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Abstract:
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Local economic development organizations use a variety of project and program types to stimulate local economic growth. Recently, many local economic developers have evaluated amateur sports tourism as a local economic stimulus. This thesis studies the economic benefits of one such tourism-based economic development project, the proposed Placer Valley Sports Complex in Placer County, California. The sponsors of the project, a local hotel group, seek to increase hotel visits in the Placer Valley area by creating and operating an amateur sports complex. Because of the substantial costs of the sports complex, and the potential economic benefits the complex could bring to the local region, it is important that project decision-makers fully study and evaluate the potential costs and benefits of the project.
I study the economic benefits of the Placer Valley Sports Complex through input-output analysis using the IMPLAN model. The IMPLAN model is a commercial input-output model that synthesizes industrial input and output, labor, and tax data and enables researchers, analysts, and consultants to estimate the economic impacts of outside changes to local economies. Using secondary source visitor-spending surveys and estimated visitor counts, I used the IMPLAN model to estimate the economic impacts of the proposed sports complex. I projected the multiyear costs of the project, and compared them to the economic benefits of the project, using the design, construction, and maintenance cost data from the project sponsors.
My results indicate that the Placer Valley Sports Complex could generate an estimated $28.8 to $91.7 million in net present value for Placer County over a 30-year period. However, because of several factors that could affect actual visitor spending related to the sports complex, there is potential that the actual economic benefits of the complex could be lower than I estimated. Sports complex sponsors need to further analyze visitor count estimates relative to the local sports market and conduct local visitor-spending surveys to fully address visitor spending uncertainty. Sports complex sponsors also need to identify a dedicated revenue source to finance the project, and there are financial, legal, and political problems that may inhibit project financing. Because of the complicated nature of economic impact analysis, and the various financial, political, and social issues involved with the Placer Valley Sports Complex, this thesis highlights the need for local policy makers to rigorously study and evaluate economic development project proposals. |
