Item No. 7b_supp_1
Meeting date: June 27, 2017

Economic Impact of
the Hiram M.
Chittenden Locks
August 12, 2016

Lake Washington
Ship Canal Users
Group
Prepared for:

Port of Seattle

Reason for the Study
 Ballard Locks is 100 years old and needs up to $60 million in new investment
to make major systems reliable and safe
 USACE (US Army Corps of Engineers) budget process prioritizes investment
based on a formula for national economic benefit that tends to emphasize
shipping tonnage.
 Ballard Locks transits approx. 1 million tons/yr of freight
 U.S. coastal shipping is approx. 1 billion tons/yr (not counting foreign
shipments)
 There are approx. 200 other locks systems in the U.S.
 Ballard Locks provides many benefits for which the Corps' economic analysis
traditionally has not fully accounted

Methodology
 Study Purpose
 Describe and quantify, where possible, the full range of economic activity
facilitated by or dependent on the Locks

 Study Tasks
 Interviews with 55+ businesses, business associations, public agencies, tribes,
USACE
 Collection and analysis of secondary data (past studies, Locks usage and repair
history, state and federal fisheries, Fish & Wildlife, Nat'l Marine Manufacturers
Assn., WA Maritime Federation, City of Seattle, demographic, economic data)
 Economic impact analysis

 Stakeholders contributed to proposal, scope of work, interview
targets, study progress

Analytical Approaches
 Value of business activity and employment that has evolved over a
century and today is directly dependent on Locks operations
 Reduced costs/increased efficiency businesses realize as a result
of the Locks' unique location
 Impact of brief closures on dependent businesses and agencies

 Impact of longer (3-month) closure (would businesses relocate,
downsize, fail?)

Locks-Dependent Businesses
 Businesses that generate revenue directly from operations inside
Locks and depend on transits of materials or customers
 E.g., Shipyards, yacht sales, moorage, construction materials

 Businesses headquartered inside the Locks, generating revenue
primarily outside the locks
 E.g., Marine products manufacturers, commercial fishing companies,
passenger cruise companies

 Businesses with no permanent presence in the lakes or ship canal, but
that benefit economically from services provided inside the Locks
 E.g. Marine insurance, legal, and other professional services; marine salvage
and other vessels not specifically addressed in the report

Ballard Locks Budget and Funding
 Routine Operations and Maintenance Budget
 Between $8.0 and $8.4 million/yr from 2011 through 2017.

 Non-routine Repairs and Upgrades Expenditures
 Avg of $1.8 million/yr
over the same period
 Major projects remain
unfunded

Major (Non-Routine) Projects Needed
Major Project

Approximate Cost

Large Lock Emergency Closure System (partly complete)

$4 million to $8 million

Filling Culvert Valve and Machinery

$5 million to $12 million

Large Lock Gate Rehabilitation

$6 million to $10 million

Emergency Generator Connections

Less than $1 million

Saltwater Drain Intake System and Diffuser Well

$5 million to $10 million

Small Lock Emergency Closure

$1 million to $5 million

Electrical System

$5 million to $7 million

Small Lock Machinery

$3 million to $5 million

Saltwater Barrier Replacement

$1 million to $2 million

Total Needed

~ $30 million to $60 million

Value of the Ballard Locks
 Economic Value
 Environmental and Public
Infrastructure Value

 Tribal Obligations
 Public Safety

Economic Value
 Busiest in nation in vessel transits -
40,000/yr
 12th busiest in commercial transits -
7,500/yr
 Supports $1.2 billion in economic
activity
 Tide-free, freshwater environment
reduces maintenance costs and
prolongs vessel life for 700
commercial and roughly 4,000
recreational vessels

Economic Value (cont.)
 Indirectly supports an estimated $785 million in seafood exports
 2016: 271 vessels 40'+ made ~1,600 transits of Locks
 200+ homeported in Washington

 ~40% of active North Pacific fishing vessels over
58' moored and/or serviced annually inside the
Locks
 Vessels that transited the locks earned over
$500 million in 2016

 One of Seattle's most popular visitor
attractions
 1.25 million visitors annually
 $38 million in visitor-related economic activity

Environmental and Public Infrastructure Value
 Locks, spillway, and fish ladder safeguard $125+ million in salmon
habitat protection and restoration
 The only point of access and egress for salmon migrating in/out of the
Lake Washington/Cedar/Sammamish watershed
 Controls water levels in Lake Washington and Lake Union to maintain
SR 520, I-90, and 75 miles of shoreline in lakes and canal

 Access point for major infrastructure projects including 520 floating
bridge and Ballard/Wallingford stormwater tunnel

Tribal Obligations
 Locks are key to meeting federal responsibilities under treaties with
Muckleshoot and Suquamish tribes.
 Muckleshoot fishing boats use the Locks annually (range of 20-80
vessels/year).
 Muckleshoot biologists work in
partnership with USACE to monitor
and manage fish runs.
 Coho (21k/year)
 Sockeye (115k/year)
 Chinook (11k/year)

Public Safety
 Rapid access between lakes and Puget
Sound saves money and increases
effectiveness for Seattle Fire Department,
Seattle Harbor Patrol, U.S. Coast Guard,
and King County Sherriff
 A major Locks failure due to earthquake or
flooding could jeopardize billions of
dollars in public infrastructure and
threaten human life
 Full extent of safety impacts currently under
study by USACE
 Report anticipated in Fall 2017

Locks Traffic
Recreational vs. Non-Recreational Vessels, 2015

Non-Recreational Vessels by Type, 2015
Other, 25

Cargo/ crew
boats, 604
Nonrecreational
vessels
7,471

Gov't, 792

Passenger
boats/
ferries, 1,094
Recreational
vessels
33,087

Source: USACE

Total Vessel Transits: 40,558

Towboats,
3,414

Commercial
fishing, 1,542

Locks Shipments
Sand and Gravel vs. All Other Commodities, KT, 2015

Commodities other than Sand and Gravel, KT, 2015
Fab. Metal
Products, 13

All Other
Commodities,
250

Other, 25
Manufac.
Prod., 47

Cement &
Concrete, 16
Sand and
Gravel,
838

Pontoon
Pipe, 22

Fish, 46
Machinery,
Bulkheads,
39

Source: USACE

Total Tonnage: 1,088 KT

Ships &
Boats, 40

Major Types of Locks Beneficiaries
 Marine services and manufacturing
 Washington and Alaska fishing fleets
 Marine transport companies
 Passenger cruise companies
 Yacht sales and marinas
 Scientific research vessels
 Recreational visitors
 Property owners
 Recreational boaters
 General public

Economic Impact Analysis
 Locks serve as critical infrastructure that historically has:
 Spurred business development that may otherwise not have occurred
 Provided for more efficient (lower-cost) operations for businesses that rely on
that infrastructure.

 Today a complex web of economic activity depends on safe, efficient,
and reliable Locks operations.
 Fully measuring all of the Locks direct and indirect economic linkages
would be exceedingly complex.

 By focusing on key users and uses, we can make informed estimates of
the scale of economic activity supported by the Locks.

Gross Revenues of Locks-Dependent Businesses
$545 million

Commercial fishing

$163 million

Shipyards/...
Yacht/ boat sales
Freight/ shipping...
Passenger services

$150 million

$109 million
$83 million

Construction

$50 million

Marinas

$32 million

All other

$59 million

Total:
$1.2 Billion

Summary of Business Impacts
Impacts

Total annual gross revenues connected to the Locks
Direct locks-dependent annual payroll

Direct locks-dependent jobs
Locks-dependent annual federal tax revenues

$1.2 billion
$120 million
Total:
3,000
$1.2 Billion
$15 million

Impacts of Locks Closure/Failure
 Service disruption
 Short, scheduled closures mostly manageable
 Long closures would lead to significant layoffs and business closures
 Timing of closure is a major factor in scale of impacts.

 Likely causes of extended closure
 Vessel collision involving miter gates
 Mechanical failure of multiple filling culvert valves
 Flood overpowering/damaging miter gates
 Earthquake

 USACE risk assessment team is studying this issue;
report anticipated in fall 2017

A long-term closure would be
astronomical for us...Contracts would be
lost. All of the shipyards would shut
down. We would have to lay off workers.

- Tug and Barge Company
A three-month closure would mean
laying off half of our workforce. Any
longer, we would go out of business.
- Shipyard Owner
Quite frankly, if we didn't have the
facility inside the Locks, there are not
many options to do business in the
Seattle area.
- Construction Company

The Locks are critical for marine
firefighting and emergency response....
Without the Locks, it would significantly
impact marine operations for
firefighting.
- Seattle Fire Department

Honestly, we could not afford a
three-month closure. I don't think it
would be viable. We are providing a
critical interstate transportation
service that would no longer exist.
- Tug and Barge Company

Economic Impact of
the Hiram M.
Chittenden Locks
August 12, 2016

Lake Washington
Ship Canal Users
Group
Prepared for:

Port of Seattle