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Economic impact of Bitterroot Resort questioned

A new study that estimates the economic impacts of the proposed Bitterroot Resort will surely be cited in ongoing community debates about the project. But what do the slew of numbers found in the study, commissioned by the Missoula Area Economic Development Corporation (MAEDC) and the Missoula Area Chamber of Commerce, really mean?

Some say the study’s findings—for instance, that a destination resort would generate some 4,600 jobs and contribute more than $300 million to Missoula and Ravalli counties 10 years down the road—effectively show that the development would be a major boon to local wages, jobs and tourism.

“From an economic standpoint, it speaks for itself,” says Cynthia Rademacher, Bitterroot Resort spokeswoman.

But others say that when viewed in the larger context of the existing economy, the findings become much more ambiguous.

The study, conducted by Oregon-based ECO-Northwest, uses data provided by Bitterroot Resort, the National Ski Area Association and Vail Resorts, Inc. to estimate direct and indirect economic effects of the proposed resort. It analyzes two different scenarios: the four-season destination resort proposed by landowner Tom Maclay that would include residential housing, commercial development, two golf courses and a convention center in addition to a major ski area on Lolo Peak; and a “small-scale” resort that could result if Maclay doesn’t get permission use public lands and instead develops a private or semi-private resort on his 3,000 acres. For each scenario, the ECONorthwest report estimates economic impacts 10 and 20 years into operations.

Its key findings assess the number of direct and secondary jobs that would potentially be created, as well anticipated wages and tourism revenue. In the first decade, the study estimates the destination resort would create about 4,600 jobs—including resort operations and associated work in industries like construction—compared to just 800 jobs from the small-scale resort, with employee wages averaging $24,000 annually. The study also predicts the destination resort would generate $110 million in annual tourist spending.

Rademacher emphasizes that employee wages of $24,000 translate into hourly wages of more than $12, almost twice Montana’s minimum wage and more than typical resort wages. Sounds pretty good, says retired University of Montana economics professor Richard Barrett, until you compare that figure to recent average wages. According to the U.S. Bureau of Economic Analysis, in 2005 the average wage in Missoula County exceeded $29,000.

“[The resort] can say they’ll pay more than twice the minimum wage, but you’ve got to be careful in weighing what that means,” Barrett says. “Numbers in the report don’t substantiate a claim that the jobs are going to be high-paying.”

Another UM economist, Steve Seninger, a member of the conservation group Friends of Lolo Peak, questions the significance of the report’s findings. The study estimates a larger destination resort would create nearly 1,400 new construction jobs, far more than the 275 resulting from the small-scale project. Seninger predicts the resort will be “waving these numbers like the American flag,” but cautions that when viewed in the larger context of the construction industry, they seem to be exaggerated. The number of construction jobs in Missoula and Ravalli Counties, according to 2006 figures from the Montana Department of Labor & Industry, totals about 4,200, three times the number of construction jobs the study attributes to the resort. Seninger doesn’t buy claims the project would account for one-fourth of all construction work in the two-county area. Nor does he believe the study’s $110 million prediction for tourist spending. That figure represents a full third of tourist dollars spent in Missoula and Ravalli Counties, according to the UM Institute for Tourism and Recreation Research, which seems questionable in light of many other existing area attractions.

“I think these numbers are overstated,” Seninger says. He believes the inaccuracy stems from the fact the study data came from Bitterroot Resort itself and other sources like Vail, which are “high-end, wear-your-fur-coat, walk-your-afghan resorts.”

ECONorthwest Planning Director Terry Moore explains that the massive scope of the resort development supports the finding of uncommonly large impacts on the construction industry and tourism, but he notes the difficulty of forecasting and then comparing estimates about the future. MAEDC President Dick King says the study used standard methodology to arrive at its predictions for tourist spending and other impacts.

“It appears to be within the ballpark—it would have a very significant impact in out-of-state tourism dollars,” King says.

Aside from specific concerns about the stunningly large impact, compared to the current economy, Barrett and Seninger question the overall value of the report since it tackles such a narrow range of issues.

“The report tells us a whole lot of stuff that we don’t know the meaning of,” Barrett says. “The thing people need to ask themselves is [what do these estimates] mean in terms of the economic and social well-being of the community?”

Critics of Maclay’s development plans fear impacts on transportation, the environment, county infrastructure, social stratification, affordable housing, and other less-calculable but equally important concerns.

King agrees the study examines just one aspect of the resort’s overall impacts, but believes it provides an important piece of the puzzle as the community considers whether to support the development. MAEDC itself is deeply mired in that process, he said, and the group’s board of directors will consider the study, hundreds of comments submitted in response to the report, and other issues before taking a position on the resort.

“Because there’s a big economic impact that the destination resort would generate, many people feel it’s a given that an economic development organization would be first in line to support it,” King says. “That’s not the case. We need to listen to a lot of people.”
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