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CC 2021-06-08_11c Participation in Visit SLO Cal Oceano Dunes_Economic Impact AssessmentMEMORANDUM TO: CITY COUNCIL FROM: WHITNEY MCDONALD, CITY MANAGER SUBJECT: CONSIDERATION OF PARTICIPATION IN VISIT SLO CAL OCEANO DUNES ECONOMIC IMPACT ASSESSMENT D ATE: JUNE 8, 2021 SUMMARY OF ACTION: Consider participation in the Oceano Dunes Economic Impact Assessment proposed by Visit SLO CAL, including the appropriation of up to $5,000 for the study from the City Manager’s Fiscal Year 2020-21 consultant services budget. IMPACT ON FINANCIAL AND PERSONNEL RESOURCES: Visit SLO CAL is requesting a $5,000 contribution toward the proposed Oceano Dunes Economic Impact Assessment, in addition to the support of City staff in supplying information necessary to complete the study. The proposed $5,000 may be paid from unexpended funds in the City Manager’s Fiscal Year 2020-21 consultant services budget. RECOMMENDATION: It is recommended the City Council consider participating in the Oceano Dunes Economic Impact Assessment proposed by Visit SLO CAL, in partnership with the South County Chambers of Commerce, and supported by the City of Grover Beach and the County of San Luis Obispo. BACKGROUND: On March 18, 2021, the California Coastal Commission approved modifications to the Coastal Development Permit issued to State Parks for operation of the Oceano Dunes State Vehicular Recreation Area (ODSVRA) that will phase out off-highway vehicle use at the park within the next three years. It is anticipated that this change will result in economic impacts to the region surrounding the ODSVRA, which has supported off- highway vehicle recreation at the ODSVRA for decades; however, these impacts are unclear at this time. Visit SLO CAL proposes to commission an Oceano Dunes Economic Impact Assessment to help the local agencies and businesses surrounding the ODSVRA evaluate and plan for the economic impacts of the upcoming changes to the ODSVRA’s operations. On May 6, 2021, the City Council received a request from Visit SLO CAL that the City of Arroyo Grande (City) participate in the economic impact assessment. This request is provided in Attachment 1. Item 11.c. - Page 1 CITY COUNCIL CONSIDERATION OF PARTICIPATION IN VISIT SLO CAL OCEANO DUNES ECONOMIC IMPACT ASSESSMENT JUNE 8, 2021 PAGE 2 At the regular City Council meeting held on May 25, 2021, Councilmember George asked that Visit SLO CAL’s request to participate in the economic study be placed on a future agenda, which was agreed to by Mayor Pro Tem Paulding. Accordingly, this item is presented for Council’s consideration. ANALYSIS: Visit SLO CAL, in partnership with the South County Chambers of Commerce, proposes to engage a professional economic consultant to prepare an Oceano Dunes Economic Impact Assessment. The stated purpose of this study is to “assess the financial effects and employment impacts of the Oceano Dunes District on the San Luis Obispo County economy” and to meet the following goals (see Attachment 1): “1. A robust and comprehensive assessment of the direct, indirect and induced economic benefits the Oceano Dunes District brings to the surrounding communities, San Luis Obispo County, and the California State Parks system. 2. To provide subsequent mitigation measures in the event of partial or full closure of the Oceano Dunes District, and identify potential opportunities for a repurposing of the State Park, as well as identify areas of opportunity in the surrounding area.” According to Visit SLO CAL, the study is intended “to help our communities plan for the future,” “provide an understanding to the real impacts of the segmented closures to the ODSVRA, and help provide the foundation for a pathway forward to ensure economic diversity in south county” (see Attachment 1). Visit SLO CAL has also assured that participation in the study will not obligate any agencies to utilize or implement the results or data presented in the study. The City of Grover Beach and the County of San Luis Obispo have also agreed to participate in the study. ALTERNATIVES: The following alternatives are provided for Council's consideration: 1. Consider and approve the City’s participation in the Visit SLO CAL Oceano Dunes Economic Impact Assessment and an appropriation of $5,000 from the City Manager’s consultant services budget for Fiscal Year 2020-21 toward the study; 2. Consider and approve the City’s participation in the Visit SLO CAL Oceano Dunes Economic Impact Assessment without the approval or appropriation of any City funds toward the study; 3. Do not approve the City’s participation in the Visit SLO CAL Oceano Dunes Economic Impact Assessment; 4. Provide other direction to staff. Item 11.c. - Page 2 CITY COUNCIL CONSIDERATION OF PARTICIPATION IN VISIT SLO CAL OCEANO DUNES ECONOMIC IMPACT ASSESSMENT JUNE 8, 2021 PAGE 3 ADVANTAGES: Participation in the Oceano Dunes Economic Impact Assessment is anticipated to provide useful data and information to the City regarding the potential economic impacts of the upcoming closure of the ODSVRA to off-highway vehicles and may support regional and local efforts to obtain mitigation for these impacts. DISADVANTAGES: Staff time and financial resources are requested to support the City’s participation in the study, while it is unclear what results or benefits the study will yield for the City. PUBLIC NOTIFICATION AND COMMENTS: The Agenda was posted at City Hall and on the City’s website in accordance with Government Code Section 54954.2. Attachments: 1. Email from Visit SLO CAL requesting the City’s participation in the Oceano Dunes Economic Impact Assessment Item 11.c. - Page 3 From: Annie Frew <Annie@slocal.com> Sent: Thursday, May 6, 2021 8:38 PM To: Caren Ray Russom <crayrussom@arroyogrande.org>; Jimmy Paulding <jpaulding@arroyogrande.org>; Kristen Barneich <kbarneich@arroyogrande.org>; Keith Storton <kstorton@arroyogrande.org>; Lan George <lgeorge@arroyogrande.org> Cc: Whitney McDonald <wmcdonald@arroyogrande.org>; Jocelyn Brennan <jocelyn@southcountychambers.com> Subject: Oceano Dunes Economic Impact Assessment for council consideration Good Evening Mayor and City Council Members, I am writing today for the future consideration of the City of Arroyo Grande’s support for our Oceano Dunes Economic Impact Assessment and a $5,000 financial contribution to hire a reputable third-party agency to conduct the study. We are working on a collaborative economic impact assessment, led by Visit SLO CAL and the South County Chambers of Commerce to conduct an impartial, third-party, robust and comprehensive assessment of the direct, indirect and induced economic benefits the Oceano Dunes District brings to the surrounding communities, San Luis Obispo County and the California State Parks system. Additionally, the study will provide subsequent mitigation measures to help prepare for the segmented closures of the off-highway vehicle area, camping and beach driving limitations, and help identify economic opportunities for communities tangential to the park. Attached is the project scope. Please note the timeline is a bit outdated and adjustments are being made to reflect a more current timeframe. We intend this assessment to help our communities plan for the future. The data will provide an understanding to the real impacts of the segmented closures to the ODSVRA, and help provide the foundation for a pathway forward to ensure economic diversity in south county. That being said, there is no obligation from any of the partnering cities or county to utilize the data if they choose not to do so. At this time, we also have confirmed partnership from the city of Grover Beach and County of San Luis Obispo. We are asking for the council to consider partnership and support of the project in the near future. By gaining your support, we can ensure a united front to help plan for the economic vibrancy of our communities in both south county and throughout SLO county. Please do not hesitate to reach out should you have any questions. Thank you for your time and consideration. All the best, -- Annie Frew Director of Community Engagement & Advocacy Visit SLO CAL Annie@SLOCAL.com O: 805.541.8000 ext. 103 | C: 805.550.9313 SLOCAL.com Attachment 1 Item 11.c. - Page 4 Oceano Dunes Economic Impact Assessment 03.01.2021 ─ Annie Frew Visit SLO CAL 1334 Marsh Street San Luis Obispo, CA 93401 Item 11.c. - Page 5 1 Overview The purpose of this study is to assess the financial effects and employment impacts of the Oceano Dunes District on the San Luis Obispo County economy. Goals 1. A robust and comprehensive assessment of the direct, indirect and induced economic benefits the Oceano Dunes District brings to the surrounding communities, San Luis Obispo County, and the California State Parks system. 2. To provide subsequent mitigation measures in the event of partial or full closure of the Oceano Dunes District, and identify potential opportunities for a repurposing of the State Park, as well as identify areas of opportunity in the surrounding area. Background The Oceano Dunes is a large, naturally occurring coastal dunes system located between Pismo Beach and the unincorporated Oceano in San Luis Obispo County. Originally occupied by the Chumash, the dunes are a rich and unique cultural and environmental asset. Aside from the environmental attractions, the most popular component is the Oceano Dunes State Vehicular Recreation Area (SVRA), a part of the larger Pismo Beach State Park, and operated under the California State Parks system. Off-highway vehicles (OHV) and off-roading enthusiasts travel from all over the world to ride along the scenic coastline. In addition to the OHV area, street legal vehicles are allowed to drive on the Pismo State Beach along with spaces designated for beach camping. Other recreation activities include, but are not limited to: fishing, surfing, paragliding, horseback riding, and hiking. Purpose A previous economic impact report was completed in 2017 however, the study was deemed incomplete and did not provide a full understanding or segmentation of the potential economic impacts. This study will ensure a robust and comprehensive assessment of the data, analysis and provide subsequent mitigation measures and areas for opportunity. Upcoming regulatory decisions will affect how the State Park operates and the current scope of recreational assets. Over the next five years, State Parks may be required to phase-out its off-highway vehicle riding area (OHV). The OHV component to the State Park is unique within California and a huge tourist attraction. People travel from all over the world to ride on the State Park all while recreating and staying in the neighboring towns. Item 11.c. - Page 6 2 This unique piece of coastline not only attracts travelers and residents alike, but also the film industry. The biodiversity and distinctive environmental makeup is particularly enticing to filmmakers, musicians, adventure photographers, and other artists. When filming occurs, the artists and their crews increase revenue for State Parks and the community in which they stay in. However, the rare environmental features are protected under state and federal laws. For example, The Endangered Species Act is federal legislation that protects listed species, such as the Snowy Plover, to ensure the habitat, breeding ground and survival of the species can persist. Several environmental laws protect the Oceano Dunes’ uniqueness but also comes with several regulatory agencies that maintain jurisdiction over the State Parks and subsequent permitting that allow for recreational activity. The dissonance between cultural and environmental preservation with the increased access to recreational activities has caused tension between State Parks and other regulatory agencies. It is our hope this economic assessment can provide the necessary data and analysis to help guide our communities in preparing for possible future regulatory decisions and begin to plan for outlined areas of opportunity. Need for Economic Impact Assessment As previously referenced, State Parks commissioned an economic impact assessment in 2017 to measure the impact of recreational activities in the Oceano Dunes District on the San Luis Obispo County economy. The report concluded that an estimated $243 million is generated annually to the county’s economy and over 3,000 local jobs based on data collected between 2016-2017. The 2017 report was quickly peer reviewed by researchers from Cal Poly State University and San Francisco State University, respectively. Researchers critiqued the report with serious regard to the report’s methodology and conclusions, ultimately calling into question the accuracy of the estimated $243 million generated to the local economy. As a result, the California Coastal Commission, other relevant agencies and the local community have largely discredited the 2017 analysis and its conclusions. In February of 2021, one of the professors who peer reviewed the 2017 State Parks assessment, Dr. Pratish Patel who is an associate professor of finance at Cal Poly, released a report assessing the six- month period when camping and off-roading were closed due to the COVID-19 pandemic and the subsequent economic impacts during the closure. Dr. Patel concluded the closure had “no significant impact” on the county’s local economy. However, Dr. Patel’s study was also severely flawed in its methodology and conclusions. The methodology was contingent on assessing the unincorporated Oceano bed-tax generated where the number of hotel rooms and vacation rentals is limited and does not provide an accurate representation of the lodging accommodations travelers utilize when accessing the park. Additionally, the data for this analysis was collected during the COVID-19 pandemic and is not reflective of typical travel seasons or circumstances. These factors, among others, compromised the data analysis and conclusions, and the report has recently been discredited by peer researchers and community members as well. Because previous studies do not provide definitive or unbiased data analysis and conclusions about the real economic impacts of the Oceano Dunes District, it is challenging for decision-makers to utilize Item 11.c. - Page 7 3 research to make informed decisions in the best interest of the community. The purpose of this study, as conducted by a third-party, will ensure an impartial, accurate and comprehensive assessment to provide the necessary information for regulatory agencies, local elected officials and other decision- making bodies. Milestones I. Gain purpose, understanding and financial buy-in from surrounding cities and county Meet with the cities of Grover Beach, Arroyo Grande and Pismo Beach in addition to the County of San Luis Obispo. Completion date: Friday March 5, 2021 II. Meet with potential agencies (Tourism Economics, Destinations Analysts, etc.) Initial meeting to discuss data collection and analysis and expected outcomes of the economic impact assessment. Completion date: Friday March 12, 2021 III. Proposal from agencies Receive proposal and select agency. Completion date: Friday, March 26, 2021 IV. Begin data collection and analysis Agency to begin data collection and analysis. Estimated completion date: Friday June 11, 2021 V. Draft findings presented for review Estimated completion date: Friday June 18, 2021 VI. Final report completed and presented to the Board Completion date: Wednesday July 21, 2021 Recommended Inputs Item 11.c. - Page 8 4 Type of Input Input Reasoning Direct OVH/SVRA Closure Pending Coastal Commission to phase-out over five years Direct Overnight camping Assess the dollars spent from camping patrons Direct Day use visitors without vehicles Determine number of visitors without vehicles from both locals and out of town visitors Direct Day use permits/users without OHV Value of those using the park in a limited capacity Direct Day use permit permits/users with OHV Value of those using the park in a limited capacity Direct Day use permits/users with street legal vehicles Value of those using the park in a limited capacity Direct Day use permits/users renting from OHV concessionaires Value of those using the park in a limited capacity Direct Employment and income of State Parks Determining the residential income generated directly by ODD Direct Other identified activities (hiking, surfing, paragliding) Value of those using the park in an isolated capacity Direct International Visitors Value of travelers from outside of the U.S. Direct Out-of-State Visitors Value of travelers from within the U.S. Direct In-State Visitors Value of travelers from California Direct Full State Parks Closure Understanding the value the entire park brings to the County Direct/Indirect Events Assessing State Parks events and the dollars spent by those attending the events Direct/indirect Film Understanding the dollars spent in our local communities from film/entertainment productions Item 11.c. - Page 9 5 Indirect Impacts in neighboring communities Gauge the financial impacts to surrounding local businesses and communities Indirect Domestic and International Press Recognition Understand the value of press recognition Indirect Employment dollars Employee dollars spent in our local communities Mitigation measure Events Identify potential events for State Parks Mitigation measure Boardwalk Understand the potential to generate income from a boardwalk Mitigation measure Other activities Identify other activities to help generate income Item 11.c. - Page 10