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Feb 07 2017

Economic Study Illustrates Island Value

By Gregg Bragg, The Island Connection Staff Writer

Seabrook Mayor Ron Ciancio felt inspired by an economic impact study conducted by The Citadel in 2015. The study was conducted by MBA students of the prestigious university using the Charleston Symphony Orchestra (CSO) as its test case. He reached out to supervising professors Green and Sobel last summer to gauge their interest in using Seabrook as a test case for another wave of the Citadel’s best and brightest. They agreed and Kiawah quickly applauded the idea and asked to join in. Work began in September and was concluded in December. Subsequently, the mayor met with The Island Connection to discuss the results.

The scope of the study sums to determining the economic contribution made by Seabrook (including Bohicket Marina), and Kiawah (including Freshfields) to Charleston County. Because the breadth of this effort exceeded the CSO example, Ciancio pushed for a two semester long effort. Maybe graduation got in the way, but only one was spent on the project, constituting the first of what Ciancio characterized as “provisos.”

I always heard if you took all the jobs created on Seabrook, Kiawah, Freshfields and the marina – the people in the shops and the construction work, that we employ more people in our area than Boeing, and I wanted to test the idea. The study was completed in a single semester but probably required more time. Some of the figures are subjective, though determined in the same fashion as a ‘Boston Consulting,’ and surveys were conducted in the off-season [fewer visitors were available] and may have skewed the numbers downward,” said the mayor.

There was no charge for this study and it isn’t [the product of] ‘Boston Consulting.’ [However] I think there’s an argument to be made that Boeing is given too much consideration compared to Seabrook. “The numbers are the numbers,” emphasized Ciancio. Public records were searched for tax information including; licenses, fees, property and income taxes, real estate and construction data. These are objective numbers. Some of the information used, like surveys of residents and visitors is more subjective.

I spent 10 minutes filling out my questionnaire but did others spend that much time, and did visitors [the few available in the off season] spend even less,” asked the mayor rhetorically, to make the point the contribution is probably higher than documented.

The students used common economic and employment multipliers to calculate downstream contributions similar to studies conducted by Seabrook in 1996 and again by the College of Charleston in 2004. It works like an example of compounding interest in reverse; A gives a dollar to B, B gives .8 to C, C gives .6 to D and so on. The 20 percent reduction in each step is used to account for any uncertainty. However, the amount exchanged in each step is combined in Seabrook’s favor with impressive results.

The executive summary credits Seabrook with $338,603,328.00 in contributions to the region’s economy and the creation of 4831 jobs. “We are .5 percent of the [Charleston County] population and contribute 2 percent of its economy and that’s just us,” said Ciancio.

He estimates Kiawah contributes over four times that amount for a combined contribution of over “11 percent of the county’s numbers, and of course the services we get for those revenues are nonexistent. There’s a lot going out and nothing coming back in,” he said when asked about the purpose of the study.

Convincing Johns Island residents and county/city officials of the need for more and better roads was the purpose of the previous studies, but that isn’t the only objective with this most recent exercise.

I met with county officials who said ‘we love you guys and are doing a lot for you’ but we can use studies like this to present to the county, and see what they can do. After the hurricane, for example we were struggling to get security out here and were begging ‘please pay some attention to us.’ And while we were evacuating there was an accident on Bohicket and we sat there for an hour. Thank heaven we were evacuating three days before the storm. But I don’t think Vic Rawl (recently promoted from member to Chair of Charleston County Council) is a fan of the cross island parkway. He needs some convincing on that issue. Too many people equate more roads with more development, but water and sewer are better ways to control that, but we already have tens of thousands of unexecuted building permits in the area,” concluded Ciancio.

The complete study is now available on the town’s website http://www.townofseabrookisland.org/wp-content/uploads/2017/01/Letter-and-study.pdf.

Kiawah mayor Craig Weaver told The Island Connection “I haven’t shared it [Kiawah’s portion] with the entire council yet. I am not sure the Kiawah piece is a finished product… and might need to be discussed with the authors before it is released.” Kiawah’s website is available by visiting http://www.kiawahisland.org/. Instructions will direct you to the proper page when the document is available.

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