It is exciting to think about the River Trails white water park that is proposed for the downtown portions of the Des Moines and Raccoon Rivers. It would be a nice addition to the amenities that help keep and attract people and businesses to the Des Moines area.
But I don’t believe the results of the economic impact study that was done by Johnson Consulting for Capital Crossroads. As reported in The Des Moines Register, the study estimates that the Water Trails project will generate $104 million of Total Direct Spending at restaurants, hotels, stores, and equipment rentals during its first five years of operation. (See link to Register article below.)
For example, the report assumes that there will be 78,068 paying active participants of the River and Adventure Park features during the first full year of operation – spending about $78 each on food, beverage, and equipment rental. If we assume the recreational and related opportunities are open 365 days per year, it means that an average of over 200 people would use the facilities every day. That doesn’t seem reasonable to me.
In addition to the 78,068 active participants, the report assumes the project will attract an additional 80,000 non-active visitors, plus 15,404 more visitors from the Iowa Events Center, for a total of 173,472 visitors who will contribute to the total economic impact of the project during the first year – spending about $100 each that they otherwise would not have spent.. (The estimated number of users increases about 6-7% per year after the first year.)
The projections include the assumption that 60,000 of the visitors will stay overnight during the first year. That equals an average of 164 overnight visitors every day who would not have otherwise stayed overnight if there weren’t a River Trails recreation project. The report includes other unrealistic estimates.
It is probably impossible to calculate the economic benefit of any new attraction that is added on top of all of those that already exist in our metropolitan area. I suppose it is expected that an economic impact study be conducted before spending $117 million on a recreational project like this. The consultants do make proper disclaimers and disclosures in their report to notify readers of how estimates were made, and that actual results may be significantly different.
It is important that we not fool ourselves into thinking that we can accurately quantify the future economic impact of such a project. My gut feeling is that the indirect benefits of the River Trails project might greatly exceed the costs, but that the directly measurable economic benefits will not.