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Dr. Dennis Foster - W.A. Franke College of Business

Canyon Forest Village: A Case Study in Public Choice Theory. Dr. Dennis Foster - W.A. Franke College of Business. Fall 1993 – June 1997. Kaibab National Forest (KNF) gathers input and considers proposals to deal with “Tusayan” growth.

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Dr. Dennis Foster - W.A. Franke College of Business

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  1. Canyon Forest Village:A Case Study inPublic Choice Theory Dr. Dennis Foster - W.A. Franke College of Business

  2. Fall 1993 – June 1997 • Kaibab National Forest (KNF) gathers input and considers proposals to deal with “Tusayan” growth. • Insiders: Park Service (NPS), NACOG, Coconino County. Some environmental groups. • Outsiders: Cities of Flagstaff & Williams, Tusayan business owners, northern AZ hoteliers.

  3. June, 1997: Draft EIS for Tusayan Growth (D-EIS) • 60 days to respond. • 5 alternatives. • Main CFV proposal: Swap 2184 acres (inholdings) for 672 acres. Build 3650 lodging rooms here (and more). • Conclusion: Northern AZ will continue to grow even with CFV.

  4. Critique (BBC & BBER): • D-EIS uses 4% annual growth in GC visitation. • D-EIS assumes CFV business is displaced from far away (Phoenix, Las Vegas, etc.) • Conclusion - CFV will have huge effects. . . except . . .

  5. What does the Forest Service want? • Housing. • Infrastructure. • Community services. • Assist NPS with GC plans. • …or, just to consolidate the inholdings?

  6. Fall 1997 to July 1998 • KNF works on a revision to the D-EIS. • None of the “outsiders” are privy to this process until it is done. • In July, 1998, a Supplemental Draft EIS is released (S-DEIS).

  7. The Supplemental Draft EIS • 45 days to respond. [Issued July 17.] • 3 new alternatives. • KNF favors a new version of CFV that has about 270 acres and builds 900 rooms. • CFV promotes a 272 acre/1270 room alternative. • NPS transit unlinked from CFV proposals. • Conclusion: No. AZ will be a little worse off!

  8. Critique (BBC & BBER): • S-DEIS miscalculated “cumulative” impacts over study period. • Impacts are too low. • “Capture” rates are arbitrary. • What might be the impact? • 90% x ($550 mill. to $1 billion)

  9. Fall 1998 to August, 1999 • KNF works on Final EIS. • City of Williams asks for BBER to run analysis for Alt. H (1200 room CFV proposal), as that has become the favorite of the KNF.

  10. August 1999 – The Regional Forester Announces Decision • She picks the 1270 room version of CFV. • Gives details of land swap valuation:2116 acres  272 acres  $5.4 million • Dismissed economic analyses as “conflicting”.

  11. Public Choice Aspects of CFV • Is there a market failure here? • Economic growth? Congestion? • What is the market response? • Williams, Flagstaff . . . even Tusayan. • What does the Forest Service really want? • Is the NEPA process valid?

  12. Public Choice Aspects of CFV • How extensive is rent-seeking? • Well, $1 billion worth! • Developers, inholders, enviros, NPS & USFS. • Museum and NAU. • Is there elitism at work here? • What interest is economic growth to USFS? • Scientific management at work here?

  13. Public Choice Aspects of CFV • Extent of Government exploitation • Value of land in the swap. • “Impacts” with large version of CFV. • All economic calculations were suspect. • Notion that project won’t boost visitation. • Doom and gloom scenario • 10 million annual visitors to GCNP by 2010!

  14. Public Choice Aspects of CFV • A Modest Proposal: • Auction off land in . . . 20 acre chunks. • Use the proceeds to buy the inholdings. • A More Dramatic Proposal: • Build CFV on the rim of the canyon! • The dream that was the Grand Canyon Inn.

  15. Aftermath:Spring 2000 County Hearings • Coconino County holds hearings on rezoning of the 272 acres for CFV. • P&Z holds many nights of hearings. • Board of Supervisors holds many nights of hearings. Sends back to P&Z. • P&Z considers changes made by the board. • Board holds final hearing announcing their vote on this issue: 4-0 in favor of rezoning.

  16. Fallout from County Hearings • CFV buildout pared down to 900 rooms. • CFV can build an additional 240 rooms if… • Opponents start lawsuit. • Opponents gather signatures to place zoning decision on the ballot. • Nov. 7, 2000 vote on Proposition 400 2-1 against the rezoning!!

  17. Canyon Forest Village:A Case Study inPublic Choice Theory Dr. Dennis Foster - W.A. Franke College of Business

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