.


The conservation group hired the consulting firm of Fodor & Associates LLC to look at the public costs associated with a typical destination resort - in this case, the proposed Thornburgh Resort outside of Redmond - vs. the tax revenue it's likely to generate.

The bottom line: a net loss to the taxpayers of about $46 million.

On the cost side, the study counted transportation (about $39 million), school facilities ($4.7 million), fire and emergency services ($581,000), other public safety ($4.6 million), parks and recreation ($464,000) and general government facilities ($1.7 million), for a total of about $51.5 million.

"To obtain an estimate of statewide fiscal impacts, the costs for the Thornburgh Resort were extrapolated to all of the destination resorts currently planned or under construction in Oregon," the report's executive summary states. "Based on the 22,374 residential units in destination resorts that are either under construction or proposed in Oregon, the total future fiscal impact is estimated to be a net cost of $747 million."

And LandWatch's report doesn't even include the less quantifiable costs of resorts -- drawing down the water table, damaging wildlife habitat, destroying open space, harming  the quality of life in rural areas.

The report notes that the "destination resort" designation originally was created to encourage development of facilities for tourists in rural areas of the state, but over time the "resorts" have morphed into something very different: high-end residential communities built outside of urban boundaries.

"The State Legislature attempted to enforce the tourism aspects of these developments by requiring a certain minimum amount of overnight accommodations and certain visitor-oriented facilities," the report states. "The intent was apparently that without such requirements, destination resorts would likely be little more than the classic, sprawling rural subdivisions that the Land Use Program was intended to prevent. However it is unclear that resorts are actually meeting their overnight accommodations requirements due to a lack of reporting and enforcement mechanisms.

"In spite of State requirements, residential lots and private homes outnumber overnight accommodations by more than two to one. Residential lot sales represent the primary feature of existing and proposed destination resorts. Questions remain as to whether the destination resorts are essentially rural subdivisions that are increasingly having adverse impacts on cities, counties and the state that are not adequately offset by tourism benefits."

The job creation benefits of destination resorts are equally dubious, according to the report. Most of the jobs resorts generate are low-paying and seasonal - and many of them don't even go to local people:

"In spite of high unemployment in Central Oregon, alarming information was reported in the Bend Bulletin last year that many of the local resorts were hiring from outside the U.S. to fill their jobs. According to the article, instead of hiring locally, the Sunriver Resort actively recruited foreign workers at overseas job fairs, hiring 85 workers from countries such as Lithuania, Brazil and Mexico. Inn of the Seventh Mountain hired 11 workers from Jamaica and Indonesia. Other resorts may be doing the same. Even if some resorts are not hiring foreigners, studies show that many of the new jobs they create will go to newcomers rather than locals."

The importance of the LandWatch study is that, for the first time, legislators and the public have some hard cost/benefit numbers about destination resorts that don't come from the resort industry and its lobbyists.

"The impact studies that have been provided by developers have portrayed an unrealistically optimistic and beneficial picture of the development project," LandWatch says on its website, where you can also download a PDF of the whole report or its executive summary. "Unfortunately, it's this view of resorts that has been allowed to set resort policy in Oregon and throughout the West. That needs to change."

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