2014

Jessie Baker

PLS 541

7/17/2014

Cost-Benefit Analysis of

Greenways in Wilmington, NC

1

Table of Contents

I. Executive Summary (2-4)

II. Problem Summary (5)

III. Literature Review (5-11)

IV. Methodology (11-16)

V. Results (16-19)

VI. Recommendations (19-20)

VII. References (21-22)

2

I. Executive Summary

Problem Summary

My goal in conducting a cost-benefit analysis of greenways is to determine if they are

worth the investment in improving the overall quality of life of citizens in Wilmington, NC. The

purpose of this CBA is to analyze literature discussing costs and benefits associated with

building greenways, to conduct a thorough analysis of data on greenways in North Carolina and

to provide recommendations on how to move forward based on the data and literature review.

My hypothesis is that greenways and trails do improve the quality of life in communities. My

key research questions focus on whether or not greenways increase tourism and business

revenue, increase property values, create jobs and reduce health care costs.

Literature

Through extensive research on literature discussing the costs and benefits of greenways

particularly in North Carolina I have found consistent trends that support that the benefits of

greenways far outweigh the costs. The primary benefits I found most frequently discussed the

economic value of greenways such as increased tourism, increased business revenue and

increased property values. Other common benefits include increased access within communities,

nature preservation, reduced cyclists and pedestrian accidents and improved physical fitness

levels of communities. Some of these benefits are easily monetized while others are not, but still

fulfill important roles within the CBA analysis.

Throughout the literature review I have concluded that the main areas of standing to

consider include primarily all citizens of Wilmington as well as business owners, wildlife,

children and future generations. Future generations can be considered because greenways reduce

pollution and promote healthier lifestyles, which both positively impact future generations in

Wilmington, NC. Wildlife has standing because they cannot speak for themselves but greenways

help preserve wildlife habitats that are often in threat of destruction from larger developments.

Overall the literature strongly supports that there are numerous benefits associated with

greenway development and while there are some costs and concerns the benefits far outnumber

them.

Data Methodology

The majority of data I used for this analysis is from other communities within North

Carolina that have built expansive greenway systems. The Outer Banks is one of my main areas

of review as they have similar revenue generated by tourism from their costal location like

Wilmington. Additionally the Carolina Thread Trail covers 15 counties in NC and provides

relevant data for changes in property values and costs associated with developing trails. For my

data analysis I chose to focus on primary costs including construction, staffing, maintenance and

usage.

For benefits I focused on tourism, property values, reduction in health costs and jobs

created. I selected these values because they provide the most concrete monetary values that I

felt produced confident results that would not be significantly changed in the long-term. I also

used data from the Wilmington Comprehensive Greenway Plan to determine the best cost

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estimated for developing over 70 miles of greenways in Wilmington, which is estimated at

$600,000 per mile (The City of Wilmington and New Hanover County, 2013).

Results

My CBA produced a NPV value of $1,450,476,397.29 and a BCR of 6.37. I used

conservative estimates based on collected data for the Carolina Thread Trail, Outer Banks trails

and the Wilmington Comprehensive Greenway Plan. I used a discount rate of 3% to account for

the value of greenways in the future, which I felt was a realistic estimate that accounted for

changes in inflation however did not put significant more value on the future than the present. I

also calculated a horizon value from year 21 with a discount rate of 3% and growth rate of 1 %

that produced a net present value with the horizon value of $1,707,013,914.70.

Recommendations

Through the supportive data and literature I recommend moving forward on developing

70 miles of greenways throughout the Wilmington community to improve the overall quality of

life of citizens. I recommend this amount of mileage because I feel this will provide

comprehensive changes and access points for the entire community not just for a focused area

and these plans have already been developed through the Wilmington Comprehensive Greenway

Plan.

I recommend prioritizing greenways to improve access to area beaches first to produce

the quickest revenue increases in tourism followed by developing greenways in poorer areas of

the community to produce the quickest universal access and health benefits. I think these two

priorities will produce the most benefits the quickest followed by extending greenways

throughout Wilmington to add onto and improve existing greenways to further connect the

community. I am confident that any expansion in greenways throughout Wilmington will

produce benefits that far exceed the costs to develop and maintain the greenway.

II. Problem Summary

Through conducting a cost-benefit analysis of greenways I will address the problem of if

greenways improve the overall quality of life for citizens in Wilmington, NC through conducting

research on other cities that have built trails. My hypothesis is that greenways do improve the

quality of life for citizens. I am defining quality of life through focusing on economic impacts

including reduced health care costs, increased business development, tourism and revenue,

reduction in cyclists and pedestrian accidents and increased property values.

My key research questions to determine this include looking at if greenways increase

tourism and business revenue; create jobs and whether or not they increase property values of

homes within the vicinity of greenways. Additionally I will look at the health cost impacts of

increased physical fitness.

The main stakeholders in Wilmington, NC which is currently undergoing a

comprehensive Greenway Plan include the citizens of Wilmington, civic leaders in the City of

Wilmington and New Hanover County and bicycle retailers and other businesses that support

greenway development. All of the citizens in Wilmington have standing in the greenway project

as well as future generations that would benefit from the trails.

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III. Literature Review

Many communities in North Carolina and across the United States are embracing the

current trend of expanding greenways, bicycle trails and pedestrian trails within their cities. The

economic benefits of trails are not a matter of speculation, but rather they have been documented

in various studies across the United States. Trails stimulate business creation, influence corporate

location decisions, boost spending, increase property values, reduce medical costs by

encouraging people to use the trails and generate tax dollars just to name a few of the benefits

they produce (Pennsylvania Land Trust Association, 2011, p. 2).

Health Trends

Trails generate revenue savings, in a National Medical Expenditure Survey one study

found that every $1 spent on trails produces approximately $3 in medical cost savings (Active

Living Research, 2011, p. 3). Trails not only benefit communities where they are built, but

adding trails within existing parks has found to increase physical activity within parks by 26

times more than a park without trails (Active Living Research, 2011, p. 4). In 2000, 300,000

deaths a year occurred associated with obesity that equaled $117 billion in medical costs.

Multiple cities that have built trails and conducted surveys reporting that since trail development

70% of trail users reported they are getting more exercise as a direct result of the trail (Rails-to-

Trails Conservancy, 2013).

The option to exercise in natural green spaces has also been found to produce

psychological benefits. A study in the UK reported that people who exercise in natural settings

feel more restored and less anxious than people that go to gyms. In some cases natural spaces

also provide therapy for conditions such as ADD and improve cognitive function for work

performance and brain development in young children (Carolina Thread Trail, 2014).

In 2011 the Division of Bicycle & Pedestrian Transportation identified key reasons as to

why North Carolina needed to increase trail access throughout the state focusing on Durham,

Greenville, Asheville, Winston-Salem and Charlotte. In 2011 they found that NC is predicted to

increase by 14% in population by 2020, which motivated policy development at local, state and

national levels to focus on balancing the needs of bicycle and pedestrian modes of alternative

transportation. An additional support for this is that the rates of obesity are on the rise in NC with

2 in 3 adults being overweight or obese (O'Brien & Jackson, 2011). In New Hanover County

nearly half (46.1%) of adults do not engage in the recommended level of physical activity of

exercise for thirty minutes three times per week and nearly 65% of adults in New Hanover

County are overweight or obese (Wilmington/New Hanover County, 2012, p. 6).

Environmental Trends

This statewide motivation to expand greenways encouraged Wilmington to develop a

comprehensive greenway plan in 2012. The environmental goal of greenways in Wilmington is

to build them primarily within linear corridors utilizing the ability of greenways to protect

natural habitats, improve water quality and reduce flooding impacts through serving as vegetated

buffers (The City of Wilmington and New Hanover County, 2013, p. 8). Another need for

expansive greenways in Wilmington, NC is their ability to support clear skies, clean rivers and

wildlife.

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In 2009 the Cape Fear River Basin had over 300 miles of streams impaired from urban

runoff, greenways help block runoff as buffers between rivers and also provide easy access for

environmental education opportunities (The City of Wilmington and New Hanover County,

2013, p. 21). According to the U.S. Department of Agriculture natural Resources Conservation

Service agricultural buffers which in this case would be greenways can remove up to 50% of

more nutrients and pesticides and up to 75% of sediment that would otherwise be washed into

waterways. This is much more cost-efficient then than the average water treatment alternative

starting at an average of $5 million (Rails-to-Trails Conservanacy, 2013).

Economic Trends

Other cities in North Carolina have seen extensive benefits through extending their

greenways through increased property values. In Apex, NC homes located adjacent to greenways

added an average of $5,000 to their property value. In 1995 research conducted by American

Lives, Inc. indicated that 77.7% of home buyers listed natural open space as essential in planned

communities with walking and biking paths ranking third as priority in places to buy. The same

study indicated that properties adjacent to greenways typically are 32% higher than properties

greater than 3,200 feet away from greenways (American Trails, 1995). According to the Carolina

Thread Trail that stretches over 15 counties currently in North Carolina homes in the affected

area of the trail have increased approximately 4% in value (Carolina Thread Trail, 2014).

A concern in some communities in the past has been the risk of increased crime and loss

of privacy that could negatively impact property values, which is why it is essential for

developers to communicate the known positive impacts of trails within communities (Racca &

Dhanju, 2006). The myth that trails attract crime was debunked by crime prevention specialist

Tod Schneider who conducted a study that crimes nearby bike paths had no actual connection to

the bike path than the nearby environment such as rivers, underbrush, wildlife, etc. Additionally

through making trails safe with lighting, well in view and adding emergency access points the

threat of increased crime is minuscule (WashCycle, 2014).

Greenways have the potential to produce huge economic development benefits, such as in

the Outer Banks the annual return on bicycle facility development is approximately nine times

higher than the initial investment with $11.80 for every $1 invested and the trails generate $60

million annually (The City of Wilmington and New Hanover County, 2013, pp. 14-15).

Additionally, the OBX trails created over 1,400 jobs that are supported by 680,000 visitors using

the bicycle facilities annually, which represent 17% of all tourists that visit the area (N.C.

Department of Transportation, Division of Bicycle and Pedestrian Transportations, 2004). New

Hanover County is similar to the Outer Banks because of the tourism draw.

Safety and Access Trends

In building greenways local trails that are convenient attract over 50% of nearby

population to use them every week or every day, the distance of the trails do matter in that the

closer they are to communities the more they will get utilized (Active Living Research, 2011, pp.

2-3). Additionally the way trails are built and maintained impact their usage, for example trails

that have good surface condition, streetlights and trailside facilities correlate positively with

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usage increases of 35%-73% in major cities such as Dallas, Chicago and Los Angeles (Active

Living Research, 2011, p. 2).

One of the greatest benefits of trails outside of parks is the universal access to mobility

that they create. Over 60 million American’s are not allowed to drive because they are too

young, 30 million adults are not licensed to drive for various reasons and 8 million Americans

over the age of 60 do not have a driver’s license, which makes access to mobility crucial to

thrive economically, socially and physically (Rails-to-Trails Conservancy). In a comparison of

similar Southeastern and Coastal U.S. cities Wilmington is at the lower level of cyclist and

pedestrian commuters at 1.2% and 2.6% compared to the highest levels of 16.6%, which

supports the need to invest in expansive greenway trails to provide accessibility for citizens to

walk or bike to work (The City of Wilmington and New Hanover County, 2013, pp. 18-19).

Currently Wilmington has over 30 miles of existing trails primarily within parks, about

50 miles of on-road bicycle facilities and over 650 miles of sidewalk. In a survey with over 3,600

Wilmington residents that responded 80% saw creating more greenways throughout Wilmington

as a top priority with 32% stating they use existing greenways multiple times per month (The

City of Wilmington and New Hanover County, 2013, pp. 43-44). Over 50% felt that lack of safe

connections to greenways was the top issue in not using greenways. (The City of Wilmington

and New Hanover County, 2013, p. 45). A survey in 2011 conducted by the North Carolina

Department of Transportation received 16,398 responses to questions regarding bicycle and

pedestrian safety issues specifically in North Carolina and 75% of the respondents felt that across

North Carolina the underlying problem for trails is the inadequate infrastructure with over 75%

of responses feeling that improved roadway design to accommodate cyclists as regular users and

adding sidewalks as a standard feature would help resolve the underlying issue (O'Brien &

Jackson, 2011).

New Hanover County has the highest annual rate of bicycle crashes out of all 100

counties in North Carolina with the City of Wilmington having the 2nd highest annual bicycle

crash rate of all NC cities, increasing greenways and safe access points reduces the likelihood of

accidents (Wilmington/New Hanover County, 2012, p. 7). It is a consistent theme that greenways

provide safe alternative travel choices for residents that wish to bike or walk to nearby

destinations (Pennsylvania Greenways Partnership Commission, 2002, p. 20).

Literature Summary

It is clear through the extensive literature of studies conducted on the costs and benefits

of greenways that the benefits appear to far outweigh the costs for multiple environmental, health

and economic reasons. In considering the development of a greenway it is important to consider

all of the potential benefits of trails as well as costs in order to realistically focus on the potential

biggest benefits for individual communities. In the case of Wilmington there are various

supportive indicators in the literature that make trails a favorable addition throughout the

Wilmington community.

IV. Methodology

For this analysis I have focused on the data provided through the Carolina Thread Trail,

Outer Banks Prosperity Report and Wilmington Comprehensive Greenway Plan to monetize my

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costs and benefits to determine the Net Present Value and Benefit-Cost Ratio. In approaching my

own data collection and analysis for a CBA on greenways I would also utilize several collection

methods described below that were frequent collection methods for the data I have utilized in

this analysis.

Public Input & Standing

To determine the costs and benefits of greenways I would want to get public feedback on

the interest and need for greenways in the Wilmington community. To do this I would hold

public workshops and outreach at local events throughout Wilmington as well as promoting

greenway plans through social media to share proposed greenway maps. The main tool I would

utilize would be a market analysis through conducting a survey that would be accessible online

as well as at local events and public workshops. My rationale for conducting a survey would be

to not only collect data on the interest in expanding greenways in Wilmington, NC but to also

collect data on physical activity levels that could be used in the future to compare with additional

surveys on if physical activity levels increased due to the development of greenways.

In collecting public input I would also want to collect public feedback in communities

where greenways could significantly impact the quality of life for residents. An example of this

would be to go door to door in poorer areas of Wilmington that may be in a food dessert or have

limited transportation options available to get feedback from residents on their likelihood to

utilize a greenway. As discussed in the literature review greenways have the benefit of

connecting communities and providing universal access, I think this focus would be important to

determine where greenways should be planned throughout Wilmington not only to provide better

access for tourists but also to residents in order to improve their quality of life. Through

gathering extensive public input for greenway development it allows planners to gain a better

understanding of where to prioritize the need to develop new greenways. It also evaluates the

willingness to pay from citizens if tax dollars are used to develop some of the greenways (The

City of Wilmington and New Hanover County, 2013, pp. 48-52).

In the topic of building greenways in Wilmington the entire community has standing in

this proposal. Residents in neighborhoods where greenways are proposed have standing because

the trails potentially will go on their property while also possibly increase their property value.

The health of citizens in Wilmington has standing because greenways provide multiple

opportunities for residents to increase physical activity and in turn reduce health care costs.

Future generations have standing because greenways accommodate economic development and

with Wilmington’s predicted population growth the more access citizens have around the

community the more beneficial it will be for everyone in reducing traffic, pollution, accidents

and improving the overall quality of life of citizens.

Wildlife has standing in this proposal not only for wildlife habitats that would be

protected through the development of additional greenways but also for dogs that would have

more activity options because their owners utilize the greenways to walk them more. Children

have standing because greenways provide activity options for them but also educational

opportunities to help them learn about conserving the environment, which could positively

impact Wilmington in the future through educating young generations that could eventually

serve as environmental leaders within the community.

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Intangible & Tangible Costs & Benefits Data

The data used to monetize the costs and benefits of greenways is illustrated in Table 1

below. My rationale for selecting $600,000 for the construction cost per mile for 70 miles is

because that is the estimated cost the Wilmington Comprehensive Greenway Plan provided in

2012 for over 70 miles of proposed trails throughout Wilmington (Wilmington/New Hanover

County, 2012). An estimated of $3,000 per mile for annual maintenance comes from the

greenway data from the Outer Banks, which I feel is similar based on the geographic dynamic of

Wilmington and the Outer Banks such as greenway bridge maintenance, falling limbs, flooding,

etc. based on our weather and geographic similarities (N.C. Department of Transportation,

Division of Bicycle and Pedestrian Transportations, 2004). Additionally it is estimated 5 FT

employees are needed for every 10 miles of trails for annual maintenance, which I have

estimated their salaries of $30,000 to be conservative.

Usage Costs

The usage cost comes from the current Wilmington population of 200,000 through

estimating approximately 47% of the population would use the trails based on a similar study of

the Outer Banks where 47% of residences use the greenways (N.C. Department of

Transportation, Division of Bicycle and Pedestrian Transportations, 2004). I am using an annual

average cost of usage of $209 per user based on the American Trails estimation that includes

maintenance and travel fees for using trails for an estimated usage rate of 47% of New Hanover

County’s population as illustrated in Table 1 (American Trails, 2014). This is a high estimate

for usage costs, but to be conservative in my BCR ratio I wanted to provide a high cost for

citizens using the trails, however in many cases the usage costs is minimal or nonexistent for

people using the trails particularly for walkers or joggers. For all costs I have included a 1%

inflation rate over a period of 20 years, which is the estimated time trails are expected to last.

Year

Construction:

$600,000 pm/70

miles

Staff Wages

$30,000= 5

FT E/10

Miles, 1%

inflation

$3000

Annual

Maintence

per mile (70

miles, 1%

inflation)

Usage Costs=

100,000

Users*$209

annual cost, 1%

inflation

Total Costs

Increased

Tourism Revenue

($60,000,000*.0

1)

Increased Property

Value (167,300 home

value*4% increase

value)*2100 Homes,

1% inflation

Health Benefits ($1

spent=$3 savings)

Jobs Created=

1,400 @

$30,000+1%

inflation

Total Benefits

0 $42,000,000.00 $42,000,000.00

1 $1,050,000 $210,000 $9,614,000.00 $10,874,000.00 $60,000,000 $14,053,200.00 $32,622,000.00 $42,000,000.00

2 $1,060,500 $212,100.00 $9,710,140.00 $10,982,740.00 $60,600,000 $32,948,220.00 $42,420,000.00

3 $1,071,105 $214,221.00 $9,806,280.00 $11,091,606.00 $61,206,000 $33,277,702.20 $42,844,200.00

4 $1,081,816 $216,363.21 $9,902,420.00 $11,200,599.26 $61,818,060 $33,610,479.22 $43,272,642.00

5 $1,092,634 $218,526.84 $9,998,560.00 $11,309,721.05 $62,436,241 $33,946,584.01 $43,705,368.42

6 $1,103,561 $220,712.11 $10,094,700.00 $11,418,972.66 $63,060,603 $34,286,049.85 $44,142,422.10

7 $1,114,596 $222,919.23 $10,190,840.00 $11,528,355.39 $63,691,209 $34,628,910.35 $44,583,846.33

8 $1,125,742 $225,148.42 $10,286,980.00 $11,637,870.54 $64,328,121 $34,975,199.46 $45,029,684.79

9 $1,137,000 $227,399.91 $10,383,120.00 $11,747,519.45 $64,971,402 $35,324,951.45 $45,479,981.64

10 $1,148,370 $229,673.91 $10,479,260.00 $11,857,303.44 $65,621,116 $35,678,200.97 $45,934,781.45

11 $1,159,853 $231,970.65 $10,575,400.00 $11,967,223.88 $66,277,328 $36,034,982.98 $46,394,129.27

12 $1,171,452 $234,290.35 $10,671,540.00 $12,077,282.12 $66,940,101 $36,395,332.80 $46,858,070.56

13 $1,183,166 $236,633.26 $10,767,680.00 $12,187,479.54 $67,609,502 $36,759,286.13 $47,326,651.27

14 $1,194,998 $238,999.59 $10,863,820.00 $12,297,817.53 $68,285,597 $37,126,878.99 $47,799,917.78

15 $1,206,948 $241,389.58 $10,959,960.00 $12,408,297.51 $68,968,453 $37,498,147.78 $48,277,916.96

16 $1,219,017 $243,803.48 $11,056,100.00 $12,518,920.88 $69,658,137 $37,873,129.26 $48,760,696.13

17 $1,231,208 $246,241.52 $11,152,240.00 $12,629,689.09 $70,354,719 $38,251,860.55 $49,248,303.09

18 $1,243,520 $248,703.93 $11,248,380.00 $12,740,603.58 $71,058,266 $38,634,379.16 $49,740,786.12

19 $1,255,955 $251,190.97 $11,344,520.00 $12,851,665.82 $71,768,849 $39,020,722.95 $50,238,193.98

20 $1,268,514 $253,702.88 $11,440,660.00 $12,962,877.28 $72,486,537 $39,410,930.18 $50,740,575.92

Total $42,000,000 $23,119,954 $4,623,991 $210,546,600.00 $280,290,545 $1,321,140,240 $14,053,200.00 $718,303,948.32 $924,798,167.78 $2,978,295,556

Costs Benefits

Table 1

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For monetizing benefits of greenways I have chosen to focus on tourism revenue,

property values and jobs created. Increased physical activity is a proven benefit of greenways,

however I have not included this in my primary itemized comparison as there is not enough

research yet on if greenways are the sole contributor to reduced health care costs. I believe

further studies through conducting surveys after greenways are built in Wilmington to compare

to surveys prior to the greenways on physical activity are needed to accurately monetize

reduction in health care costs. I did however incorporate potential health care cost savings

equivalent of every $1 spent equals $3 in savings in Table 4 to illustrate the potential difference

in NPV and BCR if these savings were considered in the future (Active Living Research, 2011).

As illustrated in Table 1 my estimated benefit of increased tourism revenue is

approximately $60,000,000 annually, which is based on the annual tourism revenue the Outer

Banks receives from over 50 miles of trails (N.C. Department of Transportation, Division of

Bicycle and Pedestrian Transportations, 2004). This is a conservative estimate, but I feel it is

accurate to use for Wilmington with our similarities in tourism attractions and this is also based

on a lower mileage greenway plan of less than 60 miles compared to Wilmington’s planned 70

miles.

For the estimated benefit of property value I have taken the median home value in

Wilmington of $167,300 and raised it 4% in value for homes with a 1% inflation rate over 20

years for homes located in the vicinity of greenways (Zillow, 2014) . This increase in value is

based on the average property value increase of homes located near the Carolina Thread Trail,

which is located across 15 counties in North Carolina and provides a realistic and conservative

increase value to homes in Wilmington (Carolina Thread Trail, 2014). I have estimated

conservatively that there are approximately 30 houses within the nearby vicinity of every mile of

Greenway for 70 miles. This is based on my estimations through the current existing greenways

throughout Wilmington along the Gary-Shell Cross-City Trail.

Table 1 illustrates the monetized values of selected costs and benefits selected based on

their best fit for Wilmington, NC. These values are essential in making final recommendations

for the CBA, however in this analysis there are multiple direct and indirect intangible and

tangible costs and benefits to consider. Table 2 illustrates additional costs and benefits to factor

in with the analysis in making final recommendations for greenway projects in Wilmington.

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V. Results

After reviewing available literature and data on the cost and benefits for developing

greenways focusing on communities in North Carolina I have found the following results listed

in Table 3 with a BCR of 6.37 and NPV of $1,450,476,397.29. Through the collected data I used

a discount of rate of 3% because I feel it is a realistic approach to the value of the benefits of the

greenway outweighing the costs in the future. I did not conduct additional sensitivity analyses

because I felt the BCR and NPV values far exceeded the costs and provided supportive data

showing that benefits outweigh the costs in developing greenways. I was also conservative in the

benefit estimations of jobs, tourism and property value revenues.

Tangible Intangible

Increased Bike/Pedestrian Accidents Increased Crime

Increased Pedestrian/Bikes in Neighborhoods

Tangible Intangible

Construction Destruction of Wildlife Habitats

Maintenance

Land Acquisition

User Maintenance

Staff Wages

Tangible Intangible

Create Jobs Reduce Crime

Attract and Retain Businesses Reduce Air/Noise Pollution

Reduce Pollution Cleanup Costs Connect Communities

Reduce Traffic Improve Psychological Health

Preserve Highway Infrastructure Improve Water Quality

Generate Economic Activity (Events, etc.) Educate Community with Nature

Protect Homes Against Flood Damage Improve Air Quality

Promote Community Thinking & Pride

Tangible Intangible

Increase Property Value Protection of Wildlife

Increase Tourism Preserve Natural Corridors

Increase Local Business Revenue Reduce Pollution Runoff

Reduce Health Care Costs Increase Physical Activity

Provide Universal Access to Community

Increased Opportunity for Active Lifestyles

Improve Cyclist/Pedestrian Sense of Safety

Make Communities More Attractive

Direct

Costs

Table 2: Costs & Benefits

Indirect

Direct

BenefitsIndirect

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Additionally I calculated a NPV+H Horizon Value of $1,707,013,914.70, which supports

positive revenue in the future after 20 years. To estimate cost savings benefits for health care,

while I did not use this in my primary analysis it should be considered that by adding health care

savings of $3 per $1 spent on building trails the NPV increased to $1,979,622,134.48 and the

BCR increased to 8.39. This estimation was based on a study in Nebraska that found every $1

investment equated to $3 in health care cost savings and is illustrated in Table 4 (Active Living

Research, 2011).

Social

Discount Rate

(3% )

Present Value CostsPresent Value

BenefitsNPV

BCR

0 $42,000,000.00 $0.00 -$42,000,000.00 0.00

0.97 $10,557,281.55 $112,673,009.71 $102,115,728.16 10.67

0.94 $10,352,285.80 $97,106,230.56 $86,753,944.76 9.38

0.92 $10,150,390.72 $95,220,672.68 $85,070,281.96 9.38

0.89 $9,951,587.37 $93,371,727.58 $83,420,140.21 9.38

0.86 $9,755,864.73 $91,558,684.33 $81,802,819.60 9.38

0.84 $9,563,209.83 $89,780,845.80 $80,217,635.97 9.39

0.81 $9,373,607.91 $88,037,528.40 $78,663,920.50 9.39

0.79 $9,187,042.47 $86,328,061.83 $77,141,019.36 9.40

0.77 $9,003,495.47 $84,651,788.79 $75,648,293.32 9.40

0.74 $8,822,947.34 $83,008,064.73 $74,185,117.39 9.41

0.72 $8,645,377.15 $81,396,257.65 $72,750,880.50 9.42

0.70 $8,470,762.68 $79,815,747.79 $71,344,985.11 9.42

0.68 $8,299,080.52 $78,265,927.45 $69,966,846.93 9.43

0.66 $8,130,306.14 $76,746,200.70 $68,615,894.56 9.44

0.64 $7,964,414.00 $75,255,983.21 $67,291,569.21 9.45

0.62 $7,801,377.61 $73,794,701.99 $65,993,324.38 9.46

0.61 $7,641,169.61 $72,361,795.15 $64,720,625.54 9.47

0.59 $7,483,761.84 $70,956,711.75 $63,472,949.91 9.48

0.57 $7,329,125.44 $69,578,911.52 $62,249,786.08 9.49

0.55 $7,177,230.85 $68,227,864.70 $61,050,633.84 9.51

$217,660,319.05 $1,387,011,433.22 $1,450,476,397.29 6.37

Results

Table 3: NPV & BCR Primary Analysis

12

Based on my results I feel my key research questions have been answered regarding

whether or not greenways increase tourism and business revenue, create jobs, increase property

values and reduce health care costs. I believe my data supports my questions through producing

positive NPV and BCR values, with the BCR value being well above the minimum

recommendation of one which indicates that greenways are worthwhile investments.

Additionally the benefit values for all of the indicators produced millions and even billions of

dollars in revenue over a twenty year period as illustrated in Table 1.

VI. Recommendations

Through conducting a CBA based on available data from other North Carolina cities as

well as data from public input from the Wilmington Comprehensive Greenway Plan it is my

recommendation to move forward on developing 70 miles of greenway trails throughout

Wilmington because they do suggest the improvement of quality of life for citizens. I believe

through the positive revenue generated from economic development of trails with tourism, job

creation and property values these are all indicators of quality of life improvements.

Additionally the intangible benefits listed in Table 2 should be heavily factored in with

relation to looking at everyone with standing and the long-term goals of greenways which could

significantly improve the health of the Wilmington community. The first priority I recommend

focusing on for starting the greenway expansion would be to improve greenway access to area

Social

Discount Rate

(3% )

Present Value CostsPresent Value

BenefitsNPV

BCR

0 $42,000,000.00 $0.00 -$42,000,000.00 0.00

0.97 $10,557,281.55 $144,344,854.37 $133,787,572.82 13.67

0.94 $10,352,285.80 $128,163,087.94 $117,810,802.15 12.38

0.92 $10,150,390.72 $125,674,484.29 $115,524,093.58 12.38

0.89 $9,951,587.37 $123,234,203.05 $113,282,615.67 12.38

0.86 $9,755,864.73 $120,841,305.90 $111,085,441.17 12.39

0.84 $9,563,209.83 $118,494,872.78 $108,931,662.94 12.39

0.81 $9,373,607.91 $116,194,001.46 $106,820,393.55 12.40

0.79 $9,187,042.47 $113,937,807.26 $104,750,764.78 12.40

0.77 $9,003,495.47 $111,725,422.65 $102,721,927.18 12.41

0.74 $8,822,947.34 $109,555,996.97 $100,733,049.63 12.42

0.72 $8,645,377.15 $107,428,696.06 $98,783,318.90 12.43

0.70 $8,470,762.68 $105,342,701.96 $96,871,939.27 12.44

0.68 $8,299,080.52 $103,297,212.60 $94,998,132.08 12.45

0.66 $8,130,306.14 $101,291,441.48 $93,161,135.34 12.46

0.64 $7,964,414.00 $99,324,617.37 $91,360,203.37 12.47

0.62 $7,801,377.61 $97,395,984.03 $89,594,606.42 12.48

0.61 $7,641,169.61 $95,504,799.87 $87,863,630.26 12.50

0.59 $7,483,761.84 $93,650,337.74 $86,166,575.89 12.51

0.57 $7,329,125.44 $91,831,884.58 $84,502,759.14 12.53

0.55 $7,177,230.85 $90,048,741.19 $82,871,510.33 12.55

$217,660,319.05 $1,826,246,690.15 $1,979,622,134.48 8.39

Results

Table 4: Health Cost Savings NPV & BCR

13

beaches because of the potential tourism benefits. Secondly I recommend prioritizing expanding

the greenways in poorer communities in Wilmington because I feel the impact of quality of life

and health benefits would be substantial in making those communities more connected and

accessible to valuable resources such as food or work.

I do not feel not building greenways is an alternative, however I recommend that prior to

developing more greenways all at once in Wilmington an extensive survey should be conducted

of current usage of greenways in Wilmington as well as physical fitness levels of Wilmington

residents. I would like to collect quantitative data on existing physical fitness levels and how

they change annually after greenways are completed to get a more accurate representation of

whether or not greenways reduce health costs and where Wilmington should focus on building

them to get the most usage. The literature and data suggests that they do reduce health care costs,

but I feel there is not enough support to determine they are the only tool that reduces health care

costs as other factors contribute to this, which is why building the greenways proposed over 10-

15 years would allow time for continuous reassessment.

In conclusion I confidently recommend that building greenways do improve the quality

of life for communities and I believe expanding the greenway system in Wilmington as much as

possible has unlimited benefits that far outweigh the potential costs far into the future. With the

predicted population growth and the increased traffic and development that come along with that

in Wilmington I feel we are only helping ourselves in the community by continuously expanding

the greenway network.

14

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