V. Economic Impact Analysis
The Southeastern Kentucky Agricultural and Exposition Center is expected to have a positive economic impact on the City of Corbin, the Tri-County region, and the state as a whole. Not only will the new facility help stimulate economic activity in the region, but it will enhance the quality of life for Corbin and Tri-County residents by allowing them to stay closer to home.  In turn, Corbin and the surrounding areas will be able to recapture a portion of local resident expenditures that are lost to the larger communities in which events are currently taking place.  Finally, this facility could help stimulate additional regional economic activity by potentially attracting industrial development and new businesses to the area.

The positive fiscal impact will result from both construction and on-going operations.  This section of the report presents the quantitative economic impact of the full development.  All dollar figures are expressed in 2005 constant dollars.

Construction Impacts
Construction impacts will flow from both the use of local labor and the purchase of local materials. Based on a physical development budget of $12 million (in constant 2005 dollars), regional labor impacts are estimated to total $3.5 million and regional expenditures for materials are estimated to total $4.3 million.  The total labor impact translates to 86 full-time employees over a 1.5 year construction period.  Because the construction of the facility will have a temporary impact on the region, incremental expenditure impacts were not estimated.  
Table 12: Tri-County Region Construction Impacts

Source: Bullock, Smith & Partners; and Economics Research Associates, 2005.

Operational Impacts
ERA estimated gross operational impacts, based on the full schedule of 149 event-days projected in the third year of operation and includes both in-state and out-of-state visitation. Attendance is expected to total over 255,000, which was estimated based on a percent occupancy basis by event-type.  Operational impacts were divided into both on-site and off-site impacts.
On-site expenditures include the following: admissions, based on estimates of attendance and average ticket prices for each event-type and concessions, based on the per capita expenditures shown previously. ERA assumed that promoters would keep 100 percent of merchandise sales, as an incentive to sponsoring a show in Corbin and therefore were not estimated in the projected operating revenues.  
There are three categories of off-site visitors; local, daytrip, and overnight.  Table 13 illustrates the distribution of local, daytrip and overnight visitors by event-type. For the purposes of this analysis, local visitors are defined as those living within 50 miles of the Southeastern Kentucky Agricultural & Exposition Center.  Daytrip visitors live between 50 and 100 miles of the facility, while overnight visitors reside over 100 miles from Corbin.  The total number of visitors in each category was estimated based on a percent distribution for each event-type.
Table 13:  Estimated Attendance by Event Type

TOTAL 43,638 80,213 131,150 255,000
There are three categories of off-site expenditures; lodging, restaurant and other.  Total restaurant expenditures for off-site local attendees and daytrip visitors was based on a $20.00 per capita expenditure.  ERA assumed that about 50 percent of local attendees would likely go to area restaurants while attending large concerts and sporting events.  It was assumed that daytrip visitors would spend, on average, $15.00 on other items, including gas and off-site merchandise, during their visit to Corbin.  Overnight visitor expenditure categories include the following: lodging, estimated at $70.00 per capita; restaurant, $34.00 per capita; and other, $17.00 per capita.

Hotel nights were determined on a weighted average basis dependant upon the event type.  It was estimated that two people would occupy each room.  In addition, it was estimated that the city of Corbin would benefit from approximately 75 percent of the hotel room occupancy as over half of the inventory lies at Exit 29. However, given the facility’s proximity to the Exit 25 rooms, it is assumed that the majority of the visitors will stay here.  See Table 26 in Appendix 4 for expenditure impact assumptions.
Table 14:  Total Expenditure Impact of All Events

Total Direct, Indirect, and Induced Expenditures $ 26,224,700
Source: Economics Research Associates, 2005

On-site and off-site expenditures were further described in terms of direct and indirect (multiplier) impacts.  Tax impacts were based on the state and local tax rates outlined in Table 15. The Southeastern Kentucky Agricultural & Exposition Center is projected to generate over $26 million in direct, indirect and induced expenditures annually. Gross state and local tax revenues are estimated to total over $905,000.  
ERA estimates that the total regional tax impact will be about $231,000. This figure is based on a 75 percent capture rate by the City of Corbin, recognizing that some impact will occur outside the city limits.  If Corbin were able to retain all expenditures, total impact to the city would be $275,000.  However, realistically some visitors will be spending restaurant and hotel dollars outside of Corbin.  Therefore it is estimated that the net tax revenues to the City of Corbin will be approximately $206,000 with $675,000 generated for the State of Kentucky.
Table 15:  Annual Projected Tax Revenue Generated by Events