Posted on May 22, 2019
GRAND RAPIDS, MI — As proponents have sought support for a controversial dredging project that aims to open a stretch of the Grand River between Grand Rapids and Ottawa County to larger powerboats, they’ve often touted its economic benefits.
New businesses such as marinas and restaurants could pop up along the river, they say. And up to 33,000 new visitors from outside of Kent and Ottawa counties would come to boat on the body of water, bringing $3.3 million in annual new spending to the region.
Those figures were outlined in an economic impact study released in October by Grand River Waterway, the group behind the project. The nonprofit wants to make the river accessible for boaters to travel between Grand Rapids and Lake Michigan, a move that supporters say will increase tourism but opponents fear will hurt the river’s ecosystem and force municipalities to shoulder ongoing maintenance costs.
So how realistic is the 33,000-visitor projection?
Two experts who reviewed the study for MLive.com said it’s difficult to say.
John Crompton, a professor at Texas A&M’s Department of Recreation, Park and Tourism Sciences who has studied tourism-related economic impact studies, said the study lists the data used to determine the 33,000 new visitor projection. But it doesn’t lay out in detail how that data was used to arrive at the figure.
Nor does it say how many years it would take to attract that many new boaters. The study says the number of visitors will be “relatively low at first and grow over time” but does not lay out a timeline for when the visitor projection is expected to materialize.
“What the researcher is telling you is up to 33,000,” Crompton said. “So, what is the range? Is it zero to 33,000? She has an upper number only. In these kinds of studies, you really should be offering a most likely scenario, an optimistic scenario and a pessimistic scenario.”
John Siegfried, professor emeritus at Vanderbilt University, said the visitor projection is “not reliable because it cannot be replicated.”
“There is insufficient explanation to justify the 33,000,” said Siegfried, who taught economics at the Nashville-based university and has researched economic impact studies.
Expanding recreation
Grand River Waterway was founded by Dan Hibma, a West Michigan developer and husband of former Michigan Secretary of State Terri Lynn Land. The Republican-led Michigan Legislature has approved $3.45 million in state funding for the project, which seeks to dredge part of a 23-mile stretch of the river between the Fulton Street bridge in Grand Rapids and the Bass River inlet, near Eastmanville.
Language in the 2019 budget directed the Michigan Department of Natural Resources to issue proposals and hire private contractors to examine the soil beneath the riverbed for hazardous substances and, pending the results of those studies, seek a state permit to dredge the river. The DNR has hired a firm to do the sediment testing but it’s not clear when it will occur.
The project has since come under fire from three Democratic state lawmakers from Grand Rapids, as well as local governments in Kent and Ottawa Counties who fear they would be forced to use more taxpayer dollars to maintain and patrol the river if the project were to move forward. Residents who live along the river have also expressed concern about noise and say the presence of larger powerboats would disrupt recreational activities such as fishing and kayaking.
Since April, several municipalities have passed symbolic resolutions opposing the project. The list includes the Ottawa County Board of Commissioners, the city of Grand Haven, Grand Haven Township, Spring Lake Township and the city of Grandville. The state of Michigan has final say over the project.
Grand River Waterway used part of the state funding, $60,000, to hire East Lansing-based Anderson Economic group to conduct the economic impact study.
Cristina Benton, the study’s lead author, said the 33,000 new visitors estimate was based upon tourism data from Kent and Ottawa counties. She said the data — which her firm did not have permission to publish in the study — shows how many people visited the region, the purpose of their trips, what activities visitors participated in and how much they spent during their visit.
Her study also estimated potential new visitors “using theoretical new marinas in Grand Rapids,” the number of registered boaters in the state, as well as interviews at several marinas in the Grand Haven and Spring Lake area “to estimate how many marina users live outside the region.”
“We also use our professional judgement here in looking at any potential growth rates and what a project like this will mean for bringing new people to the county,” Benton said, adding that her firm followed a “rigorous methodology” and looked at “many data points.”
Benton said she’s confident in the projection but acknowledged the study does not include a timeline detailing how long it would take to attract that many people.
“We didn’t really look at it in the way that you’re asking,” she said. “It starts with a lower number and it grows over time. We really didn’t look at specific break points.”
Hibma said Anderson Economic Group is “very respected and we stand by their numbers.”
Crompton, the Texas A&M professor who reviewed the study for MLive, said he doesn’t doubt the validity of the 33,000 projected visitors. But the study doesn’t provide an outside observer with enough information to independently gauge it’s accuracy.
“All of those numbers are based upon certain assumptions and interpretations, and the audience has to know if they are reasonable or not,” he said. “I’m not doubting her word at all. I just feel that she has an obligation to show how she derived at the numbers.”
Economic benefits
Grand River Waterway’s backers have attempted to drum up support for the project by pointing to the economic benefit of increased recreational activity on the river.
“I think there’s significant opportunities for employment and job creation and business development, as well as another opportunity for us to attract people to our region,” Rick Baker, president of the Grand Rapids Area Chamber of Commerce, said during a March appearance on the WGVU program West Michigan Week.
He said the project could spark development along the river in Grand Rapids as well as communities such as Walker, Grandville and Jenison. Boat slips or a marina could be integrated with housing, condominiums, apartments and other commercial and mixed-use development along the river, he said.
“Our business folks are excited about it and just ready to welcome more visitors,” said Grandville Mayor Steve Maas, who spoke alongside Baker during the March episode of West Michigan Week.
The Grand River Waterway study says there is “some land” along the river, particularly in Grand Rapids, that could be redeveloped for “river recreation-friendly uses.” In Grand Rapids, significant land along the river is zoned for industrial or transportation uses and is owned by the city or state, the study says.
Hibma owns about 200 acres with a mile of riverfront property near the M-11 bridge in Walker. He has a long history of seeking to redevelop that property, and in 2010 spoke about creating a seasonal campground there. His spokesperson, Michael Zalewski, recently told MLive.com that Hibma does not have development plans tied to the dredging project.
Speaking recently to the Grandville City Council, Hibma highlighted the economic impact study.
He touted the prospect of increased property values along the river. The economic impact study said the project could increase the true cash value of hundreds of residential properties by an estimated total of $54.4 million. The increase would result in an additional $614,000 in tax collections within municipalities along the river.
There’s no timeline in the study for when the property tax increases could take place.
Most of the tax collections would occur in Ottawa County because it’s home to the most residential properties on the river, the study notes, and would be realized when new homes are built or properties are sold.
Hibma also pointed to the estimated $3.3 million in new spending, a figure tied to the assumption that the project would attract 33,000 new visitors. If the $3.3 million in new spending were to occur, it would have an economic impact of $5.7 million, the study says.
“We thought that was a pretty good impact for $2 million,” Hibma said, referring to the estimated cost of dredging the river.
Hibma, during an interview Monday, also said he does not believe a new marina must be built on the river to attract 33,000 new visitors. If you assume there are five people per boat, that would translate to an additional 6,600 boats on the river, he said. And if you assume an equal number of boaters come to the river each day between May 1 and Sept. 30, that would translate to an average of 43 boats per day.
He acknowledged that many people would chose to boat on the river during the weekend, not during the week. But he said he still believes there is capacity on the river for additional vessels without adding a marina or boat slips.
“It’s going to get spread out over the whole season,” he said of the visitor projection.
The prospect of an economic boost hasn’t been enough to persuade skeptical municipalities to support the project.
Last week, Grandville City Council member Justin Noordhoek successfully pushed for the council to issue a resolution opposing the project. He cited potential environmental damage and questioned who would pay for maintenance costs and additional police needed to patrol the river.
“There are too many unanswered questions here,” he said.
Source: mlive.com/news
