V&T expected to generate $90 million in economic impact
Nevada Appeal Staff Writer
A railroad industry consulting company estimates the expansion of the Virginia & Truckee tourist railway will bring more than $90 million in economic activity to the region in construction activity alone, which includes wages, sales tax on materials and similar costs.
A feasibility and economic impact study done by Stone Consulting and Design, of Warren, Pa., took into account spending by the Nevada Commission for the Reconstruction for the V&T Railway, the results of a 1993-94 ridership study for the Virginia & Truckee Railroad from Virginia City to Gold Hill, and the expected increase in employment brought about by the expansion of the line to Carson City.
The study also estimates Carson City will benefit from sales tax, gaming, fuel tax and room tax revenues as well as income from the first three years of operating the railroad. The non-construction amount generated after three years of operation is estimated by the study at $53,155,757.
“I think this (the V&T project) is going to be the biggest boost to our economy locally,” said Kevin Ray, project coordinator for the Nevada Commission for the Reconstruction of the V&T Railway.
Jim Lohse, of the Comstock Historical Society, was skeptical of the findings, however. Lohse, who is often critical of the commission, discounted the findings of the study, which was based on the Regional Input-Output Modeling System or RIMS, created by the U.S. Department of Commerce.
“RIMS studies are inappropriate because they are designed to study outside funds flowing in to a project,” he said. “This studies local funds flowing to the project, that might otherwise have been spent on local businesses.”
The study estimated the existing Virginia & Truckee Railroad, owned by Bob Gray, contributes to the economy of western Nevada because the majority of riders are from out-of-state, and they spend a median of $35 per rider, in addition to the cost of the train trip.
It also said that the Grays’ railroad attracts more than 20,000 visitors a year for a 2.8-mile, 35-minute ride, despite spending less than $20,000 a year on advertising. The implication is that a longer, more scenic ride to Carson City would attract even more visitors.
The study calculated that the construction of the railway to Carson City would create new construction jobs, creating $1.64 in economic activity for every $1 spent by the project.
Another benefit, it says, is the increase in room nights of 3,900 in the first year of operation, 7,300 in the second and 11,000 in the third.
The study also predicted the gaming industry would benefit, as nearly half of the respondents to the V&T ridership survey indicated they spent money gambling. It estimates an increase in gaming of about $9.1 million.
The region would see 3,100 new jobs as a result of the expansion, not only for those directly working on construction, but increased jobs for companies that sell goods and services to the operation, according to the study.
The consultants found that based on 135,000 annual ridership, the first year of operation would provide about $5.7 million to the region in the form of wages, fuel, supplies, guest services, maintenance, equipment and other expenditures.
Carson City is expected to see $1.1 million in the first year, or $286 per day, per couple. By the second year, it is expected to rise to $2.1 million and in the third year, $3.3 million.
Overnight visitors and day-trippers would generate $4.8 million the first year, $9 million the second and $14 million the third, the study estimates.
The figures are calculated based on the 135,000 ridership estimates offered by Sierra Railroad, which was expected to take over operation of the line once it is completed. Tom Gray, son of Virginia & Truckee Railroad owner Bob Gray, said ridership in 2007 on the line from Virginia City to Gold Hill was about 42,000, and he expects it to increase when the 2008 numbers are in.
– Contact reporter Karen Woodmansee at email@example.com or call 881-7351.