Wednesday, November 30, 2011

What is the economic value of Friedman?


Recent discussions throughout the Blaine County community have established that there is a lack of accurate, consistent and reliable information regarding the current impact of the Friedman Memorial Airport on the economy of the county. A wide range of values have been offered with little justification or substantiation, and consequently many residents are confused and perhaps curious. We believe it is essential for productive, ongoing air-service discussions that the residents of our county obtain a common understanding of the impact of Friedman Memorial Airport on its economy. As a result, we spent significant time and energy trying to clarify this important question and felt compelled to present our findings to the community in this guest opinion and an upcoming economic forum for local businesses.

Economic impact calculations include not only direct impacts, such as airport employee payroll, sales and tax revenue from airport operations, but also indirect and induced activities resulting from visitor spending and other secondary economic activity. In a tourism-led economy like ours, this recirculation of the dollars from indirect and induced sources is a significant contributor to local employment and economic vitality.

In 2008, the Idaho Transportation Department funded a comprehensive economic impact study of all 75 commercial and general aviation airports in Idaho. The study included a rigorous assessment based on in-depth polling, surveys and econometric modeling. It showed that Friedman Airport:

( Is the No. 2 commercial airport in Idaho.

( Is responsible for more than 1,550 local jobs.

( Has a total economic output of $120 million.

( Represents nearly 20 percent of the total Blaine County economy.

As part of our due diligence, we benchmarked the ITD study with other similar studies, and confirmed the validity of its methodology as well as the majority of its very conservative assumptions.

However, we are conscious that "value" can be measured from both quantitative (economic) and qualitative (lifestyle) perspectives. With respect to qualitative measures for Blaine County, reliable access, time savings and the convenience associated with local commercial air service are critical to both businesses and residents. The availability of a local commercial airport is consistently in the top five factors considered by businesses when selecting a location. Likewise, commercial airport proximity plays an important part in decisions by local residents on where they live, recreate and work. For the valley's business travelers, drive times in excess of 1.5 hours to obtain air service or access customers are undesirable, costly and for many, stressful. Leisure travelers also carefully consider extended drive times when making vacation decisions.

According to a 2008 Landrum and Brown study, about 68 percent of Friedman-users are visitors, a typical figure for a resort community. For the 32 percent of users who are permanent residents, the majority are evenly divided between Ketchum (45 percent) and Hailey (39 percent), with the remaining from Bellevue (7 percent), Sun Valley (7 percent) and Carey and the county (2 percent). These data demonstrate that commercial air service at Friedman is enjoyed by and is equally important to both north- and south-valley residents.

From an economic perspective, continued commercial air service is a primary economic engine for the county in terms of revenue generation, employment and business attraction and retention. From a user perspective, such service is an important reason for choosing to live in this beautiful area. Commercial air service is also a critical component of all our property values.

Without viable commercial air services in both the near and long term, the economy of and the lifestyle offered by Blaine County will be severely and negatively affected.

In the future, we hope to explore, in more detail, the potential impacts of air service decisions on business, employment, county GDP and property values.

For those interested in the economics of air services in Blaine County, Sustain Blaine will host a forum tonight, Nov. 30, at 5:30 p.m. at the Valley Club north of Hailey. In addition to providing more detailed economic perspectives, Sustain Blaine will also conduct live-time opinion polling within the business community on a variety of air service issues.

Harry Griffith is executive director of the Sustain Blaine economic development group and Bob Youngman is a Sun Valley City Council member.

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