Cherry Point coal terminal study questions economic value

A coal train rolls through Fairhaven next to the Community Boating Center, April 30, 2014 in Bellingham. A new study suggests additional coal trains would have detrimental impacts to business and tourism, especially along Bellingham’s waterfront.
A coal train rolls through Fairhaven next to the Community Boating Center, April 30, 2014 in Bellingham. A new study suggests additional coal trains would have detrimental impacts to business and tourism, especially along Bellingham’s waterfront. The Bellingham Herald

If a proposed coal terminal is built at Cherry Point, it could end up impeding the economy in Bellingham and Whatcom County, according to a new report commissioned by Communitywise Bellingham.

The report got a warm reception during a presentation by one of its authors Tuesday, June 16, in the Leopold retirement home’s ballroom. It was not so well received by the proponents of the Gateway Pacific Terminal, who dismissed the report as biased “advocacy research.”

Communitywise Bellingham, whose mission is “advocating for our community’s economy, health and livability in relation to the proposed Gateway Pacific Terminal coal project,” paid $48,000 for the study, using donations from individuals and foundations.

The 47-page report from The PFM Group of Philadelphia doesn’t reach any hard conclusions about whether Gateway Pacific Terminal would be a detriment to the area’s economy. It focuses on the city and county’s identity as a mecca for recreation and tourism, and it suggests some of the economic damage may have been done already by the 2011 announcement of plans for the terminal.

The report advances the notion that the outdoor activities in Whatcom County amount to a “second paycheck,” or a value gained from living here, that is strong enough to attract people despite the higher home and rental costs, and lower wages. Bellingham and the county’s unique identity could be jeopardized by a coal terminal, the report said.

Evidence that the coal terminal’s impact is already being felt is in the job-growth and population figures from 2010 to 2013, the report said. Growth is down considerably relative to 2001 to 2010, when tourism, notably Canadian visitors, drove most of the economic growth. During that decade, Whatcom’s employment grew at three times the state’s rate, the report said.

Also during that decade, the Canadian dollar became increasingly strong relative to the U.S. dollar — a circumstance that favors growth in the county. In 2012, when the Canadian dollar peaked at around par relative to the U.S. dollar, retail sales in Whatcom County outpaced the state’s growth.

But the PFM report cites measures of growth in Whatcom County that fell to the statewide level or below from 2010-2013, and it points out that this drop-off coincides with the coal terminal announcement.

Also, property values along Bellingham’s rail line didn’t rebound as well as other home values in the area, the report said.

“We’re not saying GPT caused this reduction in property values,” said David Eichenthal, an author of the study, at Tuesday’s presentation. “We’re saying this is an issue that deserves further exploration.”

“There are lots of different factors that can affect the local economy,” Eichenthal said.

Hart Hodges, director of Western Washington University’s Center for Economic and Business Research, said the PFM study used good data and is sound overall, but he questioned some of its conclusions.

“I’m not willing to say the current slow population and employment growth is due to the trains,” Hodges said, adding that similar growth trends can be seen in other places.

“I’m not crazy about putting so much emphasis on the idea that Bellingham is a second paycheck city,” Hodges added, in an email to The Bellingham Herald. “Young people aren’t willing to take a smaller paycheck to live here. And glorifying that idea runs counter to all the talk about affordable housing and such.”

Where Bellingham seems most vulnerable to business and tourist impacts from the terminal is along the waterfront, the PFM report said. Up to 18 additional trains per day could run through Bellingham if the terminal is operating at full capacity, shipping 48 million metric tons of coal annually to Asian markets.

“GPT’s potential train-related impacts — increased noise, vibrations, diesel exhaust and traffic congestion — could be concentrated in the same geographic area as much of the region’s economically significant tourist attractions, accommodations and food service jobs — namely along the Bellingham waterfront,” the report states.

Perhaps the biggest question to come out of the report is this: If the terminal is built, can the added train traffic be met with more overpasses and other ways to get pedestrians, bicyclists and cars to and from the waterfront? This could correct for any harm the terminal would have on economic development at the waterfront, according to the study. But then the next question becomes, who’s going to pay for all that?

On the other side of the scale are the jobs Gateway Pacific Terminal would create: 4,400 temporary jobs during construction, plus 1,250 long-term jobs (including indirect jobs) during operation, according to the Gateway Pacific Terminal website.

The PFM study contends GPT’s own job numbers may be too high, based primarily on the assumptions made about the number of indirect jobs created. SSA Marine, the terminal applicant, did not respond to PFM’s request for jobs data.

“If SSA Marine is now willing to provide additional information on their jobs data and assumptions, we certainly welcome that change, as our community and policy makers would benefit from greater transparency and updated job projections from GPT,” Communitywise Bellingham Executive Director Shannon Wright said in an email to The Bellingham Herald.

Officials with SSA Marine did not respond to Wright’s statement but did have some things to say about Communitywise Bellingham and the PFM study.

“This is the third time that PFM has been hired to say negative things about the project. Their work is in the nature of advocacy research and it is not objective,” SSA Marine spokesman Craig Cole said in an email to The Bellingham Herald. Cole was referring to a similar 2012 study, also commissioned by Communitywise Bellingham, and a 2014 study on train traffic in the central Puget Sound, for the Puget Sound Regional Council.

Cole also defended SSA Marine’s job figures, saying the consultant that came up with them, Martin Associates of Philadelphia, is “one of the world’s leading experts on port economics.” The assumed multiplier effect for indirect jobs is in line with other industries at Cherry Point, Cole said.

Ultimately, Eichenthal said, the study intends to raise important questions for the public and decision makers.

“As a policy maker, you always make better decisions when you have more information, and this is a big decision,” Eichenthal said in an interview after his presentation.

“We leave you with more good questions than thorough answers to those questions,” Eichenthal said at the conclusion of his talk.

Reach Ralph Schwartz at 360-715-2289 or ralph.schwartz@bellinghamherald.com. Read the Politics Blog at bellinghamherald.com/politics-blog and follow him on Twitter at @BhamPolitics.

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