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3100
RESOLUTION NO. 3100 A RESOLUTION of the City Council of the City of Bremerton, Washington, approving the Section 108 Loan Guarantee Application for the Boardwalk Project. WHEREAS, the City of Bremerton is an entitlement community which receives a Community Development Block Grant (CDBG) each year from the Department of Housing and Urban Development; and WHEREAS, on May 7, 2008 the City's 2009 CDBG /HOME Policy Plan was approved by City Council, including provisions for participation in the Section 108 Loan Guarantee Program; and WHEREAS, the City of Bremerton / Kitsap County Consolidated Plan, which provides an overall strategy for housing and community development, includes provisions for participation in the Section 108 Loan Guarantee Program; and WHEREAS, HUD allows an entitlement jurisdiction such as the City of Bremerton to apply for up to 5 times its last annual entitlement; under this regulation Bremerton's maximum allowable Section 108 loan capacity is $2,867,300; and WHEREAS, the CDBG program received one application for Section 108 funding from the City of Bremerton Department of Public Works and Utilities in the amount of $2,800,000 for use in construction of the Bremerton Waterfront Boardwalk; and WHEREAS, the Bremerton Waterfront Boardwalk project received a grant of $1,750,000 from the HUD Brownfields Economic Development Initiative, contingent on qualifying for a Section 108 Loan of no less than $2,800,000; and WHEREAS, repayment shall commit City REET funds of $210,000 to $244,000 per year based on projected 4% - 6% interest rate and shall be paid over a 20 year period; and WHEREAS, the Consolidated Plan and the City's 2009 Policy Plan citizen participation plan set guidelines for public participation required for utilizing Section 108 Guaranteed Loan Program funds; and WHEREAS, the City of Bremerton held a 30 -day public comment period commencing September 21 and which was announced on September 16 at the Bremerton City Council meeting and published September 23` in the Kitsap Sun; and 1 2009 CDBG Section 108 Loan Application WHEREAS, the Department of Community Development CDBG /HOME staff on Monday, September 21, 2009 published on the City's website information about the Section 108 Loan Guarantee Program, a summary about the proposed loan application, and made available the entire text of proposed loan application for public review and comment; and WHEREAS., 4— comments were received during the advertised public comment period, which were forwarded to City Council for consideration; and WHEREAS, the Department of Community Development CDBG/HOME staff presents the Section 108 Loan Guarantee Program application for the Bremerton Boardwalk; NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF BREMERTON, WASHINGTON, DOES HEREBY RESOLVE AS FOLLOWS: SECTION]. The recitals and findings of fact set forth in this resolution are hereby incorporated as if fully set forth herein. SECTION 2. The Section 108 Loan Guarantee Program application attached hereto as Exhibit A is hereby adopted, will be forwarded to HUD for approval and, if approved, incorporated via amendment into the 2009 Action Plan to be submitted to the Department of Housing and Urban Development for approval. SECTIONS. Severability. If anyone or more sections, subsections, or sentences of this Resolution are held to be unconstitutional or invalid, such decision shall not affect the validity of the remaining portion of this Resolution and the same shall remain in full force and effect. SECTION 4. Effective Date. This Resolution shall take effect and be in force immediately upon its passage. PASSED by the City Council of the City of Bremerton, Washington this e gZ g & day of , 2009. ( e ECIL MCCOTqNCLL, Council Pre ident APPROVED AS TO FORM: ATTEST: e��Voo f R ER A. LUBO ICH, City A CAROL GEN, City erk 2 2009 CDBG Section 108 Loan Application ' 4 Exhibit A CITY OF BREMERTON BREMERTON BOARDWALK PROJECT SECTION 108 APPLICATION BEDI Grant Number: B- 09 -BD -53 -8002 Section 108 Loan Request $2.8 Million Total Project Financing $11 Million Loan Term 20 years Interest Rate Anticipated interest rate of 4% to 6% Loan Servicing $210,000 to $244,000 annual payments based on anticipated interest rate. Timeline Design work 2008 through 2011; initial construction phase begins 2012; final construction phase begins 2014. Loan and BEDI funds expenditure will begin with initial construction phase. Project Description Construction of Boardwalk and cleanup of adjacent brownfield located at Evergreen Park extension National Objective Principally benefit low- and very-low income residents; area benefit. Eligible Activity: Public Facilities and Improvements (24 CFR 570.201(c) Collateral 1) Dedicate Real Estate Excise Tax funds for capital improvements; 2) Pledge of $2,800,000 of current and future CDBG entitlement award funds. Section 108 Loan Application to City of Bremerton Applicant. City of Bremerton Public Works Project. Bremerton Boardwalk Project 1. Proiect Description Purpose: Remediation and redevelopment of a contaminated brownfields property into an expanded waterfront park, and construction of a 3,200 -ft long Boardwalk that will link the park to the City's Urban Center. The proposed improvements are presented in the attached artists renderings (see Attachments I - V). Objectives: the project will remove blight adjacent to a public park and residential neighborhood, and will provide a significant public amenity that will improve the quality of life in Bremerton, attract tourists, and consequently spur economic activity. Location: the project is located in the City of Bremerton's urban center, between Evergreen Rotary Park, located at 1400 Park Avenue, Bremerton WA 98337, and the existing Louis Mentor Boardwalk, located at Second Street and Washington Avenue. Please see Attachment VI — Plan View, and Attachment VII - Map. Ownership: the park land is owned by the City of Bremerton, the boardwalk will be owned by the City of Bremerton, and will be mostly located on property owned by the State of Washington. A land lease with the State will be executed prior to construction. Businesses Assisted: The project is construction of a public facility, therefore no private business will directly receive funding from either the Section 108 or BEDI programs. However, the City had an economic analysis of the Boardwalk Project completed as part of the design and planning (see Attachment VIII — "The Economic Impacts of the Bremerton Boardwalk "). The analysis estimated that the Boardwalk Project would spur between $37M and $64M in annual economic activity, and would create between 564 and 1,010 new jobs after year five following completion. One specific example of growth contingent on the boardwalk is documented in the support letter from M.S. Cavoad (on file), which indicates that $185M in proposed development is contingent on completion of the Boardwalk Project and Evergreen Park Expansion. To date, M.S. Cavoad has invested more than $30 million in a variety of development projects in Bremerton. Page 2 of 10 Section 108 Loan Application to City of Bremerton Applicant City of Bremerton Public Works Project: Bremerton Boardwalk Project 2. Sources and Uses Sources of project funding: Total_ 2010 2011 2012 2013 2014 WWRP - Local Parks 500,000 450,000 50,000 - - (secured grant) WWRP - Trails 2,000,000 - - 2,000,000 - - (secured grant) ALEA 500,000 500,000 - - - - (secured grant) NOAA shoreline cleanup 110,000 110,000 - - - - (secured grant) More Fish Partnership 50,000 50,000 - - - - Fund (secured grant) HUD -BEDI 1,750,000 - - 769,231 - 980,769 (grant) HUD Section 108 debt 2,800,000 - - 1,230,769 - 1,569,231 Rotary Club 100,000 100,000 - - - - (offered grant) DOE (grant amendment req'd) 90,000 90,000 - - - - Unidentified funding 3,200,000 735,000 820,000 35,000 35,000 1,575,000 Total sources 11,100,000 2,035,000 870,000 4,035,000 35,000 4,125,000 Uses of project funding: Total 2010 2011 2012 2013 2014 Boardwalk design 8,485,000 150,000 335,000 4,000,000 - 4,000,000 and construction Boardwalk design and construction; 2,615,000 1,885,000 535,000 35,000 35,000 125,000 Park development & shoreline restoration Total uses 11,100,000 2,035,000 870,000 4,035,000 35,000 4,125,000 20090820 CIP Page 3 of 10 Section 108 Loan Application to City of Bremerton Applicant: City of Bremerton Public Works Project: Bremerton Boardwalk Project Proiect Structure and Particioants Principal Parties: The project is a capital improvement that will be owned exclusively by the City of Bremerton. The project is being managed by the City of Bremerton. The City will competitively bid the construction, and award the contract to the lowest responsive, responsible bidder. All debt necessary for the project will be borrowed by the City of Bremerton. The City of Bremerton and its CDBG staff have the experience, organization, and financial resources to implement this BEDI /Section 108 funded project. The City of Bremerton's project support team consists of: Tom Knuckey, PE, Managing Engineer, City of Bremerton Public Works & Facilities: Tom is the City's Project Manager for the Boardwalk Project. Tom has over 20 years of experience in design and construction of municipal capital improvements, including management of over $60 million in grant and loan- funded capital improvement projects in Bremerton since 1998. Bill Webb, PG, Division Manager, Parametrix: The City competitively awarded a $3 million design and permitting contract for the Boardwalk Project to Parametrix, a Pacific Northwest consulting firm ranked as a top design firm by ENR. Parametrix has over 500 employees, annual revenues of over $90 million dollars, and specializes in all disciplines of engineering, architecture and environmental services. Bill Webb is the Parametrix Project Manager for the Boardwalk Project, overseeing the design, permitting, and overall project delivery. Bill has over 20 years experience with municipal project management, design and construction of waterfront and in- water projects, delivering capital improvements of over $100 million. A. Andrew Parks, CPA, Director of Financial Services, City of Bremerton: As Bremerton's Finance Director, Andy is responsible for the City's annual budget in excess of $150 Million Dollars. Andy has over 24 -years of experience in financial services, accounting, and management of public and private budgets and organizations. Andy will provide fiscal oversight and approval for the project financing plan. Marie Vila, CDBG Program Administrator, City of Bremerton: Marie oversees strategy for and management of the City's annual HUD Entitlement (CDBG, HOME and Shelter -Plus Care programs). Her responsibilities include program development and implementation, budgeting and planning, and compliance activities. Marie has worked with the City of Bremerton Block Grant program for four years, and has previous experience working with other Federal programs. Section 108 Loan funds will be managed by CDBG Program staff, with assistance of the Finance Department. Marie will coordinate the BEDI /Section 108 reporting and compliance requirements associated with the requested funds. Page 4 of 10 Section 108 Loan Application to City of Bremerton Applicant: City of Bremerton Public Works Project: Bremerton Boardwalk Project 3. Repayment Schedule and Source of Funds Repayment Schedule: Section 108 Loan proceeds are not anticipated until 2011. At that time, the full amount of the loan ($2.8 million) is anticipated in the summer of 2011, when it is expected HUD will sell marketable securities. The anticipated range of annual debt service is approximately $210,000 (4% TIC) to $244,000 (6% TIC) Amount of Payments Year Borrowing Principal Balance 2011 2,800,000 2,800,000 2012 - 95,000 2,705,000 2013 98,000 2,607,000 2014 102,000 2,505,000 2015 106,000 2,399,000 2016 110,000 2,289,000 2017 114,000 2,175,000 2018 119,000 2,056,000 2019 124,000 1,932,000 2020 129,000 1,803,000 2021 134,000 1,669,000 2022 139,000 1,530,000 2023 145,000 1,385,000 2024 151,000 1,234,000 2025 157,000 1,077,000 2026 163,000 914,000 2027 169,000 745,000 2028 176,000 569,000 2029 183,000 386,000 2030 191,000 195,000 2031 195,000 - Page 5 of 10 Section 108 Loan Application to City of Bremerton Applicant City of Bremerton Public Works Project: Bremerton Boardwalk Project Source of Funds: The City has identified two sources of funds to repay the loan: 1) The City will use a portion of its Real Estate Excise Tax (REET) to repay the Section 108 Loan. The anticipated range of annual debt service is $210,000 (4% TIC) to $244,000 (6% TIC). The City has received an average of $880,000 in REET income annually during the past 10 years. Current commitments total $560,000 per year. The completion of the Boardwalk Project is projected to generate additional REET of $5,000 per $1,000,000 in real estate sales. 2) The City will pursue the creation of a revitalization area to include the project area of impact. Upon creation of the revitalization area, an application will be submitted to the State of Washington for consideration of the formation of the area. Successful creation of the revitalization area will provide tax increment opportunities presently unavailable. 4. Collateral 1) The City pledges its Real Estate Excise Taxes as collateral for the Section 108 Loan. 2) As a requirement of the Section 108 Program, the City must pledge its present and future CDBG entitlement awards as collateral for Section 108 funded projects. The City may pledge up to 5 x its last award amount of $573,461 (2009), or $2,867,305. For the proposed application, the required pledge amount will be $2,800,000. Page 6 of 10 Section 108 Loan Application to City of Bremerton Applicant: City of Bremerton Public Works Project: Bremerton Boardwalk Project 5. Proiect Implementation Presubmission /Citizen Participation: General The Kitsap County and the City of Bremerton jointly publish a 5 -year Consolidated Plan. The Consolidated Plan is reviewed every 5 years. The current plan expires at the end of 2010; staff is presently coordinating the plan update, to be effective 2011. Development of a consolidated plan includes wide community involvement through activities like public meetings and work groups. The Plan is then presented to the community for a 30 -day public comment period and considered for adoption by Bremerton City Council at a public hearing. The City utilizes the Consolidated Plan as an overall strategy for housing and community development in Kitsap County and Bremerton, and it is a prerequisite to receiving federal funds. It guides the City in its consideration and appropriation of the HUD funding. The Consolidated Plan contains statistical information, vision statements, policies and strategies that guide future development. It consists of the following ingredients: 1. a citizen participation plan outlines the planning process; 2. a community profile analyzes demographic trends; 3. a needs assessment outlines housing and community development needs; 4. a five year strategy describes the long -term plans; and 5. a one year action plan describes proposed activities for the coming year. The City also publishes an annual Policy Plan, which sets parameters for the City's management of its HUD entitlement, including a summary of the citizen participation plan, grant application and review and selection processes, and eligibility and implementation requirements for grant funded projects. The Policy Plan is reviewed each year, presented to the community for a 30 -day public comment period and considered for adoption by Bremerton City Council at a public hearing. Both the Consolidated Plan and the Policy Plan explicitly include the Section 108 Loan Guarantee Program as a financing option for the City to consider. The Policy Plan sets forth details such as the range of activities eligible for Section 108 funding, technical assistance available, and the citizen participation process required. The City's citizen participation process was developed in accordance with 24 CFR 570.704(a)(2). Page 7 of 10 Section 108 Loan Application to City of Bremerton Applicant: City of Bremerton Public Works Project: Bremerton Boardwalk Project Public Comment Period In accordance with its citizen participation plan, the City of Bremerton has provided adequate notice for opportunities for the public to comment on the proposed Section 108 Loan application. • 8/26/2009 City Council Meeting: Staff announced award of BEDI grant and asked for Council approval to prepare a Section 108 Loan application. Council approval granted. • 9/16/2009 City Council Meeting: Staff announced a thirty day public comment period would commence on Wednesday, September 21, 2009, concurrent with posting of loan application details and draft application on the City's website. Staff name and phone number were provided for members of the public to contact with comments. Council meetings are broadcast on Bremerton - Kitsap Access Television. • 9/21/2009 Section 108 draft proposed loan application and attachments from City of Bremerton Public Works posted on City of Bremerton website for public viewing and comment. Information about Section 108 Loan Guarantee Program posted. Additionally, a link to the proposed Section 108 Loan application was posted as a "headline" on the City's homepage for visibility. Web posting includes but is not limited to: • The range of activities proposed • The extent to which low- and very-low income persons will benefit • Displacement (none) • Opportunities to make public comment • Public hearing date and time • 9/23/2009 Legal notice published in Kitsap Sun announcing receipt of Section 108 proposed loan application and public opportunity to comment on proposal. • 10/21/2009 City Council Meeting: CDBG staff presentation and council discussion of Section 108 proposed loan application. Public Hearing held to gather additional public comment. Council action to approve the application for submission to HUD. Environmental Review The project is currently undergoing the NEPA review. A biological assessment and several supporting studies have been completed in support of the JARPA- permit submittal. The JARPA was submitted in early 2009, and has since been suspended while project scope issues are being coordinated with regulatory agencies, and the local Native American Tribe in response to comments received during the NEPA public comment period. The application will be re- activated by December, 2009 and all project permitting will be completed in 2010. Page 8 of 10 Section 108 Loan Application to City of Bremerton Applicant: City of Bremerton Public Works Project: Bremerton Boardwalk Project Estimated Project Schedule 2009 Complete Remedial Action at former Chevron Property (Park Expansion Property,) and submit permits for the project. 2010 Perform first round of groundwater monitoring at park expansion property, and coordinate a second Agreed Order with the Washington State Department of Ecology to implement the Cleanup Action Plan. Complete permitting for boardwalk. 2011 Begin park construction, and complete boardwalk final design. 2012 Complete park construction and begin boardwalk construction. Section 108 loan funds will be expended beginning in 2012. 2014 Complete boardwalk construction. Fundinq Status The various sources of funding are either in -hand, or have been formally offered by the various agencies. Currently the project has raised 71 % of anticipated project costs. Please refer to Section 2, Sources and Uses, for status of funding commitments. 6. Eligible Activity The Waterfront Boardwalk Project is eligible under 24 CFR 570.201(c)— Public Facilities and Improvements. 7. National Obiective The Waterfront Boardwalk Project meets a National Objective by principally benefitting low and very-low income persons on an area basis (24 CFR 570.208(a)(1)). The Boardwalk will be a regional amenity, serving the entire Bremerton population with recreational benefits, waterfront access and a pedestrian byway. Future benefits include growth in tourism, jobs and property values. At this time, census figures indicate that 61 % of Bremerton residents earn less than 80% of the area median income 8. Public Benefit Standards Because this project is not a special economic development activity, the public benefit requirement described at 24 CFR 570.209(b) is not applicable. Page 9 of 10 Section 108 Loan Application to City of Bremerton Applicant: City of Bremerton Public Works Project: Bremerton Boardwalk Project Con tacts Marie Vila City of Bremerton Block Grant Programs Administrator 3456 th Street, Suite 600 Bremerton, WA 98337 ph: 360- 473 -5375 fax: 360- 473 -5138 marie.vilaa- ci.bremerton.wa.us Page 10 of 10 y . r ■ � 1 • { n +Vr • ` i s , :yi: kr r v l• . ti �t,� N £'"z , j'',yxy - • r. o: _lIr +��;'�`5 DIX l w fl � •� `—r�l ` ��J ��`T' _ - ^_ fit �� I���al� ,+. ,} • t / r lAew�.' Fy 5 , k r i ,v r ✓ t ' „ ' ; . `\ ^`11 fry, 4• } t ' ��{ � r � n - - , •.`�� � � � � �� � � � •) l f /3 RsY x, t"7• � F �i v � r x � V 25 el .emu � ' s § .c �, --�r• � �.�$'1•� r�+ I � F �� � ,+ g ��� �.i�y� E�b?I i �:-• L I + pia v� � > ti A+ 2 " f var1 X�dd.'+: s✓ •It' ,}. {' i , ?�I ♦�,• -{ }{�t'j "c•�'T.�y < "t{� �/ •., 1 y . , -fi . i r '' 6t T ,1.'6 at� '..d r• .`{ 1 +»f rte {Y § 'ii R•s• 5 i�o�`'(.� ! 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' � d .� �§ R C ;� � ti �' >� 4� 1 y_ �i ' � ` . �� i `. `� . 1 �I f . � �: �. ��•' �t � S}�e � �.� � � � , �.� _: .. , �� ,Y� ' � i '�':• !/�.- � . - - � Wit? �5 '.., _ '� e. `� �� ",J ;��•�\1J %�� J��., -.�, � + � � ice.. t• Y ` t rt r ! t 1� si j!{ Y + 4 � Z Ij T i Exhibit A Attachment VI Louis Mentor Boardwalk (existing) e 4 r 4`' Street 5 "' Street 6`' Street Washington Avenue t Manette Bridge a Evergreen Park % i —J Bremerton Waterfront� Boardwalk Project's Section 108 Application Attachment I - Plan View'�q Exhibit A Attachment VII, Caspeft TrsA Ceec Trod EE 19 at - ,6w - st — � F , p 1: .dl t e 8 - E FkW& -.a o9mveft AL .1 Wwo t r I" at i, Akhr S FRw -- 17ttl *I IG%h St II IDI'llin th St 3t m � Everg 1 5th at E 16 ir t M 14th C CL st I th t 12h at 12th at T-1 '31h at h St El CID 11th at PI t i iin 5t Id � t Ith at C6 10th Sit ll , _ F] 91 q Ith se St n 0 Q h &h h St k . E 10th St D f 10th t �;o� a, E;�] a E9t i St — 76 - 9F f I " F, ;0 9 E== St Ilh $t 5th at L th-st-6 41h at pwst- 3ur4wwl at Exhibit A The Attachment VIII Economic Impacts of the 'Bremerton Boardwalk Prepared for the City of Bremerton ECQNorthwest ECONOMICS • FINANCE . PLANNING 888 SW Fifth Avenue 99 W Tenth Avenue Suite 1460 Suite 400 Portland, Oregon 97204 Eugene, Oregon 97401 503 - 222 -6060 541- 687 -0051 November The Economic Impacts of the Bremerton Boardwalk ECONorthwest November 14, 2007 Contents ExecutiveSummary .......................................................................... ............................... i KeyFindings .................................................................................. ..............................i Background....................................................................................... ..............................1 TheBoardwalk Project ................................................................. ............................... l The Boardwalk Community .......................................................... ............................... 3 The Demand for Boardwalk Amenities ......................................... ............................... 6 CommunitySupport ................................................................. ............................... 6 National Demand for Outdoor Recreation ................................. ............................... 7 Demand by Non -Local Visitors ................................................ ............................... 8 Demand at Similar Facilities Elsewhere in Washington ............ ............................... 9 Economic Impact Methodology ...................................................... ............................... l 1 Classifying Economic Impacts ..................................................... .............................12 Impactsby Phase ...................................................................... .............................12 Typesof Impacts ...................................................................... .............................12 Measures of Impacts ................................................................. .............................12 Key Issues Affecting this Analysis ............................................... .............................13 The Base Case, Alternative Case, and Net Impacts ................... .............................13 Attributionof Causality ............................................................ .............................14 Economic Impact Results ................................................................. .............................14 ConstructionImpacts .................................................................. ............................... 14 OperatingImpacts ........................................................................ .............................16 Tourism - Related Economic Impacts ......................................... .............................17 Appendix A: Comments from the City of Bremerton's Survey ....... ............................... 37 Comments on Commuting: ........................................................................................ 37 Comments on Parking: .............................................................................................. 38 Comments on Safety and ADA Access: ..................................................................... 38 Comments on Economical Impact, Tourism, Shopping: ............................................. 39 Comments on Recreation/Walking /Health & Fitness: ................................................ 40 Boardwalk Impacts ECONorthwest Page ii Tables Table 1: Economic Impacts (Fair Share Scenario) .............................. ............................iii Table 2: Economic Impacts (Top Quintile Scenario) ........................ ............................... v Table 3: U.S. Census 2000 — Selected Characteristics ........................ ..............................4 Table 4: Population Statistics ........................................................... ............................... 5 Table 5: City of Bremerton Informal Survey Results ........................ ............................... 7 Table 6: National Outdoor Recreation Statistics, 2000 (unweighted data) ........................ 8 Table 7: Top Ten Activities of Visitors to Kitsap County ................. ............................... 9 Table 8: Economic Impacts From Construction (2007 dollars) ......... .............................15 Table 9: Fiscal Impacts from Construction (2007 dollars) ............... ............................... 16 Table 10: Travel- Generated Employment in 2005 (Selected Counties) .......................... 18 Table 11: Matrix of Possible Changes in Tourism (Visitor Days) ... ............................... 20 Table 12: Matrix of Changes in Tourist- Related Spending .............. ............................... 21 Table 13: Matrix of Tourism - Generated Job Impacts ...................... ............................... 22 Table 14: Economic Impacts (Fair Share Scenario) ........................ ............................... 24 Table 15: Bremerton Job Impacts (Fair Share Scenario) ................. ............................... 26 Table 16: Fiscal Impacts for State and Local Governments (Fair Share Scenario) .......... 27 Table 17: Economic impacts (Top Quintile Scenario) ..................... ............................... 29 Table 18: Job impacts (Top Quintile Scenario) ............................... ............................... 31 Table 19: Fiscal impacts (Top Quintile Scenario) ........................... ............................... 31 Table 20: Linkages Between Potential Economic Development and the Bremerton and Kitsap County Economies (impacts per 10 direct jobs) ........... ............................... 35 Table 21: Linkages Between Consumption Spending by Households and the Bremerton and Kitsap County Economies (Impacts Per $1,000,000 in Consumption Spending) ............................................................................................... ............................... 36 Boardwalk Impacts ECONorthwest Page iii Figures Figure 1: Employment Impacts (Fair Share Scenario) ...................... ............................... iv Figure 2: Employment Impacts (Top Quintile Scenario) .................... .............................vi Figure 3: The Proposed Bremerton Boardwalk ................................. ............................... l Figure 4: Comparison of Average Annual Incomes in 2006 .............. ............................... 6 Figure 5: Visitor Statistics for Wenatchee Riverfront Park ................ .............................10 Figure 6: Visitor Statistics for Chelan Riverwalk Park .................... ............................... 11 Figure 7: Visitor Trends Under Two Scenarios ............................... ............................... 23 Figure 8: Changes in Employment (Fair Share Scenario) ................ ............................... 25 Figure 9: Annual and Cumulative Tax Impacts for State and Local Governments (Fair ShareScenario) ...................................................................... ............................... 28 Figure 10: Changes in Employment (Top Quintile Scenario) .......... ............................... 30 Figure 11: Annual and Cumulative Tax Impacts for State and Local Governments (Top QuintileScenario) ................................................................... ............................... 32 Boardwalk Impacts ECONorthwest Page iv The Economic Impacts of the Bremerton Boardwalk ECONorthwest* November 14, 2007 Executive Summary Historically, the City of Bremerton has been known as a blue - collar, military town. Over the last few years, however, through the efforts of local government, community, and business leaders, the city has started to evolve into a more attractive place to visit, work, and live. The transition has been driven by Navy- related tourism and Bremerton's accessibility to the increasingly congested City of Seattle. Recognizing an opportunity to extend Bremerton's tourism cluster beyond the Navy, leaders have been forging ahead with projects to improve the ambiance and sense of community along the waterfront. The City of Bremerton has proposed building an over -water Boardwalk that will stretch almost two- thirds of a mile from the downtown Harborside area to Evergreen Park. With strong support of City officials, local businesses, and the community, the Boardwalk is a multi - objective project that will improve the quality of life, attract visitors, generate economic activity, stimulate economic development, and help to make Bremerton a more healthy community. Key Findings The City of Bremerton retained ECONorthwest to evaluate the economic impacts associated with the construction and operation of the Bremerton Boardwalk. The following are the key findings from this study. 1. The Boardwalk project has strong community support. Informal surveys conducted by the City of Bremerton show strong community support for the amenities the Boardwalk will provide. With well over 300 completed surveys, respondents indicated they would most likely use the Boardwalk when visiting other amenities in the downtown Harborside area (66 percent); attending fairs or other events on the Boardwalk (59 percent); or to enjoy shopping, dining, and entertainment downtown (53 percent). Views of wildlife and maritime activities, and access to the shoreline also ranked high among respondents. In terms of fitness- related activities, respondents indicated that they would use the Boardwalk for walking (65 percent), bicycling (30 percent), jogging (22 percent), and ' This report was prepared by ECONorthwest's Portland office for the City of Bremerton. Alec Josephson was the project manager for this analysis and was the primary author of this report. Mr. Josephson received valuable contributions from Bob Whelan, Senior Project Manager, and Jessica Smith, Research Analyst. Questions regarding the report should be directed to ECONorthwest's Portland office at (503) 222 -6060. Boardwalk Impacts ECONorthwest Page i medical /rehabilitation services (6 percent). Importantly, survey results show that the Boardwalk would accommodate the fitness activities of both local and non -local visitors across all age groups. "My wife and 1 have been reading about the proposed Bremerton boardwalk project and are very excited about the possibilities it offers to our city. Bremerton is undergoing a downtown renovation... The boardwalk will be a significant, spectacular contribution to that revitalization... We look forward to visiting the area and strolling along the new boardwalk once it is completed. It will definitely be a destination for us and our out -of -town guests. " — Survey respondent 2. The Boardwalk will accommodate the growing demand for outdoor recreation activities. The City of Bremerton's informal survey results are similar to those from the most recent National Survey on Recreation and the Environment. Both surveys showed that the demand for outdoor recreation — principally, those activities offered by the Boardwalk such as walking, biking, hiking, wildlife viewing, learning activities, family gatherings, beach and waterside access —is strong and growing. Indeed, with over 180.6 million participants nationwide (or 87.1 percent of those over 16 years old), the most popular outdoor activity is walking. Given this strong demand for the types of amenities the Boardwalk will offer, visitation is expected to be robust. Although comparable Boardwalk facilities in the Pacific Northwest are scarce, two riverfront parks in central Washington have experienced significant and growing visitor numbers. According to visitor counts collected by the Chelan County PUD, annual visitors to the Wenatchee Riverfront Park increased from 243,000 in 1986 to 1.9 million in 2006. Further north, the Chelan Riverwalk Park entertained 172,000 visitors in 2006. 3. The $24.5 million in spending associated with site clean up, sewer enhancements, and Boardwalk construction will temporarily support almost 280 full- and part -time jobs over a two -year project time period. Although the construction project will occur in Bremerton, much of the economic activity that it generates will spill over into other areas and sectors of the Kitsap County economy. Construction of the Boardwalk would directly generate approximately 200 full- and part-time jobs and $7.9 million in wages for workers in Kitsap County. As businesses purchase goods and services from other businesses and households spend their incomes, this construction activity will ripple through the Kitsap County economy. Ultimately, through this multiplier process, the Boardwalk project will ultimately account for $27.2 million in economic activity, $10.2 million in wages, $2.3 million in income for small business owners, and almost 280 full- and part-time jobs. Boardwalk Impacts ECONorthwest Page ii 4. The Boardwalk will directly benefit Bremerton's growing tourism cluster. This economic activity will spill over into other business sectors in Bremerton and elsewhere in Kitsap County. Spending by non -local visitors to Bremerton means additional sales for local businesses, and jobs and income for the local labor force. This spending will, in turn, have multiplier effects on other sectors of the local Bremerton and Kitsap County economies. Indeed, the Puget Sound Regional Council ( "PSRC ") and others view tourism as a key economic cluster that can facilitate economic development in the central Puget Sound region. The economic and fiscal impacts associated with the Boardwalk for two possible scenarios are summarized below. (Per PSRC Economic Development Grant Application guidelines, economic impacts are reported at two years and eight years after the Boardwalk has opened.) Table 1 summarizes the economic impacts for Bremerton and the rest of Kitsap County under a "fair share" scenario, where the Boardwalk produces an initial 10 percent bump in visitation and then enables Bremerton to achieve a growth rate in tourism that is comparable to the state as whole. Table 1: Economic Impacts (Fair Share Scenario) Study Area / Type of Impact Year 2 Year 8 Bremerton Output $9,734,000 $14,925,000 Wages $3,415,000 $5,236,000 Business Income $465,000 $712,000 Jobs 159 245 Rest of Kitsap County Output $5,641,000 $9,365,000 Wages $1,454,000 $2,112,000 Business Income $827,000 $1,699,000 Jobs 87 174 Total Kitsap County Output $15,375,000 $23,575,000 Wages $4,869,000 $7,465,000 Business Income $1,291,000 $1,980,000 Jobs 246 378 State and local tax revenues $939,000 $1,440,000 Under this fair share scenario, the increased economic activity associated with the Boardwalk will generate the following impacts two years after opening: • Approximately $9.7 million in economic activity, including $3.4 million in wages, $465,000 in small- business income, and almost 160 full- and part-time jobs in Bremerton; • Approximately $5.6 million in economic activity, including $1.5 million in wages, $827,000 in small- business income, and 87 full- and part-time jobs elsewhere in Kitsap County; and Boardwalk Impacts ECONorthwest Page iii • Almost $940,000 in tax revenues for state and local governments. In year eight, the impacts generated by the Boardwalk under this fair share scenario are significant and include: • Almost $15.0 million in economic activity, $5.2 million in wages, and 245 full- and part-time jobs in Bremerton; • Another $9.4 million in output, $2.1 million in wages, and 174 full- and part-time jobs for workers and businesses elsewhere in Kitsap County; and • Approximately $1.44 million in tax revenues for state and local governments. The economic impacts described above represent the annual impacts two years and eight years after the Boardwalk opens. Figure 1, below, shows the employment impacts on Bremerton and elsewhere in Kitsap County, and how they evolve over time under this fair share scenario. The income reported in year two and year eight represents the wages and business income for workers and small- business owners in each of those years. Figure 1: Employment Impacts (Fair Share Scenario) ' - ---- --...— - ' - - - - -- Year 8 - - -- Income = 400 — $9,445,480 Year 2 300 Income = a 56.159,990 0 m E P m 200 — a w s LL 100 L 0 201D 2011 2012 2013 2014 2015 2016 2017 © Bremerton ■ Elsewhere in Kitsap County Given the strong demand for the outdoor opportunities it offers, easy access to shopping and recreational activities in downtown Bremerton, and close proximity to regional transportation assets and population centers such as Seattle and Tacoma, it is possible the Boardwalk will become a unique recreation destination that generates a significant increase in tourism to Bremerton. A second, more optimistic scenario has Bremerton experiencing an initial 20 percent bump in tourism and an average annual growth rate going forward that places it in the top quintile group of counties in Boardwalk Impacts ECONorthwest Page iv Washington. The economic impacts for Bremerton and the rest of Kitsap County in year two and year eight under this top quintile scenario are summarized in Table 2. Table 2: Economic Impacts (Top Quintile Scenario) Study Area / Type of Impact Year 2 Year 8 Bremerton Output $20,616,000 $40,876,000 Wages $7,232,700 $14,341,000 Business Income $984,000 $1,951,000 Jobs 337 671 Rest of Kitsap County Output $11,947,700 $25,647,000 Wages $3,079,000 $5,783,000 Business Income $1,751,000 $4,654,000 Jobs 185 478 Total Kitsap County Output $32,563,700 $64,566,000 Wages $10,311,700 $20,445,000 Business Income $2,735,000 $5,423,000 Jobs 522 1,035 State and local tax revenues $1,989,400 $3,944,000 Under this top quintile scenario, the economic activity associated with the Boardwalk will generate the following impacts two years after opening: • Approximately $20.6 million in economic activity, including $7.2 million in wages, $984,000 in small- business income, and almost 340 full- and part-time jobs in Bremerton; • Almost $12.0 million in economic activity, including $3.1 million in wages, $1.8 million in small- business income, and 185 full- and part-time jobs elsewhere in Kitsap County; and • Approximately $2.0 million in tax revenues for state and local governments. Under this top quintile scenario, the impacts associated with the Boardwalk in year eight are significant and include: • Over $40.8 million in economic activity, including $14.3 million in wages, $2.0 million in small- business income, and approximately 670 full- and part-time jobs in Bremerton; • Approximately $25.7 million in economic activity, including $5.8 million in wages, $4.7 million in small- business income, and almost 480 full- and part-time jobs elsewhere in Kitsap County; and • Approximately $3.9 million in tax revenues for state and local governments. Figure 2 shows the employment impacts on Bremerton and elsewhere in Kitsap County, and how they evolve over time under this top quintile scenario. The income Boardwalk Impacts ECONorthwest Page v reported in year two and year eight represents the wages and business income for workers and small- business owners in each of those years. Figure 2: Employment Impacts (Top Quintile Scenario) 1 Year 8 ,200 Income $26,868,500 1,000 q ° 0 800 MV m E Year 2 ~ Income - M 600 "'-' 313,066,800 ' c m 3 400 i U_ 200 0 2010 2011 2012 2013 2014 2015 2016 2017 ❑ Bremerton ■ Elsewhere in Kitsap County 5. Interviews with business and community leaders show strong support for the Boardwalk and the economic activity it is expected to generate. Respondents were unanimous that the Boardwalk would enhance the economic development potential of Bremerton. New private investment in Bremerton will generate local jobs, and have spillover impacts for businesses and workers elsewhere in Kitsap County. Families moving to Bremerton will have similar effects. ECONorthwest estimates that every $1.0 million in consumption spending by new households will generate: • Approximately 7.6 full- and part-time jobs and $203,000 in wages in Bremerton; and • 1.7 full- and part-time jobs and $58,200 in wages elsewhere in Kitsap County. Boardwalk Impacts ECONorthwest Page vi The Economic Impacts of the Bremerton Boardwalk The City of Bremerton asked ECONorthwest to evaluate the economic impacts associated with the proposed Bremerton Boardwalk. This report describes ECONorthwest's analysis and results. Background The Boardwalk Project Although initially proposed to improve access to and maintenance of the Washington Avenue beach sewer line, the 3,200 foot -long, over -water Boardwalk represents a key component of Bremerton's current waterfront revitalization efforts. Shown in Figure 3, the Boardwalk has evolved into a multi- objective project that City officials believe can improve the quality of life, generate economic activity, stimulate additional economic development, and make Bremerton a more healthy community. Figure 3: The Proposed Bremerton Boardwalk �gL s �cRt I ,. .riown wa+ Boardwalk Impacts ECONorthwest Page 1 Similar to many cities around the United States, one of the biggest challenges facing the City of Bremerton is downtown revitalization. The Boardwalk will complement current economic development in downtown Bremerton and help to stimulate additional private investment. Projects that have been completed or are in progress include: • The Kitsap Conference Center and the 105 -room, Hampton Inn & Suites Waterfront Hotel; • The Harborside Fountain Park and Fountain Room events center; • The redevelopment of the former J.C. Penney building that will bring in a new grocery store, bookstore, health and fitness club, other retail, public gathering places, underground parking, and apartments; • New waterfront condominiums such as the Harborside and The 400; • Expansion of the Port of Bremerton Marina; and • Construction of an underground tunnel that will redirect ferry traffic, reduce vehicle congestion, and improve pedestrian access and safety in the downtown area. By connecting two popular recreation areas —the Harborside area in the city center and Evergreen Park to the north —the Boardwalk will significantly enhance the recreational opportunities afforded by these two complementary areas. It will give Bremerton residents an attractive and safe place to recreate. With intermediate connections along its length, the Boardwalk will also connect neighborhoods with business districts, so errands or visits with friends and neighbors can be accomplished without automobiles. This may reduce congestion and pollution. "People said, `Build this trail and no one will come'... Now commuters use it everyday and families come on weekends to blade and bike and walk. " — Mayor Tom Murphy in testimony before the Committee on the Judiciary of the U.S. House of Representatives, regarding the Eliza Furnace Trail in Pittsburg, Pennsylvania. Given the strong demand for the amenities it offers, easy access to shopping and recreational activities in downtown Bremerton, and close proximity to regional transportation assets and population centers such as Seattle and Tacoma, the Boardwalk may become a recreation destination that will attract both local and non -local visitors. As such, the Boardwalk will help to keep local spending local, and attract new spending by non -local visitors. This will enhance the sales opportunities of downtown businesses and benefit local employees, business owners, and households. In addition, the Boardwalk may help mitigate future costs associated with sewer maintenance and repair, and shoreline erosion. This benefits city finances and/or local taxpayers. "In the last 12 months, we've had more tourists than in the last 30 years. Before, there wasn't anything to bring them here. " — Mayor Curtis Lewis, discussing the Silver Comet Trail in Rockmart, Georgia, Atlanta Journal- Constitution, May 6, 2002. Trails, greenways, and open spaces are viewed as a way to connect suburbs to cities, attract visitors to downtown, and enhance the overall beauty of the central city. The Boardwalk project involves the clean up of almost two - thirds mile of shoreline, Boardwalk Impacts ECONorthwest Page 2 protection of shoreline that is subject to erosion, and the expansion of Evergreen Park through the redevelopment of abandoned industrial properties in Smith Cove. Essentially a "greenway over water ", the Bremerton Boardwalk will improve the quality of life and enable Bremerton to compete with other cities for residents and businesses. "Many of the green places and open spaces that need protecting most today are in our own neighborhoods. In too many places, the beauty of local vistas has been degraded by decades of ill planned and ill- coordinated development. " — Vice President Albert Gore, January 12, 1999. The Boardwalk will help to make Bremerton a more healthy community. At the national, regional, and local levels, there exists significant and growing demand for the outdoor recreation services that the Boardwalk will provide. Nationally, walking (180.6 million), bicycling (84.8 million), and hiking (73.8 million) are the top outdoor recreation activities.' Like trails and green spaces elsewhere, the Boardwalk will make it easier for people to exercise. According to researchers at North Carolina State University regarding a new trail system, 72 percent of those surveyed said that the trail would provide them a place to exercise and 57 percent said they would likely exercise more. The Boardwalk Community In addition to improving the local quality of life, the Boardwalk is expected to increase tourism — itself an economic driver —and bolster the local economy. The Puget Sound Regional Council ( "PSRC ") lists tourism as one of 15 industry clusters that can facilitate economic development in the central Puget Sound region. With miles of scenic shoreline, and close proximity to other recreational amenities and downtown businesses, the proposed Boardwalk would appear to be uniquely positioned to leverage those assets to increase tourism and bring new spending to Bremerton. By most measures of economic vitality, the immediate area surrounding the Boardwalk has historically lagged both Kitsap County and the state. Table 3 shows selected economic characteristics from the U.S. Census Bureau's 2000 Census. The USDA Forest Service, National Survey on Recreation and the Environment, 2000. 2 Mark Ivy and Roger Moore, 2000 Cary Greenway Neighbor Study. Assessing Landowner Attitudes Towards Proposed Greenway Trail Development, North Carolina State University, Department of Parks, Recreation, and Cultural Resources, April 2, 2001. 3 The immediate impact area is based on the Bremerton zip code 98337. Boardwalk Impacts ECONorthwest Page 3 Table 3: U.S. Census 2000 — Selected Characteristics Kitsap Washington Bremerton Bremerton Selected Characteristic Bremerton County State % of Count % of State Median family income $31,204 $53,878 $53,760 57.9% 58.0% Per ca pita income $15,793 $22,317 $22,973 70.8% 68.7% Families with income below povert level 21.2% 63% 7.3% 336.5% 290.4 %� Individuals with income below povert level 26.8% 8.8% 10.6% 304.5% 252.8% Individuals with income that is 50% below povert level 11 9% 3.6% 46% 330.6% 258.7% Percent of individuals over 25 years old with a bachelor's deg ree or hi 14.7% 25.3% 27.7% 58.1% 53.1% Median home value $86,400 $152,100 $168,300 568% 51.3 %� Source United States Census Bureau, 2000 Census Note The 2000 Census measures the income of citizens in 1999 According to U.S. Census Bureau data, in 1999, the median family income in the downtown Bremerton area was $31,204. This was approximately 58 percent of the median family income in both Kitsap County and Washington. In addition, the percentage of families with income below the (national) poverty level in downtown Bremerton was roughly three times greater than in Kitsap County. Ultimately, the economic distress in downtown Bremerton shows up in property values, where median home values in the immediate impact area were roughly half the median home value in Kitsap County and Washington in 1999. Bremerton has also struggled to create jobs. In fact, data from the Puget Sound Regional Council's "2004 Milestones" report shows that Bremerton led the region in job losses ( -1,611 jobs) between 1995 and 2001. These jobs losses occurred at a time when the Washington economy was growing and the U.S. economy was in its longest economic expansion in history. As communities struggle economically, residents tend to leave. While the rest of Kitsap County and the state have experienced population increases over the last six years, Bremerton's population has declined. As shown in Table 4, between 2001 and 2006, Bremerton experienced a 3.6 percent decrease in population ( -1,350 residents), while other regions of Kitsap County and Washington experienced 5.8 and 6.8 percent increases, respectively. Perhaps more importantly, according to a national study conducted by the U.S. Economic Development Administration, economically distressed areas typically suffer from a form of "adverse selection" where those most likely to leave are young or middle - aged, higher educated, and higher income households. (See the percentage of residents over the age of 25 with bachelor degrees or higher, in Table 3. Bremerton is almost half ° Out - migration, Population Decline, and Regional Economic Distress, United States Department of Commerce, Economic Development Administration, January 1999. Boardwalk Impacts ECONorthwest Page 4 the state average.) It is this characteristic of economically induced out - migration that leads to the loss of human capital and makes future economic development difficult. Fundamentally, that has been the economic problem of Bremerton. Other parts of Kitsap County have seen vibrant growth in the number of high- income families with wage earners who then commute to Seattle (where the costs of family housing have become prohibitively expensive). Bremerton, however, has been left behind. By enhancing the attractiveness of its downtown, which has all the elements of an appealing waterfront setting, the City has an opportunity to reverse that flow. If it succeeds, and the Boardwalk becomes a catalyst in achieving this goal, endogenous job growth in serving such families (e.g., education, healthcare, professional services, etc.) would accelerate and result in higher wage growth similar to what has been seen elsewhere in Kitsap County. Table 4: Population Stat Elsewhere in Elsewhere m Bremerton Population Bremerton Kitsap County Washington 39,000 Population 2001 37,260 196,140 5,741,500 38,000 2002 37,530 197,170 5,807,000 2003 38,730 198,270 5,861,300 37,000 2004 37,520 201,980 5,928,300 2005 34,580 205,820 6,016,000 2006 35,910 207,490 6,132,200 36,000 Changes 2001 -2006 -1,350 11,350 390,700 35,000 2005 -2006 1,330 1,670 116,200 % Changes 2001 -2006 -36% 58% 68% 34,000 2005 -2006 38% 08% 19% 2001 2002 2003 2004 2005 2006 Source. Washington State Office of Financial Management The accompanying chart to the right of Table 4 shows that Bremerton's recent trend in declining population reversed itself between 2005 and 2006, and the redevelopment of the downtown area may be a factor contributing to the population increase. However, the most recent income statistics show that the immediate Bremerton area surrounding the proposed Boardwalk still lags significantly behind the rest of Kitsap County and the state. As seen in Figure 4, below, the distribution of household incomes in Bremerton near the proposed Boardwalk is dramatically skewed to lower income groups. In 2006, over 31 percent of the households in downtown Bremerton had an annual income of less than $20,000— compared to 13 percent elsewhere in Kitsap County and 16 percent elsewhere in Washington. Moreover, three - quarters (75 percent) of households in the immediate impact area had an annual income less than $50,000. Boardwalk Impacts ECONorthwest Page 5 Figure 4: Comparison of Average Annual Incomes in 2006 i 30% fn v 0 L N 0 20% — O C N U m J IL 10% 0% I Less than $20 -$35k $35 -$50k $50 -$100k $100 -$200k Over $200k $20k ■Bremerton ■Elsewhere in Kitsap County ❑Elsewhere in Washington Source Clantas By improving the quality of life, stimulating local economic activity, and bringing new private investment to the downtown area, the Boardwalk may help to remedy the economic and social disparities between families in Bremerton, and the rest of Kitsap County and the state. The national study by the Economic Development Office suggests, "Areas negatively affected by long -term population decline and out - migration may possess locational advantages that are unexploited. Examples are attractiveness for tourism, a favorable industry mix on which to base additional development, or reversible bottlenecks in transportation systems or other infrastructure. " 5 The Demand for Boardwalk Amenities Surveys conducted by the City of Bremerton show near - universal support for the Boardwalk project and strong demand for the various types of services the Boardwalk will provide. These results are also evident in national recreation surveys, local visitor surveys, and visitor statistics at riverwalks and river parks elsewhere in Washington. Community Support Informal surveys conducted by the City of Bremerton show strong support for the Boardwalk and the amenities it would provide. Survey results are shown in Table 5. Comments by respondents are included in Appendix A of this report. 5 Out - migration, Population Decline, and Regional Economic Distress, United States Department of Commerce, Economic Development Administration, January 1999. 6 The City of Bremerton conducted non - random surveys of local and non -local residents in August and September of this year. Boardwalk Impacts ECONorthwest Page 6 Table 5: City of Bremerton Informal Survey Results Affirmative Survey Question Responses How would you use the Boardwalk and park connection? Visiting downtown Harborside District public plaza, fountains, and retail businesses 66% Attending fairs, arts and cultural events on boardwalk, park areas, at OC, and neighborhoods 59% Destination for yourself or out -of -town guests to enjoy shopping, dining, and entertainment 53% Bird, whale, and wildlife viewing 44% Viewing boats /other maritime activity 41% Access to shoreline and a safe plan for those using wheelchairs, walkers, or with special needs 39% Learning about the environment and our maritime, military, and Native American history 34% What fitness and /or health activities would you do on the Boardwalk and park connection? Walking 65% Bicycling 30% Jogging 22% Medical /Rehabilitation 6% Where would you be commuting to /from? Washington ferry Seattle 30% Harborside district (downtown) 22% Port Orchard ferry 15% Transit center 12% Olympic College 9% Puget Sound Naval Shipyard 7% What is the age range of users of the Boardwalk and park connection? Children under 12 30% Teenagers 19% Adults 51% Adults, Non - senors' 24% Adults, Seniors' 27% Where do you reside? Resident of Bremerton 44% Elsewhere 56% 'Adjustments made for possible double counting Source. City of Bremerton Respondents reported that they are very much in favor of the Boardwalk, and would use it for a variety of recreational and fitness activities. The top recreational activities are visiting downtown public areas and local retailers (66 percent); attending fairs and other special events (59 percent); and shopping, dining, and entertainment (53 percent). Views of wildlife and maritime activities, and access to the shoreline also ranked very high among respondents. In terms of fitness, walking (65 percent), bicycling (30 percent), and jogging (22 percent) were activities that respondents indicated they would undertake while visiting the Boardwalk. Importantly, the survey results indicate that the Boardwalk would accommodate local and non -local visitors across all age groups. National Demand for Outdoor Recreation The success —in terms of attracting visitors —of the Boardwalk ultimately depends on the demand for the services it offers. Data from the most recent National Survey on Recreation and the Environment ( "NSRE 2000 ") show that the demand for the Boardwalk Impacts ECONorthwest Page 7 various amenities the Boardwalk would offer is quite strong. In aggregate, approximately 202 million persons were involved in some sort of outdoor recreation in 2000. Walking is the most popular form of outdoor recreation, with approximately 180.6 million participants (87.1 percent of people over the age of 16.) Although walking is popular among all age groups, it is especially popular for older Americans. National participation statistics for the different types of activities that the Boardwalk is expected to provide are shown in Table 6. Table 6: National Outdoor Recreation Statistics, 2000 (unweighted data) Percent of Major Type of Activity/ Population 16 Number Specific Activity and Older (in millions) Trail /street/road activities Walking 871% 180.6 Biking 409% 84.8 Hiking 35.6% 738 Viewing and learning activities Visiting a nature center, trail or zoo 62.8% 130.2 Visiting a historic site 53.2% 110.3 Viewing and photographing activities Bird watching 410% 84.9 Viewing other wildlife 54.6% 113.2 Viewing natural scenery 698% 144.7 Sightseeing activities Sightseeing 602% 124.8 Traditional social activities Family gathering 761% 157.8 Picnicking 59.9% 124.2 Other water - related activities Visit a beach 42.0% 87.1 Visit a waterside 306% 63.4 Source 1999 -2000 National Survey on Recreation and the Environment, USDA Forest Service and the University of Tennessee, Knoxville, Tennessee Demand by Non -Local Visitors The demand for outdoor recreation evident in NSRE 2000 is also captured in survey results of non -local visitors to Kitsap County. The top 10 activities of visitors to Kitsap County are shown in Table 7. According to visitor statistics gathered for the State of Washington Department of Community, Trade and Economic Development ( "CTED ") shopping was the number 7 The National Survey on Recreation and the Environment ( "NSRE 2000 ") is conducted by the Interagency National Survey Consortium, and coordinated by the USDA Forest Service, Recreation, Wilderness, and Demographics Trends Research Group, Athens, Georgia and the Human Dimensions Research Laboratory, University of Tennessee, Knoxville, Tennessee. NSRE 2000 is a phone survey of 50,000 households in the United States. Questions are related to outdoor recreation participation, demographics, household structure, lifestyles, environmental attitudes, and natural resources. 8 Olympic & Kitsap Peninsula Visitor Profile 2002, prepared for the Tounsm Office of the State of Washington Department of Community, Trade and Economic Development, by Jim Lillstrom & Associates, April 2003. Boardwalk Impacts ECONorthwest Page 8 one activity of visitors to Kitsap County. Eight of the other top nine activities were outdoor - related. Table 7: Top Ten Activities of Visitors to Kitsap County Percent of All Activity Visitors Shopping 54% Sightseeing /driving tour 44% Family event 35% Wine tasting 27% Visit historictcultural site 22% Hiking 20% Festival /event 18% Golf 15% Biking 14% Boating /watersports 13% Source. Olympic & Kitsap Peninsula Visitor Profile 2002, April 2003 The market demand for outdoor - related recreational activities is strong at both the national and regional level. The market demand by non -local visitors for retail shopping, and eating and drinking services while visiting Kitsap County is also quite strong. With the amenities the Boardwalk will provide and close proximity to the business district in downtown Bremerton, the Boardwalk would be uniquely situated to accommodate both types of demand. Demand at Similar Facilities Elsewhere in Washington The Bremerton Boardwalk will be a unique Northwest attraction; examples of similar boardwalks in the Pacific Northwest are rare, and visitor data for comparable facilities is seldom gathered. ECONorthwest was able to obtain visitor data for two river walks in Central Washington, and these visitation statistics suggest that the demand for the recreational amenities offered at these facilities is strong and growing. In Wenatchee, Washington —a city with a population of approximately 29,000 — the Apple Capital Recreation Loop Trail was completed in 1994. Spanning both the east and west sides of the Columbia River, the park sits on 31 acres and offers visitors river views, beach access, a two -lane boat launch, and restrooms. Visitor statistics compiled by the Chelan County Public Utility District ( "Chelan County PUD ") show that park visitation has increased dramatically since opening, and reached approximately 3.8 million people in 2006. According to the Chelan County PUD, "...the Apple Capital Recreation Loop Trail has been a resounding success. The trail has become a major transportation corridor that serves thousands of commuter and recreational trail users each year ... The parks and trails have added much to our quality of living " The Apple Capital Recreation Loop Trail is a trail system that connects four public parks. The most popular attraction of the trail system is the Wenatchee Riverfront Park —with 1.1 miles of shoreline trail, numerous access points to neighborhoods, businesses, and special amenities such as an ice - skating rink, a special event mini - 9 Chelan County PUD memorandum. See http: / /www.chelanpud.org/apple- capital - loop - trail.html Boardwalk Impacts ECONorthwest Page 9 railroad, and the Wenatchee Valley Museum and Cultural Site. As is evident in Figure 5, park visitation has grown significantly since opening in 1986. According to the Chelan PUD, the annual numbers of visitors at the park increased from 243,000 in 1986 to 1.9 million in 2006. Figure 5: Visitor Statistics for Wenatchee Riverfront Park 11 111 } 1 - 1 '1 11 11. Source Visitor statistics from Chelan PUD Photograph provided by North Central Washington Portal (www ncwportal com) Further north, the city of Chelan (population 3,500) has a one -mile scenic river loop trail called Chelan Riverwalk Park. Situated on 12 acres, with restrooms, picnic areas, and a boat launch, visitation to this facility has increased almost four -fold since opening in 1986. Even in this more remote north central Washington location, almost 172,000 visitors enjoyed the park in 2006. (See Figure 6.) Boardwalk Impacts ECONorthwest Page 10 Figure 6: Visitor Statistics for Chelan Riverwalk Park 1 1 1T`M1. A I 111 IMM s�.M w� 1 •1 11 11• Source. Visitor statistics from Chelan PUD Photograph provided by North Central Washington Portal (www ncwportal.com) Although detailed visitor statistics are not available for comparable Boardwalks elsewhere in Washington, the riverwalk in Chelan and river trail in Wenatchee both provide visitation numbers that suggest the demand for the outdoor recreation services provided by the Bremerton Boardwalk is strong and growing. Economic Impact Methodology The most widely used modeling framework for economic impact analysis is known as input - output modeling. Input- output models provide an empirical representation of an economy and the relationships among the various industrial sectors, final consumers, and the larger (regional or national) economy. Input - output models generally are not available for state and regional economies. As a result, special data techniques have been developed to estimate the necessary empirical relationships from a combination of national technological relationships and county- or local -level measures of economic activity. This non - survey approach means that input- output models can be economically constructed using commercially available modeling software that relies on secondary source data collected by government agencies. The most commonly used impact analysis software is called IMPLAN (for IMpact Analysis for PLANning). This is the modeling software that ECONorthwest 10 IMPLAN was initially developed by the Forest Service of the U.S. Department of Agriculture in cooperation with the Federal Emergency Management Agency and the Bureau of Land Management of the U.S. Department of the Interior to assist federal agencies in their land and resource management planning. Since 1993, IMPLAN has been developed and distributed by the Minnesota IMPLAN Group, Inc. Boardwalk Impacts ECONorthwest Page 11 used in this analysis. In simple terms, the IMPLAN model works by tracing how spending generated by the Boardwalk circulates through the immediate impact area and the larger Kitsap County economy. Classifying Economic Impacts Depending on the project or program, economic impacts can be classified by phase, types, and measures. Impacts by Phase ECONorthwest measured economic impacts for two distinct phases. The construction impacts summarize the changes in output, earnings, and employment associated with construction of the Boardwalk. This economic activity will, in turn, generate additional tax revenues for state and local governments. Construction impacts are temporary in nature and occur as construction spending occurs. Operating impacts summarize the changes in output, earnings, and employment resulting from Boardwalk operations. Impacts from Boardwalk operations will also generate fiscal impacts for state and local governments. The operation of the Boardwalk will not require significant new expenditures or employment by the City of Bremerton. Instead, the operating impacts, in the short run, will come from new local spending by non -local visitors. In the longer run, the Boardwalk may facilitate additional private investment in Bremerton in the form of new industry and/or households. As opposed to construction impacts, operating impacts will continue as long as the Boardwalk exists. Types of Impacts Spending attributed to the Boardwalk will generate direct impacts for local businesses and workers. They include the full- and part-time jobs and income earned by the workers building the facility (during construction) and the workers providing goods and services to visitors of the facility (during operations). The Boardwalk will generate secondary impacts. These include indirect impacts for businesses and workers in industries that supply the construction project or cater to Boardwalk visitors. Secondary impacts also include induced impacts that are generated as the direct and indirect increases in employment and income enhance purchasing power and fuel additional consumption spending. These secondary impacts will be discussed in greater detail when impact results are presented in the next section. Measures of Impacts The economic impacts of the Boardwalk can be measured in several ways. This report uses the following measures: • Output measures the value of goods and services produced, and is the broadest measure of economic activity. ECONorthwest has applied the model to a variety of public and private sector projects including, most recently, an impact evaluation of Oregon's system of higher education and the potential loss of federal matching funds for long -term care services for seniors and persons with disabilities in Oregon and Washington. Boardwalk Impacts ECONorthwest Page 12 • Wages are the sum of workers' wages and salaries, and include benefits such as health and life insurance, retirement payments, and non -cash compensation. • Business income (also called proprietary income) represents the payments received by small- business owners or self - employed workers. Business income would include, for example, income received by private business owners, doctors, accountants, and lawyers. • Other income represents payments in the form of interest, rents, royalties, dividends, and profits. • Employment represents the number of full- and part-time jobs. • Taxes represent the revenues received by state and local taxing jurisdictions. Economic impacts are presented for the downtown Bremerton near the Boardwalk and Kitsap County. (The immediate Bremerton impact area is based on zip code 98337.) The impacts are stated in 2007 dollars. In addition, it is our understanding that the City of Bremerton will be using some of the study findings to apply for an economic development grant from the Puget Sound Regional Council. The grant application process requires, among other things, estimates of economic impacts in year two and year 8 following completion of the project. As such, ECONorthwest has tailored our findings to provide the City with the information required by the PSRC grant application. Key Issues Affecting this Analysis Estimated impacts can vary widely with different assumptions, and users of such estimates must take care to fully understand the logic and assumptions those estimates are based on. This section identifies assumptions that affect the analysis of the economic impacts of the Boardwalk. The Base Case, Alternative Case, and Net Impacts The future in which no new action occurs is known as `the base case.' In this analysis, the `base case' assumes that Bremerton does not construct the Boardwalk. The alternative now under consideration, of course, is that Bremerton goes ahead with construction of the Boardwalk. This is called the `alternative case.' The differences in impacts between the base case and the alternative case are the net impacts of the Boardwalk. It is important to note that no action is not the same as no change. The no- action base case represents the world without the project. Changes will occur even without the project because of other planned or likely projects, population growth, economic shifts, increased travel, and many other factors not directly attributable to or even related to the proposed project. Boardwalk Impacts ECONorthwest Page 13 Attribution of Causality Establishing a base case affects an analyst's ability to properly identify cause -and- effect relationships. Attributing effects to causes, and doing so only once (i.e., avoiding double counts), is essential to evaluating impacts. Properly identifying the cause - and - effect relationship for the Boardwalk and the visitors and/or private development it will attract is not simple. The Bremerton economy is complex and is undergoing significant changes. The decision making process of visitors is also complex, and may depend on the full range of amenities that Bremerton and Kitsap County have to offer rather than just a single attraction (such as the Boardwalk). Understanding what role the Bremerton Boardwalk plays in attracting tourists could be accomplished through surveys or by case studies of comparable facilities. The City of Bremerton recently conducted an informal survey of visitors at the Kitsap County Fair and the Blackberry Festival, and the results showed a significant number of respondents indicated that Bremerton Boardwalk would be an attraction that they would likely visit again, often. The survey, however, was not a formal scientific survey. It focused on potential uses of and activities on the Boardwalk, rather than the affect of the proposed Boardwalk on visitors' decision - making processes. In that sense, the survey is quite useful in better understanding the demand for the various types of amenities the Boardwalk will offer. Since the survey was conducted among those that were already visiting Bremerton, it does not provide insight into how many new tourists might visit Bremerton because of the Boardwalk. In that regard, this survey is insufficient to allow this analysis to estimate the change in tourism that the Boardwalk will generate. Alternatively, one could take a case study approach and use visitation statistics at other boardwalks as the basis for estimating the likely change in tourism associated with the Bremerton Boardwalk. Unfortunately, visitation statistics for comparable facilities in comparable settings —i.e., similar geography, economy, and demography —do not exist. Despite these data constraints, this analysis does not guess how many visitors the Boardwalk will attract. Instead, it uses publicly available data to develop a matrix of possible outcomes, and then looks at two plausible impact scenarios in detail. It's important to emphasize that where assumptions must be made, this study relies on the most conservative and defensible assumptions. As a result, the impacts reported in this analysis likely have a conservative bias. Economic Impact Results Construction Impacts The City of Bremerton and its consultant, Parametrix, provided detailed project cost information, including, major expense categories and funding sources. In total, the Boardwalk Project represents a $24.5 million investment in the City of Bremerton. � � The City anticipates a three -year project time frame —with project design and property 11 Construction costs are in 2010 dollars. Boardwalk Impacts ECONorthwest Page 14 acquisitions in 2007, environmental remediation in 2008, and sewer improvements and Boardwalk construction in 2009. Table 8 summarizes the output, income, and employment impacts on Bremerton and Kitsap County associated with the construction of the Boardwalk. Table 8: Economic Impacts From C onstruction (2007 dollars) Study Area / Type of Impact Direct Secondary Total Bremerton Output $3,082,000 $821,000 $3,903,000 Wages $1,648,000 $286,000 $1,934,000 Business Income $231,000 $50,000 $281,000 Other Income $227,000 $138,000 $365,000 Jobs 35 4 40 Rest of Kitsap County Output $17,249,000 $6,059,000 $23,308,000 Wages $6,268,000 $1,971,000 $8,239,000 Business Income $1,779,000 $243,000 $2,022,000 Other Income $1,383,000 $1,265,000 $2,648,000 Jobs 165 73 238 Total Kitsap County Output $20,331,000 $6,880,000 $27,211,000 Wages $7,916,000 $2,257,000 $10,173,000 Business Income $2,010,000 $293,000 $2,303,000 Other Income $1,610,000 $1,403,000 $3,013,000 Jobs 200 77 278 Source: The City of Bremerton's construction cost estimates and ECONorthwest using IMPLAN software As shown in Table 8, Boardwalk project spending is directly associated with approximately $7.9 million in wages, $2.0 million in business income, and 200 jobs for construction workers and contractors in Kitsap County. According to the economic impact models, most of the direct economic activity is expected to spill out of the immediate impact area in downtown Bremerton and be captured elsewhere in Kitsap County. Indeed, approximately 83 percent of the direct jobs and 79 percent of the direct wages accrue to construction workers originating from other parts of Kitsap County. The direct spending associated with the Boardwalk project starts a chain reaction that yields a "multiplier effect" that is larger than the original stimulus (see the column labeled "Secondary" impacts in Table 8). This multiplier effect includes indirect impacts as firms buy goods and services from other firms. A contractor working on the construction of the Boardwalk, for example, may lease equipment or purchase cement, rebar, or welding supplies —some of these intermediate goods and services will be provided by local firms. The multiplier effect also includes induced impacts as the direct and indirect increases in employment and income enhance the purchasing power of households. For instance, the construction worker who uses their income to buy groceries or take their family to the theater generates economic impacts for workers and businesses in those - sectors. These individuals will, in turn, spend their incomes. This cycle continues until the spending eventually leaks out of the economy as a result of taxes, savings, or purchases of non - locally produced goods or services or "imports." In total, the $24.5 million Boardwalk Project will generate approximately $27.2 million in economic activity, $10.2 million in wages, $2.3 million in business income, and nearly 280 full- and part-time jobs in Kitsap County over the course of the project. Boardwalk Impacts ECONorthwest Page 15 Similar to the direct impacts, most of the total economic impacts are expected to spill out of the immediate impact area in downtown Bremerton and be captured elsewhere in Kitsap County. The economic activity associated with the construction of the Boardwalk will also generate tax revenues for state and local tax jurisdictions. These fiscal impacts are reported in Table 9, below. According to the economic impact models, the construction of the Boardwalk will generate approximately $773,000 in tax revenues for state and local governments. The largest revenue component is sales taxes, with $382,800 in revenues or approximately 50 percent of the total fiscal impacts. Table 9: Fiscal Impacts from Construction (2007 dollars) Category / Type of Tax Amount Business Sales taxes $382,800 Property taxes $169,000 Motor vehicle taxes and fees $3,900 Other taxes $43,800 Non -taxes (fees, fines) $18,500 Subtotal $618,000 Households Property taxes $6,200 Motor vehicle taxes and fees $15,100 Other taxes $5,700 Non -taxes (fees, fines) $61,800 Subtotal $88,800 Other Social insurance taxes $10,800 Dividend taxes $55,700 Subtotal $66,500 Total $773,300 Source The City of Bremerton's construction cost estimates and ECONorthwest using IMPLAN software It's important to mention two points regarding the construction impacts: • Construction impacts are temporary in nature and unfold as construction spending occurs. Moreover, some of these jobs may not be new to the area in that they may employ those already working in the local construction industry. The building of the Boardwalk, however, would increase the intensity of their employment. • Construction impacts do not include funds from the City of Bremerton's General Fund. That is, in order to provide the most realistic estimate of new economic activity to the region, this source of funding is excluded because it may necessitate reduced government spending on other programs and/or higher taxes and fees. Operating Impacts The Boardwalk will not require a significant increase in City expenditures or staff time. Thus, the economic impacts attributed to operating the Boardwalk, if any, must come from other source(s). Boardwalk Impacts ECONorthwest Page 16 In the short run, the City of Bremerton's proposed Boardwalk is viewed as an economic asset that will increase tourism. Spending by non -local visitors to Bremerton means additional sales for local businesses, and jobs and income for the local labor force. This initial spending will, in turn, have a multiplier effect and generate income and jobs in other sectors of the local Bremerton and Kitsap County economies. In the longer run, it is the goal of the City to leverage the Boardwalk to enhance the economic vitality and livability of downtown Bremerton. A well- maintained Boardwalk would stimulate customer traffic at downtown businesses, retain or bring additional private investment downtown, and attract new households to Bremerton. Much like tourism impacts, the expansion of local businesses and households will generate more spending, and this spending will have a multiplier effect for other sectors of the local Bremerton and Kitsap County economies. Effectively, a well -run and attractive Boardwalk would help fuel a revitalization of the downtown area and further the early stages of transformation the community is only now beginning to see. Tourism - Related Economic Impacts As discussed previously, the Puget Sound Regional Council lists tourism as one of 15 industry clusters 12 that can facilitate economic development in the central Puget Sound region. The U.S. Economic Development Office suggests that communities may possess locational advantages allowing them to use tourism to improve economic conditions, remedy social disparities, and reverse long -run population declines or out - migration. Because it is important to establish and fully understand the base case, the following section looks at tourism in Kitsap County. Kitsap County Tourism Historically, Kitsap County and Bremerton have not been able to capture the tourism - related impacts that are benefiting most of the rest of Washington. According to travel statistics compiled for CTED, in 2005, Kitsap County was last among all 39 Washington counties in terms of the percentage of total county earnings that were travel generated (1.1 percent). This was roughly half of the state average of 2.2 percent. Likewise, Kitsap County had the fifth lowest travel- generated employment (2.5 percent of total employment) among all Washington counties. 14 This was approximately 35 percent lower than the state average of 3.9 percent, and is significantly lower than other counties in the region who rely on their scenic settings to capture travelers seeking outdoor recreation opportunities. (Selected coastal counties and their travel- generated employment are shown in Table 10.) 12 Industry clusters are inter- related industries that have a shared reliance on similar economic assets and, because they are export- oriented industries, bring new wealth into a region. As such, industry clusters are almost universally recognized as regional economic drivers. 13 Dean Runyan Associates, Washington State Statewide Travel Impacts & Visitor Volume, 1991 - 2006P, " p. 33. 14 Ibid. Boardwalk Impacts ECONorthwest Page 17 Table 10: Travel- Generated Employment in 2005 (Selected Counties) Travel - Generated County Employment Employment Percent Pacific 9,840 2,080 21.1% Grays Harbor 33,600 4,260 12.7% Jefferson 14,870 1,660 11.1% Clallam 35,940 3,170 8.8% Mason 20,290 1,300 6.4% Island 35,720 2,420 6.8% San Juan 10,380 1,840 17.7% Kitsap 125,130 3,180 2.5% Washington State Statewide Travel Impacts & Visitor Volume, 1991-2006P, "page 33, prepared by Dean Runyan Associates for the State of Washington Department of Community, Trade and Economic Development, Tourism Office, December 2006 Estimating Tourism- related Impacts (A Matrix of Alternative Outcomes) The City of Bremerton, business leader, and others in the community believe that the Boardwalk will accomplish a wide range of objectives, including becoming a recreation destination that will attract tourists. However, the ability of the Boardwalk to attract tourists depends on more than just the amenities it offers. It also depends on how the Boardwalk is packaged with other local amenities –both recreational and business — and how it is marketed. This study does not offer recommendations. In order to estimate the tourism- related economic impacts of the Boardwalk, the central question is: "How many visitors will the Bremerton Boardwalk attract? " To answer this question, ECONorthwest compiled detailed visitor statistics from various public sources to establish a visitor base case scenario, i.e., Bremerton without the Boardwalk. We then used the same public information and posited changes in visitation to develop alternative scenarios for Bremerton with the Boardwalk. The differences between the two represents the tourism- related impacts associated with the Boardwalk. These outcomes have been arrayed in matrix formats. [Note: A visitor day is equal to one visitor staying for one day. For example, a family of four that stays for two days is the equivalent of 8 visitor days.] Estimating tourism - related economic impacts is a four step process involving: 1) establishing a visitor base case, 2) developing a visitor alternative case, 3) measuring the spending associated with the net increase in visitors, and 4) running the estimated tourism - related spending through specially - constructed input- output models of the Bremerton and Kitsap County economies. These four steps and their data sources are discussed in detail below. Establish the Visitor Base Case Detailed annual travel impacts and visitor volume data for Washington from 1991 -2005 are compiled by Dean Runyan Associates for the State of Washington's Department of Community, Trade and Economic Development ( "Statewide Travel Boardwalk Impacts ECONorthwest Page 18 Study "). The Statewide Travel Study has detailed statistics on the number of travelers, and traveler expenditures by type of traveler and commodity. Because visitor data is not available at the sub -county level, Kitsap County visitor expenditure data was scaled down to the Bremerton area using the city-to -county ratio of retail and service sector employment. With the opening of the Boardwalk expected in 2010, these 2005 visitor statistics were adjusted upward using the average annual growth rate in visitor expenditures in Kitsap County between 1991 and 2005. Day visitors, according to the Statewide Travel Study, are only included if their point of origin is at least 50 miles away from their destination. This would effectively exclude almost four million potential day visitors within a 50 -mile radius of the Boardwalk. To augment data from the Statewide Travel Study, ECONorthwest used detailed statistics from the Washington State Ferry System 16 and the U.S. Census Bureau. 17 According to Washington State Ferry data, in 2006, approximately 2.4 million riders used the Seattle - Bremerton ferry route. Roughly one -half of this total, or 1.2 million riders, were westbound. 18 ECONorthwest estimates that approximately 194,000 ferry passengers (or 8.2 percent of total ridership) were westbound travelers coming to Bremerton for recreation and/or personal, business, and other reasons, and whose trip origin was within 50 miles of Bremerton. These 2006 ridership statistics were adjusted to 2010, when the Boardwalk is expected to open, based on the growth in ridership for this route between 2005 and 2006. The U.S. Census publishes county-level commuter statistics that are cross - tabulated by origin and destination. This data shows commuter travel into Kitsap County, and where that travel originated. In 2000, the U.S. Census shows 10,260 commuters traveled into Kitsap County for work. These commuter statistics were adjusted to 2010, using the growth in commuter traffic between 2005 and 2006. The U.S. Census' commuter data enables us to estimate the number of visitors who would not be captured in the Statewide Travel Study or ferry statistics. By working in a given area, people become familiar with recreational, shopping, and dining opportunities in that area. This knowledge may lead to return visits. ECONorthwest estimated the number of commuters coming into Bremerton from adjacent counties (within the 50 mile radius, but not by ferry) and assumed that a fraction of workers return with their families to recreate, shop, or dine. ECONorthwest estimates that annual 15 ES202 data provided by the Washington Employment Security Department. t6 2006 Origin Destination Onboard Survey, prepared for the Washington State Ferries and Washington State Department of Transportation by Cambridge Systematics, Inc., NuStats Incorporated, and RST International, June 2007, pp. 7 -54 to 7 -86. 17 U.S. Census Bureau, County-to- County Worker Flow Files, released March 6, 2003. These files were compiled from Census 2000 responses to the long -form questions on where people worked. See http://www.census.gov/population/www/cen2000/commuting.html#WA 18 Interestingly, Washington State Ferries reports east and west bound travel is approximately the same across all purposes. However, recreational trips have a much different directional flow, which is "attributed to the fact that Seattle and surrounding areas have tourist attractions that are more likely to attract shopping and recreation trips in the eastbound direction during weekdays in the p.m. period." See 2006 Origin Destination Onboard Survey, p. 7 -54. Boardwalk Impacts ECONorthwest Page 19 commuter -based visitation to Bremerton in 2000 is approximately 6,440 persons. These were adjusted to 2010 using the growth in commuter traffic between 2005 and 2006. Establish the Visitor Alternative Case The alternative case is based on the number of new visitors that are attracted to Bremerton because of the Boardwalk. If the Bremerton Boardwalk is successful, it will cause a bump or increase in visitation once it opens in 2010, and then will contribute to visitor growth in future years. Because the Bremerton Boardwalk is so unique, relevant visitation statistics or case studies are either not available or applicable. Therefore, ECONorthwest developed a matrix of possible changes in tourism that includes different assumptions about the initial bump in tourism following Boardwalk opening in 2010 (these assumptions are in the rows) and the incremental growth in tourism that the Boardwalk may generate in years to follow (these assumptions are shown in the columns). [The City of Bremerton is applying for an economic development grant from the Puget Sound Regional Council. One component of the grant application requires economic impacts for two different time periods. The matrix shown in Table 11 has therefore, been divided into tourism impacts in year two and year eight fallowing project completion.] Table 11: Matrix of Possible Changes in Tourism (Visitor Days) Change in the Average Annual Growth Rate of Visitor Days 0% 5% 10% 20% 30% 40% 50% Increase in Visitor Days - Year 2 0% 0 2,430 4,860 9,730 14,600 19,460 24,330 5% 60,050 62,600 65,160 70,270 75,380 80,490 85,590 ° 10% 120,100 122,780 125,460 130,810 136,160 141,510 146,860 N 20% 240,210 243,120 246,050 251,880 257,720 263,560 269,400 r 30% 360,310 363,470 366,630 372,960 379,280 385,610 391,940 40% 480,420 483,810 487,220 494,030 500,850 507,660 514,470 c 50% 600,510 604,160 607,820 615,110 622,410 629,710 637,010 y Increase in Visitor Days - Year 8 > 0% 0 21,960 44,190 89,450 135,820 183,330 231,980 S 5% 76,970 100,020 123,360 170,890 219,580 269,460 320,540 E 10% 153,930 178,090 202,540 252,330 303,340 355,590 409,100 m 20% 307,860 334,200 360,880 415,200 470,840 527,850 586,230 30% 461,780 490,330 519,230 578,070 638,360 700,110 763,360 40% 615,710 646,450 677,570 740,950 805,860 872,370 940,480 50% 1 769,640 802,580 835,920 903,820 973,380 1,044,630 1,117,600 Source ECONorthwest Table 11 shows the various combinations of changes in visitor days. For example, if the Boardwalk causes an initial 10 percent bump in visitation and then causes the average annual visitor growth rate to increase by 5 percent in years going forward, then in year two, the Boardwalk would have generated approximately 122,780 visitor days. 19 The change in the average annual visitor growth rate represents the incremental growth caused by the Boardwalk. For example, if the average annual growth rate of tourism in Bremerton is estimated at 4.2 percent, then a 10 percent increase in the annual growth rate represents a 4.62 percent growth rate going forward (0.042 + (0.042 x 0.10) = 0.046). Boardwalk Impacts ECONorthwest Page 20 Estimate Local Spending by Different Visitor Classes The data in Table 11 represent the total number of new or additional visitor days generated by the Boardwalk under a variety of assumptions. The Statewide Travel Study identifies visitors by different visitor classes. There are overnight visitors who stay in hotels /motels, campgrounds, private homes, and vacation homes. There are also day visitors. Each spending class has different expenditure patterns, and the Statewide Travel Study provides estimates of visitor spending by type of commodity purchased, including: accommodations; food and beverage services; food stores; ground transportation and motor fuels; arts, entertainment, and recreation; and retail sales. This data is provided for five geographic regions within Washington — Kitsap County is in the Coastal Region. Table 12 shows the change in visitor spending under varying assumptions regarding the initial increase in visitation following opening in 2010, and the annual growth rate going forward. Table 12: Matrix of Changes in Tourist - Related Spending Change in the Average Annual Growth Rate of Visitor Days 0% 5% 10% 20% 30% 40% 50% Increase in Annual Visitor Spending in millions - Year 2 0% $000 $025 $050 $1 00 $149 $199 $249 5% $614 $640 $667 $719 $771 $823 $876 ° 10% $1229 $12.56 $1283 $1338 $1393 $1448 $1502 c0 20% $2457 $2487 $2517 $2577 $2637 $2696 $2756 30% $3686 $3718 $3751 $3815 $3880 $3945 $4010 c 40% $4915 $4949 $4984 $5054 $5124 $51.93 $5263 `0 50% $61 43 $6181 $6218 $6293 $6367 $6442 $6517 . 24 Increase in Annual Visitor Spending in millions - Year 8 > 0% $000 $225 $452 $915 $1389 $1875 $2373 a 5% $7.87 $1023 $1262 $1748 $2246 $2757 $3279 E 10% $15.75 $1822 $2072 $2581 $31 03 $3638 $41 85 M 20% $3149 $34.19 $3692 $4248 $4817 $5400 $5997 30% $4724 $50.16 $5312 $5914 $6531 $71 62 $78.09 40% $6299 $66.13 $6932 $7580 $8244 $8924 $9621 50% 1 $7874 $8211 $8552 $9246 $9958 $10687 $11433 Source ECONorthwest. Continuing with the previous example, if the Boardwalk causes an initial 10 percent bump in visitation and the annual rate of visitation to increase by 5 percent in years going forward, then at the end of year two, the Boardwalk would have generated approximately 122,780 visitor days. Given the breakout between overnight and day visitors, and the different spending levels associated with these classes of visitors, then we could expect the Boardwalk to generate an additional $12.56 million in visitor spending in Bremerton in year two. Estimate Economic Impacts With visitor counts and detailed expenditure data for each visitor class, ECONorthwest used specially - constructed models of the Bremerton and Kitsap County Boardwalk Impacts ECONorthwest Page 21 economies to estimate the economic impacts associated with the change in tourism spending. 20 Table 13: Matrix of Tourism - Generated Job Impacts Change in the Average Annual Growth Rate of Visitor Days 0% 5% 10% 20% 30% 40% 50% Job Impacts - Year 2 0% 0 3 6 13 19 25 31 0 5% 77 80 84 90 97 103 110 c 10% 154 158 161 168 175 182 189 20% 309 313 316 324 331 339 346 a 30% 463 467 471 479 488 496 504 40% 618 622 626 635 644 653 661 `0 50% 772 777 781 791 800 809 819 y Job Impacts - Year 8 j 0% 0 28 57 115 175 236 298 _= 5% 99 129 159 220 282 346 412 CL 10% 198 229 260 324 390 457 526 3 20% 396 430 464 534 605 679 754 m 30% 594 630 667 743 821 900 981 40% 791 831 871 952 1,036 1,121 1,209 50% 989 1,032 1,075 1,162 1,251 1,343 1,437 Source ECONorthwest using IMPLAN Continuing with the previous example, the 10 percent bump and 5 percent increase in the average annual growth rate of visitors, leads to an increase of 122,780 visitor -days and $12.56 million increase in visitor spending. Table 13 shows that this spending will generate approximately 158 jobs in Bremerton. These jobs are created within the tourism cluster and include sectors, such as eating and drinking establishments; accommodations; retailers; and providers of art, entertainment, and recreation services. In addition, these job impacts include the multiplier effects from business and household spending that spread the initial visitor spending to social and health services, government, retailers, and others. These job impacts, however, are only for the immediate Bremerton area near the proposed Boardwalk. They do not include spillover spending and jobs created in other parts of Kitsap County. These spillover impacts are discussed in detail in the next section of the report. Estimating Tourism - related Impacts (Two Plausible Scenarios) The success of the Boardwalk depends on the demand for the amenities it offers; how those amenities complement (or substitute) other local amenities including shopping, dining, and recreation services; and how the Boardwalk is marketed by the City of Bremerton, local businesses, and other community groups. In the previous section, we developed matrices that look at a variety of outcomes depending on the initial increase in visitation and the growth in tourism going forward. This section looks at two plausible scenarios. The first scenario is a "fair share" scenario that has the Boardwalk generating an initial 10 percent bump in visitation and then an average visitor growth rate comparable to the state of Washington. 20 IMPLAN just released new 2006 data, which will capture the recent economic changes in Kitsap County and, more importantly, downtown Bremerton. Boardwalk Impacts ECONorthwest Page 22 A second, more optimistic scenario has Bremerton experiencing a 20 percent bump in visitation when the Boardwalk opens in 2010, and then an annual growth rate that puts Bremerton in the upper quintile growth rate for counties in Washington. These two scenarios are shown in Figure 7. The PSRC milestone years are shown as vertical gray lines at 2012 and 2018. Figure 7: Visitor Trends Under Two Scenarios PSRC 2,400,000 Year 8 Milestone 2,200,000 • • 2,000,000 -- -- • • • — PSRC • • 1,800,000 -- Year 2 • • • Miestone • � • • O Boardwalk • • ' .�� r 1.600.000 Opens �— •'^ S • • • r • 1,400.000 — — 1.200,000 1,000,000 Construction 800,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Base Case Fair Share Scenario • Top Quintile Scenario Fair Share Scenario The first scenario uses a "fair share" approach that assumes the Boardwalk will generate an initial 10 percent increase in visitation l and enable Bremerton to have a visitor growth rate —as derived from visitor expenditures -- comparable to the state as a whole. That is, between 1991 -2005, tourism related expenditures grew at an average annual rate of 4.54 percent in Washington and 4.22 percent in Kitsap County. The fair share approach assumes that the Boardwalk would enable Bremerton to experience, after the initial 2010 bump in tourism, an annual growth rate comparable to the state; i.e., Kitsap County's average annual growth rate would increase by approximately 7.58 percent to just match the historical growth rate in Washington. The annual economic impacts for two time periods —years two and eight— are shown in Table 14. Zi This 10 percent bump in visitation is based on the annual average growth rate in visitation at the Chelan Riverwalk Park and the Wenatchee Riverfront Park between 1986 and 2006. In both cases, park visitation has grown dramatically over the last four years. Boardwalk Impacts ECONorthwest Page 23 Table 14: Economic Impacts (Fair Share Scenario) Study Area ! Year 2 Year 8 Type of Impact Direct Secondary Total Direct Secondary Total Bremerton Output $7,594,820 $2,138,940 $9,733,760 $11,645,580 $3,279,770 $14,925,350 Wages $2,640,890 $774,000 $3,414,890 $4,049,440 $1,186,820 $5,236,260 Business Income $367,960 $96,670 $464,630 $564,210 $148,220 $712,430 Other Income $841,810 $440,560 $1,282,370 $1,290,790 $675,540 $1,966,330 Jobs 138 21 ,159 212 33 245 Rest of Kitsap County Output $2,386,530 $3,254,520 $5,641,050 $3,659,410 $5,705,170 $9,364,580 Wages $516,650 $937,070 $1,453,720 $792,210 $1,319,310 $2,111,520 Business Income $468,900 $357,850 $826,750 $719,000 $980,350 $1,699,350 Other Income $237,670 $577,900 $815,570 $364,450 $657,400 $1,021,850 Jobs 49 38 87 75 99 174 Total Kitsap County Output $9,981,350 $5,393,460 $15,374,810 $15,304,990 $8,270,110 $23,575,100 Wages $3,157,540 $1,711,070 $4,868,610 $4,841,650 $2,623,680 $7,465,330 Business Income $836,860 $454,520 $1,291,380 $1,283.210 $696,940 $1,980,150 Other Income $1,079,480 $1,018,460 $2,097,940 $1,655,240 $1,561,650 $3,216,890 Jobs 187 59 246 287 91 378 Source ECONorthwest using IMPLAN As can be seen in Table 14, the majority of the direct impacts benefit the Bremerton area immediately surrounding the Boardwalk. Under this fair share scenario, approximately $7.6 million in economic activity is generated in year two. This economic activity includes $2.6 million in wages, $368,000 in business income, and 138 jobs. In year 8, the direct impacts in the local Bremerton area will have grown to over $11.6 million in economic activity, $4.1 million in wages, and 212 jobs. Some of these direct impacts will spill over into other parts of Bremerton and Kitsap County. 22 Non -local visitors who come to the Boardwalk may travel to other parts of Bremerton or Kitsap County and purchase goods and services. For example, some overnight visitors will stay in RV campgrounds. According to the impact models, RV campgrounds are not available in the immediate Bremerton impact area. Thus, expenditures on this type of overnight accommodation will spill over into other parts of Kitsap County and the direct economic impacts on the downtown Bremerton economy will be zero. Expenditures on arts, entertainment, and recreation also show a similarly high spillover effect. The spillover effect described previously also extends beyond the direct impacts of tourism spending. There will be indirect and induced spillover effects as Bremerton businesses and households purchase goods and services from other businesses located elsewhere in Kitsap County. For example, spillover impacts occur when a Bremerton restaurant purchases produce from a wholesaler in Poulsbo, or the downtown hotel employee takes their family out to dinner in the nearby community of Manette. In total, the fair share analysis shows that, in year two, non -local visitors attracted to Bremerton because of the Boardwalk will generate approximately $15.4 million in economic activity, including $4.9 million in wages, $1.3 million in business income, and almost 250 jobs for businesses and workers in Kitsap County. In year eight, the impacts will have grown to $23.6 million in output, $7.5 million in wages, and almost 380 jobs for workers and businesses in Kitsap County. 22 Our immediate impact area is defined quite narrowly as U.S. postal zip code 98337. Boardwalk Impacts ECONorthwest Page 24 Figure 8, below, shows how the job impacts grow under this fair share scenario. The income reported in year two and year eight represents the wages and business income going to workers and small business owners in each of those years. Figure 8: Changes in Employment (Fair Share Scenario) — Year 8 Income = 400 $9,445,480 Year 300 Income = — a $6,159,990 0 m E F 200 — - — a 0 c eo 75 LL 100 — — 0 2010 2011 2012 2013 2014 2015 2016 2017 © Bremerton ■ Elsewhere in Msap County Source ECONorthwest using IMPLAN Linkages between businesses can also be viewed from an economic perspective. Table 15 shows the direct job impacts for Bremerton in year two and year eight. The direct impacts represent jobs in the tourism cluster that PSRC, and others, believe can be an economic driver in the central Puget Sound area. Given the nature of tourism spending, these direct jobs are concentrated in accommodations and food services; retail and wholesale trade; and arts, entertainment, and recreation. The direct job impacts in Bremerton's developing tourism cluster are linked to jobs in other sectors of the Bremerton and Kitsap County economies. Some of these jobs are additional tourism jobs just outside of the immediate impact area. Other jobs are generated as a result of business and household spending that can be traced back to the initial spending stimulus, i.e., tourism expenditures. Boardwalk Impacts ECONorthwest Page 25 Table 15: Bremerton Job Impacts (Fair Share Scenario) Type of Impacts/ Industry Sector Year 2 Year 8 Bremerton's Tourism Cluster Accomodations and Food Services 94 144 Retail and Wholesale Trade 18 28 Arts, Entertainment, and Recreation 16 25 Other 10 16 Subtotal 138 212 Spillover Effects on Other Industries in Bremerton and Kitsap County Natural Resources 1 1 Construction, Manufacturing, Utilities 2 2 Retail and Wholesale Trade 11 17 Finance, Insurance, and Real Estate 9 13 Services 80 123 Government 6 10 Subtotal 108 166 Total Kitsap County 246 378 Source ECONorthwest using IMPLAN In year two, the fair share analysis shows that the Boardwalk is associated with 138 jobs in the Bremerton's tourism cluster. These jobs are linked, via the multiplier process, to another 108 jobs in other sectors of the local economy. Likewise, in year eight, tourism spending generated by the Boardwalk will yield 212 jobs in Bremerton's tourism cluster and another 166 jobs elsewhere. In both cases, the job multiplier is 1.80. A job multiplier is a mathematical shortcut that describes the relationship between direct jobs and jobs elsewhere in the economy. In this case, for every 10 tourism jobs created in downtown Bremerton, another 8 jobs are generated or supported in other sectors of the local economy. 23 A Type II or Type SAM ,lob multiplier is calculated as: [total jobs / (direct fobs)] Boardwalk Impacts ECONorthwest Page 26 Table 16: Fiscal Impacts for State and Local Governments (Fair Share Scenario) Class of Tax/ Type of Tax Year 2 Year 8 Indirect Business Taxes Sales taxes $527,500 $808,800 Property taxes $228,500 $350,400 Other taxes $108,900 $166,900 Non -Taxes (fines and fees) $34,000 $52,100 Subtotal $898,900 $1,378,200 Personal Taxes Property taxes $2,500 $3,900 Non -taxes (fines and fees) $25,700 $39,400 Other taxes $2,300 $3,600 Motor vehicle licensing $5,900 $9,100 Subtotal $36,400 $56,000 Social Insurance Taxes Employee contribution $800 $1,200 Employer contribution $3,100 $4,800 Subtotal $3,900 $6,000 Total $939,200 $1,440,200 Source ECONorthwest using IMPLAN The fiscal impacts shown in Table 16 are derived from the economic activity generated as a result of the Boardwalk. They are based on economic activity generated in downtown Bremerton, as well as spillover effects to other parts of Kitsap County. In year two, the economic activity associated with the Boardwalk will generate approximately $940,000 in tax revenues for state and local taxing jurisdictions. In year eight, state and local tax revenues reach almost $1.4 million. Pursuant to the requirements of the PSRC Economic Development Grant Application, the fiscal impacts shown in Table 16 are for two time periods -2 years and 8 years after the Boardwalk opens. They do not show how the fiscal impacts vary across years or cumulate over time. This is shown in Figure 9, below. Boardwalk Impacts ECONorthwest Page 27 Figure 9: Annual and Cumulative Tax Impacts for State and Local Governments (Fair Share Scenario) $10,000,000 i $9,000,000 i I H $8,000,000 — $7,000,000 — c $6,000,000 �E E $5.000,000 r 12 $4,000,000 1 O ' $3,000,000 1 $2,000,000 — $1,000,000 $0 _01 F -H 1 11 1 2010 2011 2012 2013 2014 2015 2016 2017 ❑Annual ■Cumulative l —___ -- - -. -- - - -- - - -- - - - - -- -- ------- -- - - ----- - --- - - - - --- - - -- - - --- - - - - -- — --------------- - Source ECONorthwest using IMPLAN As visitation and spending increase, the annual fiscal impacts grow. Moreover, if the City of Bremerton is successful at receiving a $3.0 million economic development grant from the PSRC, the economic activity and government revenues the Boardwalk generates would, under this fair share analysis, essentially "pay back" the grant within three years. It's important to note that the fiscal impacts shown in Figure 9 assume that visitor spending and taxation patterns remain the same. As with the economic impacts, the fiscal impacts also do not make adjustments for non -local visitors who originate from other parts of the state. Their spending in Bremerton, of course, may simply substitute for spending in other parts of the state. Upper Quintile Scenario In Kitsap County, tourism expenditures increased at an average annual rate of 4.22 percent between 1991 and 2005, ranking Kitsap County 19th among Washington's 39 counties. This average annual growth rate places Kitsap County in the third quintile group, i.e., among 60 percent of the counties with the lowest average annual growth rate in tourism expenditures. 24 A second, more optimistic scenario has Bremerton experiencing an initial bump in tourism once the Boardwalk opens, and then an average annual growth rate that places it 24 Quintiles are calculated by sorting a population or sample in ascending order, and then dividing the data into five equal groups [n this case, the first or lowest quintile represents the eight counties in Washington with the lowest average annual growth rate in tourism spending. Boardwalk Impacts ECONorthwest Page 28 among the top quintile group for counties in Washington. Specifically, this scenario posits a 20 percent bump in tourism and an increase in the average annual growth rate that would then place Bremerton among the top counties in the state. The top quintile group of Washington counties experienced a 5.9 percent average annual growth in tourism spending between 1991 and 2005. Accordingly, this upper quintile scenario has Bremerton's tourism growth rate increasing by 39 percent to just match the average annual growth rate for the top quintile group. Table 17 shows the economic impacts associated with the Boardwalk under this top quintile scenario. Table 17: Economic impacts (Top Quintile Scenario) Study Area / Year 2 Year 8 Type of Impact Direct Secondary Total Direct Secondary Total Bremerton Output $16,085,770 $4,530.270 $20,616,040 $31,893,990 $8,982,380 $40,876,370 Wages $5,593,390 $1,639,330 $7,232,720 $11,090,270 $3,250,370 $14,340,640 Business Income $779,330 $204,740 $984,070 $1,545,210 $405,950 $1,951,160 Other Income $1,782,940 $933,100 $2,716,040 $3,535,120 $1,850,090 $5,385,210 Jobs 292 45 337 580 91 671 Rest of Kitsap County Output $5,054,650 $6,893,030 $11,947,680 $10,022,090 $15,624.840 $25,646,930 Wages $1,094,260 $1,984,710 $3,078,970 $2,169,640 $3,613,230 $5,782,870 Business Income $993,140 $757,930 $1,751,070 $1,969,150 $2,684,890 $4,654,040 Other Income $503,400 $1,223,980 $1,727,380 $998,110 $1.800,430 $2,798,540 Jobs 104 81 185 206 272 478 Total Kitsap County Output $21,140,420 $11,423.300 $32,563,720 $41,916,080 $22,649,520 $64,565,600 Wages $6,687,650 $3,624,040 $10,311,690 $13,259,910 $7,185,540 $20,445,450 Business Income $1,772,470 $962,670 $2,735,140 $3,514,360 $1,908,720 $5,423,080 Other Income $2,286,340 $2,157,080 $4,443,420 $4,533,230 $4,276,930 $8,810,160 Jobs 396 126 522 786 249 1,035 Source ECONorthwest using IMPLAN Under this more optimistic scenario, in year two, the Boardwalk will have generated $16.1 million in economic activity, including approximately $5.6 million in wages and over 290 jobs for Bremerton's developing tourism cluster. This will stimulate additional economic impacts in downtown Bremerton and elsewhere in Kitsap County. Indeed, countywide, year -two impacts amount to $32.6 million in economic activity, $10.3 million in wages, $2.7 million in small- business income, and 522 jobs. Under this higher growth rate assumption, the economic impacts become significantly larger in year 8. If the demand for Boardwalk amenities continues to grow and local (City, businesses, and community groups) marketing efforts are successful, then it's not inconceivable that Bremerton could experience an increase in visitation that grows much faster than Kitsap County's historical growth rate. If this growth rate pushes Bremerton toward the top quintile of counties in Washington, then, by year eight, the economic impacts for Bremerton and Kitsap County are substantial. Under this more optimistic scenario, in year eight, the Boardwalk will have generated $40.9 million in economic activity in downtown Bremerton and another $25.7 million in economic activity elsewhere in Kitsap County. In terms of employment 25 This 20 percent bump is based on the average annual growth to visitation at the Wenatchee River Front and Chelan Rivewalk Parks over the last five years. Boardwalk Impacts ECONorthwest Page 29 opportunities, this translates into approximately 670 jobs in the downtown Bremerton and almost 480 jobs elsewhere in the county. Figure 10, below, shows how the job impacts grow under this more optimistic top quintile scenario. The income reported in year two and year eight represents the wages and business income going to workers and small businesses in each of those years. Figure 10: Changes in Employment (Top Quintile Scenario) 200 Year 8 1 Income = $26,866,500 1,000 H 0 800 ID E Year 2 N Income d 600 $13,046,800 - -- v ' c r 400 — - -- - LL 200 — 0 2010 2011 2012 2013 2014 2015 2016 2017 0Bremerton ■ Elsewhere inKitsapCounty Source ECONorthwest using IMPLAN Under this more optimistic top quintile scenario, Table 18 shows that the Boardwalk is associated with just over 290 jobs in Bremerton's tourism cluster two years after opening. These jobs are linked, via the multiplier process, to another 230 jobs in other sectors of the local economy. Likewise, in year eight, tourism spending generated by the Boardwalk will yield 580 jobs in Bremerton's tourism cluster, and another 455 jobs elsewhere. Boardwalk Impacts ECONorthwest Page 30 Table 18: Job impacts (Top Quintile Scenario) Type of Impacts/ Industry Sector Year 2 Year 8 Bremerton's Tourism Cluster Accomodations and Food Services 199 395 Retail and Wholesale Trade 38 75 Arts, Entertainment, and Recreation 34 67 Other 21 43 Subtotal 292 580 Spillover Effects on Other Industries in Bremerton and Kitsap County Natural Resources 2 3 Construction, Manufacturing, Utilities 3 7 Retail and Wholesale Trade 23 46 Finance, Insurance, and Real Estate 18 36 Services 170 337 Government 13 26 Subtotal 230 455 Total Kitsap County 522 1,035 Source ECONorthwest using IMPLAN Because our assumptions regarding the specific expenditure patterns of tourists do not change, the job multiplier under this more optimistic growth scenario is the same as under the fair share analysis. The job multiplier for the tourism cluster in Kitsap County is 1.80. Thus, every 10 jobs generated by Boardwalk tourism are linked to another 8 jobs in other sectors of the Kitsap County economy. Table 19: Fiscal impacts (Top Quintile Scenario) Class of Tax/ Type of Tax Year 2 Year 8 Indirect Business Taxes Sales taxes $923,300 $2,215,100 Property taxes $400,000 $959,600 Othertaxes $190,600 $457,100 Non -Taxes (fines and fees) $59,600 $142,800 Subtotal $1,573,500 $3,774,600 Personal Taxes Property taxes $4,400 $10,700 Non -taxes (fines and fees) $44,900 $107,800 Othertaxes $4,100 $9,800 Motor vehicle licensing $10,400 $24,900 Subtotal $63,800 $153,200 Social Insurance Taxes Employee contribution $1,400 $3,300 Employer contribution $5,500 $13,100 Subtotal $6,900 $16,400 Total $1,644,200 $3,944,200 Source ECONorthwest using IMPLAN Table 19 shows the fiscal impacts for state and local taxing jurisdictions under this more optimistic upper quintile scenario. In year two, the economic activity stimulated throughout Kitsap County by non -local visitor spending generates approximately $1.6 million in tax revenues. In year eight, the total reaches $3.9 million. In both instances, the largest tax component is sales taxes. In Kitsap County, the sales and use tax rate is 8.6 percent. Of this total, the local and state tax rates are 2.1 and 6.5 percent, respectively. Thus, the $2.2 million in sales tax revenues generated by Boardwalk Impacts ECONorthwest Page 31 economic activity in Kitsap County will add approximately $537,000 in additional county revenues in year eight. Figure 11 shows the annual and cumulative fiscal impacts associated with the Boardwalk under the top quintile scenario. As visitation and spending increase, the annual fiscal impacts grow. Figure 11: Annual and Cumulative Tax Impacts for State and Local Governments (Top Quintile Scenario) $24,000,000 i y $20,000.000 �d X $16,000,000 i� Im E d $12,000,000 — 'a C7 i - o $8,000,000 m � $4,000,000 — — $0 MI F E F1 F, 2010 2011 2012 2013 2014 2015 2016 2017 � ❑Annual ®Cumulative Source ECONorthwest using IMPLAN The fiscal impacts shown in Figure 11 assume that visitor spending and taxation patterns remain the same. As with the economic impacts, the fiscal impacts also do not make adjustments for non -local visitors who originate from other parts of the state. Estimating Economic Development Impacts In the longer run, the Boardwalk may improve the local quality of life and expand business opportunities. As a result, the Boardwalk may facilitate additional private investment by attracting (or retaining) new industry or households to Bremerton. ECONorthwest interviewed numerous developers, and business and community leaders, regarding the impact of the Boardwalk on their development plans. Respondents were unanimous that the Boardwalk would enhance the economic development potential of Bremerton. This is what of few of them told us: "Businesses such as our will experience a positive impact, as the area becomes a more desirable location for tourists, shoppers, and urban residents. " — Budd Gould, President, Anthony's Restaurants "My business will benefit from increased employee retention. " — Eric Anderson, CEO, Art Anderson Associates Boardwalk Impacts ECONorthwest Page 32 "Our business will benefit from these improvements by helping attract newcomers to the Bremerton area who may be seeking future residence and employment in Kitsap County. " — Leslie and Rick Krueger, Encore Communities "The boardwalk will also attract new homeowners who wish to live in a community committed to residents who appreciate the natural beauty of Puget Sound. " — Kathy Cocus, Interim Executive Director, Economic Development Alliance "The boardwalk will be a natural venue for community events, tourism and recreation opportunities. The increased activity and attraction will help bring restaurants, retail, and other businesses to downtown, creating new jobs and fostering economic vitality. " — Ron Sher, Metrovation "Olympic College will be able to promote the area to attract top candidates to the college. A dynamic city with parks and green spaces is highly sought after by those looking to relocate. " — David Mitchell, President, Olympic College "As a business owner, we benefit greatly from the increased number of-permanent residents in our city, the economic flow they generate, and most importantly, their vested interest in Bremerton. " — Tim Quigley, Quigley Insurance Services "The Boardwalk, Evergreen Park and Sewer upgrade projects will further position Bremerton as the city who will lead our community into the future, setting the state for increased employment, economic opportunities, and an exciting urban center for our region. " — Art Castle, Executive Vice President, Home Builders Association of Kitsap County Our interviews of business and community leaders clearly showed strong, positive support for the Boardwalk and the economic activity it is expected to generate. Most of these impacts will be captured in the short-term tourism impacts measured in the previous section. From a more long -term, economic development perspective, economic impacts should only be attributed to projects that are, in some fashion, caused by the Boardwalk. For example, at one extreme, suppose a developer constructs a mixed -use project that has 10,000 square feet of retail space on the first floor, and 100 condominium units above. Further, suppose that all of the living spaces were sold to families who just moved to the area. Lastly, suppose that the developer would not have constructed the project without (or "but for ") the Boardwalk and that all of the families who moved to the area did so because the improved quality of life attributed to the Boardwalk. In this example, then, all of the retail activity and jobs, as well as the consumption spending by households could be thought of as new economic activity for the region. This economic activity could be fed into an input - output model to measure the direct and multiplier effects on businesses and workers. Boardwalk Impacts ECONorthwest Page 33 ECONorthwest's survey of local business and community leaders included the following line of questioning to establish or assess the causal relationship between the Boardwalk and economic development projects and/or plans: 1. "How does the Boardwalk Project affect the re- location or expansion plans of your business? " 2. "Without the Boardwalk, would you still have undertaken your project ? With regards to the causative impact of the Boardwalk, respondents indicated that the project —the, renovation of the J.C. Penney site, for example —would have proceeded even if the Boardwalk project did not occur. In many instances, planning for their projects originated before the Boardwalk plan was conceived. In other instances, the overwhelming decision to proceed with their development project was the economic development that has occurred in Bremerton over that last three to four years. Despite the lack of sufficient causal evidence to link the Boardwalk to economic development plans, this doesn't mean that the Boardwalk is not important to these plans and/or projects. In all cases, respondents indicated that the Boardwalk would likely generate additional economic activity that will benefit their business or community group. Nor does it mean that the additional economic activity generated by the Boardwalk won't inspire local or non -local developers to increase development activity in the future. Economic development plans change as economic activity changes, and the relationship between the two generally works in the same direction Lastly, the survey results do not suggest that the Boardwalk won't be a significant positive amenity that improves the local quality of life and helps to keep local families from moving out of the area or attracts families —a retired couple or working professionals with children, for example —to move to Bremerton. The City of Bremerton's informal survey suggests that the Boardwalk will, indeed, enhance the local quality of life and better living standards do affect the location decisions of households. The ability of the Boardwalk in reinvigorating the development of downtown Bremerton ultimately will depend on the quality of its design, its integration with other local amenities, how well it is maintained, and the community's success at using it as a catalyst for other infrastructure and amenity improvements. Given the tremendous gains made by the City of Bremerton in just the last few years in attracting new private and public investments, one can be optimistic that the Boardwalk would further the expansion of Bremerton from an old Navy town to a diverse and attractive city to visit and live in. However, the analysis has no basis for saying with certainty how well the community would be able to achieve its goals. Thus, a range of plausible outcomes has been proposed. In order to assess the possible economic impacts from future economic development, Table 20 shows the economic linkages between various selected industry sectors and the Bremerton and Kitsap County economies. 2 This "but for" line of questioning is essential to attribute economic impacts to a program or a project. The recognized methodology can be found in "Public Works Program — Performance Evaluation," prepared by Rutgers University, New Jersey Institute of Technology, Columbia University, Princeton University, National Association of Regional Councils, and the University of Cincinnati for the U.S. Department of Commerce, Economic Development Administration, May 1997. Boardwalk Impacts ECONorthwest Page 34 Table 20: Linkages Between Potential Economic Development and the Bremerton and Kitsap County Economies (impacts per 10 direct jobs) Total Secondary Impacts in Secondary Impacts Secondary Impacts in Ten Jobs in These Sectors are Linked to... Bremerton Elsewhere in Kitsap County Kitsap Coun Jobs Wages Jobs Wages Jobs Wages Retail Furniture and home furnishings stores 40 $139,000 23 $63,000 63 $202,000 Electronics and appliance stores 14 $46,000 1 2 $32,000 25 $78,000 Food and beverage stores 26 $89,000 18 $47,000 44 $136,000 Health and personal care stores 30 $104,000 20 $55,000 51 $159,000 Clothing and clothing accessories stores 2.1 $72,000 1 2 $31,000 32 $103,000 Sporting goods, hobby, book and music stores 15 $53,000 09 $24,000 24 $77,000 Miscellaneous store retailers 12 $39,000 08 $22,000 20 $61,000 Services Museums, historical sites, and parks 35 $93,000 30 $77,000 66 $170,000 Other amusement, gambling, and recreation 23 $75,000 21 $52,000 45 $127,000 Hotels and motels 1.9 $64,000 1 7 $47,000 36 $111,000 Food services and drinking laces 1 14 $40,000 1 1 3 $33,000 1 27 $73,000 Source ECONorthwest using IMPLAN The economic linkages shown in Table 20 have been calculated for every ten direct jobs that may occur as a result of future business development. That is, 10 jobs in the hotel and motel sector in Bremerton are linked to another 1.9 jobs and $64,000 in wages in other sectors of the Bremerton economy, and 1.7 jobs and $47,000 in wages elsewhere in Kitsap County. To illustrate, suppose the Boardwalk and the economic activity that it generates influences a private developer to construct a new grocery store in Bremerton that will employ 40 people. This investment in Bremerton will have multiplier effects beyond the 40 direct hires. Using the job and wage multipliers reported in Table 20: 1) In Bremerton, the grocery store is linked to another 10.4 jobs (40/10 x 2.6 secondary jobs) and $356,000 in wages (40/10 x $89,000 secondary wages); and 2) Elsewhere in Kitsap County, the grocery store is linked to another 7.2 jobs (40/10 x 1.8 secondary jobs) and $188,000 in wages (40/10 x $47,000), all else remains the same. 27 Families moving to the Bremerton area will have similar multiplier effects for the city and the county. Table 21 shows the multiplier effects associated with $1.0 million in consumption spending by households with an average annual income between $50,000 and $70,000. 27 This assumes that the change in final demand is relatively small compared to the Bremerton and Kitsap County economies. In addition, the multiplier effects shown in Tables 18 and 19 were developed using 2006 IMPLAN data. Economic impacts for spending that occurs in the near future will be more reliable than for spending that occurs at a much later date. Boardwalk Impacts ECONorthwest Page 35 Table 21: Linkages Between Consumption Spending by Households and the Bremerton and Kitsap County Economies (Impacts Per $1,000,000 in Consumption Spending) Impact Area Jobs Wages Bremerton 7.6 $203,000 Elsewhere in Kitsap County 1.7 $58,200 Total Kitsap County 9.3 $261,200 Source ECONorthwest using IMPLAN Households purchase a variety of goods and services —from groceries and utilities, to doctor visits and legal services. Table 21 shows that every $1 million dollars in consumption spending is associated with 7.6 jobs and $203,000 in wages in Bremerton, and another 1.7 jobs and $58,200 in wages elsewhere in Kitsap County (all else remains the same). The previous discussion is intended to summarize how additional private investment and new families might generate additional economic activity in Bremerton and Kitsap County. In short, spending by businesses and households will directly generate economic activity in Bremerton that will have ripple effects on other sectors and other areas of Kitsap County. Boardwalk Impacts ECONorthwest Page 36 Appendix A: Comments from the City of Bremerton's Survey Comments on Commuting: 1. We see the future plans of Bremerton and it's a beautiful picture. Need all the support we can get from anyone and everyone. Beautiful site for people on ferry coming in from Seattle. More tourists to come with everyone's help. 2. We love to catch the Port Orchard foot ferry to Bremerton and walk through Bremerton's new construction. We can't wait for the new boardwalk to walk to Evergreen Park. We are trying to be healthy and exercise more. 3. Excellent idea. Need to incorporate a connection to the (future) Manette Bridge to enable people on foot and on bikes to travel conveniently (and car free) between Manette district and downtown. 4. I would love to come over on the ferry then ride my bike on the boardwalk. I would use it several times a week. 5. I will use the boardwalk mainly for commuting, so I don't get harassed by police and other people on the roads. 6. I would love to see a path that connects Bremerton to Silverdale, we need more bike paths. 7. We want a beautiful bridge with bike lanes and room for walking. This would be a legacy for future generations and happiness for current ones! 8. Would be great to access dentist office and take foot ferry instead of driving around. Now I'll be able to walk to his office from the park at the end of the walkway. 9. We bought a unit in The 400 to shorten a commute to Seattle (easy walk on/walk off). Also enjoy the future waterfront and marina. Would love to have more commercial in the area (shops, grocery stores, etc). Moved here from Kingston and we now only use one vehicle. 10. We love using the foot ferry to take the ferry to Seattle or to go to the Blackberry Festival from Port Orchard. 11. We take the Port Orchard foot ferry to the Bremerton Boardwalk all the time throughout the year. This year we visited the waterfront in Bremerton and it was terrific! Keep up the good work! 12. This would truly be a blessing to have such easy access for me to walk and bike as I do not own a car in Bremerton. 13. It looks like a good idea for people commuting from Port Orchard to use as a passage to Olympic College. I am currently a student there and would love the calm walk. 14. This would be very helpful for college and university students who commute from out of town. A direct route from the ferry to the college and offsite universities would ease commuting woes. 14. This would give my kids headed to Olympic College a safe way to school, plus help in the tourist area. Boardwalk Impacts ECONorthwest Page 37 16. I work at PSNS and love the walk and view during my lunch time break. On occasion I need to take the Port Orchard ferry home and how nice it is to have a safe, dry place to wait for the boat to come in. Bremerton has needed a face lift for a long time. Thank you! 17. I think that it is an amazing idea. It will help make Bremerton more into commuting and lower the crime rate and poverty! Also, it will give the kids a good place to be so they won't get into trouble! 18. This would really bring tourists like me who are visiting without cars to Bremerton, which is currently given very short swift in travel guides. With the new museums and this boardwalk, Bremerton would be an easy ferry day trip destination from Seattle. Comments on Parking: 1. Parking is an issue for our guests (at The 400), but otherwise we love living, working, and playing in downtown Bremerton. 2. Expanded parking for cars will help with boating use. I use the ramp a lot and enjoy the park as well. Improvement will draw in the community and take some pressure off the park as well. 3. Where shall we park? I got a $45 ticket taking my granddaughter to Evergreen Park! 4. This will give people a very good impression when coming to town and will draw people into the downtown district. But the parking has to improve!!! Comments on Safety and ADA Access: 1. Don't forget the needs of pedestrians outside of the Harborside District, many people would prefer to walk if it was safer. 2. This will be great for us who live downtown, particularly for my husband who is wheelchair bound. 3. Great idea, we need more walking paths. 4. I am very excited about the safety of being able to go for a walk with my kids and not having to worry about cars. Also great for bike rides. 5. I think it's a great idea; we are always looking for a place to go for a safe walk and to take the kids and guests from out of town. It's about time that Bremerton upgrade itself. 6. Really looking forward to riding our bikes as a family in a safe location on the walkway (boardwalk). 7. I think the boardwalk is a good step towards a better pedestrian trail system, but don't stop there! 8. I can't wait for this to be completed as we live off of Highway 16 and have no sidewalks or anywhere else to walk for health reasons. 9. Elevators are helpful to handicap people, people with temporary injuries, etc. 10. I work at PSNS and love the walk and view during my lunch time break. On occasion I need to take the Port Orchard ferry home and how nice it is to have a Boardwalk Impacts ECONorthwest Page 38 safe, dry place to wait for the boat to come in. Bremerton has needed a face lift for a long time. Thank you! 11. Very neat idea. I'm glad Bremerton is finally getting cleaned up and creating a safer environment. 12. Because of medical issues, I cannot tolerate auto exhaust, so the boardwalk will enable me to walk downtown from my home near Evergreen Park (something I have been unable to do since 2001). 13. It needs to have better handicap and wheelchair access!!! 14. We live in Manette, this will help to access all amenities of downtown Bremerton without having to travel with traffic and cars. 15. Looking forward to the whole downtown revitalization — the boardwalk will be a great way to get pedestrians safely to and from Olympic College and the waterfront. 16. I think the boardwalk project is a great idea to help beautify the waterfront. It is also a safer path for those that walk the roads in Bremerton. It will also help beautify not just the Bremerton terminal and waterfront park, but also Evergreen Park. 17. Need more parking, grocery store, security at night, highly safe railing (unlike what is at the new park!) The ends of pipes are open and sharp! 18. Need to have pedestrian/vehicle access to any improvement in downtown area. Without those two items, nothing will have complete success. 19. It would be nice to be able to safely walk or ride bikes from the college to the ferry or to the shipyard. Comments on Economical Impact, Tourism, Shopping: 1. We are residents of Belfair and come to Kitsap County on a regular basis. We are looking forward to the continued improvement of downtown Bremerton. 2. My friends and I like to kayak to restaurants and downtown areas. Nice to see how we'll be able to land on the various natural beach areas. Just as important, I want to see a bicycle trail that connects to Olympic College, Clear Creek Trail, and Recovery Trail in the Port Townsend area. Think big — you folks are doing great! 3. Great tourist site! 4. Great project with gateway access to the city from Perry. Will tie in nicely with new Maritime Museum and development. 5. This would really bring tourists like me who are visiting without cars to Bremerton, which is currently given very short swift in travel guides. With the new museums and this boardwalk, Bremerton would be an easy ferry day trip destination from Seattle. 6. This is something Bremerton really needs. Bremerton could be a real destination city and this boardwalk will be a huge draw. My family and I already use the downtown area more since it was improved and this will increase our interest. Boardwalk Impacts ECONorthwest Page 39 7. Would love to see personalized pavers for sale as a means to obtain private funding. 8. I am interested in purchasing personalized bricks on the new walkway or at Evergreen Park. 9. As a lifetime resident of Bremerton, I love it ... good project! Good for the economy and the environment. 10. I think this will be a huge improvement to our tourist attraction and fitness for our overweight population, giving us a beautiful area to walk, jog, etc. and just enjoy the views. 11. A boardwalk would help increase activity downtown, bringing in more customers and business, as well as providing a natural resource that is always welcome - the natural beauty of the Puget Sound. 12. Excellent idea. Will promote more business within the area. 13. I am excited about this project! I own a house in Manette and think it will energize my neighborhood, as well as bring beauty and "new views" to the downtown area. Evergreen Park will benefit and inevitable boosts to the local economy will take place. 14. Great project! Will bolster our community, just as similar projects have enhanced communities in other cities. 15. 1 think this plan will entice me to bring my family to downtown Bremerton to shop and dine during the day and evenings. 16. I don't personally have a business in Bremerton. However, we think the boardwalk project is fabulous! I am a former resident of Bainbridge Island and Silverdale. I now live within the city limits on Kitsap Lake. We know so many people throughout the county and even out of Seattle who absolutely love downtown Bremerton! The economic growth and popularity among younger people (with the parks and events, theaters, etc.) is inevitable. Go Bremerton! 17. This would be an excellent day trip from Poulsbo! Kitsap County needs this. 18. Expands access to downtown Bremerton — which would make it a destination! 19. I like the idea. It will stimulate employment opportunities for carpenters like myself. 20. 1 think this idea is a great way to attract tourists from Seattle to use Evergreen Park. I believe Evergreen Park will become more popular from this project. 21. I feel this is a wonderful option for Bremerton. I have lived in Kitsap County for 40 years and this project is long overdue. This will bring life back to Bremerton as well as business and tourists. Comments on Recreation/Walking/Health & Fitness: 1. 1 think this will be a huge improvement to our tourist attraction and fitness for our overweight population, giving us a beautiful area to walk, jog, etc. and just enjoy the views. 2. Sounds like a great idea to bring more people to downtown and provide more recreation opportunities. Boardwalk Impacts ECONorthwest Page 40 3. The boardwalk is a capital idea, while it takes time I can hardly wait for its completion so I can walk from The 400 to Evergreen Park beside a beautiful waterway. 4. We have a walking group at work (KPS Health Plans) and we walk Evergreen Park daily and love the park. We are very excited about the boardwalk and sewer project. We want to be the first to walk it! 5. This will make a wonderful walking spot! 6. Makes the boardwalk and Evergreen Park and downtown Bremerton a destination to visit and explore. 7. Hurry! Hurry! We need the boardwalk for exercise and better property values. Bring the excitement past the downtown core. 8. We are looking forward to the increased marine capacity. 9. Go for it! I am looking forward to walking on it! Hot dog carts will fit nicely! 10. The new design for downtown Bremerton is fantastic, keeps traditions of old town charm with the convenience and practicality of a metropolis. The walkways will help with routing and commuting and exercise promotion will be greatly improved. 11. I can't wait to use the boardwalk for health and fitness. Bring it on! 12. I'm going to love it! When I heard a boardwalk for everyone to walk, ride bikes, and fish on (maybe), I said "This is a great idea!" If I am at Evergreen Park and want to go to my grandpa's shop, I can have fun walking there on the boardwalk. 13. Really would love to rollerblade on the boardwalk, it is great exercise. 14. Enjoy the boardwalk hop, someday it will go to the Evergreen Park by the water. 15. We love coming down for family walks, a full boardwalk would just make it more fun! 16. We love all the improvements in the downtown. Our family enjoys walking along the boardwalk as it is, and we enjoy the festival at Evergreen Park. The idea of joining the two is a natural progression. 17. What a wonderful place to have family time! 18. I am so excited and can't wait to walk/jog on our new boardwalk! 19. I work downtown and would use the boardwalk for walking on breaks. 20. This will be so great! We've seen the gray whales at Evergreen Park and would love to watch them from the boardwalk. 21. I'm really starting to love coming to downtown to walk now! So I can't wait until the rest is done. Ferry parking is ok ... keep up the good work. 22. The Bremerton boardwalk project is a great idea. After its completion, I expect to use it several times a year for leisure purposes. 23. This is a great addition to downtown Bremerton. I work in the Harborside Building and would use it regularly for walking/biking and as a path to Evergreen Park. 24. Wonderful idea. Will be used by children from our daycare facility. 25. Sounds like a great idea environmentally and for outdoor recreation. Boardwalk Impacts ECONorthwest Page 41 26. This will be a great opportunity to walk, there are so few places to walk now. 27. Looking forward to spending a lot of time walking on the boardwalk. 28. We really enjoy what is currently available to the public! We have taken our out - of -town family to enjoy the fountains and view. Keep it up! 29. Extended family members enjoy the fountain park. Looking forward to the boardwalk completion. We will bring friends and family to the area to enjoy. Had visitors from Japan travel across Seattle ferry to Bremerton. 30. The boardwalk will be great for bike rides and relaxing entertainment. I think this will bring Bremerton back to being one of America's finest cities. 31. Will be a great recreation site, good for walking, jogging with a great view. A beautiful waterfront access area will draw many people, not only locals, but visitors to the area. 32. I was on the current boardwalk for the first time earlier this week and I was so pleased to see the changes to the area. Having a father with medical disabilities, it struck me that this boardwalk will be an excellent place to bring him to enjoy the waterfront. He loves the outdoors and will spend hours enjoying this. 33. We are looking forward to visiting the boardwalk when it is completed. It's great to see steps being taken to revitalize downtown Bremerton and to promote physical activity for local residents. 34. We would walk the boardwalk very often. We can't wait for it to come! 35. We love the current boardwalk and would really enjoy an extended one! We could do some serious walking like we currently do almost everyday somewhere else! 36. I think I will feel like walking on water. 37. Good running route. 38. This is a good opportunity for families to go out and have a nice walk. 39. That's so cool! People will love it, a great place to enjoy an afternoon. 40. I think walking along the water for exercise would be wonderful — therapeutic, relaxing, and extremely peaceful. Great stress relief between classes for Olympic College or daily stress relief. 41. We brought the grandkids to the Kitsap Conference Center last weekend from Arkansas, and they loved it. 42. What a wonderful thing for Bremerton, it will be fabulous when the walk is finished and we can enjoy all of pleasures of living in the Pacific Northwest. 43. Sounds like a great idea to bring more people to downtown and provide more recreation opportunities. 44. Great project, I will use it for running. Recreation Suggestions: 1. "Fishing" — promoting fishing for youth and seniors and people who are paying for this public facility. Without fishing from boardwalk, I will not support the boardwalk unless public fishing is allowed. Boardwalk Impacts ECONorthwest Page 42 2. I would like to see a kayak launching area — we would use this area for out of town visitors and ourselves. 3. Need more bicycling identified, safe areas to take my family to enjoy. Recreation keeps kids out of trouble. 4. Improve walking trail and waterfront view. 5. Please provide support for fishing. 6. Go for it! I am looking forward to walking on it! Hot dog carts will fit nicely! 7. Need an underwater diving park! Combine with the boardwalk! 8. How about a walking trail (bike trail ?) extending from boardwalk to Port Orchard? Improves community access and possible bike (shipyard) communities. Great improvement for entire Sinclair communities. 9. 1 think this will be a boon for the entire area. I would like to see festivals, health fairs, etc. held on the boardwalk. My feeling is that it would draw people from all around the greater Puget Sound area more. 10. Suggest contacting PSNS about donating a periscope off one of the recycled subs for mounting and viewing of ferries, boats and Sinclair Inlet. Similar to the Pearl Harbor Sub Museum. 11. Great idea and good for social interaction. Needs some benches if it is going to be 2 miles long. I don't see any in the graphics. 12. It would be great if we could add a marine /tidepool educational center! General Comments and Suggestions: 1. My wife and I have been reading about the proposed Bremerton boardwalk project and are very excited about the possibilities it offers to our city. Bremerton is undergoing a downtown renovation with the building of the new condo units on the waterfront and the new park by the ferry landing in addition to all the other projects such as the new Naval Museum. The boardwalk will be a significant, spectacular contribution to that revitalization. It will be a major, distinctive shoreline feature for Bremerton and may ultimately become the symbol of the city (much as the Space Needle has for Seattle, but obviously on a smaller scale). We look forward to visiting the area and strolling along the new boardwalk once it is completed. It will definitely be a destination for us and our out -of -town guests who visit. We lived in San Diego for 35 years before moving to Bremerton and I can tell you that Bremerton appears to be on the cusp of a substantial revitalization, much as San Diego has accomplished over the last three decades. Downtown San Diego is now a tourist attraction and a highly desirable location to live and play. We can see the same thing happening here in Bremerton and we believe that this boardwalk will be an important catalyst for that change. Let's get it built as soon as we can. 2. Fantastic idea! We're looking forward to using the walk! 3. I am very excited for the future boardwalk to Evergreen Park! Boardwalk Impacts ECONorthwest Page 43 4. This is my first time in the area. We've come from Portland, Oregon by boat and nearly missed Bremerton en route to Poulsbo. Stopped when we saw the festival on the water and am very excited to see the development of the waterfront for tourism/boaters /visitors. 5. Great development plan! Keep improving the waterfront. I'm impressed by the many innovations the city has done to make the waterfront an accessible and sightseeing destination. It gives to its citizens and visitors alike. 6. I think that the purpose of this boardwalk is a great idea. Sewage definitely needs to be cleared up. I'm also excited about being able to take walks and jogging along the waterfront. Amazing! 7. I live in Manette and hope more trails and walkways, will be in site for the future. We support the boardwalk and are excited for its completion. 8. Will be a great addition — will tie downtown to Evergreen Park and bring more renovation. 9. The boardwalk at Bremerton is delightful — the extension will make it an eventual world attraction (like Lahaina on Maui). All who are involved should really go for it. 10. I enjoy the detail into cleaning up the waterfront and re- opening downtown Bremerton. 11. Really can't wait to see the project finished, it looks great! I think it will really beautify this area. 12. Great job! Can't wait! 13. This is a great project for Bremerton to revitalize the town. This project needs to happen and is well worth the investment. 14. It is an amazing idea! I would use the boardwalk everyday if it is put in. 15. This is awesome! A phenomenal project that will really put Bremerton on the map! 16. 1 am so excited to see the boardwalk up and being used. ASAP is my comment. I am so proud to be part of the City of Bremerton. 17. I am so excited to see the continued improvements in the downtown area. Geographically, Bremerton is the most beautiful area. Am so glad that plans are in place to retain and highlight this beauty. 18. This is the best thing anyone could possibly have in this downtown area. So much to offer. This is the last of the Kitsap waterfront. Seeing the development is rewarding and inspiring. So much to offer. Potential is so great. 19. Please start soon, this is going to be great! 20. This is great, it can't happen fast enough! 21. I will use this boardwalk, it is a great idea and will really enhance Bremerton. 22. Wonderful idea! I can't wait. I think the boardwalk is a great plan. Bremerton is back, I' m proud! 23. I am amazed, it is great! 24. Looking forward to the new addition to our community. Boardwalk Impacts ECONorthwest Page 44 25. This will be a beautiful and functional addition to the city and society. Thank you. 26. Great job, we love the vision. 27. The vision for Bremerton's redevelopment is perfect!! 28. Build it! The sooner the better! 29. We are really hopeful for the boardwalk to help children in our community. I own a home. Please help build my community. 30. I believe the Bremerton boardwalk will be a real plus for the area. I'm looking forward to the completion of this project. Great idea. 31. We join with you in the revitalization of Bremerton. Yes, go for it! 32. This is so important for the "new" city of Bremerton. We totally support it 100 %. 33. I love the design and am looking forward to taking long walks here! 34. Great job, can't wait to see the dream come true! 35. This is fantastic to see Bremerton coming back to life! 36. I would be thrilled to have the boardwalk! 37. I think this is a good idea for the community. 38. Beautiful place to have in Bremerton. 39. This is one that we are most excited about. 40. I hope this proceeds. Sounds like a great project. 41. Great ideas! Can't wait to see and use it. We love coming to Bremerton by boat and car. 42. What a dream come true. Bremerton will shine! We will call with grant opportunities. 43. Very well thought out project! 44. Wonderful, wonderful, I love it! 45. This is vital to improving all of Kitsap County. 46. Can't wait to see this project finished. 47. Since the "Bremer Stranglehold" was taken off downtown, this idea, much like West Vancouver's walkway, would be great! 48. Please build this quickly! 49. Lived here for over 70 years, I am very excited about "everything" being done downtown. Great job! 50. We are a family of six and can't wait for this to be done! 51. Anything to make the eyesore we call Bremerton more visually appealing is a plus. 52. Sounds like it will add in a positive way to downtown Bremerton. 53. This project is amazing! We can't wait to have something this fun and exciting to use and to show out -of -town guests! 54. Nice place to visit! Boardwalk Impacts ECONorthwest Page 45 55. I think this will be a great project for the area, I am looking forward to going there and enjoying the new amenities. 56. I think this is a good idea for all local citizens. Do not upscale Bremerton too much. 57. Sounds like it would be great. Would make Bremerton a better city! 58. Multiple funding and uses is a great idea. Good asset for the city. 59. It will be a great addition for the development of Bremerton/Kitsap County. 60. Excellent idea to create a reason to move to Bremerton. Now address crime, cheaper rentals, and more ownership of homes. 61. Looks beautiful! 62. This will help build a better Bremerton that is people friendly. 63. Keep up the good work for the people of Bremerton. 64. I would enjoy it with my friends. 65. It looks like a great idea, I would definitely take advantage of it. 66. I haven't spent too much time in Bremerton — this will definitely bring me to the city. Good luck! 67. Very nice project. Bremerton doesn't have a nice walking area and this will be awesome. 68. Great idea. It's about time that the waterfront area is improved. We look forward to enjoying the boardwalk. 69. Good idea for entire county! 70. I can't think of anything that would benefit the city more as it continues its rebirth. 71. Looks awesome, way to clean up Bremerton! 72. This boardwalk looks fantastic! A great idea to spice up our waterfront. 73. It's wonderful seeing this on the brink of coming alive. I worked on the neighborhood plan that first promoted this vision! 74. Yes, get it done! We need something for people to do downtown. 75. We are encouraged to see what the future will hold for Bremerton. 76. Great plan, the idea of the elevator is exciting — great job! 77. Fabulous idea, about time! 78. Let's get this thing done! I love it. Please make sure design and construction of it do not harm shorelines and marine habitat and maybe even enhance marine and shore life. 79. Great idea for use of grant money. 80. I've lived here 35 years and I love what is happening to Bremerton. Thank you Cary Bozeman and city leaders! 81. I feel this is a wonderful option for Bremerton. I have lived in Kitsap County for 40 years and this project is long overdue. This will bring life back to Bremerton as well as business and tourists. 82. This sounds like a fantastic project to revitalize a decaying downtown. Boardwalk Impacts ECONorthwest Page 46 83. I knew Bremerton had a far - sighted city government (unlike B.I.!) Good luck, can't wait to see it finished! Negative Comment: 1. As a taxpayer, I am disgusted at the flagrant disregard that this county has for conservative economics. I am tired of having my hard -earned dollars being thrown away every time you decide that a building is not new enough. Construction like the Manette Bridge and our school building are not disposable. Furthermore, traffic in the new downtown is now a nightmare that keeps me away whenever I can avoid this area. General Suggestions: 1. Come up with money to remove houses at the end of bridge that are an eyesore. Bridge pedestrian walkibike lanes on side to access from boardwalk. 2. Boat slips — would have been nice if we were able to vote on this before the fact. 3. A year ago, I suggested adding bronze statues along the boardwalk that would be interactive for children. Each one would have a sign giving clues to what might come next. Maybe animal statues as opposed to characters. 4. We would love to see Shakespeare in the Park here in Bremerton! We travel to see Worden or Greenstage productions (they are high quality productions) and would love to see these groups on this side of the sound. 5. Have a permanent gazebo -style raised platform for Sunday concerts (as they do in Mexico). 6. I'd like to see a walk -in movie, an arcade downtown, also it would be nice to see a music store, and men's clothing store for those of us here in Bremerton so we don't have to travel all the way into Silverdale. 7. As a musician who has performed music locally for festivals for approx. 18 years, it would be nice to have a venue for festivals. Love to have a covered stage /amphitheater. 8. Looking forward to amphitheater for better events at Evergreen Park. 9. Please include lots of benches (sponsored ?) made of concrete or wood Boardwalk Impacts ECONorthwest Page 47 I i Exhibit B U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT SECTION 108 LOAN GUARANTEES Section 108 is the loan guarantee provision of the Community Development Block Grant (CDBG) program. Section 108 provides communities and states with a means of leveraging their CDBG funds to obtain additional financing resources for economic development, public facilities, large -scale physical development projects and housing rehabilitation. Regulations governing the Section 108 program may be found at Title 24 Code of Federal Register Part 570, Subpart M "Loan Guarantees ". ELIGIBLE APPLICANTS AND ACTIVITIES Eligible Applicants Eligible applicants include the following public entities: • CDBG entitlement entities, and • Nonentitlement communities that are assisted in the submission of applications by States that administer the CDBG program. Eligible Activities Activities eligible for Section 108 financing include: • Economic development activities eligible under CDBG; ° • Acquisition of real property; • Rehabilitation of publicly -owned real property; • Related relocation costs; • Clearance, demolition, and removal on acquired or rehabilitated public property (including environmental cleanup); • Site preparation including construction, reconstruction, or installation of public facilities related to property acquired or rehabilitated using Section 108 funds or for economic development purposes; • Payment of interest on the guaranteed loan and issuance costs of public offerings; • Debt service reserves; • Housing rehabilitation eligible under CDBG; and • In limited circurnstances, housing construction as part of community economic development. Public entities may directly use the funds or may re -loan funds to businesses, non - profits or other third parties to undertake eligible activities. All CDBG regulations apply. As with the CDBG program, projects and activities must either principally benefit low and moderate income persons, aid in the elimination or prevention of slums and blight, or meet urgent needs of the community. - Section 108 loan guarantee funds are included in the requirement that 70% of all CDBG expenditures must benefit persons of Iow and moderate income. HOW THE PROGRAM OPERATES Maximum Commitment Amount Commitments are limited as follows: • An entitlement entity may apply for up to five times the public entity's latest CDBG entitlement amount, minus any outstanding Section 108 commitments or principal balances on Section 108 loans. • A nonentitlement entity may apply for up to five times the latest CDBG amount received by its State, minus any outstanding Section 108 commitments or principal balances on Section 108 loans for which the State has pledged its CDBG as security. State programs may apply additional restrictions. Financing Source Section 108 obligations are financed annually through underwritten public offerings in which fixed rate notes are sold to private investors. To ensure the marketability of Section 108 notes, 1 HUD provides a 100 percent full faith and credit guarantee to investors. Financing between public offerings is provided through an interim lending facility established by HUD. Although HUD coordinates the funding process, it does not have a direct role in the flow of funds. The interim lender and investors provide funds, underwriters and the Fiscal Agent manage the transactions, and the locality and any third party participants borrow the funds. Security Security for the loan guarantee includes a pledge by the public entity or State (in the case of nonentitlement entities) of its current and future CDBG funds. The CDBG funds are not escrowed and may continue to be used as planned. Additional security is also required, which provides a safeguard to reduce the risk to CDBG funds. The additional security requirements will be determined on a case -by- case basis, but could include assets financed by the guaranteed loan. Loan Repayment The maximum repayment period for a Section 108 loan is 20 years. Interim loan interest payments are due quarterly on the first day of the months of February, May, August, and November. On permanent loans, principal payments are due once a year on August 1 and interest payments are due twice a year on August 1 and February 1. Principal payments must be made in increments of $1,000. Interest begins accruing from the date the funds are deposited in the entity's account. HUD has the ability to structure the principal amortization to match the needs of the project and borrower. Prepayment Investors buying the Section 108 notes are guaranteed the timely payment of principal and interest for a ten -year period. Technically, the borrower cannot prepay the loan during this period. However, by guaranteeing the income stream to the investor through a deposit of funds with a Fiscal Agent, the borrower is defeasing or voiding the Section 108 obligation. Interim loans may be prepaid at any time without penalty. Jurisdictions do have the options of remaining in the interim financing facility for the term of the loan. Interest Rates. Interest rates on interim borrowing are priced at the three -month London Interbank Offered Rate (LIBOR) plus 20 basis points (0.2 %). Interest rates on obligations sold in public offerings will be determined by market conditions at the time but generally will be slightly lower than yields on Federal agency securities (e.g. Fannie Mae and Freddie Mac) with comparable terms. Financing_ Fees The only financing fees of the Section 108 program are those related to issuance of the Section 108 notes, such as fees to the underwriters and the Fiscal Agent and any other expenses related to the offering. Total financing fees will generally be one -half to one percent (0.5% - 1.0 %) of principal. Other than these up -front fees, no additional maintenance fees are charges for permanent Section 108 notes. Interim loans are charged a $100 quarterly fee. Regulations. All CDBG program regulations such as citizen participation, Davis- Bacon, and relocation /displacement compliance must be met. The environmental assessment must be completed prior to incurring or expending any project costs. Developing an Application Applications for Section 108 guarantees are accepted throughout the year. Public entities wishing to apply for Section 108 loan guarantee assistance are advised to contact HUD in advance for guidance in preparing an application. For assistance contact: Donna J. Batch, Region X Economic Development Specialist, at (204) 220 -5374 or donna.batch @hud.gov 2