Michigan Port Study Provides Stunning Portrait of Substantive Economic Impact

Anybody who accidentally looks through the wrong end of a telescope or a pair of binoculars and comes away unimpressed typically becomes astounded when simply turning things around and looking through the device in the manner originally designed to provide the wow factor. Last month, economic developers, port city municipalities, destination attractions, and the entire hospitality industry from recreation to lodging, dining and beyond realized that for too many years they’ve been collecting data from the wrong end of the device. By turning their focus to the truly big picture or “full spectrum,” they have come to the realization that Michigan’s ports and waterways are providing more than four times the economic impact discovered in previous studies. It’s a new day filled with discoveries.

At a full day meeting and workshop held in Lansing, on April 18, 2019, the Michigan Port Collaborative released the results of the first “Full Spectrum” economic impact study of Michigan ports ever conducted in this state. Many state officials and legislators were represented at the gathering, including US Senators Debbie Stabenow and Gary Peters who provided video statements commenting on the specific results of the report. The study concluded that the total economic impact of Michigan’s ports and harbors was approximately $19.7 Billion…four times higher than any previous statewide port and harbor economic impact study. It also estimated that 151-thousand full time equivalent jobs were supported by the economic activity associated with Michigan’s ports and harbors during the period evaluated.

That’s critical data for Michigan’s Great Southwest inasmuch as we have a full-scale harbor that deals in both industrial commerce and recreational and hospitality sectors alike.

Just last week, after participating in the christening of the new Harbor Hopper Cycleboat in the inner harbor at St. Joe, Cornerstone Alliance President Rob Cleveland referenced the new impact study and joined me at dockside to further delve into just how important the cycleboat step onto the water is for the community, saying, “We’ve probably been underestimating the impact of the waterfront and the harbor, and it certainly speaks to all of the work that we continue to do in the harbor. It speaks to the importance of the harbor study that was done in 2015, the harbor charrettes that are being reviewed now, and how we can really maximize our waterways.”

Cleveland, who has been working diligently to accomplish a designated DNR Water Trail for the waterfront locally says the economic impact is critical to the future viability of the entire community, noting, “It’s the very reason that Berrien County and Abonmarche and Cornerstone Alliance and the Southwest Michigan Planning Commission over the last six months have applied for a Coastal Zone Management grant and a DNR Waterways grant.”

The Cornerstone President says, “All of these activities are designed to create more infrastructure that will allow the public to be able to access the waterfront and waterways. It’s key as we’re trying to add more public space for people to access the water in whatever way they can, so the effort is really bringing this to the people so if you want to ride on the Cycleboat, if you want to do it yourself in a kayak, or you want to put your own boat in the water, the goal here is to try to meet people where they are and make it comfortable for them to access the water, making it far more accessible for everyone.”

Here is data regarding the commercial/recreational ports & harbors of Michigan’s Great Southwest from the report:

St. Joseph-Benton Harbor

Total Economic Impact: $353-million
Direct Economic Impact: $195.8-million
Secondary Economic Impact: $157.2-million
Total Full-Time Equivalent Jobs: 2,882
Direct Full-Time Equivalent Jobs: 1,900
Secondary Full-Time Equivalent Jobs: 982
Total Labor Income: $133.7-Million
Direct Labor Income: $81.6-Million
Secondary Labor Income: $52.1-Million
Visitor Spending on Lodging/Vacation Rentals: $26.6-Million
Visitor Spending on Restaurants: $25.1-Million
State & Local Tax Revenues from Water-Based Culture: $23.4-Million

South Haven

Total Economic Impact: $154.9-million
Direct Economic Impact: $87.5-million
Secondary Economic Impact: $67.4-million
Total Full-Time Equivalent Jobs: 1,213
Direct Full-Time Equivalent Jobs: 789
Secondary Full-Time Equivalent Jobs: 424
Total Labor Income: $57.9-Million
Direct Labor Income: $35.5-Million
Secondary Labor Income: $22.4-Million
Visitor Spending on Lodging/Vacation Rentals: $15-Million
Visitor Spending on Restaurants: $8.4-Million
State & Local Tax Revenues from Water-Based Culture: $10.3-Million

Saugatuck-Douglas

Total Economic Impact: $261.9-million
Direct Economic Impact: $146.4-million
Secondary Economic Impact: $115.5-million
Total Full-Time Equivalent Jobs: 2,161
Direct Full-Time Equivalent Jobs: 1,436
Secondary Full-Time Equivalent Jobs: 725
Total Labor Income: $98.7-Million
Direct Labor Income: $60.3-Million
Secondary Labor Income: $38.4-Million
Visitor Spending on Lodging/Vacation Rentals: $21.2-Million
Visitor Spending on Restaurants: $20-Million
State & Local Tax Revenues from Water-Based Culture: $17.5-Million

Muskegon

Total Economic Impact: $358.3-million
Direct Economic Impact: $192-million
Secondary Economic Impact: $166.3-million
Total Full-Time Equivalent Jobs: 3,896
Direct Full-Time Equivalent Jobs: 1,864
Secondary Full-Time Equivalent Jobs: 2,032
Total Labor Income: $139.1-Million
Direct Labor Income: $79.9-Million
Secondary Labor Income: $59.2-Million
Visitor Spending on Lodging/Vacation Rentals: $24.4-Million
Visitor Spending on Restaurants: $23.3-Million
State & Local Tax Revenues from Water-Based Culture: $20.9-Million

Grand Haven

Total Economic Impact: $307.6-million
Direct Economic Impact: $149.8-million
Secondary Economic Impact: $157.8-million
Total Full-Time Equivalent Jobs: 2,382
Direct Full-Time Equivalent Jobs: 1,481
Secondary Full-Time Equivalent Jobs: 901
Total Labor Income: $119-Million
Direct Labor Income: $64.7-Million
Secondary Labor Income: $54.3-Million
Visitor Spending on Lodging/Vacation Rentals: $17.6-Million
Visitor Spending on Restaurants: $17.4-Million
State & Local Tax Revenues from Water-Based Culture: $15.5-Million

The ports at New Buffalo and Holland were not included in the Michigan Port Collaborative study, and care was taken to deduct a percentage to avoid including visitor counts in New Buffalo for the modeling in St. Joseph.

The report includes narrative capsules from each port, including narrative on St. Joseph & Benton Harbor from Millicent Huminsky, the Executive Director of the Southwestern Michigan Tourist Council.

Each port included in the study also takes a look at Key Threats and General Conclusions arrived at. For St. Joe, the report sees the threat of the Asian Carp as potentially huge, saying:

Invasive species, particularly the Asian Carp, were discussed as potential threats during the May port/harbor meeting in St. Joseph. Barriers such as electric current, noisemakers, and water jets near Joliet, Illinois are designed to deter the species from entering Lake Michigan (Flesher, 2018). Asian Carp have reportedly, however, breached such barriers in the past (Flesher, 2017). Further efforts against the spread of Asian Carp are underway through a Great Lakes Basin Partnership between Wisconsin, Ohio, Ontario, and the City of Chicago. This partnership is currently working on tactics to prevent the spread of Asian Carp at Brandon Road Lock in Illinois (Michigan Water Strategy: 2018 Annual Report).

Additionally, the report has this Conclusion for St. Joseph:

Water-based tourism and recreation are integral components of St. Joseph’s economy. As described in these sections, the community has made great strides in not just remedying its over-industrial past, but also in embracing its rich and beautiful water resources. St. Joseph not only serves as a quick getaway for Chicagoans, but also hosts visitors from across the U.S. (and world) for its unique offerings such as the nearby Jack Nicklaus Signature Golf Course at Harbor Shores.

The South Haven port assessment includes these Key Threats there:

While not a comprehensive list, here are some of the key threats discussed during the harbor / port interview in May:

➢ Declining water quality and varying water-levels.

➢ Failing structures along the waterfront that require federal funding to replace or repair.

➢ South Haven would benefit from a boat hull-out on both sides of the Dyckman Avenue Bridge. Such capability would bolster the emergency responsiveness of the community.

➢ Tourism economics is seasonal. Therefore, the addition of a large meeting space in South Haven would enhance the community’s ability to attract tourism during off-peak seasons.

For South Haven’s conclusion statement, you will find this:

South Haven’s water-based tourism and recreation economic impacts underpin the area’s economy. With excellent walkability, and a seamless connection between the area’s downtown and waterfront, South Haven attracted nearly 1/3 of a million overnight visitors during 2017. As seen in Table 34, the marina remains relatively full during its 183-day season, with seasonal slip demand being slightly stronger than transient slip demand.

Back at the overall report, according to Felicia Fairchild, President of the Michigan Port Collaborative, “While a number of economic impact studies have been conducted over the years, those studies focused on traditional maritime measurements. We devised this ‘full spectrum’ study to also include economic drivers for individual ports that add economic values which have not been included in previous studies such as port specific businesses, port specific tourism and port specific recreation.” She adds, “ We had a hunch the economic value of our ports and harbors was far greater then previously reported.”

Denny Blue, Secretary of the Michigan Port Collaborative says the organization is a 501C3 not-for-profit organization that has been involved in representing the ports of Michigan for more than a decade on issues that are critical to the economic success of all port communities. He says, “When lake levels dropped drastically in 2009, concern regarding the economic viability of many Michigan ports began to wane at the state and federal levels. The dredging and infrastructure challenges caused by low water levels created a trend in thinking, among some state officials, that our ports and harbors were an economic liability.” Don Gilmet, Vice President of the collaborative says, “ We represent the ports of Michigan and we wanted to challenge that trend in thinking,” and adds, “Michigan Harbors are the front doors to our communities.”

The study was commissioned by the MPC in November 2017 and conducted by Dr. Vincent Magnini, PhD., Executive Director of the Institute for Service Research in Virginia Beach. Bill Boik, Consultant, retired from the State of Michigan Department of Natural resources, also contributed to the study and participated in the nine-day tour of port and harbor communities who helped finance the project. In addition, Dr. John Crotts of Charleston, SC served on the research team.

Other important findings in the study revealed:

An estimated $7.7 Billion in labor income can be attributed to the economic activity of the state’s ports and harbors
Water-based tourism and recreation economic impacts are nearly four times the size of commercial economic impacts
The state of Michigan and municipalities within the state collected an estimated $1-Billion in tax revenues in 2017 due to water -based tourism and recreation in and around Michigan’s ports and harbors
The federal government witnessed approximately $1.3-Billion in tax revenues in 2017 as a result of water-based tourism and recreation in/around Michigan’s ports and harbors.

Marci Cisneros, Treasurer of the collaborative says, “This project has been enlightening. We will utilize the results to educate our legislators and state officials regarding the monetary value of our ports and harbors going forward.”

The report reflected trip-specific visitor spending due to Michigan’s ports and harbors including:

$70-Million in spending on Charter Fishing
$149.9-Million in spending on Cruise & Ferry Operations
$3.8-Billion on other Lodging, Restaurants, Gas, Groceries and the like

Looking at non-trip-specific visitor spending due to Michigan’s ports and harbors, the survey found:

$2.1-Billion spent on new and used boat purchases and payments or installments on boats
$3.5-Billion spend on boat maintenance, repair, slip rentals, off-season storage, taxes, and licensing and registration for watercraft

You can read the entire study and see all the charts, graphs, photos and data by clicking the link below:

Economic-Impact-Report-Of-Michigan-Ports-And-Harbors-2019

The study was conducted by the Michigan Port Collaborative through a matching grant, applied for by the City of Alpena and provided by the Michigan waterways through the Michigan State Waterways Commission. Grant matching funds were provided by the Michigan State Housing Development Authority and from the following localities: