An estimate of economic impact by the proposed Nevada County Outdoor Events Ordinance
August 6, 2014
This data was acquired by a telephone survey of a majority of local businesses engaged in all aspects of making weddings happen in western Nevada County.
Wedding planners were our primary outreach target, due to the fact that these businesses have the best view of the scope and severity of the economic impact by the proposed Nevada County Outdoor Events Ordinance.
We also sought and found supporting data and information from recognized national business groups and from academic sources of economic expertise, to be cited below.
This supporting data allowed us to revise our original estimate upwards, quite substantially.
It is estimated that if permits become required as specified in the ordinance, our local economy will suffer a loss of more than $100 million in total economic activity.
The line items below are summarized from our direct responses to the survey and the supporting data mentioned above.
— Over 80 percent of Nevada County weddings are out-of-town visitors
— 500 weddings/year (1)
— 160-170 guests each on average (1)
— $30K direct spend on the wedding (1)
— $300 each guest hospitality spend (2 nights lodging plus 6 meals), total $50,000 per wedding
— That is $80,000 per wedding, spread among all the vendors/planners/innkeepers/restaurants, etc.
— 500 weddings is $40 million and this is likely just a slice of impacted outdoor events that are not an attractive nuisance, but would be required to obtain a permit or drastically reduce their business.
— With a 6-times tourist dollars input multiplier (moderately conservative), that is a $240 million contribution of this business activity to the western Nevada County economy. (2)
— 60-70 percent of these weddings are conducted at venues that do not currently require any sort of permit.
— It is estimated that if permits become required as specified in the ordinance, our local economy will suffer a loss of more than $100 million in total economic activity.
— Innkeepers of all descriptions also pay TOT (Transient Occupancy Tax) of 10 percent of gross room receipts to either the city they are in (Grass Valley, Nevada City, Truckee), or to the county.
Using the data and formulas above, the estimated decline in total (cities and county) TOT that would result from the ordinance is approximately $1 million.
This is real money, not just a benefit of the multiplier.
Sales taxes would also be affected in a similar fashion.
A key question is whether existing law/regulation is adequate to handle the two or three known venues that have been the source of the vast majority of complaints and violations.
Looking at just one of the requirements for a conditional use permit, flush toilets, there is no residential septic system that can handle 200 flushes in a six-hour period, so this would eliminate any facility that is not on a public sewer system.
In addition, the attraction of Nevada County for this business is the outdoor wedding in a rural/natural setting, so we must preserve this attraction or suffer the economic losses.
The business community of Nevada County, and especially those businesses directly involved with our wedding industry, is deeply concerned that passage of this ordinance in any form will bring irreparable harm to our local economy from which we will not soon recover.
The economy remains fragile, especially in rural areas such as ours that rely heavily on tourism.
Some would label this important sector an "underground economy."
That's an inappropriate attempt to discredit a viable cottage industry whose operators pay income, sales, and property taxes just like any other business.
We need to be sure that any new restrictions on business activity pass the basic public policy interest-balancing test.
This test compares negative community-wide and economy-wide impacts to any new fees or other regulatory impacts that benefit only the few (county departments and a small number of impacted neighbors near two or three event venues) and this ordinance fails the test.
Sources: (1) The Wedding Report, a national Wedding Industry Market Research Firm: http://www.theweddingreport.com/wmdb/index.cfm?action=db.viewdetail&t=c&lc=06057&setloc=y
(2) Ronald Nykiel, the Dean of Business at Husson University in Bangor, Maine, as part of a series on the tourist economy in rural Maine, by Deans of Business at four universities in the Bangor area: http://bangordailynews.com/2011/02/18/business/tourism-dollars-are-essential-to-state-economy/
(3) A copy of the Outdoor Events Ordinance dated May 2014: http://www.mynevadacounty.com/nc/countycounsel/docs/Outdoor%20Event%20Ordinance%20-%20May%202014.pdf
Cathy Whittlesey is the Nevada City Chamber of Commerce CEO.
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