Economic impact assessment of the proposed commercial vertical launch complex at Kennedy Space Center

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Title:
Economic impact assessment of the proposed commercial vertical launch complex at Kennedy Space Center
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Creator:
Stevens, Thomas J.
Hodges, Alan W.
Mulkey, W. David
Rahmani, Mohammad
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Food and Resource Economics Department, Institute of Food and Agricultural Sciences, University of Florida
Place of Publication:
Gainesville, Fla.
Publication Date:
Copyright Date:
2008

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Prepared under Technical Services Agreement number KSC0817904 for Dynamac Corporation, Kennedy Space Center, Florida

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Economic Impact Assessment of the Proposed Commercial Vertical

Launch Complex at Kennedy Space Center


Final Project Report
Prepared under Technical Services Agreement number KSC0817904
for Dynamac Corporation, Kennedy Space Center, Florida



Thomas J. Stevens, Alan W. Hodges *, W. David Mulkey and Mohammad Rahmani
University of Florida, Institute of Food and Agricultural Sciences
Food and Resource Economics Department
P.O. Box 110240, Gainesville, Florida 32611-0240


Corresponding author contact:
352-392-1845 x312
awhodges@ufl.edu
economicimpact.ifas.ufl.edu



October 20, 2008








Economic Impact Assessment of the Proposed Commercial Vertical
Launch Complex at Kennedy Space Center

Executive Summary
The purpose of this study is to evaluate certain economic impacts associated
with the proposed construction and operation of a Commercial Vertical Launch Complex
(CVLC) at Kennedy Space Center, Florida, from 2008 through 2020. Kennedy Space
Center (KSC) is located in Brevard County, on the east coast of central Florida. The
study-area used for this analysis includes Brevard, Orange and Volusia Counties.
The estimated economic impacts for this analysis were generated using an input-
output model of the study area constructed with IMPLAN Professional software and
databases. The budget for construction and ground operations associated with the
CVLC was developed by Reynolds, Smith & Hill, Inc., and totaled approximately $949.1
million. It was assumed that 100 percent of the funding for these expenditures would
originate from outside the study area, thus representing new dollars to the local
economy and generating multiplier effects. Spending estimates from this budget were
allocated to various IMPLAN industry sectors to estimate the positive economic impacts
of the project. Negative economic impacts associated with possible temporary closures
of the Canaveral National Seashore and the Merritt Island National Wildlife Refuge
during CVLC launch operations were also evaluated.
The net total (sum of positive and negative) economic impacts from the
development of the CVLC are shown in table ES1 below. All impacts are given in 2008
dollars. Impacts for output, value-added, labor income, other property type income,
indirect business taxes, and employment are shown in the individual columns. The
direct, indirect, induced, and total economic impacts are reported in separate table
rows. Direct impacts are the regional changes in revenues, income, taxes and jobs that
result from the initial round of spending and employment activities associated with the
CVLC project. Indirect effects occur when directly impacted businesses alter their
purchases of intermediate inputs from the local supply chain. Induced impacts occur as
employees and proprietors of directly and indirectly impacted businesses adjust their
spending for personal consumption as earnings increase or decline. Total impacts are
the sum of these direct, indirect and induced effects, and measure the full economic
impacts of an activity as it ripples through a regional economy.








The net output impacts associated with the CVLC project are estimated to total
$1.881 million from 2008 through 2020. Value-added impacts, which represent the sum
of labor income, other property type income and indirect business taxes, totaled $1,107
million. Labor income, which represents employee and proprietor earnings, totaled
$848.5 million. Other property type income, which includes corporate profits, rents,
dividends, and interest, totaled $202.5 million. Indirect business taxes, which includes
sales, excise and property taxes (but not taxes on income or profits), totaled $55.8
million. The net number of job-years (full and part-time) created as a result of the CVLC
project are estimated to total 16,340.
The most direct way to compare the economic impacts of the proposed CVLC to
the economic activity in the study area, or to current NASA activities at Kennedy Space
Center, is in terms of jobs. In 2006 the Bureau of Economic Analysis estimated that
there were 1.36 million jobs in the three-county region of east central Florida. The total
employment impact of NASA at KSC for 2007 was estimated at 35,960 jobs. The total
net employment impact of 16,340 job-years for the CVLC project, represents about
1,257 continuous jobs over the project's 13 year duration. This is equivalent to about
3.5 percent (on average) of the employment created by NASA in 2007, and about 0.09
percent of the total employment in the three-county study area.
The estimated economic impacts resulting from possible reductions in
recreational visitors to the Merritt Island National Wildlife Refuge and the Canaveral
National Seashore were relatively minor compared to the positive impacts generated by
spending and employment generated by the CVLC project. The relative size of the
maximum anticipated impacts from the closure of recreational areas ranged from 3.2 to
6.9 percent of the respective positive impacts from CVLC construction and ground
operations. In percentage terms, the most affected measure of economic impact from
reduced visitor spending was in the form of indirect business taxes, which were
estimated to be 6.9 percent as large as the positive impacts of the CVLC project.









Table ES1. Net economic impacts associated with the construction and operation of a
Commercial Vertical Launch Complex at Kennedy Space Center, 2008 2020.
Valu- Lar Other Indirect
Value- Labor
Output added Income Property Business Employment
Effect Level (Mn$) (Mn$) (Mn$) Income Taxes (jobs)
(Mn$) (Mn$)
Direct 911.3 531.0 471.1 49.5 10.5 8,086
Indirect 229.5 124.0 90.9 24.7 8.5 1,793
Induced 740.4 451.7 286.5 128.3 36.8 6,462
Total 1,881.1 1,106.7 848.5 202.5 55.8 16,340
All values in 2008 dollars. Totals may not sum exactly due to rounding.
Employment impacts include fulltime and part-time positions.









Economic Impact Assessment of the Proposed Commercial Vertical
Launch Complex at Kennedy Space Center

Introduction

The purpose of this study is to evaluate certain economic impacts associated

with the proposed development and operation of a Commercial Vertical Launch

Complex (CVLC) at Kennedy Space Center, Florida, from 2008 through 2020. 1

Kennedy Space Center (KSC) is located in Brevard County, on the east coast of central

Florida, just east of Titusville (Figure 1). It is envisioned that the proposed CVLC would

include two separate launch pads along with associated facilities for vehicle assembly,

processing and testing, propellant storage, and possibly, launch control.

There are four proposed sites for the CVLC (Figure 2). One of these sites is

located within the traditional operational area of Kennedy Space Center, just south of

Launch Complex (LC) 39A, on the north end of the Banana River (Site 1). Another

proposed site (Site 2) is located near the intersection of the A. Max Brewer Memorial

Parkway (State Road 406) and Kennedy Parkway (State Road 3), on the southwest

Figure 1. Study area for proposed Commercial Launch Facility at Kennedy Space
Center, Florida.


GainesvIlle



Ocala L aytona Beach A t I a n t I c

Florida volusia Co. o e a
I FI
v .. : Kennedy Space
I,- U. -- Center
Orlando
Orange Co. .
Kissimmee
As lelbourne
a" .
Clearwater CJ
Tampa
Ste
Petersburg
Fort Pierce
araisota

1 The CLVC project was initially scheduled to begin in the fourth quarter of 2008. By the time this report was in its
final draft form, it no longer appeared certain that the project would begin before 2009.








Figure 2. Location of proposed sites for Commercial Vertical Launch Complex at
Kennedy Space Center, Florida.


Source: Dynamac Corporation.


side of Mosquito Lagoon. Site 3 is on the Cape Canaveral Air Force Station (CCAFS),
south of LC 40 and north of LC 37 on Phillips Parkway. Site 4, also on CCAFS, is the
former site of LC 34, east of the intersection of Phillips Parkway and ICBM Road.
Positive economic impacts of the commercial launch facility are anticipated from
spending and employment for the construction and operation of the space vehicle
processing and launch facilities to be located at the KSC. Some negative economic
impacts from this project may take place due to recurring temporary closures of certain
recreational areas located within the Merritt Island National Wildlife Refuge (MINWR)
and the Canaveral National Seashore (CNS). These two areas are major recreational
attractions on Florida's east coast. Both are located mostly within the boundaries of the
Kennedy Space Center, and are jointly managed by the National Aeronautics and








Space Administration (NASA), the National Park Service (NPS), and the U.S. Fish and
Wildlife Service (USFWS).
Since the late 1950s, the development and operation of the NASA space
program at KSC has provided a significant stimulus to the economy of east-central
Florida. In fiscal year 2007, direct spending by NASA at the KSC totaled $1.66 billion
(Bn) for Brevard County alone (NASA and W. Warren McHone). Another $123 million in
direct spending by the KSC took place in the remaining counties of Florida. In 2007,
approximately 14,500 jobs were based at KSC and approximately ninety-four percent of
those employees resided in Brevard County, with the remaining six percent living in
other counties in Florida. These jobs generated approximately $1.1 Bn in gross
earnings for the State of Florida in 2007. The total economic impact of the KSC for
2007 was estimated at $4 Bn in output, $2 Bn in household income and 35,960 jobs
(NASA and W. Warren McHone).
In 2004 it was decided that the NASA Space Shuttle program would be retired in
2010. It is anticipated that there will be a substantial reduction in KSC related economic
activity in the area when this occurs. The proposed commercial vertical launch program
may help soften some of these losses. Expenditures for the CVLC are projected to total
nearly $950 million in 2008 dollars through the year 2020.
In order to maintain both public safety and operational security, the Federal
government acquired additional lands adjacent to the operational areas of the KSC and
gave them special designations that would preclude commercial and residential
development, and preserve their exiting natural ecosystems into perpetuity. These
areas now comprise the MINWR and the CNS.
The MINWR overlies the KSC and encompasses about 140,000 acres,
consisting of brackish estuaries and marshes, coastal dunes, and native forests.
MINWR is an internationally recognized wildlife, fishing, boating and bird watching
attraction for locals and tourist alike, that received an estimated 690,000 recreational
visitors in 2007 (Whitmore, MINWR). Public use activities include hiking on back-country
trails, wildlife observation and photography, manatee viewing, a self-guided auto-tour at
Black Point Wildlife Drive, fishing, waterfowl hunting, boating, canoeing/kayaking,
camping and environmental education. Certain sections of MINWR are permanently
closed to the public. Other sections are closed temporarily during Shuttle launch and








landing operations. It is anticipated that launch operations associated with the CVLC
may result in closures for MINWR ranging from zero to forty days per year, depending
on which site is chosen for development and the number of scheduled launches. At the
time of this report, it was anticipated that there would be no more than 18 launches per
year at the CVLC, once launch operations began.
The CNS consists primarily of 24 miles of undeveloped Atlantic coastline
immediately north of the operations area of KSC. It covers approximately 57,000 acres.
All but the north end of CNS (Apollo Beach) lies within MINWR and KSC. CNS is
accessible by State Road A1A from the north, to Apollo Beach, and by State Road 402
from the south, to Playalinda Beach. A large middle section, Klondike Beach, is
managed as a "back-county" area, where no vehicles are allowed and only a small
number of hikers are permitted each day. Nearly 538,000 visitors are estimated to
have recreated at Playalinda Beach in 2007 (U.S. Dept. of the Interior, National Parks
Service). This is despite it being closed during Space Shuttle launch operations for 20
days. When launch operations begin at the CVLC, it is estimated that Playalinda Beach
may be closed for as many as 40 days each year.
The extent of recreational closures at the MINWR and CNS will be dependent on
which of the four sites is chosen for the CVLC, and on the future schedule of launch
activities by commercial vendors. It is anticipated that if Site 2 is selected for
development, then closures of up to 40 days per year may take place, due to its relative
proximity to the CNS and Mosquito Lagoon in the MINWR. There would likely be no
closures, if sites 1, 3, or 4 are developed instead.
The Space Shuttle and other space related programs at the KSC also draw
visitors to east-central Florida for business and recreational purposes. This would
include recreational visitors to the Kennedy Space Center Visitor Complex, and
individuals who travel to the area to observe launches and landings. A 2002 study by
PMG Associates, Inc., for the Florida Space Coast Office of Tourism documented some
of the impacts from these types of visitors. Since it was not known how the
development of the CVLC would affect this type of visitation to the study area, it was not
evaluated in this analysis.









Analysis Methodology


Study Area Definition and Description
Economic impacts of the CVLC project were evaluated for the regional economy
of east central Florida, consisting of Brevard, Orange, and Volusia counties (Figure 1).
County-to-County Worker Flow Files from the 2000 Census indicate that 97.6 percent of
workers in Brevard County reside within these three counties (U.S. Dept. of Commerce,
Bureau of Census). The economy of the study area is dominated by Orange County,
which has over 850,000 (62.6 percent) of the area's 1.36 million jobs (Table 1).
Twenty-one percent, or 288,676, of the area's remaining jobs are located in Brevard
County, and 16.2 percent, (220,375) are located in Volusia County. The total number of
jobs in the study area grew by 16.7 percent from 2000 to 2006 (US Dept. of Commerce,
Bureau of Economic Analysis). In 2006, personal income for the study area totaled
nearly $74 Bn, in 2008 dollars. Nearly 53 percent, or $38 Bn, of that income went to
residents of Orange County. Brevard County garnered nearly $20 Bn, or 26.7 percent,
of the area's total personal income. In real terms, personal income in the study area
grew by nearly 22 percent from 2000 to 2006. The three-county region accounted for
10.3 percent of Florida's total personal income for 2006.


Table 1. Employment and personal income statistics for Brevard, Orange, and Volusia
Counties in Florida, 2006.
Employment Change Personal Income Change
Region 2006 since 2000 2006 since 2000
Jobs Percent Percent $million Percent Percent
Brevard 288,676 21.2% 18.6% 19,678 26.7% 20.4%
Orange 851,093 62.6% 14.6% 38,188 51.7% 23.0%
Volusia 220,375 16.2% 23.0% 15,937 21.6% 20.8%
Area Total 1,360,144 100.0% 16.7% 73,803 100.0% 21.8%
Florida 10,521,966 17.8% 719,699 23.8%
Source: Regional Economic Information System, Bureau of Economic Analysis, U.S. Department of
Commerce. http://www.bea.gov/bea/regional/reis/default.cfm?catable=Sinqle%20Line
Personal Income values were adjusted to 2008 dollar equivalents using the Bureau of Labor Statistics,
Consumer Price Index All Urban Consumers, for June, 2008.









Regional Economic Impact Analysis
The economic impacts estimated in this study are based on input-output (1-0)
analysis and models. 1-0 analysis is a standard technique for estimating the secondary
(indirect and induced) economic consequences, or impacts, that occur when there is a
change in the flow of dollars and jobs into or out of a regional economy. 1-0 models are
mathematical representations of an economy formulated in terms of transactions
between industries, governments, employees, and households (Schaffer, 1999). These
models are based on detailed business and demographic data collected by agencies of
the Federal and State governments. From these models, industry level and aggregate
economic multipliers are calculated, and then used to estimate indirect and induced
impacts or effects. Indirect effects occur as businesses change the amount of inputs
purchased through the supply chain to produce the goods and services purchased in
the initial (direct) transactions. Additional induced effects occur as household spending
responds to changes in employee and proprietor earnings.
The types of economic impacts typically estimated with I-0 models include output
or gross revenues, value-added (which includes labor income, other property type, and
indirect business taxes), and employment or jobs. Each of these measures represents
a different way of assessing the size or contribution of a particular activity or event to a
regional or national economy. Detailed definitions of these types of impacts or effects
can be found in the glossary (Appendix B) at the end of this report.
The economic impacts of the CVLC were evaluated using the IMPLAN
Professional software system, which is an I-0 modeling system comprised of
software tools and regional economic databases (Minnesota IMPLAN Group). It
includes data on U.S. economic activity at the county level for 509 different industry
sectors, as well as for employment, households, governments, commodity production,
trade, transfer payments, and capital investments.2 For this analysis, the IMPLAN
model constructed to represent the economy of east-central Florida was based on 2006
data using the software's default modeling parameters.




2IMPLAN uses a sectoring scheme similar to North American Industry Classification System (NAICS): For details
see hllip "\ .implan.com/librarv/Ddf files/implan sectoring 2001.pdf .








The first step in assessing economic impacts of the CVLC project was
determining the level and type of changes (positive and negative) in spending and/or
employment that would occur as a result of the project. Once these values were
estimated, they were allocated to the appropriate industrial or institutional sectors within
the IMPLAN model. Consideration was given to how much of the spending would take
place inside the study area, and how much of the spending would occur at the retail,
wholesale or producer levels.

Construction and Ground Operations Expenditures
This assessment is for the first three phases of development and operations of
the CVLC project, initially scheduled from 2008 through 2020. The budget for these
activities was developed by Reynolds, Smith & Hills, Inc., and provided to FRED by the
Dynamac Corporation for this purpose. This budget is summarized below in Table 2.
At the time of this analysis, expenditure and employment data for launch and payload
operations associated with the CVLC project were not available. Thus the economic
impacts for these aspects of the project were not evaluated.
Project activities in Table 2 are categorized by phase and type of activity
(construction or ground operations). Proposed expenditures on construction could begin
in 2008 and continue through 2018, totaling $709 million (Mn), or 74.7 percent of the
project's total budget. Significant expenditures would not begin until 2010 with the start
of construction on the horizontal vehicle processing facility and vertical launch pad, in
Phase 2A. Ground operations would begin in 2009 and continue through 2020.
Proposed expenditures for these activities total $240 Mn (25.3 percent of total) over the
life of the project. Altogether, expenditures for construction and ground operations sum
to slightly over $949 Mn, in 2008 dollars (Table 2).









Table 2. Projected expenditures for construction and ground operations for the
Commercial Vertical Launch Complex at Kennedy Space Center.

Phase Type of Activity Years Expenditure ($)
1-A. Relocation of Advanced Technology Development Center (ATDC) facilities.

Construction 2008-09 $1,200,000
Ground Operations 2009-11 $2,106,203
1-B. Construction and operation of maintenance and storage facility for the anchor
tenant.

Construction 2010 $11,699,000
Ground Operations 2011-12 $3,276,315
1-C. Construction and operation of administration and control facility for the anchor
tenant.

Construction 2010-11 $10,686,000
Ground Operations 2012-20 $33,699,240
Phase 1 Total $62,666,758
2-A. Construction and operation of horizontal vehicle processing facility and vertical
launch pad.
Construction 2010-12 $204,230,000
Ground Operations 2013-20 $59,909,760
2-B. Construction and operation of a second bay to the horizontal processing facility
with equipment and infrastructure to accommodate a second horizontal provider

Construction 2012-14 $40,569,000
Ground Operations 2014-20 $51,172,920
2-C. Construction and operation of a third bay to the processing facility along with
further accommodations for a third horizontal launch provider
Construction 2014-15 $39,884,000
Ground Operations 2015-20 $41,188,960
Phase 2 Total $436,953,640
3-A. Construction and operation of a new launch pad and vertical vehicle integration
facility for a fourth horizontal launch provider
Construction 2014-16 $284,315,000
Ground Operations 2016-20 $32,451,120
3-B. Construction and operation of an additional bay to vertical processing facility with
equipment and infrastructure to accommodate a second vertical launch provider.

Construction 2017-18 $116,472,000
Ground Operations 2018-20 $16,226,560
Phase 3 Total $449,463,680

Construction Total $709,055,000
Ground Operations Total $240,029,078
Grand Total $949,084.078


All values in 2008 dollars.








In Table 3, a summary of the allocation of construction and ground operation
expenditures to IMPLAN industry sectors is shown. Construction expenditures are split
three ways between IMPLAN sectors for "Manufacturing and Industrial Buildings",
"Highways, Streets, Bridges and Tunnels", and "Other New Construction". Other New
Construction includes activities like non-water or sewer pipeline construction, construction
of power and communication transmission lines, and construction of tank storage facilities
for water and other liquids or gases. A minor share of construction expenditures were
allocated to Commercial and Institutional Buildings, which occurs in Phase 1 of the project
for administration, maintenance and storage buildings (Table 3).
The largest share of ground operation expenditures (31.2%) in Table 3 were
allocated to Facilities Support activities, which includes maintenance, janitorial, trash
disposal, security, mail routing, and reception services for buildings and facilities
developed by the project (IMPLAN sector 453). The next largest sector allocation (28.1 %)
went to Support Activities for Air Transportation (sector 397). This involves the fueling,
ferrying, inspection, testing, and maintenance and repair of aircraft, or in this case,
spacecraft. Another 28 percent of ground operations expenditures were divided equally
between IMPLAN sectors 354 (Missile and Space Vehicle Manufacturing), and 355 (Parts
for Space Vehicles and Missiles). The remaining 12.5 percent of ground operation
expenditures were allocated to Telecommunications, Data Processing Services, Scientific
Research, Management, Office Administration, Warehousing and Storage, and Wholesale
Trade (Table 3). All expenditures for construction and ground operation activities
associated with the CVLC were treated as "new" dollars entering the regional economy of
east central Florida. As a result, all of these expenditures will generate multiplier effects
that will contribute to the overall impacts of the project.









Table 3. Summary of Commercial Vertical Launch Complex expenditures by IMPLAN
sector.
IMPLAN Sector Name (number) Expenditure ($) Percentage
Construction
Manufacturing and industrial buildings (37) 241,618,333 34.1%
Commercial and institutional buildings (38) 22,385,000 3.2%
Highways, streets, bridges, and tunnels (39) 202,233,333 28.5%
Other new construction. (41) 242,818,333 34.2%
Total Construction $709,055,000 100.0%

Ground Operations
Missile and space vehicle manufacturing (354) 33,491,220 14.0%
Parts for space vehicles & missiles (355) 33,491,220 14.0%
Wholesale trade (390) 526,551 0.2%
Support activities for air transportation (397) 67,508,991 28.1%
Warehousing and storage (400) 2,621,052 1.1%
Telecommunications (422) 6,739,848 2.8%
Data processing services (424) 6,739,848 2.8%
Scientific research and development (446) 526,551 0.2%
Management of companies and enterprises (451) 6,739,848 2.8%
Office administrative services (452) 6,739,848 2.8%
Facilities support (453) 74,904,102 31.2%
Total Ground Operations $240,029,078 100.0%

Grand Total $949,084,078
All values in 2008 dollars


Recreation and Tourism Expenditures
The maximum anticipated reductions in recreational spending in the study-area due
to temporary closures of the MINWR and Playalinda Beach at CNS are estimated in
Tables 4 and 5. These reductions are based on annual visitation counts and estimates

provided by the NPS and the USFWS (Table 4). Since visitor counts were obtained
independently from CNS and MINWR, it is possible some double counting occurred. This
would occur when an individual or group visited both CNS and MINWR on the same day.
To estimate the average total spending for each activity per day, annual visitation numbers

were multiplied by estimates of the average daily expenditures per person per day for each
activity, which were obtained from the USFWS, and Hazen and Sawyer, P.C. (Table 5).
Multiplying the total daily spending estimates by the maximum anticipated number of
closure days per year (40) provided estimates of annual spending reductions for each

activity (Table 5). The maximum total reductions in recreational expenditures over all









MINWR and CNS activities by non- residents as a result of the closures is estimated at

$6.6 Mn per year, in 2008 dollars. For resident visitor spending, the estimated reduction is

$2.5 Mn per year (Table 5).

If launch operations begin in 2013 (after completion of Phase 2A), then these

spending reductions will occur for eight successive years (2013 2020) over the timeline

of the budget. In this case, the maximum total estimated recreational spending reductions

over the project budget time-line will equal $52.8 Mn for non-resident visitors, and $20.1

Mn for resident visitors (in 2008 dollars). The reduced spending by non-residents will have

negative multiplier effects for the region's economy in addition to its direct impact, because

this reduction represents lost "new" dollars that no longer enter the regional economy. In

contrast, the negative impacts from reduced resident spending are limited to their direct

effects ($20.1 Mn).

Table 4. Annual and estimated daily recreational visitor counts and share of user-days by
non-resident visitors for Merritt Island National Wildlife Refuge and Canaveral
National Seashore, Florida, in 2007.

Totl A l Average Share of
number of User Days by
Activity (Area) Visitors ins er N
2007 Visitors per Non-
Day1 Residents
Column A B C
Fishing/boating 48,000 161 25%
(Southern Mosquito Lagoon)
Waterfowl hunting 8,032 27 60%
(Southern Mosquito Lagoon & other)
Wildlife viewing/photography 477,500 1,602 40%
(Black Point Drive, etc.)
Hiking 150,000 503 33%

Canoeing/Kayaking 3,000 10 25%

Bicycling 3,000 10 33%

Camping (Dummit Grove) 300 1 33%

Swimming (Playalinda Beach) 537,813 1,582 40%
Total All Activities 2 1,227,645 3,611
Sources: Merritt Island National Wildlife Refuge (Doran Whitmore), and Canaveral National Seashore (NPS Stats
website: http://www.nature.nnps.gov/stats/park.cfm?parkid=315).
1 Column B = column A (the number of days the respective area is open to the public each year);
2 Values may not sum exactly due to rounding.









Table 5. Estimated annual reductions in spending by recreational visitors at Merritt Island National Wildlife Refuge and
Canaveral National Seashore, due to closures for commercial launches at Kennedy Space Center.1
Average Trip-Related
Spending Per Total Trip-Related Estimated Annual Spending Reductions
Activity (Area) Person-Day Spending Per Day as a result of Closures 2
Non- Non- Total Non- Total
Residents Residents Residents
Residents Residents All Users Residents All Users
Column D E F G H I J K
Units $s $s $s $s $s $1,000s $1,000s $1,000s
Fishing/boasquito Lagoon) ing $144 $34 $5,780 $4,080 $9,859 $231,182 $163,187 $394,369
(Southern Mosquito Lagoon)
Waterfowl hunting $345 $38 $5,581 $410 $5,990 $223,232 $16,384 $239,616
(Southern Mosquito Lagoon & other)
Wildlife viewing/photography $110 $26 $70,346 $24,760 $95,106 $2,813,845 $990,387 $3,804,232
(Black Point Drive, etc.)
Hiking $110 $26 $18,231 $8,685 $26,916 $729,243 $347,413 $1,076,656

Canoeing/Kayaking $125 $26 $314 $194 $508 $12,541 $7,778 $20,319

Bicycling $110 $26 $365 $174 $538 $14,585 $6,948 $21,533

Camping (Dummit Grove) $110 $26 $36 $17 $54 $1,458 $695 $2,153

Swimming (Playalinda Beach) $102 $26 $64,483 $24,442 $88,925 $2,579,315 $977,688 $3,557,003

Total All Activities 3 $165,135 $62,762 $227,897 $6,605,401 $2,510,480 $9,115,881

Source for per-person-day spending: US Fish and Wildlife Service, 2008; and, Hazen & Sawyer, P.C., 2008.
1 Spending values were converted from 2007 to 2008 dollars using the Consumer Price Index (for all Urban Consumers) for June 2008, divided by the annual CPI for 2007
(or a factor of 1.0553).
2 Represents closure of 40 days annually based on 18 launches per year.
3 Values may not sum exactly due to rounding.
The computations used to derive the estimates in the columns of Tables 4 and 5 are as follows: B = A + (the number of days the respective area is open to the public each
year); F=BxC x D; G= B x (1 -C) xE; H=F+G; I = Fx 40+1,000; J = G x 40 1,000; K= I +J.








The breakout of visitor expenditures by expense item and IMPLAN industry
sectors, as shown in Table 6, was derived from Table 2.11 in the Hazen and Sawyer,
P.C. study entitled "Indian River Lagoon Economic Assessment and Analysis Update",
(Aug. 2008). Expenditure data in the Hazen and Sawyer study were developed from a
survey of nearly 400 visitors to the Indian River Lagoon (which includes MINWR). The
largest expense category (at over 30 percent of total spending) was for "Shopping and
Sundries", which was allocated to IMPLAN Sector 410 (General Merchandise Stores)
(see Table 6). Boat and Auto Fuel (Gasoline Stations) was the next largest visitor
expenditure category at nearly 21 percent of total spending. Other sectors which
captured double digit percentages of total visitor expenditures include Food Service and
Drinking Places (14.1 percent), and Boat and Equipment Rental (11.2 percent). The
remaining 23.5 percent of total visitor expenditures were allocated among eight
additional spending categories as shown in Table 6.
For this analysis, all changes in expenditures were assumed to have occurred
within the study area of Brevard, Orange and Volusia Counties, so there would be no
leakage of spending for the first round of transactions. Whether subsequent rounds of
spending occur within the study area is determined within the IMPLAN model by a set of
econometrically estimated regional purchase coefficients. Some of the changes in retail
purchases by recreational visitors were margined so that the cost of goods sold were
not included in the direct impacts. This would be the case for changes in visitor
expenditures with Motor Vehicle and Parts Dealers, Food and Beverage Stores, Gas
Stations, Sporting Goods Stores, and General Merchandise Stores, where there would
be little or no physical transformation in the goods sold by the vendor. These spending
estimates and parameters were entered into the IMPLAN model and the economic
impacts of the CVLC project were estimated from the model's economic multipliers.









Table 6. Summary of recreational user spending reductions due to commercial launch
closures at Kennedy Space Center, by economic sector, 2013--2020. 1,2.

Percent of Non- Residents Total All
Expense Item IMPLAN Sector Total Residents Users
Spending 2 $1,000 $1,000 $1,000
401 Motor vehicle and
Boat Repairs / Purchase 401 velerand 0.1% $34 $13 $46
parts dealers
Food and Beverages 405 Food and beverage 8.6% $4,573 $1,738 $6,312
Stores stores
Boat and auto fuel 407 Gasoline stations 20.7% $10,961 $4,166 $15,126
Tackle, bait, and/or ice 409 Sporting goods 4.9% $2,605 $990 $3,596
stores
410 General
Shopping and Sundriesrchdise stores 30.5% $16,104 $6,121 $22,225
merchandise stores
432 Automotive
Auto Rental, Taxi, Bus 432 Automotive
A Rens equipment rental and 5.6% $2,950 $1,121 $4,071
leasing
435 General and
Boat and Equipment 435 General and
ment consumer goods 11.2% $5,918 $2,249 $8,168
rental
Park Entrance Fees 475 Museums, historical 0.1% $57 $22 $79
sites, zoos, and parks
Ramp, Marina and 478 Other amusement 0.1 $ $
0.1% $74 $28 $102
Parking Fees and recreation
480 Other
Camping fees accommodations 1.2% $633 $241 $874
(includes campgrounds)
481 Food services and
Restaurants and Bars 481 -od erviceand 14.1% $7,461 $2,836 $10,297
drinking places
Lodging 485 Hotels and motels 2.8% $1,472 $559 $2,032
Total 100% $52,843 $20,084 $72,927
1 Represents closure of 40 days annually over 8 years, based on a maximum 18 launches per year.
2 Source for sector selection and expenditure share: Hazen and Sawyer, P.C., "Indian River Lagoon
Economic Assessment and Analysis Update", Table 2.12, August 2008.








Results


Construction and Ground Operations Impacts
Summary results of the positive economic impacts of expenditures for Phases 1A
through 2A, and 2B through 3B, of the CVLC are shown in Table 7 In Table 8, the
positive economic impacts of expenditures for CVLC construction and ground
operations are summarized. All results are given in 2008 dollar values and no
adjustment in these values was made respective to the timing of the impacts. More
detailed economic impacts by two digit NAICS sectors are provided in Table Al in
Appendix A of this report.
Impacts for output, value-added, labor income, other property type income,
indirect business taxes and employment are shown in the individual columns of Tables
7 and 8. The direct, indirect, induced, and total economic impacts are reported in
separate table rows. Direct impacts are the revenues, income, taxes and jobs
generated directly by expenditures on the CVLC project. As previously mentioned,
indirect effects occur when directly impacted businesses use revenues originating from
outside the region to purchases inputs (goods and services) from the local supply chain.
Induced impacts from non-local revenues occur when the households of employees and
business proprietors spend their income or profits for personal consumption at other
regional businesses. Total impacts are the sum of these direct, indirect and induced
effects, and measure the full economic impacts of an activity as it ripples through the
regional economy.
The total output impact generated by Phases 1A through 2A was estimated to
equal nearly $676 Mn in 2008 dollars (Table 7). Value-added impacts represent the
sum of labor income, other property type income, and indirect business taxes. The total
value-added impact of the CVLC during phases 1A through 2A was estimated at $396
Mn (Table 7). Labor income, which represents the sum of employee compensation
and proprietor profits, was estimated to equal nearly $300 Mn. Other property type
income consists of rents, royalties, interest, dividends and corporate profits. This
impact was estimated to equal $76 Mn for these phases of the CVLC project. Nearly
$21 Mn in indirect business taxes, which represent excise, property, and sales taxes, as
well as business and licensing fees, are estimated to result from the CVLC project. This
figure does not include taxes on income or profits. Employment impacts represent the









number of full and part-time jobs created by an economic activity. A total of 5,863 job-
years are estimated to result from the direct, indirect and induced effects of these first
phases of the CVLC project. (Table 7). If activities of the first phase span 13 years,
then this would represent 451 continuous jobs over the duration of that phase.

Table 7. Economic impacts of expenditures for the Commercial Vertical Launch
Complex at Kennedy Space Center, by project phase, 2008 2020.
Va- L r Other Indirect Employ-
Value- Labor
Output added income Property Business ment
Phase and Type of Activity (Mn$) (Mn$) (Mn$) Income Taxes (job
(Mn$) (Mn$) years)
Phase 1A-2A (first facility, 2008-2020)
Construction 497.9 285.5 217.1 55.0 13.3 4,395
Ground Operations 177.6 110.9 82.5 21.0 7.5 1,469
All Activities 675.5 396.4 299.6 76.0 20.8 5,863
Phase 2B-3B (second, third facilities, 2012-2020)
Construction 939.8 540.9 418.1 97.8 25.0 8,467
Ground Operations 335.3 210.2 158.9 37.3 14.1 2,830
All Activities 1,275.1 751.2 577.0 135.1 39.1 11,297
Entire Project Life
Construction 1,437.6 826.4 635.2 152.8 38.3 12,862
Ground Operations 513.0 321.2 241.3 58.2 21.6 4,299
All Activities 1,950.6 1,147.6 876.6 211.1 59.9 17,160
Totals may not sum exactly due to rounding.
Employment impacts include fulltime and part-time positions.

The economic impacts of Phases 2B through 3B are nearly twice as large as
those for Phases 1A through 2A (Table 7). Total output impacts are estimated to equal
$1.275 Bn. Value-added impacts for these latter phases total $751 Mn. This consists
of nearly $577 Mn in labor income, $135 Mn in other property income, and $39.1 Mn in
indirect business taxes. An estimated 11,297 job-years are generated as a result of the
economic activity in Phases 2B through 3B (Table 7). Since these phases of the project
are slated to span 9 years, this would represent about 1,255 continuous jobs over that
period of time.
Differences in the economic consequences of construction versus ground
operations for the CVLC project are highlighted in Table 8. With the exception of
indirect business taxes, the impacts from arising from the direct, indirect and induced
effects of construction activities are between 2.5 and 3.0 times larger than those from









ground operations activities for the CVLC project. Output impacts from construction
activities for the CVLC total nearly $1.44 Bn compared to $513 Mn for ground
operations. For construction activities, value-added impacts are estimated to total $826
Mn compared to $321 Mn for ground operations. The components of value added are
similarly proportional between construction and ground operations with the exception of
indirect business taxes. Here, the impacts of construction activities are only about 75
percent greater than those for ground activities. The employment impact of construction
activities, 12,862 job-years, is nearly three times larger than the 4,299 job-years created
from expenditure for ground operations over the life of the project. In general, the
induced multiplier impacts for both construction and ground activities are from three to
five times greater than those created through indirect effects. This is because a much
larger proportion of the labor and value-added inputs originate from within the study
area compared to the material inputs used for the project.


Table 8. Economic impacts of construction and ground operations expenditures for the
Commercial Vertical Launch Complex at Kennedy Space Center, 2008 2020.

Other Indirect
Activity Effect Level Value- Labor Property Business Employ-
Activity Effect Level r.,., JJ. . . r....


Construction Activities
Direct
Indirect
Induced
Ground Operations Activities
Direct
Indirect
Induced


Ou pu
(Mn$)
1,437.6
709.1
178.9
549.7
513.0
240.0
59.3
213.7


added
(Mn$)
826.4
394.9
96.7
334.7
321.2
157.7
32.3
131.2


II IcoeUIII
(Mn$)
635.2
352.4
71.0
211.8
241.3
134.4
22.9
84.1


(Mn$)
152.8
38.5
18.8
95.5
58.2
14.2
7.3
36.7


I axes
(Mn$)
38.3
4.0
6.9
27.4
21.6
9.1
2.0
10.5


(jobs)
12,862
6,686
1,396
4,780
4,299
1,941
468
1,889


All Activities 1,950.6 1,147.6 876.6 211.1 59.9 17,160
Direct 949.1 552.7 486.8 52.8 13.1 8,627
Indirect 238.2 129.0 93.9 26.1 8.9 1,864
Induced 763.3 465.9 295.9 132.1 37.9 6,669
Totals may not sum exactly due to rounding.
Employment impacts include fulltime and part-time positions.








The combined impacts of all phases, and, construction and ground operations,
are summarized in the bottom section of Table 8. Slightly over 1.95 Bn in total output
impacts result from the CVLC project starting in 2008 and going through 2020. This
averages out to $150 Mn per year. The total value-added impacts of the project are
estimated to be nearly $1.15 Bn. At $877 Mn, Labor income comprises about 76
percent of the total value-added impact from the project. Impacts from other property
type income and indirect business taxes are estimated to total about $211 Mn and $60
Mn, respectively, over the life of the project.
Not surprisingly, the industries most impacted by construction and ground
operations for the CVLC were Construction, Manufacturing, Government and,
Administration and Waste Services (Table Al). Construction was the most impacted
industry with respect to output, value-added and employment measures. Manufacturing
was the second most impacted industry in terms of output, while Government, and,
Administration and Waste Services, was the second most important for value-added
and jobs, respectively.

Recreational and Tourism Industry Impacts

The maximum anticipated negative economic consequences resulting from
reduced recreational visitor expenditures at MINWR and CNS are summarized in Table
9. Changes in expenditures by resident visitors to these attractions only generate
direct impacts because there is no loss of new or outside dollars to the regional
economy as residents will likely spend disposable income on other purchases. In
contrast, reductions in non-resident visitor expenditures generate negative indirect and
induced effects, as well as direct effects. Although there are fewer non-resident
visitors, their expenditures are substantially greater than resident visitors'. As a result,
even the direct impacts of non-resident visitors are 2 to 3 times greater than those of
residents. When including the additional indirect and induced impacts from non-
resident expenditures, the total impacts from reductions in non-resident visitor spending
are from 4.5 to 8.3 times greater than those by resident visitors. All together, maximum
negative output impacts from reduced visitation at MINWR and CNS are estimated to
total $69.5 Mn between 2013 and 2020, or about $8.7 Mn per year. Reductions in
value-added impacts total an estimated $41 Mn over eight years. This value-added








impact was comprised mostly from a $28 Mn reduction in labor income, and an $8.6
Mn reduction in other property type income. Slightly over $4.1 Mn in indirect business
taxes were lost due to these closures. These reduced expenditures and their
secondary effects are estimated to result in a loss of 820 job-years to the regional
economy between 2013 and 2020, or approximately 102 jobs each year.

Table 9. Economic impacts of reduced visitor expenditures due to temporary closures at
Merritt Island National Wildlife Refuge and Canaveral National Seashore for the
Commercial Vertical Launch Complex activities at Kennedy Space Center,
2013 2020.
Other
their Indirect
Visitor Type / Effect Level Output Value Labor Property Business
Added Income Type Taxes ment
(Mn$) (Mn$) (Mn$) Income (Mn$)axes (Jobs)
(Mn$) (Mn$)
(Mn$)
Resident Visitors (direct) -10.41 -5.97 -4.32 -0.92 -0.73 -149
Non-Resident Visitors -59.11 -34.84 -23.76 -7.65 -3.43 -670
Direct -27.38 -15.71 -11.37 -2.41 -1.93 -392
Indirect -8.74 -4.92 -3.03 -1.46 -0.43 -71
Induced -22.99 -14.22 -9.37 -3.79 -1.07 -207
Total all Visitors -69.51 -40.81 -28.09 -8.56 -4.16 -820
Totals may not sum exactly due to rounding.
Employment impacts include fulltime and part-time positions.

Real Estate, Retail Trade, Accommodations and Food Services, and
Government were the industries most impacted by reductions in recreational visitor
spending as a result of closures (Table A2). These are sectors that are typically
impacted from changes in tourism activities. For retail trade, the number of jobs lost
due to closures (22) is equal to 1.85 percent of the 1,196 retail jobs created by CVLC
construction and ground operation activities.

Net Impacts for Construction, Ground Operations and Recreation/Tourism

The net impacts of the CVLC are estimated by summing the positive impacts of
expenditures for construction and operation of the complex, with the negative impacts
from reduced visitor spending. These net impacts are summarized in Table 10 below.
Net output impacts total over $1.88 Bn for the life of the CVLC project (for an average of
$145 Mn per year). This represents a 3.56 percent reduction from the $1.95 Bn in total
positive output impacts from CVLC construction and ground operations shown in Table








8. A similar relationship exists between the magnitude of the net and total positive
impacts for value-added, its components, and employment, except for indirect business
taxes. The net indirect business tax impacts are nearly 7 percent less as a result of the
recreational area closures. This is due to the higher proportion of retail sales, and sales
taxes, associated with recreational expenditures, compared to fewer taxes collected on
wholesale or producer level transactions associated with the construction and operation
of the CVLC.
These total and net impacts of the CVLC are composed predominantly of direct
and induced effects. This indicates that a substantially larger share of direct and
induced spending occurs inside the region or study area, than is the case for indirect
spending. The smaller proportion of indirect spending indicates that a large share of the
intermediate inputs purchased by local contractors working on the CVLC are not
produced within the region. The larger induced effects result from the fact that most of
the employees for the CVLC project are likely to live and spend their earnings within the
local three county study area.

Table 10. Net economic impacts of expenditure changes for the Commercial Vertical
Launch Complex at Kennedy Space Center, 2008 2020.
Other Indirect
Value- Labor Other Indir Employ-
Output added Income Property Business Employ-
Activity added Income ment
(Mn$) (Mn$) Income Taxes Oobs)
(Mn$) (Mn$) (jobs)
(Mn$) (Mn$)
Construction and Ground
Conspurtion d Ground 1,950.6 1,147.6 876.6 211.1 59.9 17,160
Operations
Recreation/Tourism -69.5 -40.8 -28.1 -8.6 -4.2 -820
Net Impact 1,881.1 1,106.7 848.5 202.5 55.8 16,340
Values may not sum exactly due to rounding.
Employment impacts include fulltime and part-time positions.









References and Information Sources Cited


Florida Space Coast Office of Tourism, 2008, Value of Tourism, 2006, Brevard County
Tourism Development Council.
http://www.nbc-2.com/News/documents/080428 brevardvaluesummary.pdf

Hazen and Sawyer, P.C., 2008, Indian River Lagoon Economic Assessment and
Analysis Update, Aug. 2008.
http://www.sirwmd.com/indianriverlaqoon/pdfs/IRL Economic Assessment 2007.pdf

Minnesota IMPLAN Group (MIG), 2006. IMPLAN, Economic Impact and Social
Accounting Software, and data for Florida. Stillwater, MN. http://www.implan.com

NASA, Office of the CFO at Kennedy Space Center, Florida, and W. Warren McHone,
Ph.D., Transportation Economics Research Institute, 2008, Economic Impact of NASA
in Florida FY 2007.
http://www.nasa.gov/centers/kennedy/pdf/217899main Economic Impact NASA 2007.pdf

PMG Associates, Inc. 2003, Economic Impact Analysis of Tourism 2002 Brevard
County, Florida., Florida Space Coast Office of Tourism, 321-433-4470.

Reynolds, Smith and Hills, Inc., Architects, Engineers and Planners, 2235 N. Courtenay
Parkway, Merritt Island, Florida.

Schaffer, William A., 1999, Regional Impact Models. The Web Book of Regional
Science. Regional Research Institute, West Virginia University.
http://www.rri.wvu.edu/WebBook/Schaffer/TOC.html

U.S. Department of Commerce, Bureau of Economic Analysis, Regional Economic
Information System, 2006, Local Area Personal Income.
http://www.bea. ov/bea/regional/reis/default.cfm?catable=Single%20Line

U.S. Department of Commerce, Census Bureau, 2000, Population Division,
Journey-To-Work & Migration Statistics Branch, 2000 County-to-County Worker Flow
Files. http://www.census.gov/population/www/socdemo/iourney.html

U.S. Fish and Wildlife Service, 2008, Merritt Island National Wildlife Refuge: Facts.
http://www.fws.gov/southeast/pubs/facts/mrtcon.pdf

U. S. Department of the Interior, Fish and Wildlife Service, Merritt Island National
Wildlife Refuge, and, National Park Service, Canaveral National Seashore., 2003,
Third Biennial Mosquito Lagoon Conference, August, 2002, Titusville, FL.
http://www.nbbd.com/godo/minwr/research/ML02-abstracts.pdf

U. S. Department of the Interior, Fish and Wildlife Service, Merritt Island National
Wildlife Refuge, and, National Park Service, Canaveral National Seashore. 2005,
Fourth Biennial Mosquito Lagoon Conference, Feb. 2005, Cocoa Beach, Florida.








http://www.nbbd.com/aodo/m i nwr/research/M L04-abstracts. pdf


U.S. Dept. of the Interior, National Parks Service, Public Uses Statistics Office, 2008,
NPS Stats. http://www.nature.nps.gov/stats/park.cfm?parkid=315

U.S. Department of the Interior, Fish and Wildlife Service, and U.S. Department of
Commerce, U.S. Census Bureau, 2008, 2006 National Survey of Fishing, Hunting, and
Wildlife-Associated Recreation. Jan. 2008.
http://library.fws.gov/nat survev2006 florida.pdf

U.S. Department of the Interior, Fish and Wildlife Service, 2006, Merritt Island National
Wildlife Refuge: Draft Comprehensive Plan and Environmental Assessment. November
2006. http://www.fws. ov/southeast/planninq/PDFdocuments/Merritt%201sland%20Draf
t/Edited%20Draft%20CCP.pdf

Whitmore, Doran, 2008, Personal Communication, Department of Interior, USFWS,
Merritt Island National Wildlife Refuge, Sept. 2008.









Appendix A


Table Al. Economic impacts of construction and ground operations expenditures for the
Commercial Vertical Launch Complex at Kennedy Space Center by industry
group, 2008 2020 (rank-ordered by output impacts).
Other Indirect
Value- Labor Employ-
Industry Group (NAICS) Output Added Income Property Business meant
Income Tax
Million $ Million $ Million $ Million $ Million $ Jobs
Construction 768.42 421.50 375.55 41.60 4.35 7,132
Manufacturing 147.52 52.86 43.99 8.15 0.72 391
Government & non NAICs 128.81 116.72 52.63 56.36 7.73 838
Prof. scientific & tech. srvcs. 128.04 70.27 64.75 4.60 0.93 959
Administrative & waste srvcs. 123.15 85.93 72.20 12.85 0.88 1,460
Transportation & Warehousing 101.35 73.08 63.22 1.17 8.68 1,253
Health & social services 95.59 58.33 50.48 7.17 0.68 995
Retail trade 89.17 58.48 36.47 9.73 12.27 1,196
Finance & insurance 76.88 41.01 23.63 15.46 1.93 406
Real estate & rental 62.70 40.25 11.24 22.87 6.15 391
Wholesale Trade 57.04 38.45 21.59 8.43 8.43 327
Information 50.14 21.76 11.45 8.46 1.85 181
Accommodation & food services 41.21 22.15 14.76 4.84 2.56 653
Other services 31.89 16.75 13.11 2.42 1.22 524
Management of companies 20.83 12.71 9.86 2.65 0.20 91
Educational services 10.86 6.59 6.00 0.49 0.10 177
Arts- entertainment & recreation 10.11 6.09 4.16 1.27 0.67 157
Utilities 5.67 3.87 1.15 2.14 0.58 13
Ag, Forestry, Fish & Hunting 1.13 0.71 0.33 0.37 0.01 16
Mining 0.10 0.05 0.02 0.02 0.00 0
Total 1,950.63 1,147.56 876.57 211.05 59.93 17,160
All values in 2008 dollars.
Employment impacts include fulltime and part-time positions.
NAICS is the North American Industry Classification System









Table A2. Economic impacts of reduced visitor expenditures due to temporary closures at
Merritt Island National Wildlife Refuge and Canaveral National Seashore for
Commercial Vertical Launch Complex activities at Kennedy Space Center, by
industry group, 2013 2020 (rank-ordered by output impacts).

Other Indirect
Value- Labor Other Indirect Employ-
Industry Group (NAICS) Output Added Income Property Business ment
Income Tax
Million $ Million $ Million $ Million $ Million $ Jobs
Real estate & rental -1.45 -0.86 -0.62 -0.19 -0.05 -14
Retail trade -1.42 -0.90 -0.56 -0.13 -0.20 -22
Accommodation & food services -1.37 -0.72 -0.48 -0.16 -0.08 -22
Government & non NAICs -0.56 -0.51 -0.28 -0.20 -0.03 -5
Prof. scientific & tech. svcs. -0.35 -0.19 -0.17 -0.02 -0.00 -3
Health & social services -0.33 -0.20 -0.17 -0.02 -0.00 -3
Finance & insurance -0.29 -0.16 -0.09 -0.06 -0.01 -2
Manufacturing -0.28 -0.07 -0.05 -0.02 -0.00 -1
Construction -0.27 -0.12 -0.11 -0.01 -0.00 -2
Wholesale Trade -0.21 -0.14 -0.08 -0.03 -0.03 -1
Information -0.19 -0.08 -0.05 -0.03 -0.01 -1
Administrative & waste srvcs. -0.19 -0.12 -0.09 -0.02 -0.00 -3
Transportation & Warehousing -0.12 -0.07 -0.06 -0.01 -0.00 -1
Other services -0.12 -0.06 -0.05 -0.01 -0.00 -2
Management of companies -0.11 -0.06 -0.05 -0.01 -0.00 -1
Arts- entertainment & recreation -0.07 -0.04 -0.03 -0.01 -0.00 -1
Educational services -0.04 -0.02 -0.02 -0.00 -0.00 -1
Utilities -0.03 -0.02 -0.01 -0.01 -0.00 -0
Ag, Forestry, Fish & Hunting -0.01 -0.00 -0.00 -0.00 -0.00 -0
Mining -0.00 -0.00 -0.00 -0.00 -0.00 -0
Total -7.39 -4.35 -2.97 -0.96 -0.43 -84
All values in 2008 dollars.
Employment impacts include fulltime and part-time positions.
NAICS is the North American Industry Classification System.









Appendix B: Glossary of Regional Economic Terminology


Direct effects/impacts: Direct impacts, represent the revenues, value-added, income, or jobs that
result directly from an economic activity within a regional economy.
Employment or Jobs: Represents the total numbers of wage and salaried employees as well as
self-employed jobs. This includes full-time, part-time and seasonal workers measured in
annual average jobs.
Indirect Business Taxes: Include sales, excise, and property taxes as well as fees and licenses
paid by businesses during normal operations. It does not include taxes on profits or income.
Indirect effects/impacts: Indirect effects occur when businesses use revenues originating from
outside the region, or study area, to purchase inputs (goods and services) from local suppliers.
This secondary, or indirect business, generates additional revenues, income, jobs and taxes for
the area economy.
Induced effects/impacts: Induced effects or impacts occur when new dollars, originating from
outside the study area, are introduced into the local economy. Induced economic impacts
occur as the households of business owners and employees spend their earnings from these
enterprises to purchase consumer goods and services from other businesses within the region.
This induced effect generates additional revenues, income, jobs and taxes for the area
economy.
Input-Output Analysis: The use of input-output models to estimate how revenues or employment
for one or more particular industries, businesses or activities in a regional economy impact
other businesses and institutions in that region, and the regional as a whole.
Input-Output Models: A mathematical representation of economic activity within a defined region
using inter-industry transaction tables or matrices where the outputs of various industries are
used as inputs by those same industries and other industries as well.
Labor Income: All forms of employment compensation, including employee wages and salaries,
and proprietor income or profits.
Local revenues/expenditures: Local revenues or spending represent simple transfers between
individuals or businesses within a regional economy. These transactions do not generate
economic spin-off or multiplier (indirect and induced) effects.
Margins: Represent the differences between retail, wholesale, distributor and producers prices.
Non-local revenues/expenditures: When outside or new revenues flow into a local economy
either from the sale of locally produced goods and services to points outside the study area, or
from expenditures by non-local visitors to the study area, additional economic repercussions
occur through indirect and induced (multiplier) effects.
Other Property Type Income: Income in the form of rents, royalties, interest, dividends, and
corporate profits.
Output: Revenues or sales associated with an industry or economic activity.
Total Impacts: The sum of direct, indirect and induced effects or economic impacts.
Value-added: Includes wages and salaries, interest, rent, profits, and indirect taxes paid by
businesses.




Full Text

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i Economic Impact Assessment of the Proposed Commercial Vertical Launch Complex at Kennedy Space Center Final Project Report Prepared under Technical Services Agreement number KSC0817904 for Dynamac Corporation, Kennedy Space Center Florida T homas J. S tevens, Alan W. Hodges W. David Mulkey and Mohammad Rahmani University of Florida Institute of Food and Agricultural Sciences Food and Resource Economics Department P.O. Box 110240 Gainesville, Florida 32611 0240 Corresponding aut h or contact: 352 3 92 1845 x312 awhodges@ufl.edu economicimpact.ifas.ufl.edu October 20 2008

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ii Economic Impact Assessment of the Proposed Commercial Vertical Launch Complex at Kennedy Space Center Executive Summary The purpose of this study is to evaluate certain economic impacts associated with the proposed construction and operation of a Commercial Vertical Launch Complex (C V LC) at Kennedy Space Center, Florida, from 2008 through 2020 Kennedy Space Center (KSC) is located in Brevard County, on the east coast of central Florida The study area used for this analysis includes Brevard, Orange and Volusia Counties. The estimated e conomic impacts for this analysis were generated using an input output model of the study area constructed with IMPLAN Professional software a nd databases. The budget for construction and ground operations associated with the CVL C w as developed by Reynolds, Smith & Hill, Inc., and totaled approximately $949.1 million. It was assumed that 100 percent of the funding for the se expenditures would originate from outside the study area, thus representing new dollars to the local economy and generating multiplier effects. S pending estimates from this budget were allocated to various IMPLAN industry sectors to estimate the positive economic impacts of the project Negative economic impacts associated with possible temporary closures of the Canaveral National Seashore and the Merritt Island National Wildlife Refuge during CVLC launch operations were also evaluated. The net total (sum of positive an d negative) economic impacts from the development of the CVLC are shown in t able ES1 below All impacts are given in 2008 dollar s Impacts for o utput, value added, labor income, other property type income, indirect business taxes and employment are show n in the individual columns The direct, indirect, induced and total economic impacts are reported in separate table rows Direct impacts are the regional changes in revenues, income, taxes and jobs that result from the initial round of spending and emp loyment activities associated with the CVLC project I ndirect effects occur when directly impacted businesses alter their purchases of intermediate inputs from the local supply chain Induced impacts occur as employees and proprietors of directly and ind irectly impacted businesses adjust their spend ing for personal consumption as earnings increase or decline Total impacts are the sum of these direct, ind irect and induced effects, and measure the full economic impact s of an activity as it ripples through a regional economy.

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iii The net output impacts associated with the CVLC project are estimated to total $1.881 million from 2008 through 2020. Value added impacts, which represent the sum of labor income, other property type income and indirect business tax es, totaled $1,107 million. Labor income, which represents employee and proprietor earnings, totaled $848.5 million. Other property type income, which includes corporate profits, rents, dividends, and interest, totaled $202.5 million. Indirect business taxes, which includes sales, excise and property taxes (but not taxes on income or profits), totaled $55.8 million. The net number of job years (full and part time) created as a result of the CVLC project are estimated to total 16,340 The most direct way to compare the economic impacts of the proposed CVLC to the economic activity in the study area, or to current NASA activities at Kennedy Space Center, is in terms of jobs. In 2006 the Bureau of Economic Analysis estimated that there were 1.36 million jobs in the three county region of east central Florida. The total employment impact of NASA at KSC for 2007 was estimated at 35,960 jobs. The total net employment impact of 16,340 job years for the CVLC project, represents about 1,257 continuous jobs ove 3.5 percent (on average) of the employment created by NASA in 2007, and about 0.09 percent of the total employment in the three county study area. The estimated economic impacts resulting fr om possible reductions in recreational visitors to the Merritt Island National Wildlife Refuge and the Canaveral National Seashore were relatively minor compared to the positive impacts generated by spending and employment generated by the CVLC project. The relative size of the maximum anticipated impacts from the closure of recreational areas ranged from 3.2 to 6.9 percent of the respective positive impacts from CVLC construction and ground operations. In percentage terms, the most affected measure of e conomic impact from reduced visitor spending was in the form of indirect business taxes, which were estimated to be 6.9 percent as large as the positive impacts of the CVLC project.

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iv Table ES1. Net e conomic i mpacts a ssociated with the c onstruction an d o peration of a Commercial Vertical Launch Complex at Kennedy Space Center, 2008 2020. Effect Level Output (Mn$) Value added (Mn$) Labor Income (Mn$) Other Property Income (Mn$) Indirect Business Taxes (Mn$) Employment (jobs) Direct 911.3 531.0 471. 1 49.5 10.5 8,086 Indirect 229.5 124.0 90.9 24.7 8.5 1,793 Induced 740.4 451.7 286.5 128.3 36.8 6,462 Total 1,881.1 1,106.7 848.5 202.5 55.8 16,340 All values in 2008 dollars. Totals may not sum exactly due to rounding Employment impacts include ful ltime and part time positions.

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1 Economic Impact Assessment of the Proposed Commercial Vertical Launch Complex at Kennedy Space Center Introduction The purpose of this study is to evaluate certain economic impacts associated with the proposed developmen t and operation of a Commercial Vertical Launch Complex (C V LC) at Kennedy Space Center, Florida, from 2008 through 2020 1 Kennedy Space Center (KSC) is located in Brevard County, on the east coast of central Florida, just east of Titusville (Figure 1) It is envisioned that the proposed CVLC would include two separate launch pads along with associated facilit i es for vehicle assembly processing and testing, propellant storage, and possibly, launch control. T here a re four proposed sites for the C V LC (F igure 2) One of these sites is located within the traditional operational area of Kennedy Space Center, just south of Launch Complex (LC) 39A, on the north end of the Banana River (Site 1) An other proposed site (Site 2) is located near the intersection of the A. Max Brewer Memorial Parkway (State Road 406) and Kennedy Parkway (State Road 3), on the southwest Figure 1. Study a rea for p roposed Commercial Launch Facility at Kennedy Space Center, Florida. 1 The CLVC project was initially scheduled to begin in the fourth quarter of 2008. By the time this report was in its final draft form it no longe r appeared certain that the project would begin before 2009.

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2 Figure 2. Location of p roposed s ites for Commer cial Vertical Launch Complex at Kennedy Space Center, Florida. Source: Dynamac Corporation. side of Mosquito Lagoon. Site 3 is on the Cape Canaveral Air Force Station (CCAFS), south of LC 40 and north of LC 37 on Phillips Parkway. Site 4, also on CC AFS, is the former site of LC 34, east of the intersection of Phillips Parkway and ICBM Road. Positive economic impacts of the commercial launch facility are anticipated from spending and employment for the construction and operation of the space vehicle processing and launch facilities to be located at the KSC. Some negative economic impacts from this project may take place due to recurring temp orary closures of certain recreational areas located within the Merritt Island Nationa l Wildlife Refuge (MINWR ) and the Canaveral National Seashore (CNS). These two areas are major recreational Kennedy Space Center, and are jointly managed by the National Aeronautics and

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3 Sp ace Administration (NASA), the National Park Service (NPS), and the U.S. Fish and Wildlife Service (USFWS) Since the late 1950s, the development and operation of the NASA space program at KSC has provided a significant stimulus to the economy of east cen tral Florida. In fiscal year 2007, direct spending by NASA at the KSC totaled $1.66 billion (Bn) for Brevard County alone ( NASA and W. Warren McHone ) Another $123 million in direct spending by the KSC took place in the remaining counties of Florida. In 2007, approximately 14,500 jobs were based at KSC and approximately ninety four percent of those employees resided in Brevard County, with the remaining six percent living in other counties in Florida. These jobs generated approximately $1.1 Bn in gros s earnings for the State of Florida in 2007 The total economic impact of the KSC for 2007 was estimated at $4 Bn in output, $2 Bn in household income and 35,960 jobs (NASA and W. Warren McHone ) In 2004 it was decided that the NASA Space Shuttle program would be retired in 2010. It is anticipated that there will be a substantial reduction in KSC related economic activity in the area when this occurs. The proposed commercial vertical launch program may help soften some of these los s es. Expenditures for the CVLC are projected to total nearly $950 million in 2008 dollars through the year 2020. In order to maintain both public safety and operational security, the Federal government acquired additional lands adjacent to the operational areas of the KSC an d gave them special designations that would preclude commercial and residential development and preserve their exiting natural ecosystems into perpetuity. These areas now comprise the MINWR and the CNS. The MINWR overlies the K S C and encompasses abou t 140,000 acres consisting of brackish estuaries and marshes coastal dunes, and native forests MINWR is an internationally recognized wildlife, fishing boating and bird watching attraction for locals and tourist alike that received an estimated 690, 000 recreational visitors in 2007 (Whitmore, MINWR). Public use activities include hiking on back count r y trails wildlife observation and photography manatee viewing, a self guided auto tour at Black Point Wildlife Drive fishing waterfowl hunting b oat ing, canoeing /kayaking camping and environmental education. Certain sections of MINWR are permane n tly closed to the public. Other sections are closed temporarily during Shuttle launch and

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4 landing operations. It is anticipated that launch operations associ ated with the CVLC may result in closures for MINWR ranging from zero to forty days per year depending on which site is chosen for development and the number of scheduled launches. At the time of this report it was anticipated that there would be no mor e than 18 launches per year at the CVLC once launch operations began The CNS consists primarily of 24 miles of undeveloped Atlantic coastline immediately north of the operations area of KSC. It cov ers approximately 57,000 acres. All but the north end of CNS (Apollo B each) lies within MINWR and KSC CNS is accessi ble by State Road A1A from the north to Apollo B each and by State Road 402 from the south to Play a linda B each A large middle section Klondike B each is managed as a area where no vehicles are allowed and only a small number of hikers are permitted each day. Nearly 538 ,000 visitors are estimated to have recreated at Playalinda Beach in 2007 ( U.S. Dept. of the Interior, National Parks Service ) This is despite it being cl osed during Space Shuttle launch operations for 20 days When launch operations begin at the CVLC it is estimated that Playalinda Beach may be closed for as many as 40 days each year. The extent of recreational closures at the MINWR and CNS will be depe ndent on which of the four sites is chosen for the CVLC, and on the future schedule of launch activities by commercial vendors. It is anticipated that if Site 2 is selected for development, then c losures of up to 40 days per year may take place, due to its relative proximity to the CNS and Mosquito Lagoon in the MINWR. There would likely be no closures if sites 1, 3, or 4 are developed instead. The Space Shuttle and other space related programs at the KSC also draw visitors to east central Florida for business and recreational purposes. This would include recreational visitors to the Kennedy Space Center Visitor Complex, and individuals who travel to the area to observe launches and landings. A 2002 study by PMG Associates, Inc., for the Florida Spac e Coast Office of Tourism documented some of the impacts from these types of visitors. Since it was not known how the development of the CVLC would affect this type of visitation to the study area, it was not evaluated in this analysis

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5 Analysis Metho dology Study Area Definition and Description E conomic impacts of the CVLC project were evaluated for the regional economy of east central Florida, consisting of Brevard, Orange, and Volusia counties (Figure 1). County to County Worker Flow Files from t he 2000 Census in dicate that 97.6 percent of workers in Brevard County reside within these three counties (U.S. Dept. of Commerce, Bureau of Census) The economy of the study area is dominated by Orange County, which has over 850,000 (62.6 percent) of the a Twenty County, and 16.2 percent, (220,375) are located in Volusia County. The total number of jobs in the study area grew by 16.7 percent fro m 2000 to 2006 ( US Dept. of Commerce, Bureau of Economic Analysis) In 2006, personal income for the study area totaled nearly $74 Bn in 2008 dollars. Nearly 53 percent, or $38 Bn of that income went to residents of Orange County. Brevard County garn ered nearly $20 Bn or 26.7 percent, grew by nearly 22 percent from 2000 to 2006. T he three county region accounted for for 2006. Table 1. Employment and p ersonal i ncome s tatistics for Brevard, Orange, and Volusia Counties in Florida 2006. Region Employment 2006 Change since 2000 Personal Income 2006 Change since 2000 Jobs Percent Percent $million Percent Percent B revard 288,676 21.2% 18.6% 19,678 26.7% 20.4% Orange 851,093 62.6% 14.6% 38,188 51.7% 23.0% Volusia 220,375 16.2% 23.0% 15,937 21.6% 20.8% Area Total 1,360,144 100.0% 16.7% 73,803 100.0% 21.8% Florida 10,521,966 17.8% 719,699 23.8% Source: Regional Economic Information System, Bureau of Economic Analysis, U.S. Department of Commerce http://www.bea.gov/bea/regional/reis/default.cfm?catable=Single%20Line Personal Income v alues were adjusted to 200 8 dollar equiv ale nts using the Bureau of Labor Statistics, Consumer Price Index All Urban Consumers, for June, 2008.

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6 Regional Economic Impact Analysis The economic impacts estimated in this study are based on input ou tput (I O) analysis and models. I O analysis is a standard technique for estimating the secondary (indirect and induced) economic consequences or impacts that occur when there is a change in the flow of dollars and jobs into or out of a re gional economy I O models are mathematical representations of an economy formulated in terms of transactions between industries, governments, employees, and households (Schaffer, 1999). These models are based on detailed business and demographic data collected by agen cies of the Federal and State governments. From these models, industry level and aggregate economic multipliers are calculated, and then used to estimate indirect and induced impacts or effects Indirect effects occur as business es change the amount of in puts purchased through the supply chain to produce the goods and services purchased in the initial (direct) transactions Additional induced effects occur as household spending responds to changes in employee and proprietor earnings. The types of ec onomic impacts typically estimated with I O models include output or gross revenues, value added (which includes labor income, other property type and indirect business taxes ) and employment or jobs Each of these measures represents a different way of assessing the size or contribution of a particular activity or event to a regional or national economy. Detailed definitions of these types of impacts or effects can be found in the glossary (Appendix B) at the end of this report. The economic impacts of the CVLC were evaluated using the IMPLAN Professional software system which is an I O modeling system comprised of software tools and region al economic databases ( Minnesota IMPLAN Group ) It includes data on U.S. economic activity at the county leve l for 509 different industry sectors as well as for employment, households, governments, commodity production, trade, transfer payments, and capital investments 2 For this analysis, t he IMPLAN model constructed to represent the economy of east central F lorida was ba s ed on 2006 data using the default modeling parameters 2 IMPLAN uses a sectoring scheme similar to North American Industry Classification System (NAICS): For details see http://www.implan.com/library/pdf_files/implan_sectoring_2001.pdf

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7 T he first step in assessing economic impacts of the CVLC project was determining the level and type of changes (positive and negative) in spending and/ or employment that wou ld occur as a result of the project Once these values were estimated they were allocated to the appropriate industrial or institutional sectors within the IMPLAN model C onsideration was given to how much of the spending would take place inside the stu dy area, and how much of the spending would occur at the retail, wholesale or producer levels. Construction and Ground Operations Expenditures This assessment is for the first three phases o f development and operations of the CVLC project, initially sch eduled from 2008 through 2020. The budget for these activities was developed by Reynolds, Smith & Hills, Inc ., and provided to FRED by the Dynamac Corporation f or this purpose This budget is summarized below in Table 2 At the time of this analysis, exp enditure and employment data for launch and payload operations associated with the C VLC project were not available. Thus the economic impacts for these aspects of the project were not evaluated. Project activities in Table 2 are categorized by phase and t ype of activity (con struction or ground operations) Proposed e xpenditures on construction could begin in 2008 and continue through 2018, total ing $709 million (Mn) or 74.7 percent of the Significant expenditures would not begin u ntil 2010 with the start of construction on the horizontal vehicle processing facility and vertical launch pad in Phase 2A. Ground operations would begin in 2009 and continue through 2020. Proposed e xpenditures for these activities total $240 Mn (25.3 p ercent of total ) over the life of the project. Al together, expenditures for construction and ground operations sum to slightly over $949 Mn in 2008 dollars (Table 2 ).

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8 Table 2 Projected expenditures for c onstruction and g round o perations for the Commer cial Vertical Launch Complex at Kennedy Space Center Phase Type of Activity Years Expenditure ( $ ) 1 A. Relocation of Advanced Technology Development Center (ATDC) facilities. Construction 2008 09 $1,200 ,000 Ground Operations 2009 11 $2,106 ,203 1 B. Construction and operation of maintenance and storage facility for the anchor tenant. Construction 2010 $11,699 ,000 Ground Operations 2011 12 $3,276 ,315 1 C. Construction and operation of administration and control facility for the anchor tena nt. Construction 2010 11 $10,686 ,000 Ground Operations 2012 20 $33,699 ,240 Phase 1 Total $62,66 6,758 2 A. Construction and operation of horizontal vehicle processing facility and vertical launch pad. Construction 2010 12 $204,230 ,000 Ground Op erations 2013 20 $59,909,760 2 B. Construction and operation of a second bay to the horizontal processing facility with equipment and infrastructure to accommodate a second horizontal provider Construction 2012 14 $40,569 ,000 Ground Operations 201 4 20 $51,172,920 2 C. Construction and operation of a third bay to the processing facility along with further accommodations for a third horizontal launch provider Construction 2014 15 $39,884 ,000 Ground Operations 2015 20 $41,188 ,960 Phase 2 Tot al $436,95 3,640 3 A. Construction and operation of a new launch pad and vertical vehicle integration facility for a fourth horizontal launch provider Construction 2014 16 $284,315 ,000 Ground Operations 2016 20 $32,451 ,120 3 B. Construction and o peration of an additional bay to vertical processing facility with equipment and infrastructure to accommodate a second vertical launch provider. Construction 2017 18 $116,472 ,000 Ground Operations 2018 20 $16,226 ,560 Phase 3 Total $449,46 3,680 Cons truction Total $709,055 ,000 Ground Operations Total $240,029 ,078 Grand Total $949,084 ,078 All values in 2008 dollars.

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9 In Table 3 a summary of the allocation of construction and ground operation expenditures to IMPLAN industry sectors is shown. Con struction expenditures are split Other N ew C onstruction includes activities like non water or sewer pip eline construction, construction of power and communication transmission lines, and construction of tank storage facilities for water and other liquids or gases. A minor share of construction expenditures were allocated to Commercial and Institutional Bui ldings, which occurs in Phase 1 of the project for administration, maintenanc e and storage buildings (Table 3 ). The largest share of ground operation expenditures (31.2%) in Table 3 were allocated to Facilities Support activities, which includes mainte nance, janitorial, trash disposal, security, mail routing, and reception services for buildings and facilities developed by the project (IMPLAN sector 453). The next largest sector allocation (28.1%) went to Support Activities for Air Transportation (sect or 397). This involves the fueling, ferrying, inspection, testing, and maintenance and repair of aircraft, or in this case, spacecraft. Another 28 percent of ground operations expenditures were divided equally between IMPLAN sectors 354 (Missile and Spac e Vehicle Manufacturing), and 355 (Parts for Space Vehicles and Missiles). The remaining 12.5 percent of ground operation expenditures were allocated to Telecommunications, Data Processing Services, Scientific Research, Management, Office Administration, Warehousing and Storage, and Wholesale Trade (Table 3 ). All expenditures for construction and ground operation activities associated with the CVLC east central Florida. As a result, all of th ese expenditures will generate multiplier effects that will contribute to the overall impacts of the project.

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10 Table 3 Summary of Commer cial Vertical Launch Complex e xpenditures by IMPLAN s ector IMPLAN Sector Name (number) Expenditure ($) Percentage Construction Manufacturing and industrial buildings (37) 241,618,333 34.1% Commercial and institutional buildings (38) 22,385,000 3.2% Highways, streets, bridges, and tunnels (39) 202,233,333 28.5% Other new construction. (41) 242,818,333 34.2% To tal Construction $709,055,000 100.0% Ground Operations Missile and space vehicle manufacturing (354) 33,491,220 14.0% Parts for space vehicles & missiles (355) 33,491,220 14.0% Wholesale trade (390) 526,551 0.2% Support activities for air transp ortation (397) 67,508,991 28.1% Warehousing and storage (400) 2,621,052 1.1% Telecommunications (422) 6,739,848 2.8% Data processing services (424) 6,739,848 2.8% Scientific research and development (446) 526,551 0.2% Management of companies and enter prises (451) 6,739,848 2.8% Office administrative services (452) 6,739,848 2.8% Facilities support (453) 74,904,102 31.2% Total Ground Operations $240,029,078 100.0% Grand Total $949,084,078 All values in 2008 dollars Recreation and Tourism E xpenditures The m aximum anticipated reductions in recreati onal spending in the study area due to temporary closures of the MINWR and Playal inda Beach at CNS are estimated in Table s 4 and 5 These reductions are based on annual visitation counts and estim ates provided by the NP S and the USFWS ( Table 4) Since visitor counts were obtained independently from CNS and MINWR, it is possible some double counting occurred. This would occur when an individual or group visited both CNS and MINWR on the same day T o estimate the average total spending for each activity per day, a nnual visitation numbers were multiplied by estimates of the average daily expenditures per person per day for each activity which were obtained from the USFWS and Hazen and Sawyer, P.C (Table 5) Multiplying the total daily spending estimate s by the maximum anticipated number of closure days per year (40) provided estimates of annual spending reductions for each activity (Table 5) The maximum total reduction s in recreational expendi tures over all

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11 MINWR and CNS activities by non residents as a result of the closures is estimated at $6.6 Mn per year, in 2008 dollars. For resident visitor spending, the estimated reduction is $2.5 Mn per year (Table 5) If launch operations begin in 2013 (after completion of Phase 2A), then these spending reductions will occur for eight successive years (2013 2020) over the timeline of the budget In this case the maximum total estimated recreational spending reductions over the project budget tim e line will equal $52.8 Mn for non resident visitors, and $20.1 Mn for resident visitors ( in 2008 dollars ) The reduced spending by non residents will have this reductio no longer enter the regional economy. In contrast, t he negative impacts from reduced resident spending are limited to their direct effects ($20.1 Mn ). Table 4. Annual and e stimated d aily r ecreational v isitor c ounts and s hare of u ser d ays by n on r esident v isitors for Merritt Island National Wildlife Refuge and Canaveral National Seashore, Florida, in 2007. Activity (Area) Total Annual Visitors in 2007 Average number of Visitors per Day 1 Share of User Days by Non Residents Column A B C Fishing/boating (Southern Mosquito Lagoon) 48,000 161 25% Waterfowl hunting (Southern Mosquito Lagoon & other) 8,032 27 60% Wildlife viewing/photography (Black Point Drive, etc.) 477,500 1,602 40% Hiking 150,000 503 33% Canoeing/Kayaking 3,000 10 25% Bicycling 3,000 10 33% Camping (Dummit Grove) 300 1 33% Swimming (Playalinda Beach) 537,813 1,582 40% Total All Activities 2 1,227,645 3,611 Sources: Merritt Island National Wildlife Refuge (Doran Whi tmore), and Canaveral National Seashore (NPS Stats website : http://www.nature.nnps.gov/stats/park.cfm?parkid=315 ). 1 Column B = column A (the number of days the respective area is open to the public each year ); 2 Values may not sum exactly due to rou nding.

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12 Table 5 Estimated a nnual r eductions in s pending by r ecreational v isitors at Merritt Island National Wildlife Refuge and Canaveral National Seashore, d ue to c losures for c ommercial l aunches at Kennedy Space Center. 1 Activity (Area) Average Trip Related Spending Per Person Day Total Trip Related Spending Per Day Estimated Annual Spending Reductions as a result of Closures 2 Non Residents Residents Non Residents Residents Total All Users Non Residents Residents Total All Users Column D E F G H 3 I J K 3 Units $s $s $s $s $s $1,000s $1,000s $1,000s Fishing/boating (Southern Mosquito Lagoon) $144 $34 $5,780 $4,080 $9,859 $231,182 $163,187 $394,369 Waterfowl hunting (Southern Mosquito Lagoon & other) $345 $38 $5,581 $410 $5,990 $2 23,232 $16,384 $239,616 Wildlife viewing/photography (Black Point Drive, etc.) $110 $26 $70,346 $24,760 $95,106 $2,813,845 $990,387 $3,804,232 Hiking $110 $26 $18,231 $8,685 $26,916 $729,243 $347,413 $1,076,656 Canoeing/Kayaking $125 $26 $314 $194 $508 $12,541 $7,778 $20,319 Bicycling $110 $26 $365 $174 $538 $14,585 $6,948 $21,533 Camping (Dummit Grove) $110 $26 $36 $17 $54 $1,458 $695 $2,153 Swimming (Playalinda Beach) $102 $26 $64,483 $24,442 $88,925 $2,579,315 $977,688 $3,557,003 Total All A ctivities 3 $165,135 $62,762 $227,897 $6,605,401 $2,510,480 $9,115,881 Source for per person day spending: US Fish and Wildlife Service, 2008; and, Hazen & Sawyer, P.C., 2008. 1. Spending values were converted from 2007 to 2008 dollars using the Consum er Price Index (for all Urban Consumers) for June 2008, divided by the annual CPI for 2007 (or a factor of 1.0553). 2. Represents closure of 40 days annually based on 18 launches per year. 3. Values may not sum exactly due to rounding. The computations use d to derive the estimates in the columns of Tables 4 and 5 are as follows: B = A (the number of days the respective area is open to the public each year); F = B C D; G = B (1 C) E; H = F + G; I = F 40 1,000; J = G 40 1,000; K = I + J.

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13 The breakout of visitor expenditures by expense item and IMPLAN industry sectors as shown in Table 6, was derived from Table 2.11 in the Hazen and Sawyer, P.C. (Aug. 2008). Expenditure data in the Hazen and Sawyer study w ere developed from a survey of nearly 400 visitors to the Indian River Lagoon (which includes MINWR). The Sundr ( General Merchandise Stores ) ( see Table 6 ). Boat and Auto Fuel (Gasoline Stations) was the next largest visitor expenditure category at nearly 21 percent of total spending. Other sectors which captured doub le digit percentages of total visitor expenditures include Food Service and Drinking Places (14.1 percent), and Boat and Equipment Rental (11.2 percent). The remaining 23.5 percent of total visitor expenditures were allocated among eight additional spendi n g categories as shown in Table 6 For this analysis all changes in expenditures were assumed to have occurred within the study area of Brevard, Orange and Volusia Counties, so there would be no leakage of spending for the first round of transactions. Whether subsequent rounds of spending occur within the study area is determined within the IM P LAN model by a set of econometrically estimated regional purchase coefficients. Some of the changes in retail purchases by recreational visitors were margined so that the cost of goods sold were not included in the direct impacts. This would be the case for changes in visitor expenditures with Motor Vehicle and Par t s Dealers, Food and Beverage Stores, Gas Stations, Sporting Goods Stores, and General Merchandise S tores, where there would be little or no physical transformation in the goods sold by the vendor. These spending estimates and parameters were entered into the IMPLAN model an d the economic impacts of the CVLC mic multipliers.

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14 Table 6. Summary o f r ecreational u ser s pending r eductions d ue to c ommercial l aunch c losures at Kennedy Space Center, by economic sector, 2013 -2020. 1, 2. Expense Item IMPLAN Sector Percent of Total Spending 2 Non Residents Res idents Total All Users $1,000 $1,000 $1,000 Boat Repairs / Purchase 401 Motor vehicle and parts dealers 0.1 % $34 $13 $46 Food and Beverages Stores 405 Food and beverage stores 8.6 % $4,573 $1,738 $6,312 Boat and auto fuel 407 Gasoline station s 20.7 % $10,961 $4,166 $15,126 Tackle, bait, and/or ice 409 Sporting goods stores 4.9 % $2,605 $990 $3,596 Shopping and Sundries 410 General merchandise stores 30.5 % $16,104 $6,121 $22,225 Auto Rental, Taxi, Bus fares 432 Automotive equipment renta l and leasing 5.6 % $2,950 $1,121 $4,071 Boat and Equipment Rental 435 General and consumer goods rental 11.2 % $5,918 $2,249 $8,168 Park Entrance Fees 475 Museums, historical sites, zoos, and parks 0.1 % $57 $22 $79 Ramp, Marina and Parking Fees 478 Other amusement and recreation 0.1 % $74 $28 $102 Camping fees 480 Other accommodations (includes campgrounds) 1.2 % $633 $241 $874 Restaurants and Bars 481 Food services and drinking places 14.1 % $7,461 $2,836 $10,297 Lodging 485 Hotels and motels 2.8 % $1,472 $559 $2,032 Total 100% $52,843 $20,084 $72,927 1. Represents closure of 40 days annually over 8 years, based on a maximum 18 launches per year. 2. Source for s ector selection and expenditure share : on

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15 Results Construction and Ground Operations Impacts Summary results of the positive economic impact s of expenditures for Phases 1A through 2A and 2B through 3B of the C V LC a re shown in Table 7 I n Table 8 the positive economic impacts of expenditures for CVLC construction and ground operation s are s ummarized All r esults are given in 2008 dollar val ues and n o adjustment in the se values w as made respective to the timing o f the impacts. More detailed economic impacts by two digit NAICS sectors are provided in Table A 1 in A ppendix A of this report. Impacts for o utput, value added, labor income, other property type income, indirect business taxes and employment are shown i n the individual columns of Tables 7 and 8 The direct, indirect, induced and total economic impacts are reported in separate table rows Direct impacts are the revenues income, taxes and jobs generated directly by expenditures on the CVLC project A s previously mentioned indirect effect s occur when directly impacted businesses use revenues originating from outside the region to purchases inputs ( goods and services) from the local suppl y chain. Induced impacts from non local revenues occur when the households of employees and business proprietors spend their income or profits for personal consumption at other regional businesses. Total impacts are the sum of these direct, indirect and induced effects and measure the full economic impact s of an act ivity as it ripples through the region al economy. The total output impact generated by Phases 1A through 2A was estimated to equal nearly $676 M n in 2008 dollars (Table 7). Value added impacts represent the sum of labor income, other property type in come, and indirect business taxes. The total value added impact of the CVLC during phases 1A through 2A was estimated at $ 396 M n (Table 7). Labor income which represents the sum of employee compensation an d proprietor profits, was estimated to equal n early $300 M n Other property type income consists of rents, royalties, interest, dividends and corporate profits. This impact was estimate d to equal $76 M n for these phases of the CVLC project. Nearly $ 21 M n in indirect business taxes, which represen t excise, property, and sales taxes, as well as business and licensing fees, are estimated to result from the CVLC project This figure does not include taxes on income or profits. Employment impacts represent the

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16 number of full and part time jobs create d by an economic activity. A total of 5 863 job years are estimated to result from the direct, indirect and induced effects of these first phases of the CVLC project. (Table 7 ). If activities of the first phase span 13 years, then this would represent 4 51continuous jobs over the duration of that phase. Table 7. Ec onomic i mpacts of e xpenditures for the Commercial Vertical Launch Complex at Kennedy Space Center, by p roject p hase, 2008 2020. Phase and Type of Activity Output (Mn$) Value added (Mn$) La bor Income (Mn$) Other Property Income (Mn$) Indirect Business Taxes (Mn$) Employ ment (job years ) Phase 1A 2A (first facility, 2008 2020) Construction 497.9 285.5 217.1 55.0 13.3 4,395 Ground Operations 177.6 110.9 82.5 21.0 7.5 1,469 All Activities 675.5 396.4 299.6 76.0 20.8 5,863 Phase 2B 3B (second, third facilities, 2012 2020) Construction 939.8 540.9 418.1 97.8 25.0 8,467 Ground Operations 335.3 210.2 158.9 37.3 14.1 2,830 All Activities 1,275.1 751.2 577.0 135.1 39.1 11,297 Entire Project Life Construction 1,437.6 826.4 635.2 152.8 38.3 12,862 Ground Operations 513.0 321.2 241.3 58.2 21.6 4,299 All Activities 1,950.6 1,147.6 876.6 211.1 59.9 17,160 Totals may not sum exactly due to rounding Employment impacts include fulltime a nd part time positions. The economic impacts of Phases 2B through 3B are nearly twice as large as those for Phases 1A through 2A (Table 7) Total output impacts are estimated to equal $1.275 B n Value added impacts for these latter phases total $751 M n This consists of near ly $577 M n in labor income, $135 M n in other property income, and $39.1 M n in indirect business taxes. An estimated 11, 297 job years are generated as a result of the economic activity in Phases 2B through 3B (Table 7 ) Since these phases of the project are slated to span 9 years, this would represent about 1,255 continuous jobs over that period of time. Difference s in the economic co nsequences of construction versu s ground operations for the CVLC project are highlighted in Table 8 With the excepti on of indirect business taxes, the impacts from arising from the direct, indirect and induced effects of construction activities are between 2.5 and 3.0 times larger than those from

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17 ground operations activities for the CVLC project. Out put impacts from construction activities for the CVLC total nearly $1.44 B n compared to $513 M n for ground operations. For construction activities, value added impacts are estimated to total $826 M n compared to $321 M n for ground operations. The componen ts of value added are similarly proportional between construction and ground operations with the exception of indirect business taxes. Here, the impacts of construction activities are only about 75 percent greater than those for ground activities. The em ployment impact of construction activities,12,862 job years, is nearly three times larger than the 4,299 job years created from expenditure for ground operations over the life of the project. In general, the induced multiplier impacts for both constructio n and ground activities are from three to five times greater than those created through indirect effects. This is because a much larger proportion of the labor and value added inputs originate from within the study area compared to the material inputs us ed for the project. Table 8 Economic i mpacts of c onstruction and g round o peration s e xpenditures for the Commercial Vertical Launch Complex at Kennedy Space Center 2008 2020 Activity Effect Level Output (Mn$) Value added (Mn$) Labor Income (Mn$) Other Property Income (Mn$) Indirect Business Taxes (Mn$) Employ ment (jobs) Construction Activities 1,437.6 826.4 635.2 152.8 38.3 12,862 Direct 709.1 394.9 352.4 38.5 4.0 6,686 Indirect 178.9 96.7 71.0 18.8 6.9 1,396 Induced 549.7 334.7 211.8 95.5 2 7.4 4,780 Ground Operations Activities 513.0 321.2 241.3 58.2 21.6 4,299 Direct 240.0 157.7 134.4 14.2 9.1 1,941 Indirect 59.3 32.3 22.9 7.3 2.0 468 Induced 213.7 131.2 84.1 36.7 10.5 1,889 All Activities 1,950.6 1,147.6 876.6 211.1 59.9 17,160 Direc t 949.1 552.7 486.8 52.8 13.1 8,627 Indirect 238.2 129.0 93.9 26.1 8.9 1,864 Induced 763.3 465.9 295.9 132.1 37.9 6,669 Totals may not sum exactly due to rounding Employment impacts include fulltime and part time positions.

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18 The combined impacts of all phases, and, construction and ground operations, are summarized in the bottom section of Table 8 Slightly over 1.95 B n in total output impacts result from the CVLC project starting in 2008 and going through 2020. This averages out to $150 Mn per yea r. The total value added impacts of the project are estimated to be nearly $1.15 B n At $877 M n Labor income comprises about 76 percent of the total value added impact from the project. Impacts from other property type income and indirect business tax es are estimated to total about $211 M n and $60 M n respectively over the life of the project. Not surprisingly the industries most impacted by construction and ground operations for the CVLC were Construction, Manufacturing, Government and, Administrat ion and Waste Services (Table A1). Construction was the most impacted industry with respect to output, value added and employment measures. Manufacturing was the second most impacted industry in terms of output, while Government and, Administra tion and Waste Services was the second most important for value added and jobs, respectively. Recreational and Tourism Industry Impacts The maximum anticipated ne gative economic consequences resulting from reduced recreational visitor expenditures at MINWR and CNS are summarized in Table 9 Changes in expenditures by resident visitors to these attractions only generate direct impacts because there is no loss of new or outside dollars to the regional economy as residents will likely spend disposable income on o ther purchases In contrast, r eduction s in non r esident visitor expenditures generate negative indirect and induced effects, as well as direct effects. Although there are fewer non resident visitors, their expenditures are substantially greater than re sident visitor s As a result, even the direct impacts of non resident visitors are 2 to 3 times greater than those of residents. When including the additional indirect and induced impacts from non resident expenditures, the total impacts from reduction s in non resident visitor spending are from 4.5 to 8.3 times greater than those by resident visitors. All together, maximum negative output impacts from reduced visitation at MINWR and CNS are estimated to total $69.5 M n between 2013 and 2020 or about $ 8.7 Mn per year Reductions in value added impacts total an estimated $41 M n over eight years This value added

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19 impact was comprised mostly from a $28 M n reduction in labor income, and an $8.6 M n reduction in other property type income. Slightly over $ 4.1 M n in indirect business taxes were lost due to these closures. These reduced expenditures and their secondary effects are estimated to result in a loss of 820 job years to the regional econom y between 2013 and 2020 or approximately 102 jobs each year Table 9 Economic i mpacts of r educed v isitor e xpenditures due to t emporary c losures at Merritt Island National Wildlife Refuge and Canaveral National Seashore for the Commercial Vertical Launch Complex a ctivities at Kennedy Space Center, 20 13 2020. Visitor T ype / Effect Level Output (Mn$) Value Added (Mn$) Labor Income (Mn$) Other Property Type Income (Mn$) Indirect Business Taxes (Mn$) Employ ment (Jobs) Resident Visitors (d irect ) 10.41 5.97 4.32 0.92 0.73 149 Non Resident Visitors 59.11 34.84 23.76 7.65 3.43 670 Direct 27.38 15.71 11.37 2.41 1.93 392 Indirect 8.74 4.92 3.03 1.46 0.43 71 Induced 22.99 14.22 9.37 3.79 1.07 207 Total all Visitors 69.51 40.81 28.09 8.56 4.16 820 Totals may not sum exactly d ue to rounding Employment impacts include fulltime and part time positions. Real Estate, Retail Trade, Accommodations and Food Services, and Government were the industries most impacted by reductions in recreational visitor spending as a result of clo sures (Table A2). These are sectors that are typically impacted from changes in tourism activities. For retail trade, the number of jobs lost due to closures (22) is equal to 1.85 percent of the 1,196 retail jobs created by CVLC construction and ground o peration activities. Net Impacts for Construction Ground Operation s and Recreation /Tourism The net impacts of the CVLC are estimated by s umming the positive impacts of expenditures for construction and operation of the complex with the negative impacts fr om reduced visitor spending These net im pacts are summarized in Table 10 below. Net output impacts total over $1.88 B n for the life of the CVLC project (for an average of $145 Mn per year) This represents a 3. 56 percent reduction from the $1.95 B n in total positive output impact s from CVLC construction and ground operations shown in Table

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20 8 A similar relationship exists between the magnitude of the net and total positive impacts for value added, its components and employment, except for indirect business taxes. The net indirect business tax impacts a re nearly 7 percent less as a result of the recreational area closures. This is due to the higher proportion of retail sales, and sales taxes, associated with recreational expenditures, compared to f ewer taxes collected on wholesale or producer level transactions associated with the construction and operation of the CVLC These total and net impacts of the CVLC are composed predominantly of direct and induced effects. This indicates that a substan tially larger share of direct and induced spending occurs inside the region or study area, than is the case for indirect spending. The s maller proportion of i ndirect spending indicates that a large share of the intermediate inputs purchased by local contr actors working on the CVLC are not produced within the region. The larger induced effects result from the fact that most of the employees for the CVLC project are likely to live and spend their earnings within the local three county study area Table 1 0 Net e conomic i mpacts of e xpenditure c hanges for the Commercial Vertical Launch Complex at Kennedy Space Center, 2008 2020. Activity Output (Mn$) Value added (Mn$) Labor Income (Mn$) Other Property Income (Mn$) Indirect Business Taxes (Mn$) Employ me nt (jobs) Construction and Ground Operations 1,950.6 1,147.6 876.6 211.1 59.9 17,160 Recreation/Tourism 69.5 40.8 28.1 8.6 4.2 820 Net Impact 1,881.1 1,106.7 848.5 202.5 55.8 16,340 Values may not sum exactly due to rounding Employment impacts include fulltime and part time positions.

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21 References and Information Sources Cited Florida Space Coast Office of Tourism 2008, Value of Tourism, 2006 Brevard County Tourism Development Council. http://www.nbc 2.com/News/documents/080428_brevardvaluesummary.pdf Hazen and Sawyer, P.C. 2008, Indian River Lagoon Economic Assessment a nd Analysis Update Aug. 2008 http://www.sjrwmd.com/indianriverlagoon/pdfs/IRL_Economic_Assessment_2007.pdf Minnesota IMPLAN Group (MIG), 2006. IMPLAN, Economic Impact and Social Accounting Software, and data for Florida. Stillwater, MN. http:// www.implan.com NASA Office of the CFO at Kennedy Space Center Florida, and W. Warren McHone, Ph D ., Transportation Eco nomics Research Institute, 2008, Economic Impact of NASA in Florida FY 2007 http://www.nasa.gov/centers/kennedy/pdf/217899main_Economic_Impact_NASA_2007.pdf PMG Associates, Inc. 2003, Economic Impact Analysis of Tourism 2002 Brevard County, Florida. Florida Spa ce Coast Office of Tourism 321 433 4470. Re ynolds, Smith and Hills, Inc., Architects, Engineers and Planners, 2235 N. Courtenay Parkway, Merritt Island, Florida. Schaffer William A. 1999, Regional Impact Models. The Web Book of Regional Science. Regi onal Research Institute, W est V irginia U niv ersity. http://www.rri.wvu.edu/WebBook/Schaffer/TOC.html U.S. Department of Commerce, Bureau of Economic Analysis, Regional Economic Information S ystem, 2006, Local Area Personal Income http://www.bea.gov/bea/regional/reis/default.cfm?catable=Single%20Line U.S. Department of Commerce, Census Bureau, 2000 Popul ation Division, Journey To Work & Migration Statistics Branch 2000 County to County Worker Flow Files http://www.census.gov/population/www/socdemo/journey.html U.S. Fish and Wild life Service, 2008, Merritt Island National Wildlife Refuge: Facts http://www.fws.gov/southeast/pubs/facts/mrtcon.pdf U S. Department of the Interior, Fish and Wildlife Service Me rritt Island National Wildlife Refuge and National Park Service C anaveral National Seashore ., 2003 Third Biennial Mosquito Lagoon Conference, August, 2002, Titusville, FL http://w ww.nbbd.com/godo/minwr/research/ML02 abstracts.pdf U S. Department of the Interior, Fish and Wildlife Service Me rritt Island National Wildlife Refuge and National Park Service C anaveral National Seashore 2005, Fourth Biennial Mosquito Lagoon Confe rence, Feb. 2005 Cocoa Beach, Florida.

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22 http://www.nbbd.com/godo/minwr/research/ML04 abstracts.pdf U.S. Dept. of the Interior, National Parks Service Public Uses Statistics Offic e, 2008, NPS Stats http://www.nature.nps.gov/stats/park.cfm?parkid=315 U.S. Department of the Interior, Fish and Wildlife Service, and U.S. Department of Commerce, U.S. Census Bureau, 2008, 2006 National Survey of Fishing, Hunting, and Wildlife Associated Recreation. Jan. 2008. http://library.fws.gov/nat_survey2006_florida.pdf U.S. Department of the Interior, Fish an d Wildlife Service, 2006, Merritt Island National Wildlife Refuge: Draft Comprehensive Plan and Environmental Assessment. November 2006. h ttp://www.fws.gov/southeast/planning/PDFdocuments/Merritt%20Island%20Draf t/Edited%20Draft%20CCP.pdf Whitmore, Doran 2008, Personal Communication, Department of Interior, USFWS, Merritt I sland National Wildlife Refuge Sept. 2008

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23 Appendix A Table A1. Economic i mpacts of c onstruction and g round o peration s e xpenditures for the Commercial Vertical Launch Complex at Kennedy Space Center by i ndustry g roup 2008 2020 ( r ank ordered by o utput i mpacts) Industry Group (NAICS) Output Value Added Labor Income Other Prop erty Inc ome Indirect Bus iness Tax Employ ment Million $ Million $ Million $ Million $ Million $ Jobs Construction 768.42 421.50 375.55 41.60 4.35 7,132 Manufacturing 147.52 52.86 43.99 8.15 0.72 391 Government & non NAICs 128.81 116.72 52.6 3 56.36 7.73 838 Prof. scientific & tech. srvcs. 128.04 70.27 64.75 4.60 0.93 959 Administrative & waste srvcs. 123.15 85.93 72.20 12.85 0.88 1,460 Transportation & Warehousing 101.35 73.08 63.22 1.17 8.68 1,253 Health & social services 95.59 58.33 5 0.48 7.17 0.68 995 Retail trade 89.17 58.48 36.47 9.73 12.27 1,196 Finance & insurance 76.88 41.01 23.63 15.46 1.93 406 Real estate & rental 62.70 40.25 11.24 22.87 6.15 391 Wholesale Trade 57.04 38.45 21.59 8.43 8.43 327 Information 50.14 21.76 11.45 8.46 1.85 181 Accommodation & food services 41.21 22.15 14.76 4.84 2.56 653 Other services 31.89 16.75 13.11 2.42 1.22 524 Management of companies 20.83 12.71 9.86 2.65 0.20 91 Educational services 10.86 6.59 6.00 0.49 0.10 177 Arts entertainment & recreation 10.11 6.09 4.16 1.27 0.67 157 Utilities 5.67 3.87 1.15 2.14 0.58 13 Ag, Forestry, Fish & Hunting 1.13 0.71 0.33 0.37 0.01 16 Mining 0.10 0.05 0.02 0.02 0.00 0 Total 1,950.63 1,147.56 876.57 211.05 59.93 17,160 All values in 2008 dollars E mployment impacts include fulltime and part time positions. NAICS is the North American Industry Classification System

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24 Table A2. Economic i mpacts of r educed vi sitor e xpenditures due to t emporary c losures at Merritt Island National Wildlife Refuge and Can averal National Seashore for Commercial Vertical Launch Complex a ctivities at Kennedy Space Center, by industry group 2013 2020 ( rank ordered by o utput i mpacts). Industry Group (NAICS) Output Value Added Labor Income Other Prop erty Inc ome Indirect Bus i ness Tax Employ ment Million $ Million $ Million $ Million $ Million $ Jobs Real estate & rental 1.45 0.86 0.62 0.19 0.05 14 Retail trade 1.42 0.90 0.56 0.13 0.20 22 Accommodation & food services 1.37 0.72 0.48 0.16 0.08 22 Governme nt & non NAICs 0.56 0.51 0.28 0.20 0.03 5 Prof. scientific & tech. svcs. 0.35 0.19 0.17 0.02 0.00 3 Health & social services 0.33 0.20 0.17 0.02 0.00 3 Finance & insurance 0.29 0.16 0.09 0.06 0.01 2 Manufacturing 0.28 0.07 0.05 0.02 0.00 1 Construction 0.27 0.12 0.11 0.01 0.00 2 Wholesale Trade 0.21 0.14 0.08 0.03 0.03 1 Information 0.19 0.08 0.05 0.03 0.01 1 Administrative & waste srvcs. 0.19 0.12 0.09 0.02 0.00 3 Transportation & Warehousing 0.12 0.07 0.06 0.01 0.00 1 Other services 0.12 0.06 0.05 0.01 0.00 2 Management of companies 0.11 0.06 0.05 0.01 0.00 1 Arts entertainment & recreation 0.07 0.04 0.03 0.01 0.00 1 Educational services 0.04 0.02 0.02 0.00 0 .00 1 Utilities 0.03 0.02 0.01 0.01 0.00 0 Ag, Forestry, Fish & Hunting 0.01 0.00 0.00 0.00 0.00 0 Mining 0.00 0.00 0.00 0.00 0.00 0 Total 7.39 4.35 2.97 0.96 0.43 84 All values in 2008 dollars Employment impacts include full time and part time positions. NAICS is the North American Industry Classification System

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25 Appendix B : Glossary of Regional Economic Term inology Direct effects/impacts: Direct impacts, represent the revenues, value added, income, or jobs that result direc tly from an economic activity within a regional economy. Employment or Jobs: Represents the total numbers of wage and salaried employees as well as self employed jobs. This includes full time, part time and seasonal workers measured in annual average jo bs. Indirect Business Taxes : Include sales, excise, and property taxes as well as fees and licenses paid by businesses during normal operations. It does not include taxes on profits or income. Indirect effects/impacts: Indirect effects occur when busine sses use revenues originating from outside the region, or study area, to purchase inputs (goods and services) from local suppliers. This secondary, or indirect business, generates additional revenues, income, jobs and taxes for the area economy. Induced e ffects/impacts: Induced effects or impacts occur when new dollars, originating from outside the study area, are introduced into the local economy. Induced economic impacts occur as the households of business owners and employees spend their earnings from these enterprises to purchase consumer goods and services from other businesses within the region. This induced effect generates additional revenues, income, jobs and taxes for the area economy. Input Output Analysis: The use of input output models to est imate how revenues or employment for one or more particular industries, businesses or activities in a regional economy impact other businesses and institutions in that region, and the regional as a whole. Input Output Models: A mathematical representation of economic activity within a defined region using inter industry transaction tables or matrices where the outputs of various industries are used as inputs by those same industries and other industries as well. Labor Income: All forms of employment comp ensation, including employee wages and salaries, and proprietor income or profits. Local revenues/expenditures: Local revenues or spending represent simple transfers between individuals or businesses within a regional economy. These transactions do not generate economic spin off or multiplier (indirect and induced) effects. Margins: Represent the differences between retail, wholesale, distributor and producers prices. Non local revenues/expenditures: When outside or new revenues flow into a local econom y either from the sale of locally produced goods and services to points outside the study area, or from expenditures by non local visitors to the study area, additional economic repercussions occur through indirect and induced (multiplier) effects. Other P roperty Type Income: Income in the form of rents, royalties, interest, dividends, and corporate profits. Output: Revenues or sales associated with an industry or economic activity. Total Impacts: The sum of direct, indirect and induced effects or econo mic impacts. Value added: Includes wages and salaries, interest, rent, profits, and indirect taxes paid by businesses.