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~' , I2 <br />Some Reflections on the Document "Economic Impact .Analysis of the Buckhorn <br />Village Project on (sic] Orange County, North Carolina, May 2008," "developed by <br />The Sanford Holshouser Business Development Group" (no author given), by <br />Craufurd Goodwin, James B. Duke Professor of Economics, Duke University <br />The Buckhom project is presented to the citizens of Orange County mainly in terms of its <br />supposed economic benefits. Therefore it is essential that the citizens receive an <br />independent and balanced economic assessment. Here are my thoughts on what we have <br />been given in this document and what we continue to need. <br />There is a need for. two kinds of estimate related to this project: the first, a "fiscal" <br />estimate should provide the best guess of the likely impact of the project on the <br />expenditure responsibilities and revenue streams of County government; the second, an <br />"economic" estimate, should contain the best guesses about the impact of this project on <br />the economy of Orange County and its citizens as workers, consumers, retirees, <br />unemployed etc. Pieces of these two estimates are presented here, all tangled together. <br />Neither one is close to complete. <br />My most serious concern about this document is that it is not the detached, probing, <br />skilful, balanced, examination of this project that we require. Instead it is another <br />advocacy piece designed to cast only the best light on the proposal. This is the sort of <br />document that we may expect to receive from a developer, exaggerating the positives and <br />neglecting the negatives. Indeed it has been prepared by a "business development group," <br />which undoubtedly spends much of its time producing booster pamphlets of this kind for <br />clients. It is an embarrassment that presumably our tax dollars were spent to purchase this <br />report. <br />There is not time nor need to give a full discussion of the document, but let me offer a <br />few observations to support my criticism. First, the author depends far too heavily and <br />uncritically on data provided by the developer, such as "new annual properly tax <br />revenue," which for starters are not.expressed as gross or net (e.g. ~if property values of <br />other retailers in the County, current or projected, are reduced by this project "net" <br />becomes very important). In. the same veiri, will projected sales at Buckhorn, used to <br />calculate sales tax revenues, impinge on sales at other malls in Orange County; it seems <br />likely and so again "net" becomes significant. That the document gives as its only two <br />references the "Barnes report" that was handed to us recently and a "Renkow report" that <br />is not well described as to origin, must give us pause. Barnes in a cost benefit analysis <br />chose to list only benefits but not costs, and even though prepared also by a booster group <br />is used in this document as an authority throughout on such critical topics as "new retail <br />sales tax" and new "construction jobs." <br />One of the main arguments of this report, highlighted in the Executive Summary, is that <br />Orange County is "underserved" by retail because it has a lower income to sales ratio, <br />and income to retail employment, than other counties. It is said, xegretfully, that funds are <br />"leaking" out to other counties. Does this imply that we are "over-served" with education <br />and medical services where our comparative advantage lies, or that we should deplore the <br />