In previous blogs and emails I mentioned that the cost of mismanaging our lakes was hundreds of millions. Col. Ed Kertis challenged me in an email to document that number. As a result I applied simple logic and math to obvious costs that are related directly to lake level rather than the depressed economics being experienced nation wide. The results are discussed below and show the cost to be in the billions of dollars.
A big contributor to obvious losses is the decrease in lake front value from deteriorating lake front access, views, and esthetics. In a recent reevaluation of property values by the McCormick County Assessor the assessor added $100,000 to every lake front property as a reasonable value of lake front access, views, and esthetics. Simply halving that value because of the horrible condition of our lake front properties generates a loss of $225 million on Lake Thurmond where there are 4,500 lake front properties. I had no data on the number of lake front properties at Lake Hartwell but assuming it is similar to Lake Thurmond raises this loss to a conservative figure of $450 million. Conservative because the real loss on lake front value is probably a great deal larger and these figures do not account for the overall loss in attractiveness of these areas for any real estate purchase regardless of whether you are talking lake front or not.
I also had data on one major development on Lake Thurmond that has been tabled indefinitely because of the unpredictable levels at the lake. This project would have cost $35 million. Again I think it is safe to assume a similar loss at Lake Hartwell. Doubling this gives a conservative estimate of $70 million in lost developments around these two lakes. Conservative because it represents what only one business owner had planned. Surely there would be more projects of similar costs if a survey were made of all planned developments that are now tabled.
And finally I had data from studies made a few years ago by the Lake Hartwell Association and the Corps as to how much money is brought into Lake Hartwell from visitors and water related business. These show a loss of about $150 million in general incomes from lake visitation etc. (excluding real estate losses) at Lake Hartwell when the lake drops more than 8 ft. Doubling this to include Lake Thurmond gives a conservative figure of $300 million. Conservative because it does not include the impact on lake related jobs in the area.
Adding these together gives a total loss of $820 million and this does not include the overall impact on real estate values in the general area. Obviously fewer people will be attracted to real estate in a lake area when the lakes are no longer attractions. In other words it is safe to say that the economic impact of low lake levels is in excess of a $billion with an additional impact from lost jobs because of depressed lake related industries such as dock building, construction, restaurants, etc.
CATEGORY/ TOTAL COST
lost lake front premium $450,000,000
tabled projects $70,000,000
decreased lake business $300,000,000
total not including real estate $820,000,000
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if real estate included >>$1,000,000,000
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