The Business of Beaches
Is a beach still a beach without sand? Are “beach towns” still beach towns without beaches? These actually aren’t riddles, but rather, just some simple ideas to consider.
We recently attended a pretty illuminating workshop at UCI on “The Economics and Resilience of Orange County’s Beaches,” sponsored by assemblywoman Diane Dixon, with other local politicians, agency heads, and staff from UCI departments like Dr. Brett Sanders, Nicola Ulibarri and Ed Coulson. What’s not new, but was reiterated loud and clear, is the economic significance that the coast and beaches have on the SoCal economy. Spoiler: The money and jobs that beaches produce is pretty extraordinary.
Just how extraordinary? Dig on these stats…
You know the old real estate mantra: Location, location, location… And wouldn’t ya know it, houses are worth more near pretty beaches. Only thing is, beaches erode…but taxes don’t?
Recently, Professor of Real Estate Ed Coulson made a compelling connection between beach erosion and property values at the recent UCI Workshop on “The Economics and Resilience of Orange County’s Beaches.” Why is that important to San Clemente? Because over half ($48M) of the city’s $80M general budget comes from property taxes, a much higher percentage than neighboring communities with less beach.
Negative impacts to property values have a direct — and you guessed it, negative — impact on the city’s biggest source of tax revenue, diminishing its ability to fund key priorities like public safety (the biggest cost line item in our budget). Not to mention lesser priorities like the beach.
The Spanish Village by the Sea is a special community of residential neighborhoods that revolve around the beach lifestyle and the economic engine that it powers. Here’s some data that explains that.
Because the thing about a democracy…is that WE decide what’s what, right?
But let’s back it up a little. At a recent city council meeting on July 17, city manager Andy Hall laid out the cost of sand replenishment and various options for funding it. The presentation highlighted how cities’ tax bases differ and how a community like Newport Beach has been able to fund sand replenishment over many decades. (They’re on their 13th cycle, now.)
So if SC actually wants to have healthy beaches — and keep its rep as a “beach town” — it needs to figure out how to fund it. That’s where WE [the People] come in.
After the presentation, the many comments from the public, and hours of debate by council members, Mayor Cabral directed the city manager to prepare information for a 3/4% increase in the sales tax. This increase would be dedicated to sand replenishment, beach access, and marine safety, to be presented at the August 6 meeting. The public will be there, debate and discussion will be vigorous, and the ask is to simply put the measure on the November 5 ballot for voters to ultimately decide. This special purpose tax would require 67% approval to pass, a high hurdle, indeed. But in a democratic society, letting the voters decide seems appropriate, no?
When you think of South Carolina, most folks don’t generally associate the state with tourism. Regardless, its economy has been changing rapidly over the past several decades. Congressman Jim Clyburn of South Carolina said that the state “used to thrive on supplying textile and tobacco (but) now leans on two very different ‘t’s’: tourism and transportation”. In fact, one in every 10 jobs in the state is within the tourism industry. Furthermore, South Carolina’s economic growth from tourism over the five years from 2015 through 2019 was about 150% greater than the U.S. national economic growth over the same period. And, no surprise, coastal beaches are the state’s greatest single attraction.
So, when South Carolina beaches were under threat, the state sought to replenish them. And replenish them it did, to the tune of ~$20 million annually over the 30-year period from 1990-2019. That equates to 1.7 million cubic yards of sand, annually.
And what did the state get in return for its investment? Nourished beaches advanced 110 feet on average — and tourism boomed. South Carolina beach tourists generate $16.6 billion annually in South Carolina economic development and about $1.8 billion in taxes. For each $1 spent on beach nourishment, South Carolina receives over $1,200 in economic development generated by beach tourists, while federal, state, and local governments receive almost $130 in taxes. Talk about a return on investment!
An Art Deco, pastel-colored cultural scene, featuring models, celebrities, and people-watchers has long made Miami Beach (especially South Beach) an icon of international jet setters and bohemian debauchery. Miami Vice, the hit TV series from 1984-89, starring stylish Detectives Sonny Crockett and Ricardo Tubbs, a very 80s soundtrack, and the show’s distinct visuals, helped revitalize the perception of Miami Beach in the 1980s.
But revitalized from what?
Well, beneath the veneer of this surprisingly dark cop show, was the real star: the revitalized beaches! Miami’s beaches, during the 1960s and ‘70s, had actually fallen victim to groin wars, as shortsighted development, exacerbated by hotels and condos using structure, tried to “save” their beaches. However, as BBOB constantly points out, groins and structure often have unintended consequences.
In Miami Beach’s case, it was the contraction of the asset that attracted tourists in the first place. Miami’s seven mile stretch turned into a “seedy backwater of debt ridden hotels,” and in 1977, the newly elected Mayor said, “Business was so bad I was happy just to see prostitutes.” Yeah.
Beach nourishment from 1978-1983, at an initial cost of $51 million, actually saved the day. In the first year after nourishment, tourism spending increased by $290 million, and today, Miami Beach is cited as the top rated beach in the U.S.