19950786 Ver 1_Economic Impact Analysis_19950728

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BRUNSWICK COUNTY
REPLACEMENT OF BRIDGE NO. 198 ON SR 1172
OVER ATLANTIC INTRACOASTAL WATERWAY
AT SUNSET BEACH, NORTH CAROLINA
FEDERAL AID PROJECT NO. BRS-1813(1)
STATE PROJECT N0.8.2230101
TIP NO. B-682
ECONC?MIC IMPACT
ANALYSIS
Prepared For.
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PLANNING & ENVIRONMENTAL BRANCH
NORTH CAROLINA DEPARTMENT OF TRANSPORTATION
June 1995

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Final Report

SUNSET BEACH BRIDGE REPLACEMENT:
ECONOMIC IMPACT ANALYSIS
'
Pre ared for•
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GREINER, INC .

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Prepared by:
APOGEE RESEARCH, INC.
June 7, 1995
Copyright ®1995 Greiner, Inc.
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Sunset Beach Bridge -Final Economic Impact Report
TABLE OF CONTENTS
1
EXECUTIVE SUMMARY ...................................... ii
I.INTRODUCTION .......................................... 1~
' Study Objective ......................................... 1
Study Approach ......................................... 1
' II. BACKGROUND .......................................... 3
Problems with the Current Bridge .............................. 3
Potential Traffic Effects of Bridge Replacement ..................... 4 - -
' Potential Economic Impacts of Bridge Replacement ................... 5
' III. ECONOMIC IMPACT ANALYSIS .. : ::::::::::::::::::::::::::: 12
General Approach and Data Sources 12
Day Visitors ........................................... 12
' Mainland Commercial Activity .:::::::::: : :::::::::::::::::::: 15
Mainland Property Development 16
Island Development ...................................... 18
' Other Economic Impacts .................................... 27
Caveats and Exclusions 31
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Sunset Beach Bridge -Final Economic Impact Report
• EXECUTIVE SUMMARY
This study evaluates the economic impact of a bridge replacement in Sunset Beach,
' North Carolina on the entire community -- the island and mainland portions of the town.
Given the uncertainty inherent in such astudy -- particularly given the lack of hard data
available on the relevant contributing factors -- the study is intended to evaluate the direction
and magnitude of the economic effects, rather than provide precise point estimates of the
economic impacts.
' In order to examine the potential impacts of a bridge replacement in Sunset Beach,
Apogee Research, in association with Hayes and Associates, evaluated the historical impacts
of bridge replacements on the two neighboring islands -- Holden Beach and Ocean Isle
Beach, North Carolina. While no setting can provide a perfect, controlled context for
estimation of the impacts on Sunset, these two islands were selected for their comparability
' to Sunset Beach. The consultants then gathered data on economic activity in Sunset Beach
over the same period in order to compare it to the neighboring islands, and to assess the
potential economic impacts of the proposed bridge replacement at Sunset Beach.
' The following summary of results for this analysis -- for each of the elements of
'economic activity -- are highlighted in Table 1.
• Day Visitors to the Island. The proposed bridge may generate an increase in
day visitors to Sunset Beach Island during peak season but this will have little
' or no direct economic impact on the area.
• Mainland Commercial Activity. Easier access to the mainland afforded by the
' proposed bridge replacement could stunulate peak season expenditure in
mainland commercial establishments, particularly restaurants and stores along
or close to the Sunset Beach causeway.
• Mainland Pro a Develo meet. The rima drivin forces f
P nY P P rY g or mauiland
development are essentially independent of the ease or difficulty of access to
Sunset Beach Island. Thus the (economic) effects of the proposed bridge on
mainland development are likely to be marginal.
' • Pace and Character of Island Development. The proposed replacement bridge
is unlikely to affect the extent or character of residential or commercial
' development on the island. Although some feel a new bridge could accelerate
the pace of build-out of platted lots, there is no evidence from Holden Beach
or Ocean Isle to support such a hypothesis. Thus, there are not likely to be
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Sunset Beach Bridge -Final Economic Impact Report

significant economic effects attributable to bridge-induced development on
Sunset Beach island. -
• Composition of Population. Given the public safety and traffic flow benefits,
' it is possible that the proposed replacement could stimulate an increase in
working families and retirees on Sunset Beach island and a concomitant shift
away from primarily rental properties with seasonal occupants. Given the
' difference in number of persons per unit, the result would be a lower
occupancy rate. Whether this effect is confined to the shoulder season (when
retirees are least likely to rent their units) or extends to summer season as well
' depends on the number of retirees that rent out in peak season to higher
occupancy vacationers. Evidence is impressionistic and not conclusive,
however, and we cannot forecast the likely demographic impacts (and -
' associated economic effects) of the proposed bridge replacement.
• Town Finances. If a high rise bridge replaced the current bridge, the Town of
' Sunset Beach could save the $25,000 now spent annually (1993 level) on
traffic control at the bridge. There is no indication that a new bridge would
accelerate property appreciation and town revenues from property tax
revenues.
' • House Salvaging. Individual owners, and even the federal government, stand
to gain financially from house salvaging that would be made possible by the
proposed replacement bridge. The potential for salvaging could also boost
residential upgrading.
• Cost of Doing Business on the Island. By cutting travel tune, the proposed
' high rise or mid rise replacement bridge to Sunset Beach would reduce the
cost to mainland companies of delivering supplies and making service calls to
the island.
• Fishin Tournaments. Sort fishin tournaments can be affected b the current
g P g Y
bridge. A high rise bridge would ensure that this activity does not come in
' conflict with the interests of land-based traffic.

Apogee Research, Inc. -Page iii
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Sunset Beach Bridge -Final Economic Impact Report

Table 1.
' Potential Impact of Sunset Beach Bridge Replacement
Economic Impact Factor' Probability of
" Magnitude of
' Impact on Factor Economic Impact
Due to Factor"'
' Day Visitors to Island H +
Development on Sunset Beach Mainland
' Commercial Activity H + +
Property Development L +
Development on Sunset Beach Island
Pace of Development M + +
Multi-family/High rise Buildings 0 0
Proportion of Residents -Year-round M +
House Upgrading through Replacement M +
Cost-efficiency of Supplying/Servicing Island H -~-
Overall Economic Impact on Town M +
NOTES:
(i) These factors -- which may or may not be affected by a bridge replacement -are potential contributors to
economic activity in Sunset Beach.
(ii) The probability that a bridge replacement will have an impact on the factor (regardless of the size of that
impact).
KEY: "0" = No chance of any effect; "L" =Low probability of effect; "M" =Moderate probability
of effect; and "H" =High probability of effect.
(iii) The potential impact of the factor on overall economic activity in the town of Sunset Beach; since this
column reports projections for economic impact on the towtf as a whole, even a large change in the factor
may result in a very low overall economic impact.
KEY: "+" =very low increase in economic activity from the change in the factor; "++" =low
increase in economic activity; "+++" =moderate increase in economic activity; and "++++" _
large increase in economic activity. (A "-", "-", etc. would indicate decreases in economic activity; this
is not relevant here.)
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Sunset Beach Bridge -Final Economic Impact Report
I. INTRODUCTION

Study Objective
As part of the Sunset Beach Bridge Replacement Environmental Impact Statement,
Apogee Research, Inc. , was charged with assessing the economic impacts of replacement of
the current pontoon bridge in Sunset Beach, North Carolina. This economic impact study
was to evaluate the effect of a bridge replacement on the entire community -- the island and
mainland portions of the town. Given the uncertainty inherent in such astudy -- particularly
given the lack of hard data available on the relevant contributing factors -- the study was
intended to evaluate the direction and magnitude of the economic effects rather than provide
precise point estimates of the economic impacts. In addition, the study was to provide
overall impacts of a bridge replacement in general, without reference to the specific bridge
scenario or location selected.
In order to examine the potential impacts of a bridge replacement on Sunset Beach, it
was useful to evaluate the historical impacts of bridge replacements on the two neighboring
islands -- Holden Beach and Ocean Isle Beach, North Carolina. Many have pointed to
development trends on these islands, particularly on Ocean Isle, as indicators of what is
'likely to occur on in Sunset Beach. By examining the similarities and differences between
Sunset Beach and the two neighboring islands, including the existence or absence of the key
economic and social factors identified in the case studies of the other islands, we can offer a
more realistic evaluation of the likely economic impacts of the proposed bridge replacement
on Sunset Beach.
Apogee Research, in association with Hayes and Associates, therefore, conducted case
studies of Holden Beach and Ocean Isle Beach, North Carolina -- evaluating the economic
activity on these two islands over the last decade. This includes the period prior to bridge
replacements on the two islands (pre-1986), and economic activity following the
replacements. While no setting can provide a perfect, controlled context for estimation of
the impacts on Sunset, these two islands were selected for their comparability to Sunset
Beach. The consultants then gathered data on economic activity in Sunset Beach over the
same period in order to compare it to the neighboring islands, and to assess the potential
economic impacts of a potential bridge replacement in the future in Sunset Beach.
Study Approach
This study involved three basic steps:
Data collection, including interviews with individuals in each of the three
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Sunset Beach Bridge - Fina! Economic Impact Report
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communities, and review of data gathered by Hayes and Associates on Sunset
Beach as well as the two case study islands;
• Development of case studies, including evaluation of the baseline scenario
' (prior to the bridge replacements), and assessment of economic factors and
impacts following the bridge replacements; and
• Evaluation of the potential economic impacts of a new bridge in Sunset Beach,
including comparison of conditions and history of Sunset with the two
neighboring islands, and assessment of other constraints and facilitators of
economic activity in the three towns.
Data gathered and evaluated included land use plans, building permit histories, - -
environmental constraints, sewage and water issues, population breakdowns and growth, and
other qualitative measures of economic activity and underlying economic factors. The case
studies involved interviews with numerous individuals on the three islands, including local
officials, business people, developers, citizens and local community organizations, and state
officials. Interviews were free-flowing exchanges in which interviewees were probed beyond
simply their opinion of this potentially controversial issue (bridge replacement); the
' consultants sought to gather data on the underlying issues that shape economic activity in the
three towns.
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Sunset Beach Bridge -Final Economic Impact Report
II. BACKGROUND
[Please refer to material from Hayes & Associates reports and the court case summary as
' background to this report.]
Problems with the Current Bridge
The current bridge connecting Sunset Beach island to the mainland over the
Intracoastal Waterway is a one-lane pontoon swing-span bridge. Its age and current
' condition exacerbate problems already inherent in its design. Problems associated with its
operation are of two types: traffic interruptions or discontinuities and insufficient lane
capacity. -
' Traffic Interru tion
P
' Traffic interruptions can be triggered by scheduled and unscheduled bridge openings
to allow passage of waterborne vessels on the Intracoastal Waterway. The bridge must swing
' open on demand for commercial vessels; it opens hourly for pleasure craft from April
through October and on demand from November through March. These openings, however,
can be aborted or forestalled in case of emergencies, for example to allow firetrucks or
emergency vehicles to get to the island or back to mainland medical facilities. Generally, the
' net result of these interruptions is ground traffic congestion -- cars backed up on either side
of the opened bridge waiting for water traffic to pass through. Occasionally, these
discretionary bridge interruptions interfere with emergency responses because: (1)
communication with the bridge tender was delayed and the bridge was closed to vehicular
traffic when the emergency vehicle arrived, (2) water traffic was already passing through
when the emergency message was received and either could not be stopped in time or the
emergency vehicles arrived before the bridge was fully aligned.
' Serious consequences can result when traffic is interrupted because the bridge cannot
carry vehicular traffic. Aside from bridge closings due to breakdowns and repairs, which
may be longer than anticipated if unique parts must be custom made, the bridge is hampered
' by especially high or low tides that preclude proper alignment of the pontoon-based segment
and the land-based entry and exit ramps. It is also closed to land traffic in extremely high
winds. Thus, under adverse weather conditions such as tropical storms and hurricanes,
' timely and complete evacuation by land might be impossible. And, in personal health or fire
emergencies, there is always the chance that the bridge is closed to vehicular traffic because
of breakdowns or weather-related conditions. Such public safety issues are at the heart of
' plans to replace the current bridge.
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Sunset Beach Bridge -Final Economic Impact Report
Insufficient Lane Capacity

The current one lane bridge is a bottleneck to traffic flow given the volume of traffic
during the peak season months, particularly when traffic reaches its apex on Saturdays as
vacation rentals turn over. Cars back up at the lights waiting their turn to cross in both
directions; this is exacerbated by the scheduled and on-demand bridge openings to water
traffic. The resulting congestion has been said to generate such long delays that shoppers
find their frozen foods defrosted by the time they cross onto the island. Because of the
congestion and long waits to cross the bridge, the town of Sunset Beach assigns two police
officers to direct traffic during the peak months.
Potential Traffic Effects of Bridge Replacement
The proposed replacement bridge would eliminate most weather-based interruptions in
vehicular traffic flow. First, the replacement bridge would be firmly anchored on land, thus
not affected by tidal water height. Second, it would be less susceptible to storms and high
winds -- though certainly restricted to some types of vehicles under extreme (hurricane) wind
velocity conditions. That is, in contrast to the current bridge, the proposed replacement
bridge would be accessible to ground traffic under extreme weather conditions and, when
conventional vehicles are barred from crossing, it would still be passable by heavier
emergency vehicles such as police and fire services under all but the most adverse
conditions.
Moreover, because it would be new, a replacement bridge would be less vulnerable to
mechanical or structural failures and closedowns for repair than the current bridge, though
the mechanical component of a bascule bridge would make a bascule replacement more prone
to problems than a high rise fixed bridge.

The construction of a two lane bridge would more than double capacity since, in
addition to doubling the number of cars that could cross at once, it would eliminate the need
to stop traffic to change directional flows. A high rise, fixed span (65 foot) bridge would
permit continual traffic flow; mid-level and low-level bascule bridges would require,
respectively, periodic and frequent bridge openings to Waterway vessels'. However, it
1 Data on vessel height recently collected by Greiner Engineering indicate that a low-
' level bascule bridge would have to open to water traffic nearly as often as the current
bridge -- a low-level (15 foot) bascule bridge would provide unrestricted passage of

' vessels less than 19 % percent of the time during daylight hours. Amid-level (30
foot) bascule bridge would provide unrestricted passage of vessels over 41 percent
ofthe time during daylight hours.
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Sunset Beach Bridge -Final Economic Impact Report
would permit continuous traffic in both directions when open to road traffic, thus more than
doubling the flow during those time periods compared to the current pontoon swing bridge.
In sum, the proposed bridge replacement would directly address safety concerns
stemming from bridge closings to vehicular traffic and, at the same time, address some or all
root causes of traffic interruption, congestion and delay. A high level fixed span, however,
would have no attendant and thus no "gatekeeper, " which is perceived. by some as a loss in
security (see below).
Potential Economic Impacts of Bridge Replacement
Aside from possible impacts of bridge re-alignment and/or disruptions during
construction, the potential economic effects are rooted in public reaction to congestion and - -
safety conditions -- both real and perceived. Several groups of individuals with different
perspectives are involved:
• Island homeowners (both those with their primary residence and those with
second homes on the island);
• Island vacationers (renters);
• Day visitors to the island;
• Mainland residents and visitors;

1
1
• Owners and employees of retail establishments on the island and on the
mainland; and
• Real estate developers, who may feel that island access is relevant to demand
for their developments.
Within the groups of residents, there are subgroups according to age and working or
retirement status.
This section of the report describes the dynamic relationships that could generate
economic impacts from a bridge replacement that alters three major elements of current
bridge operations: non-discretionary closings to vehicular traffic; discretionary closings to
vehicular traffic; and insufficient lane-capacity. The study team explored each of these
potential relationships, using published data and information from on-site interviews. The
subsequent section describes our conclusions on the likelihood and relative magnitude of each
of the possible economic impacts identified below.
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Sunset Beach Bridge -Final Economic Impact Report
Safety Issues
' Assurance of bridge passage and the "safety factor" of a new bridge could stimulate
demand for island residences and even day visits from people currently concerned about
' being caught on the island during a public emergency such as the March 1993 storm when
the bridge had to be closed to all vehicular traffic. Personal safety may be an even greater
concern of retirees worried about needing emergency medical care when the bridge is non-
' operational under extreme tidal conditions or during a bridge breakdown, or when emergency
response is delayed because the bridge could not swing back into place before the emergency
vehicle arrived at the light. Anew high rise bridge would alleviate most if not all of these
concerns and could generate increased demand for permanent residence and vacation stays.
On the other hand, some island residents see safety benefits in the current bridge -
' tended by an overseer who can act as a "gatekeeper," noting who passes over and, in their
view, able to interrupt island-to-mainland land traffic at will to prevent escape from the
' island of a thief or other wrongdoer.
Figure 1 presents a logic diagram that illustrates the dynamics of the possible
' interactions; Table 2 identifies the population groups and describes these same relationships
verbally. Referring to the figure, non-discretionary bridge interruptions for vehicular traffic
can undermine public safety; discretionary bridge service interruptions may affect personal
security and crime deterrence. These potentially affect all those on the island, though not all
may perceive the issue equally.
' Congestion and Predictability
Congestion can discourage people from coming to the island as permanent residents,
' vacationers, and/or as day visitors. This could affect demand for real estate. Certainly
congestion and particularly the inability to anticipate the length of traffic delays and travel
time could discourage island residence by those who need to adhere to commuting or other
' schedules for work, education, or leisure activities.
Congestion can also add to the cost of doing business on the island itself by inhibiting
' timely delivery of building materials, food and other supplies to commercial enterprises and
by tying up delivery vehicles in traffic.
' Although island residents must purchase almost all basic groceries and supplies on the
mainland, congestion can also "bottle up" people on the island and discourage them from
' visiting the mainland for shopping or leisure during the peak season thus depriving mainland
businesses of some demand from island residents and vacationers. By the same token,
congestion could foster somewhat greater purchases of convenience goods and novelties from
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Sunset Beach Bridge -Final Economic Impact Report
__
the commercial ventures on the island than would be the case if access to the mainland were
' easier.
Referring to Figure 1, bridge closings of both kinds affect -travel dependability; one
' cannot predict with any degree of certainty how long it will take to cross to the mainland or
visa versa. The limited bridge capacity in itself fosters congestion in peak months; this is
exacerbated by bridge closings, thus increasing average trip time.
Transportation dependability and average trip time are likely to be articularl
P Y
important to year-round working families and/or those with children in school. These may
' also be important to year-round retirees with tightly scheduled commitments, though this
connection is not delineated in the figure. Mainland residents and vacationers may be
influenced by these (and by public safety concerns, not delineated in the figure) in their
' timing and number of day visits to the island. Ease of access to the island for day trips
could also affect mainland development. Moreover, ease of egress most likely affects the
' number of discretionary trips from the island to the mainland during peak season, thus
impacting commercial development on the mainland (and on the island, as noted above).
' Other Factors
Although the number of day visitors to the island, local island and mainland
' development, and commercial activity on both sides of the bridge can be affected by ease of
access, these are also shaped by other factors such as those indicated in Figure 1. These
include:
' • Totally exogenous factors, e.g., the general state of the economy, tax
. treatment of second homes, government policies and availability of insurance
' covering natural disasters;
• Independent limiting factors such as physical availability of land, constraints
' on construction imposed by environmental regulations; and
• More localized factors that are or can be independent of traffic conditions,
' e.g., zoning policies, sewerage infrastructure, number of parking spaces and
public provision of beach-area amenities.
' These factors must also be considered in an analysis of the economic impact of the
proposed bridge replacement.

Apogee Research, Inc. -Page 7

Figure ~
Re/ationship Among Bridge Characteristics and Possib/e Economic /mpacts (Part ~)
POPULATION GROUP
(POTENTIALLY) AFFECTED
VARIABLE AFFECTED ~ Retirees -interested in primary
residence on island.
Personal security and crime
deterrence:
BRIDGE • surveillance
• control escape route
CHARACTERISTIC
Discretionary bridge closing to
vehicular traffic:
• hourly, for pleasure boats
• on-demand, for commercial vehicles
Public Safety:
................ • exit in general emergency
• entry of emergency vehicles
(fire, ambulance)
• access to mainland medical
Non-discretionary bridge closings
to vehicular traffic:
• extreme tides
• storms
• repairs
Transportation dependability:
• ability to cross bridge
• travel time predictability
Vacationers -interested in island stay.
Retirees -interested in island as
second home.
Working families -interested in island
as second home.
Working families -interested in
primary residence on island
Island residents, vacationers
Bridge capacity Average travel time: peak periods
(number of lanes)
i 1 .t Mainland residents, vacationers

Figure ~
Re/ationship Among Bridge Characteristics and Possib/e Economic /mpacts (Part 2)
POPULATION GROUP
(POTENTIALLY) AFFECTED
Retirees -interested in primary
residence on island.
Vacationers -interested in island stay.
Retirees -interested in island as
second home.
Working families -interested in island
as second home.
Working families -interested in
primary residence on island
Island residents, vacationers
1liainland residents, vacationers
INTERMEDIATE EFFECT
PRIMARY (POTENTIAL)
ECONOMIC IMPACT
CRITICAL NON-BRIDGE FACTORS
Zoning, sewage
E ...................................:
Discretionary trips from island to
mainland:
• leisure activities
.shopping
:. .......................................................:
Island development:
. pace
• extent
• nature/style
• population mix
:...................................:
Land Availability
:... ................................:
:.....................................
National local
economic
conditions
Number of day visitors to island Mainland land development: ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
• golf course
ems- .residential
Parking, beach
;.. .......... .................... ~.................d ~ amenities on island '

Sr~nset Beach Bridge -Final Economic Impact Report
Table 2.
Description of Bridge Characteristics, Affected Population and Possible Economic Impacts
Bridge Factor Affected Population Group Economic Vaziables and Impacts
Chazacteristic
Non- Public safety on island: evacuation of All island residents and visitors; Demand for housing on island.
discretionary population and visitors in general emergency; perhaps a greater concern of senior
bridge closings ability of emergency vehicles to access citizens.
to vehicular island; access to mainland medical facilities.

tratlic
Travel dependability: relative certainty of Working families residing on island, Demand for housing on island.
ability to cross bridge. especially commuters, school children.
(Retirees and others with schedule
commitments.)
Personal security on island: crime-deterring All island residents, particularly older Demand for housing on island.
Discretionary role of bridge tender as gatekeeper. single females.
bridge closings
to vehicular Public safety on island: response time of All island residents and visitors; Demand for housing on island.
traffic emergency vehicles. perhaps a greater concern of senior
citizens.
Travel dependability: predictability of trip Working families residing on island, Demand for housing on island.
time when bridge is functioning. especially commuters, school children.
(Retirees and others with schedule
commitments.)
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Sunset Beach Bridge -Final Economic Impact Report
Bridge Factor Affected Population Group Economic Vaziables and Impacts
Characteristic
(Discretionary Average travel time between island and Working families residing on island, Demand for housing on island.
bridge closings mainland (closings aggravate existing especially commuters, school children.
to vehicular congestion). (Retirees and others with schedule
traffic, commitments.)
continued)
All island residents and vacationers. Part-time residents' decision to stay through peak
Day visitors. season, thus composition of island population during
peak season.
Number of peak season trips to mainland for leisure
and shopping, thus commercial development on
mainland.
Number of peak season day visitors.
Effects on demand for mainland residential
development.
Bridge capacity Average travel time (congestion). Working families residing on island, Demand for housing on island.
(number of especially commuters, school children.
lanes) (Retirees and others with schedule
commitments.)
All island residents, vacationers. Part-time residents' decision to stay through peak
Day visitors. season composition of island population during
peak.
Number of peak season trips to mainland for leisure
and shopping, thus commercial development on
mainland.
Number of peak season day visitors.
Effects on demand for mainland residential
development.
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Sunset Beach Bridge -Final Economic Impact Report
--
III. ECONOMIC IlVIPACT ANALYSIS
The economic impact of the proposed bridge is measured against a baseline that
' incorporates the non-bridge factors identified above. The baseline, therefore, is not the
situation as it is today in 1993 but, rather, the future situation as it would be if the pontoon
bridge were retained -- including any growth or other economic changes that are anticipated
independent of the bridge replacement.
General Approach and Data Sources
' [If Apogee report is a stand-alone document, add Ha es & Associates descri lion of data
Y p
sources.]
' Results of the economic im act anal sis ar
p y e presented separately for each of the four
' types of economic impact identified in Figure l:
• Mainland commercial activity;
' • Mainland property development;
' • Day visitors to the island; and
• Island development (commercial and residential), including the pace and
' character of development as well as the composition of the population.
A fifth section summarizes other potential economic impacts. As described in the
' introduction above, these results are based on case studies of the two neighboring islands,
and on analysis of the town of Sunset Beach itself.
' Day Visitors
Improved access to Sunset Beach Island is likely to spark increased interest in day
visits to the island by people currently discouraged due to congestion and by a smaller group
of people currently worried about being caught on the island by anon-functioning bridge. In
interviews with people at Holden Beach and Ocean Isle, opinions were mixed on whether or
not their bridges had stimulated an increase in day visitors but more thought day visitors had
increased in the wake of the new bridges. Several suggested that day visitors are influenced
' by convenience, that difficulty of access to Sunset Beach island did divert some day visitors
to the other two islands and that easier access to Sunset would reverse this, particularly those
coming from south of Shallotte. As most day visitors come from within a 50 mile radius (in
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Sunset Beach Bridge -Final Econondc Impact Report
the opinion of the interviewees), they are aware of traffic conditions when they plan their
beach trips. '
Many interviewees stressed the importance of other factors such as development on
the mainland and increased population in Brunswick county in general as primary
determinants of the number of day visitors to Holden and Ocean Isle. Some felt that
mainland development depended on factors totally independent of the barrier islands and
access to their beaches, that is, mainland development and the concomitant increase in day
visitors would have taken place even if the old swing bridges were still in place.
However, several interviewees suggested that at least some of the mainland
development near Holden Beach is itself stimulated by improved access to the island. In
particular, they suggested that residents of mobile homes on the mainland come to Holden as
day visitors with boats and that improved access increased the demand by boat owners for
mobile homes in the area. Ironically, day visitors towing boat trailers across the new bridge
are a significant source of current traffic congestion on Holden in peak periods because they
must negotiate a difficult cross-traffic left turn as they leave the bridge to access the boat
ramp, thus undercutting some of the congestion relief afforded by the new bridge. In
addition, day visitors without boats also turn left at this point if they want to use the public
parking area under the bridge deck.
Several general points may be inferred:
• The number of day visitors to North Carolina beaches will increase because
population is increasing and, in particular, local development is occurring that
is for the most part independent of traffic conditions in Sunset Beach. The
proximity of these shore resorts to population centers may also be a factor.
• Some of these day visitors are interested in launching boats and are coming to
the islands only because that is where the ramps are located.
' • Day visits are increasing in spite of congestion but some visitors are probably
diverted to Ocean Isle and possibly Holden rather than coming to Sunset Beach
because of congestion or other concerns about the current bridge.
' The net effect of the proposed replacement bridge to Sunset Beach island may very
well be an increase in day visitors. The bridge-related increase in day visitors that actually
' occurs will be affected by several other variables:
• Location of the boat launch ramp (mainland or island);
' • Number of parking spaces available on the island;
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Sunset Beach Bridge -Final Economic Impact Report
• Provision of non-auto transportation from the mainland (shuttle buses); and
' • Number and nature of commercial services and supporting facilities.
' Clearly the choice of location of a public launch facility will affect day visitors whose
primary interest is in access to the Intracoastal Waterway. Locating the boat launch facility
to the mainland would lessen the number of day visitors to the island.
' It is not as clear how much parking availability will affect day visits. One
interviewee noted that day visitors come to the island even when no more parking is
' available. However, another interviewee felt that day visitors depart soon after their amval
if no parking is available near the beach even if there are spaces further away. In the view
of this interviewee, available and convenient parking is most definitely a constraint on the
' number of day visitors. Moreover, this same interviewee observed that, given the price of
land on Sunset Beach island, the extent of development adjacent to the beach, and the
existing liberal policy on non-resident on-street parking, convenient parking is already at its
' maximum feasible capacity (283 spaces total for day visitors, including 45 new spaces near
the fishing pier).2
' The natural limitation on day visitors imposed by insufficient parking capacity is not
an absolute constraint however. Shuttle buses from the mainland, with satellite parking at
passenger collection points, could circumvent this bottleneck. At least one mainland
' developer has considered using a shuttle as a way of easing access under current and
anticipated future conditions for development residents and visitors, perhaps in conjunction
with adevelopment-affiliated facility on the island as a recreational base for mainland
' residents. It is not clear whether a new bridge would affect the decision to provide such a
service.
' In many beach communities on the East Coast, the existence of extensive commercial
attractions draws day visitors to the resort areas. However, the three barrier islands have
limited commercial facilities and those that are there primarily service the island population
' rather than act as a magnet to increased visitors. As the residents of the three islands want
to ensure these remain "family oriented" beach communities, they have an expressed interest
in constraining commercial activity through zoning.
' Whether or not the brid a stimulates an increase in da visitors n r
g y , a y p o~ected
' increase in day visitors is likely to have a minimal direct economic impact since day visitors
spend very little on Sunset Beach and the other two barrier islands; one store owner
' z Hayes & Associates, Town of Sunset Beach Land Use Plan U date 1992, .17.
P P
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Sunset Beach Bridge -Final Economic Impact Report
--
estimated that 99 percent of his business is from residents and renters, only one percent from
' day visitors, though percentages surely vary depending on the type of store. The tendency
for day visitors to bring their own supplies and purchase very little at the beach is likely to
continue on Sunset Beach Island in spite of a bridge replacement that eases access because
' there are only a few commercial establishments, there are no commercial entertainment
activities (except the fishing pier), and commercial expansion is tightly limited by zoning
ordinances that are likely to be maintained by an island population strongly committed to the
current community characteristics.
Conclusion: The proposed bridge may generate an increase in day visitors to Sunset
' Beach Island during peak season but this will have little or no direct
economic impact on the area.
Improved access for day visitors may generate indirect economic effects, not through
an increase in the number of day visitors per se but through induced demand for mainland
' residences and vacation rentals that are convenient to ocean beaches. This will be evaluated
below.
' Mainland Commercial Activity
The proposed replacement bridge would reduce average travel time and improve the
' predictability of travel times from the island to the mainland. By reducing uncertainty and
waiting time in lines on either side of the bridge, it would also go a long way to limiting the
aggravation often associated with cross-bridge trips during peak season. In turn, this could
' stimulate island-to-mainland discretionary trips and generate an increase in purchases from
mainland stores, restaurants, and entertainment facilities by island residents and vacationers.
' In the off-peak periods, island residents and renters have no problem crossing the
bridge to mainland stores and restaurants so a new bridge. should not affect commercial
activity during these months. However, several interviewees felt that during the peak season
' island residents and renters limit their discretionary trips to the mainland because (1)
congestion and traffic interruptions make it difficult to commit to appointments (e.g., dinner
reservations, golf tee times, etc.) and, (2) in any case, such visits are not worth the time and
' aggravation of the trip across the bridge.
' Logically, impeded traffic would be more of a disincentive for year-round residents
(who could go for dinner, play golf, etc. during the off-peak periods) than for peak-season
renters. This was the view of one interviewee who said that vacationers react to the
' congestion by planning around it rather than by not going to the mainland and that permanent
residents minimize their visits to mainland restaurants and recreation in peak season because
they want to avoid the crowds at these places themselves, not because of the cross-bridge
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Sunset Beach Bridge -Final Economic Impact Report
congestion. It is not clear whether easier access would overcome some of the permanent
' residents' resistance to mainland activities in peak season,
Interviewee opinion on the commercial impacts of the bridge replacement at Holden
' Beach was mixed. One respondent downplayed the impact of the bridge, saying that the
significant (interviewee description) increase observed in commercial activity on the mainland
causeway after the bridge issue was settled was not because of the engineering characteristics
' of the bridge but because previous uncertainty over the bridge location had led investors to
postpone plans until after the location was determined.
' On the other hand, another interviewee felt that the potential effects of the Holden
bridge have not yet been fully realized because the lack of a sewer system has inhibited the
' commercial development that should follow in the wake of the new bridge. Although the
replacement alleviated the bridge-based congestion that had discouraged patrons previously,
commercial establishments such as restaurants cannot expand in response to increased
' patronage because they need increased capacity for effective disposal of fluid waste.
Conclusion: Easier access to the mainland afforded by the proposed bridge
' replacement could stimulate peak season expenditure in mainland
commercial establishments, particularly restaurants and stores along or
close to the Sunset Beach causeway.
Mainland Property Development
t Although the general state of the economy and other economic factors are the basic
determinants of mainland development and commercial expansion, access to Sunset Beach
Island could play a role in their locational focus. Improved access through bridge
1 replacement could spur demand for mainland homes and rentals close to Sunset Beach Island.
Such an increase in local population would also stimulate a concomitant increase in
commercial activity in the area and contribute to the flow of day visitors to the island
' beaches.
' The town of Sunset Beach includes two mainland jurisdictional units: an incorporated
area and an ETA or extraterritorial area. The town has expanded geographically on the
mamland by annexmg segments of the ETA and then expanding the ETA buffer to
' compensate for the shift. Ideally, we could explore the magnitude of bridge-induced
development on the mainland by comparing the rates of mainland growth adjacent to Ocean
Island and Holden Beach with the growth in the Sunset Beach area, noting any differences in
' rates that might be correlated with bridge replacement in 1985-86. Unfortunately, neither
Holden Beach nor Ocean Isle have mainland residential areas within their corporate limits.,
though Ocean Isle does have 1,526 acres of developable land in its mainland ETA. Thus the
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Sunset Beach Bridge -Final Economic Impact Report
situations of the three islands are not fully analogous. In any case, we do not have the
annual data series necessary for a numerical analysis.
Between 1977 and 1992, Sunset Beach annexed 417.1 acres containing 297 housing
units, an increase of 28.2 percent. As of 1992, the platted lots on the mainland were 66.5
percent developed in the incorporated area and 56.7 percent developed in the ETA, leaving
463 and 677 platted lots undeveloped in the two areas respectively.3 As we have no data on
' mainland plat development over time and the published historical data on building permits
and housing units are not presented separated for the three town areas (mainland, island,
ETA), annexation is our only indication of growth. Nonetheless, these data and anecdotal
evidence (for example, plans for additional development of golf resort communities) indicate
past and continuing interest in mainland development that, at least for the present, seems to
' be independent of improvements in peak season access to the island beaches.
Interviews with area business people confum our general impression that development
on the mainland will continue whether or not a new bridge is built. The area is becoming
known for its champion quality golf courses, drawing visitors from abroad as well as from
the mid-Atlantic and northeastern states. People are drawn to the general southern North
' Carolina area by lower taxes, good climate, and leisurely life style. They focus on the
barrier islands -- particularly Sunset Beach and Ocean Isle -- because they can go to Myrtle
"Beach, South Carolina for entertainment and shopping but do not have to live in its more
commercial environment. One respondent mentioned the importance of the area's location
midway between Florida and the Northeast -- perfect for retirees who want weather like
Jacksonville, Florida but want to be closer to their original homes in the Northeast.
' Beach access could be an im ortant factor in attractin otential mainland residents
P gP
and visitors, especially those who are beach oriented but cannot afford the higher property
' costs, do not want to climb the stairs necessary to reach the first floor of the raised island
homes, and/or are concerned about flood damage and hurricanes. However, it appears that
' developers are not concerned about beach access and its effect on their sales. If the pontoon
bridge is not replaced and access becomes more difficult, developers expect to work around
the bottleneck -- perhaps by building private beach facilities on the island to accommodate
' mainland property owners in their developments and providing shuttle transportation to these
beach clubs.
Moreover, golf courses are probably the most significant single force in mainland
development and the affiliated resort/retirement communities may attract a clientele that is
Hayes & Associates, Town of Sunset Beach Land Use Plan Update 1992, p.
18.
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Sunset Beach Bridge -Final Economic Impact Report
not really swayed by beach access. One respondent estimated that there are 100 golf courses
within the Wilmington-Myrtle Beach axis, and that continued development over the next 10-
15 years will raise the number in Brunswick County alone from the present 20 to 30-40.
Rather than saturating the market, the increasing number of courses is a draw to golfers who
' enjoy playing a variety of courses rather than being confined to a few alternatives that they
visit repeatedly.
Although beach access may be a minunal concern for golfers committed to staying on
the mainland, there may be a minority of golfers who would prefer to stay on the island and
' "commute" to the golf courses but, under current conditions, are deterred by the difficulty of
punctual arrival for their tee times. Some interviewees perceived a virtual absence of
dedicated golfers on Sunset Beach Island -- particularly those on repeat visits who had
' previously been caught in bridge back-ups. It is possible, therefore, that improved access
might draw some golfers away from the mainland and onto the island.
' Some mainland residents (and potential residents) are more focused on boating than
beach characteristics. The Sunset Beach bridge slows access from marinas to the open ocean
along the Intracoastal Waterway because boats must wait for the hourly bridge opening.
' Although one interviewee thought that easier water travel would encourage more pleasure
boating and stimulate demand (increase the pace) for real estate on the mainland as well as
the islands, another respondent felt very strongly that mainland development was not at all
inhibited by the Sunset Beach bridge impediment to waterway traffic.
Conclusion: The primary driving forces for mainland development are essentially
' independent of the ease or difficulty of access to Sunset Beach Island.
Thus the (economic) effects of the proposed bridge on mainland
development are likely to be marginal.
' Island Develo ment
P
' Pace and Character of Development
' The proposed replacement bridge would alleviate congestion, particularly acute during
the peak season, and eliminate most concerns about public safety. Although it would also
mean the end of the picturesque introduction to the island at the quaint pontoon bridge which
has proven an attraction for many,4 most interviewees felt that the net effect would be
' a Some interviewees feel that the pontoon bridge itself strengthens demand for housing
on Sunset Beach and that a new high-rise bridge could actually undermine the housing
market.
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Sunset Beach Bridge -Final Economic Impact Report
heightened interest in Sunset Beach properties and/or better quality of living for residents
' already on the island.
Many island residents fear that a high rise bridge would step up the pace of
development and even generate irresistible pressures for higher density developments
However, in spite of the logical appeal of a new bridge to certain population groups, the
experience at Holden Beach and Ocean Isle do not support these perceptions.
In general, younger vacationers are probably less concerned about access to the
' mainland. As most, if not all, come to the barrier islands for beach vacations in a family-
oriented environment, they are not committed to mainland access for entertainment and thus
congestion is less of a disincentive. Similarly, access to medical care and safety are thought
' to be less important to this group as well. - -
Logically, the proposed bridge replacement would have its greatest influence on
' demand for housing from three population subgroups, which would have to form the core of
any acceleration in demand:
• Working families (as year-round residents, not vacationers), because they
would no longer face an uncertain and aggravating commute to work during
the summer;
• Retiree permanent residents, because they would no lon er wo about access
g n'Y
to mainland medical care due to bridge interruptions;6 and/or
' • Retiree visitors and second home owners currentl intimidated b
y y congestion
and safety issues associated with the pontoon bridge.
' Permane r i
nt es dents are a small proportion of the island's peak population (3.8
percent in August 1993'). Thus the core of any bridge-based acceleration in demand for
island housing would have to be based on (1) stepped up retiree interest in second homes on
' s In this regard, note the comments by the court in favor of the plaintiffs in the 1990
suit challenging the bridge replacement.
6 It should be noted that this effect could be countered by a decrease in retirees --
particularly single women -- who feel their personal security is enhanced by having an
' around-the-clock bridge tender on the current bridge.
Hayes & Associates, "Phase 1 Draft Land Use Impact Report," November 11, 1993,
~ based on 1993 (Sunset Beach) Land Use Survey.
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Sunset Beach Bridge -Final Economic Impact Report
Sunset Beach Island, and/or (2) a very significant expansion in the base of working families
and retirees interested in permanent residence on the island.
Data compiled by Hayes & Associates indicate no acceleration in development on
' Holden Beach or Ocean Isle in the wake of their high rise bridge replacements. In Holden
Beach, the annual (compound) rate of growth in permanent population increased from 5.5
percent iri the 1970-80 period to 10.5 percent in the 1980-90 period which includes the
bridge replacement (May 1986 opening). However, permanent population is less than 10
percent of total peak population and the annual growth in peak residential population was less
in the decade 1980-1990 than 1970-1980. The number of building permits issued annually
for all residential units was greater prior to the bridge than after as well (136 and 110 units
respectively in 1984 and 1985 or 123 per year; 47-73 per year from 1986 through 1992 or 54
' per year average).$ Figure 2, Part A presents historical data on building permits for all
three barrier islands and the accompanying Figure 2, Part B presents the (regression)
estimated trend lines for the 1982-1985 and 1986-1992 periods.
' The evidence from Ocean Isle is similar. That is, there was an increase in compound
annual growth for permanent residents (8.7 percent 1970-80 and 11.3 percent 1980-90) but a
' decrease in total peak residential population rate of growth (8.1 percent 1970-80, dropping to
7.6 percent 1980-90). And building permits issued each year in the pre-bridge period ranged
from 105 to 221, averaging 165 per year, but dropped to 15-37 (excluding mobile homes) for
' each post-bridge year 1986-1992 with one "spike" of 117 in 1987 when the 73 unit high rise
building was permitted (averaging 41 per year including the high rise units).9
' Interviewees noted the importance of general economic influences -- e.g., 1984-1986
boom in the Atlantic Southeast, greater expenditure on leisure, etc., followed by changes in
federal tax treatment of second homes under the .1986 Tax Reform Act -- in determining
' demand for island development. If these factors "masked" the effect of the new bridge at
Holden Beach and Ocean Isle, then the effects of the bridge should be revealed by
' comparison with some sort of a control case or baseline that is influenced by the .same
general economic trends. Sunset Beach itself is a "control" since it faced the same economic
environment and tax reforms, yet had no change in physical infrastructure.
' Ironically, Sunset Beach sustained a relatively higher level of building permits for
' $ "The Induced Im act on Land Use as the Result of Hi
p gh Rise Bndge Replacement at
Holden Beach and Ocean Isle Beach, " Preliminary Technical Memorandum,
' December 1, 1993.
- 9 Ibid.
Apogee Research, Inc. -Page 20

Figure 2: Building Permits (1980 -1992)

2s0

200
Lr
Cat '
i
~.
a
lso

~.
.s?

z loo

s0

A . TS;..a....:....1 T.. a,. ~
0
1980 1982 1984 1986
Data provided is annual.
•OC) Denotes high-level bridge constmction. Year
The Ocean Isle bridge was placed in service Nov. 1985.
Ike Holden Beach bridge was placed in service May 1986. ii
B: Computed Trends
2s0

200
. '
~ 1s0
'

~,

~'
100

a
z so
' o
.y./ •~ ~~ •z%
~.~
.~•~'
1980
1982 1984 1986 1988 1990
Year
Ocean Isle Holden Beach Sunset Beach Sunset Beach Excluding Mobile
1992
(i) Actual building permit records from Hayes and Associates
(ii) Based on regression analysis of actual data
1988 1990 1992

Sunset Beach Bridge -Final Economic Impact Report
housing units -- that is, 108-185 per year in the 1982-1985 period, averaging 156 per unit,
and 89-172 in the 1986-1992 period, averaging 127 annually10, which was closer to its pre-
1986 rate than Holden Beach and Ocean Isle were to theirs. It appears that the new bridges
were not strong stimuli to development of new housing units. Unfortunately, time series data
for Sunset Beach do not disaggregate by location and thus it is not possible to distinguish
growth on the island from the town overall. However, new growth in Sunset Beach has been
nearly evenly divided between the island and the mainland during the last two years.
Other (non-economic) factors are important to the pace and nature of development on
the three islands: sewerage treatment capacity, the pattern of ownership of platted
undeveloped land, and zoning regulations. At present, dependence on septic systems may
limit the development potential and occupancy rates on the island. First, occupancy of
existing residences is limited to two persons per bedroom with the number of bedrooms
determined by septic capacity as evaluated by the health board. Second, some platted vacant
lots may require low-pressure systems for development. Any high rise building, if permitted
by zoning, would require a package sewage plant.
Thus a sewer treatment plant and system could open the way for fuller development
of platted lots and higher occupancy rates in both current and future units. There is no doubt
that a sewer system would make it easier and/or less costly to develop the remaining platted
single family and duplex unit lots, accelerating full build out of the island." However,
' most interviewees felt that all three islands are destined to be fully built out regardless of the
type of bridge connecting them to the mainland; that the pace, character and density of
development are determined by zoning, sewerage, and the actions of primary landowners;
and that these factors are not affected by the bridge. In short, the current bridge at Sunset
Beach is an aggravation but does not inhibit development.
' Hayes & Associates' report describes the concentration of original land ownership
under a single family for each island. Many interviewees felt that the dominance of one
' owner was a significant factor in determining the character and speed of development. With
development, ownership has become diffused but the current owners retain a strong interest
m perpetuating the character of the towns.
10 These data include mobile homes and multi-family dwellings as well as single family
' and duplex units. Data for single family and duplex units alone, the only types
allowed on the island, are 26-140 units per year 1982-1985, averaging 94 units per
' year, and 36-102 units per year 1.986-1992, averaging 69 units per year.
11 One interviewee felt that a 1987 surge n the puce of lots on Ocean Isle was a
~ reflection of the new sewer system.
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Sunset Beach Bridge -Final Econo»uc Impact Report
Some have hypothesized that a new high rise bridge would open the door to pressure
' for changes in zoning to permit high density development: This would require a change of
heart on the part of the majority of voters to alter the 35 foot building height limitations
which, in Holden Beach and Sunset Beach, can only be altered with majority approval in a
' general referendum. (The voting population of the Town of Sunset Beach includes full-time
residents who are registered voters in the Town of Sunset Beach.) Phrased in economists'
terms, a fixed bridge and sewage system may be "necessary" conditions for high density
development, but they are not "sufficient" conditions; popular support is also required. Our
interviewees indicated that there is a very strong interest in Sunset Beach in retaining
restrictive zoning that would rule out high density development as well as expanded
' commercialism on the island. Moreover, Ocean Isle has both a bridge and a sewer system
yet it also has retained a zoning limitation on the size of the unit that can be built on each
plat.12
If the pace of development a ears unaffected b the brid ere lacements there mi ht
PP Y g P g
still be economic impacts on property values, and thus on real estate tax revenues and
summer rental income that could be attributed to a bridge-based increase in demand for
accommodations. Table 3 and Figure 3 show property values over time; values are a
function of the number of units as well as the value of each unit and thus are a composite
' index of demand for housing on the islands. These data do not support the hypothesis that
.new bridges at Holden Beach and Ocean Isle spurred an increase in the value of island
property. Although we cannot compute per unit value as we do not have an inventory of
' total units each year, we can see that the rate of increase is greater for Sunset Beach than the
other two islands in the post-1986 period.
Conclusion: The proposed replacement bridge is unlikely to affect the extent or
character of residential or commercial development on the island.
Although some feel a new bridge could accelerate the pace of build-out
' of platted lots, there is no evidence from Holden Beach or Ocean Isle to
support such a hypothesis. Thus, there are not likely to be significant
economic effects attributable to bridge-induced development on Sunset
Beach island.
12 According to one of our interviewees, heated floor space can occupy no more than 36
' percent of the platted lot and no more than an additional 36 percent in impervious
surfaces. The 15 story 73-unit high rise condominium at the western end of Ocean
Isle was planned before the bridge and, according to several interview sources, is not
the harbinger of a general shift to increased density. See Hayes & Associates, "The
Induced Impact on Land Use, " op. cit. , for background on the high rise building.
' Apogee Research, Inc. -Page 23

Figure 3: Property Values (1980 -1992)
' A: Historical Data`
350
' ,-.

i 300
..,
o
~ 250
w
0
.~
~. 200

~ 150
o

100

50

a
1 a o

.
~ ~
~ .•

a
~' ~' •-•-
1980
350

`~ 300
0

c 250
h
0
•..i
200

0 150

~ loo
'
a~ 50
t~
0
a
0
1982 1984 1986 1988 1990 1992
Year
B: Computed Trends "

0
a
1980
1982 1984 1986 1988 1990 1992
Year
Ocean Isle Holden Beach Sunset Beach
' (i) Actual property valuation reports from Hayes and Associates
(ii) Based on regression analysis of actual data

1

Sunset Beach Bridge -Final Economic Impact Report
Table 3.
Property Values of the Three Communities
Holden Beach Ocean Isle Sunset Beach
Year Total Percentage Total Percentage Total Percentage
value (in increase over value (in increase over value (in increase over
$1,000s) previous year $1,000s) previous year $1,000s) previous year
1981 $58,215 $32,984
1982 62,187 6.8% 33,750 2.3%
1983 65,145 4.8 $67,298 36,911 9.4
1984 69,975 7.4 77,584 15.3 % 40,500 9.7
1985 76,345 9.1 98,180 26.5 45,000 11.1
Property Revaluation in 1986
1986 207,718 265,751 138,840
1987 212,263 2.2 270,058 1.6 139,345 0.4
1988 217,518 2.5 284,863 5.5 150,276 7.8
1989 221,460 1.8 290,858 2.1 153,327 2.0
1990 226,794 2.4 290,836 0.0 162,015 5.7
1991 228,998 1.0 296,195 1.8 179,383 10.7
1992 231,723 1.2 300,820 1.6 203,848 13.6
' Composition of Population
' One possible indirect effect of the proposed replacement bridge is a change in the
composition of the island population, both regarding age and working status, and the
distribution between year-round and seasonal occupancy. As the proposed replacement
bridge would address both safety and traffic flow concerns that are particularly important to
potential year-round residents, the increase in demand for on-island residences could be
' particularly noticeable for this portion of the population. In turn, this could have
implications for the composition of the island's population.
' Year-round residents were estimated to be less than 5 percent of the island's
' o ee Research Inc. - Pa a 25
AP 8 8

1
Sunset Beach Bridge -Final Economic Impact Report
' 13
population in the peak season, thus there is room for a sizeable shift in composition. On
the other hand, the small initial base means that analysis of any such effects must be placed
in perspective -- even a high rate of increase in number of permanent residents will take time
to have a noticeable effect on the island's characteristics.
' A shift in favor of year-round working families would, of course, reduce the
proportion of seasonally occupied units on the island in the summer. Similarly, an increase
in year-round retired residents and a move away from rental units could reduce the
proportion of seasonal residents as well. Since year-round units have a lower occupancy rate
than seasonally occupied units (2.24 and 8 persons per unit respectively14), the total number
' of people staying on the island during peak season would be less. In turn, this could reduce
area expenditure on food and entertainment during the peak season.
1 These are only hypotheses, however, based on concerns voiced by area residents and
evidence of bridge-induced shifts in population characteristics at Holden Beach and Ocean
Isle gathered from interviews rather than objective census data. Several respondents
suggested that the bridge replacements at Holden Beach and Ocean Isle resulted in an
increase in permanent resident families with working members who commute to jobs on the
' mainland. On Holden Beach, one respondent estimated that about half the year-round
families have members commuting to mainland jobs (hospital, nuclear plant) and are
therefore concerned with travel time and predictability.
' Other respondents felt that the bridge replacements fostered an increase in older
residents on both islands. One respondent suggested that (permanent resident) retirees may
' have been deflected to Ocean Isle from Sunset Beach because of concerns over the bridge at
Sunset and access to mainland medical facilities. A realtor commented that older potential
buyers express concern about access to medical facilities and feel more comfortable with a
secure bridge. It would be only logical that the proposed bridge replacement would increase
retirees' interest in Sunset Beach. On the other hand, another concluded that the Holden
Beach bridge did not alter the (economic) mix of owners because the lots were already
' owned before the bridge was built.
Estimating the responses of retiree-owners to a new bridge at Sunset Beach and the
balance between seasonal and permanent occupancy is complicated by another factor
' 13 Ibid., p. 8.
' 14 Hayes & Associates, "Phase 1 Draft Land Use Impact Report," November 11, 1993;
pp. 4 and 6. Data drawn from U.S. Census and 1993 (Sunset Beach) Land Use
Survey.
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1

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Sunset Beach Bridge -Final Economic Impact Report
described by two interviewees: some retirees rent out their island beach house during the
peak season, leaving the island to avoid the more congested environment and/or to take
advantage of the income they could gain by renting out at peak rates. The respondents noted
this issue for Sunset Beach, attributed to traffic congestion and restricted access, but also for
Ocean Isle where access is not a problem.
Unfortunately, we cannot verify any of these perceptions empirically because (1)
demographic data available for 1990 do not distinguish between mainland and island
segments of Sunset Beach and (2) there are no consistent historical series for the three islands
on population composition, or on seasonal versus permanent residency.
Conclusion: Given the public safety and traffic flow benefits, it is possible that the
proposed replacement could stimulate an increase in working families
and retirees on Sunset Beach island and a concomitant shift away from
primarily rental properties with seasonal occupants. Given the
difference in number of persons per unit, the result would be a lower
occupancy rate. Whether this effect is confined to the shoulder season
(when retirees are least likely to rent their units) or extends to summer
season as well depends on the number of retirees that rent out in peak
season to higher occupancy vacationers. Evidence is impressionistic
and not conclusive, however, and we cannot forecast the likely
demographic impacts (and associated economic effects) of the proposed
bridge replacement.
Other Economic Impacts
Although the pace and nature of property development are the impacts of greatest
interest to area residents, the proposed bridge may have other economic effects as well.
These include the effects on town finances, house salvaging, the cost of doing business on
the island, and the sport fishing industry.
Town Finances
One indisputable economic gain from a high rise bridge replacement at Sunset Beach
would be budgetary savings for the town. Under current conditions, the town posts two
police officers at the bridge to control and direct traffic during the peak season. This cost
the town $25,000 in 1993,1s an expenditure that would be unnecessary with atwo-lane fixed
is Of this $25,000, $10,000 was overtime payment to regular police and $15,000 was
for an auxiliary force. (Conversation with Linda Fluegel, Sunset Beach Town
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Sunset Beach Bridge -Final Economic Impact Report
span bridge. (The town would still need officers to control traffic during peak season if the
replacement were a bascule bridge.)
Town finances could also be affected by the proposed bridge if property appreciation
accelerates -- i.e., the result of expanded demand for Sunset Beach properties. Data from
the three barrier islands indicate a general increase in property values that is more rapid than
Brunswick County in general. But, as can be seen from Figure 3, the increase in Sunset
Beach values -- without a new bridge -- is proportionally greater than that in Ocean Isle and
Holden Beach with replacement bridges.16 Perhaps bridge-based differences in property
appreciation can only occur once the plattable lots are more fully developed; perhaps other
factors are more important in determining demand and property values. In sum, there is no
empirical evidence from the other two islands to justify forecasts of a bridge-based increase
in property values and town revenues for Sunset Beach.
Conclusion: If a high rise bridge replaced the current bridge, the Town of Sunset
Beach could save the $25, 000 now spent annually (1993 level) on
traffic control at the bridge. There is no indication that a new bridge
would accelerate property appreciation and town revenues from
property tax revenues.
House Salvaging

The width and instability of the current pontoon bridge precludes moving houses from
the island to the mainland for relocation. On the other hand, the proposed bridge
replacement would allow resale and reuse of beach houses that are economically obsolete,
due to increased land values on the island, or at-risk because of environmental/weather
conditions.
On Holden Beach and Ocean Isle, houses can be salvaged and moved to the mainland
over the high rise bridges. For example, one interviewee noted that the Federal Emergency
Management Administration (FEMA) will pay 110 percent of the value of an at-risk house
(exclusive of the land) that is within 20 feet of the escarpment; 10 percent of this payment is
used to rip out the house and the septic system and the remainder is used to reimburse the
' Manager; October 8, 1993.)
16 The break in the data series (due to revaluation just before the bridges were
' completed) complicates analysis. We assume, however, that bridge-based increases in
property values would be spread over time as an accelerated rate of increase rather
than sudden jump in a short period.
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Sunset Beach Bridge -Final Economic Impact Report
owner. With a bridge such as those at Ocean Isle and Holden Beach, the government can
t transport the house to the mainland and sell it (probably at a subsidized cost) to someone in
an area not at risk of extreme weather, thus recouping some of the cost and/or providing
reduced-cost homes to lower income families. This is not possible with the current Sunset
' Beach bridge and any at-risk houses either have to be moved to a new site on the island
farther back from the beach, upgraded to conform to a more stringent code, or demolished
and replaced.
' The economic benefit of salvagin de ends on the number of candidate houses on
g P
Sunset Beach and their resale value. Although we have no statistics on these, one
' interviewee estimated that six to seven houses are moved off Ocean Isle each year to the
mainland for placement elsewhere and then replaced on the island with higher quality houses.
Hayes & Associates estimated that 50 houses have been moved off Holden Beach since the
high rise bridge was constructed (i.e., about 7 a year) and about 50 more now meet FEMA
guidelines and will be moved in the future at FEMA expense."
' Another respondent gave us anecdotal evidence of the value of a bridge for house
transporting. He identified a Sunset Beach house that could be sold for $5,000-10,000 as
' part of a desired property upgrading. The cost of moving it to the mainland, assuming a
new bridge, was estimated as $6,000. This $11,000-16,000 investment plus the cost of a
foundation could produce a mainland residence worth $40,000 net of land value. This
' represents a $34,000 "profit" over the demolition and replacement of the house without
salvaging -- a profit shared by whoever takes the responsibility for organization and
management and the property owner, whose net costs of upgrading would be reduced by the
' house sale price.
With increasing land values, the potential for house salvaging could encourage
residential upgrading through salvaging and replacement (rather than remodeling) since house
sale reduces the net cost of rebuilding.
' Conclusion: Individual owners, and even the federal government, stand to gain
financially from house salvaging that would be made possible by the
' proposed replacement bridge. The potential for salvaging could also
boost residential upgrading.
1
"Hayes & Associates, "The Induced Impact on Land Use as the Result of High Rise
Bridge Replacement at Holden Beach and Ocean Isle Beach, " Preliminary Technical
Memorandum, December 1, 1993; p. 9.
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Sunset Beach Bridge -Final Economic Impact Report
Cost of Doing Business on the Island
Aside from bridge breakdowns and tidal interruptions of vehicular flow, normal
congestion and discretionary bridge closings increase the time involved in transporting
supplies, construction materials, and other goods to Sunset Beach Island. In turn, this
increases the cost of doing business with island merchants, builders, and residents. The
proposed bridge replacement would certainly reduce these costs.
At the present time, it appears that the sellers and transporters are absorbing the costs
of congestion; there is no evidence of premiums charged for island deliveries. Interviewees
did note that suppliers complain about the wait at Sunset Beach bridge when making
deliveries. One respondent commented that, before the Ocean Isle bridge was replaced,
suppliers would wait until they had a full load or a full "run" of service calls before they
would but that now they are willing to come with a partial load or service run. However, he
was not sure how much of this was bridge related and how much due to the state of the
economy and increased intensity of competition.
Conclusion: By cutting travel time, the proposed high rise or mid rise replacement
' bridge to Sunset Beach would reduce the cost to mainland companies of
. delivering supplies and making service calls to the island.
' Fishing Tournaments
The low bridge at Sunset Beach interrupts non-commercial water traffic as well as
' vehicular traffic. One respondent noted that tournament sport fishing is serious business,
with prizes up to $50,000, and that speed in accessing and returning from open ocean fishing
sites is critical in the race to finish. During poor weather, boat captains often prefer to get
' to the fishing site via the Waterway and this involves passing through the Sunset Beach
bridge. This respondent suggested that, if the pontoon bridge is not replaced with a high rise
bridge, the result could be an aggravation of current bridge-based congestion as sport fishing
' increases in popularity because:
' Fishing boats might pay for commercial licenses and force the bridge to open
on demand to let them pass; and/or
' Sport fishing might become so popular and lucrative for the area that public
pressure forces the bridge to remain open during the competition or at least the
times when most boats are leaving and returning.
' That is, if land traffic and sport fishing interests confronted each other over bridge
openings, this respondent seems to feel that the fishing interests could prevail.
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Sunset Beach Bridge -Final Economic Impact Report
Conclusion: Sport fishing tournaments can be affected by the current bridge. A high
' rise bridge would ensure that this activity does not come in conflict with
the interests of land-based traffic.
' Caveats and Exclusions
This study has not addressed the possible economic unpacts during bridge
' construction, i.e., traffic disruption, interruption to commercial activity along the causeway,
increased jobs and income from construction activity in the area. These effects -- though
potentially very significant -- are short lived and not in the scope of this analysis. Nor have
' we considered the economic effects of a realignment, which would be required for several of
the alternatives under consideration. Again, these effects could be considerable in the short
run as businesses on the current and future access roads adjusted, as rights of way are -
finalized, and as new patterns of commercial location are determined. In the longer run, it is
logical to assume that, aside from financial transactions involving rights of way, the
' economic impact would be more of a shift in commercial locus, with benefits for some and
losses for others, with a net effect limited to the costs of relocation rather than permanent
reduction in commercial activity.

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