to Nicholas Johnson's Iowa Environmental Project Web Site www.nicholasjohnson.org/politics/IaChild
Boosterism and the Fog of Rain Forests
Sunrise Optimist Club
Iowa Memorial Union
Iowa City, Iowa
October 5, 2004
[revised 20041001 1700, 20041007 1500]
Note: This is the latest in over a dozen statements from Nicholas Johnson, including six published newspaper columns, regarding the proposed Coralville rain forest. The complete list is appended, below.
My memory is that my father, Wendell Johnson, was at one time president of Iowa City’s only Optimist Club, but that in those days they all decided to sleep in late and just get together for lunch.
My wife, Mary Vasey, is with me here this morning. Her father, Wayne Vasey was responsible for starting the University of Iowa's School of Social Work. He was also a member of that club. Indeed, the stories Mary and I have been told are that our fathers occasionally did dual stand-up routines for their fellow Optimists.
In any event, I’m quite impressed with your ability to generate so much optimism this early in the morning. You call yourselves the "sunrise" club, and that's still an appropriate name a week or so after the fall equinox, but give it another month and you'll have to call yourselves "the optimistic forces of darkness club."
It's quite appropriate that you should ask me to speak about the proposed $180 million, 4-1/2-acre rain forest in Coralville. Because so far as I can tell it is a project that is driven by little more than pure optimism.
Why I have chosen to study and write about this project over the past four years is, frankly, as much of a mystery to me as it is to my family.
Whether it is built -- or not -- will have no impact upon me personally, financially, professionally, politically or socially. I guess my fixation comes from the same thing that causes you to contribute time and effort to our community, through this Optimist Club and in numerous other ways. We're like the fellow who asked the farmer what he could do to help, and was told "Just grab a plow and start plowing." We want to help improve our community in whatever ways we can.
It seemed to me this project was not getting the critical evaluation it needed if it was to be successful, and so I thought I'd just grab a plow and start plowing.
I should make clear from the outset that I consider myself “neither booster nor basher.” If this thing is ever built I may even pay it a visit myself -- once. In fact my Iowa Environmental Project Web site [http://www.nicholasjohnson.org/politics/IaChild] contains links to more information and opinion favorable to the project than the project has on its own Web site. Of course, it's balanced. It also contains links to comments from opponents, and to my own writing.
I have met with the project's chief administrator, David Oman, on a number of occasions, and have exchanged emails and phone conversations with him. I met with Nancy Quellhorst after her appointment. I have great respect for the promotional work that both of them do, and for the most part, in my opinion, do exceedingly well.
Though I’m confident they don’t consider me among their strongest supporters, the fact is that I have suggested sources of funding and given them a number of other suggestions designed to help them succeed. I have not been among those ridiculing the idea of, as some have characterized it, “a rain forest in a corn field.” Nor have I emphasized that there are better uses for $50 to $180 million in public money. What I have been doing is asking questions; tough questions; questions that the promoters must ask themselves if they are to have any chance of success.
As some of you know, I am used to speaking for entire semesters at a time. And during the last four years some of my speaking and writing has involved the Coralville rain forest project. In one of the pieces I wrote earlier this year I itemized 14 categories of unanswered questions and issues; not 14 issues, 14 categories of issues -- most of which remain not only unresolved but unaddressed. However, because you have suggested I hold my remarks to considerably less than an entire semester, most of those 14 categories won't even be mentioned this morning, let alone explained and explored.
My last Des Moines Register op ed column was an effort to describe the elements of a very successful rain forest in Omaha, at the Henry Doorly Zoo, and contrast those elements with what the Coralville project has, and has not, done so far. ["Coralville Project Can't Match Up to Omaha's Zoo," Des Moines Register, July 17, 2004] I do not have the time to review that list of helpful suggestions either.
For those of you who would like to know more than we can cover here, you should find the Web site http://www.nicholasjohnson.org/politics/IaChild], with its dozens of links, a very helpful place to begin.
Benefit-Cost Analysis and Risk Assessment
So let me stick with some basics, and begin with a word about benefit-cost analysis and risk assessment.
We hear a lot from the project's cheerleaders about its potential benefits.
But all of you are experienced enough to know that no project can be evaluated on the basis of imagined “benefits” alone. The very name, “benefit-cost analysis,” suggests that benefits must be balanced against costs.
Few proposed projects for any community have no benefits whatsoever. The Coralville rain forest has possible benefits. Developing a breed of pigs that could fly might have possible benefits. The existence of possible benefits is seldom if ever an issue.
The questions always are: (1) "Just what are those benefits?", (2) "What are the probabilities they will be realized?" and (3) "Even if they are ultimately realized, do the benefits justify their costs?"
The techniques of “risk assessment” also must be brought to bear. What are the downside risks? What’s the worst case scenario? How devastating would it be? What are the probabilities it will come to pass? What then -- to use the language of our challenge in Iraq -- would be our "exit strategy"? Are the potential benefits worth taking that potential risk?
These are some of the questions I have been asking for the past four years.
Barriers to Rational Analysis
The frustrations this project creates for anyone trying to think about it analytically are similar to those associated with nailing Jello to a wall.
The fact there are frustrations doesn’t mean the project shouldn’t go ahead. What it does mean, however, is that it should not proceed until we have the data that would be necessary to enable a rational person to come to a verifiable, analytical conclusion as to whether or not it should proceed.
So what do I mean by "Jello"? What are those barriers to analysis?
Lack of Focus
The most fundamental problem is the promoters' lack of focus.
It is so severe that it reminds me of the story of the professor who asks her class if anyone has any questions.
A hand goes up. “I have only one question, professor.”What are the rain forest's proponents talking about?
“Yes,” the professor says, “what is it?”
To which the student replies, “What on earth are you talking about?”
A major problem is that what the rain forest’s proponents talk about shifts from time to time.
Over the years they have said it was going to be a K-5 school, a tourist attraction, a national scientific research center, environmental conservation demonstration projects, a rain forest without animals, sometimes a forest with plastic tree trunks and sometimes with real trees, a teacher training facility, a rain forest with animals, an IMAX theater, prairie grass and wetlands, and so forth.
Occasionally they downplay one or another of these ideas, acknowledging that they are mutually inconsistent (such as surrounding an elementary school with hoards of tourists).
Eight years after Ted Townsend’s generous efforts began, they have yet to settle upon a name for their project. It began as “Iowa Child.” That word, "child," was initially an acronym for "Center for Health In a Loving Democracy" [see "The Coralville Rain Forest: A Brief Overview of Remaining Issues," April 9 and 24, 2004, endnote 6]. "Iowa Child" was ultimately abandoned for “Iowa Education/Environmental Project” (although the sponsoring foundation, and its Web site, continue to use "Iowa Child"). They are now using “Iowa Environmental Project” -- temporarily, as what they call “a placeholder.” [See see Zack Kucharski's "Coralville Rainforest Project Running in Red," The Gazette, August 7, 2004.]
Moreover, this last change is further evidence of a rather bewildering shift in focus. For they dropped the word “education” from their name at the very time they were bringing on board their education director. He is, as you probably know, one of Iowa’s most prestigious educators, the former director of the Iowa Department of Education, Ted Stillwell.
The project at one time received and spent a $500,000 U.S. Department of Education grant that brought together an impressive group of educators to consider science education in general and the use of a rain forest in science education in particular. But the group was subsequently disbanded, their report to the USDOE has never been put on the project’s Web site, and there is no known, detailed, board-approved, educational plan based on that earlier work.
This shifting lack of focus is perhaps the most serious contributor to the project's Jello-like consistency.
Lack of Details
Second, regardless of what the focus may be during any given month, the project either doesn’t have, or has but is unwilling to share, any evidence of detailed plans.
As a couple of professionals in this business
put it, "just having a theme park does not automatically insure an influx
of tourism." Clive B. Jones and John Robinett, "The Future Role of Theme
Parks in International Tourism," ERA Issue Paper, Economics Research Associates,
June 1995, at
http://www.econres.com/documents/issue_papers/issue_era_15_future_role_of_theme_parks.pdf ("Typically, residents (from within 1.5 to 2 hours) will account for 80 percent of traditional theme park visitation. Even the tourist visitors are often in the area for other reasons (such as visiting friends and relatives). Thus, just having a theme park does not automatically insure an influx of tourism.")
We have plenty of local monuments to this intuitive truth.
I am not the only one who has had difficulty getting information from the project. Four years ago I was promised answers that have yet to arrive. A document that was coming in March of this year isn’t here yet. For months the project's Web site has been promising that, "A newly designed site will be updated soon." The press was told it would definitely be ready by August. As of early October [I last checked October 1] we were all still waiting.
Most of the talk about the rain forest's finances so far has focused on raising that $180 million construction cost. Clearly, a $90 million shortfall in a $180 million project is a bit of a problem.
But focusing on construction costs diverts attention from what is the much more serious financial problem: attracting the attendance necessary to sustain operating costs year after year.
A major factor in bringing big numbers to an attraction is the concept of "destination."
Some multi-million-visitor attractions become destinations in their own right. Families may drive or fly to Anaheim, California, for the sole purpose of touring Disneyland for as long as a week. But it is rare for an attraction to be the destination.
More common is the attraction that is merely located in or near a destination. In this sense, a destination may just be an urban center so large that its population can, alone, support the attraction. An area may be a destination because of natural features such as oceans, beaches, or mountains. It may appeal to history buffs, like Boston or Savannah. It may be a major conference center, like Las Vegas. It may be a destination because of the large number and diversity of commercial attractions that are clustered there, each contributing to the success of the others. Or it may, like New York City, be a destination because of a combination of these qualities.
However much we may admire the boosterism of Coraliville, Iowa, it does not, yet, qualify -- by any of these measures, let alone a combination -- as one of America's most popular (or populous) "destinations."
And bear in mind, we're not talking about attendance the first year or two when the data indicate that almost anything new will attract the curious. We're talking about 5, 10 and 20 years after opening, long after you and I have been there once or twice.
Individual attractions such as this rain forest, especially those that are not located at "destinations," draw as much as 80 percent of their attendance primarily from their surrounding areas. So the rain forest will be disproportionately dependent on Iowans for operating revenue.
[Why will the rain forest be disproportionately dependent on Iowans?Given the relatively low attendance figures, the rain forest will need comparatively high ticket prices to generate its operating costs. But the high admission fees will tend to discourage the necessary attendance, given the availability of alternative, and cheaper, attractions.
The promoters speak of the out-of-state "drop-in" visitors traveling Interstate-80. They point to what they say are the 50,000 vehicles that pass the site each day.
There may be data regarding the percentage of drivers who are potential, spontaneous customers for an attraction (as distinguished from customers for rest stops, gas, food, lodging and shopping) along an Interstate highway, but the promoters have provided none, and I am unaware of any.
Without such data I believe any reference to "50,000" is grossly misleading -- for the following reasons.
(a) For starters, the number is 45,000, not 50,000. More significant, if vehicles are counted, say, five miles either side of the Coralville exits the number drops to something closer to 30,000. In other words, one-third of the I-80 traffic going by the rain forest site is apparently local residents using I-80 to go from one part of town to another. But that's the least of it.
(b) Not everyone who works in the Coralville area lives there. So what proportion of that 30,000 are people who, for example, live in Cedar Rapids, or North Liberty, and work in Iowa City -- or travel some other direction and distance between home and work? Commuters are unlikely to take a three hour break to tour a rain forest on their way to work.
(c) Intuitively, it seems reasonable to posit that many of those 30,000 vehicles involve, not only Iowans (i.e., not potential out-of-state rain forest customers), but Iowans who are on a schedule, have a task, a destination, a meeting, or other reason why they're not in the market for attractions as they travel from, say, Davenport to Des Moines. The few who are from out-of-state may well also be on business, and a schedule, trying to cover as much mileage each day as possible.
(d) Certainly this is true of the numerous semi-truck drivers who are under time pressure to make their runs (if they have been counted in that 30,000).
(e) This leaves some number of vehicles occupied by parents with children, working couples on holiday, and retired or otherwise leisurely individuals. Presumably, however, a significant proportion of them are Iowans as well.
(f) Of those who are from out-of-state, how many of them will be either coming to Coralville as a destination, or sufficiently leisurely to be open to spontaneously deciding to visit attractions along the way (rather than trying to make it to the motel where they have a reservation, grandmother's house, or to their real destination in, say, Chicago or Denver)?
(g) Finally, among that number, what percentage are likely to be sufficiently attracted by the notion of our rain forest to make Coralville the place they do stop (rather than the competing sites along the way)? Whatever that number may be, it is so small as to make any reference to "50,000" grossly misleading.]
For example, for less money than the Coralville rain forest alone will cost, a family of four can spend the entire day touring numerous attractions at Omaha's Henry Doorly Zoo -- including what was once the world's largest indoor rain forest.
But even with our rain forest's inflated proposed admission charges, it will need between 1.1 to 1.5 milliion visitors a year to survive.
In case you haven't yet done the math, those numbers mean that every man, woman and child in the state of Iowa will have to pay it a visit, at least once every two years, from the day they're born until the day they die. Are you prepared, this morning, to pledge you will do that?
And even this calculation assumes that those Iowans who live west of Des Moines will honor their life-long obligation to make the bi-annual drive across the state to give us their money rather than getting their periodic rain forest fixes after the short drive to Omaha.
The authors of a balanced bit of good journalism in the Des Moines Register last month noted many experts' skepticism about the rain forest's projected revenues. They also reported Oman's reliance on his consultants' rosy predictions. They asked,
"What if [Oman's] experts are wrong?Perry Beeman and Erin Jordan, "Amazon Meets Iowa," Des Moines Register, September 19, 2004, http://www.nicholasjohnson.org/politics/IaChild/dmr40919.html.
"Oman is not saying. He avoided answering questions about what would be done with the facility -- and whether taxpayers would pay the deficits -- should the rain forest fail to draw the 1.1 million annual visitors needed to break even.
"He suggested that it is a virtual certainty the Coralville project will succeed."
This confidence is typical of the project's boosters.
As mentioned earlier, the presentations by the promoters, the op eds and letters to the editor from their committee members, usually speak only of the potential benefits -- if and when their dreams are ever realized. They don't say, "what I would like to see the rain forest do," or "what we hope to be able to do," or even "what we plan on doing." They speak a language of certainty: "The project will . . .."
When challenged with the tough questions, if any response is provided at all, it is often just a listing of the prestigious individuals they have signed on, from chief administrator David Oman, to former Governor Robert Ray, to former director of the Iowa Department of Education, Ted Stillwell -- as if names were an adequate substitute for business plans and data.
Well, I'm sorry, but one cannot simply refuse to address one's responsibility for the consequences if a multi-million-dollar public project fails financially. Its success is not "a virtual certainty." In fact, most of the expert economists with whom I've communicated or whose work I've read, economists who research and write about such matters, think it's much more likely that the project will not make it financially.
It's easy to get consultants to provide a promoter the inflated projections he or she would like to see.
It's much harder to get the subsequent reality to match. As a result, the nation is littered with the vacant remains of boosters' dreams turned to nightmares.
Anderson's specific forecast is consistent with the research of independent academic economists Robert A. Baade and Victor Matheson, "Super Bowl or Super (Hyper)bole? Assessing the Economic Impact of America's Premier Sports Event," http://lanfiles.williams.edu/~vmatheso/research/superbowl2.pdf. One of their examples involves a calculation that the NFL's claim of a $396 million impact from Super Bowl XXXIII on the economy of south Florida in 1999 exaggerates the actual effect by as much as 10 to 20 times. Matheson has come to comparable conclusions with regard to the projections of promoters of other major sporting events. [See http://lanfiles.williams.edu/~vmatheso/research.htm]
And see, Steven E. Spickard, "Value of a Major League Sports Franchise to a Community," ERA Issue Paper, Economic Research Associates, November 6, 1995, at http://www.econres.com/documents/issue_papers/issue_era_18_major_league_sports_franchise.pdf . ("[E]conomic impacts of sports teams . . . are not hundreds of millions of dollars. . . . [F]or economic development purposes, sports stadiums and arenas are not particularly effective at creating jobs and income. Compared with . . . ports and factories, sports facilities are a rather poor investment. In most cities, a single substantial hotel has a greater economic impact than a major league sports facility.")
Does this seemingly common experience of overly optimistic estimates of visitor attendance -- whether for sports, the arts, or outdoor facilities -- mean that the Coralville rain forest attendance projections have also been proven to be overly optimistic? Of course not. What it does mean is that we should be very concerned they may be. What it does mean is that our communities need the second and third opinions that can only be provided by independent economists who are not working for the project.
What are our options if, as so many predict, our project does not make it financially?
There are four that I can imagine:
The Elephant in Our Rain Forest
Even assuming the project would be able to create a sufficient cash flow to stay in business, I've left for last what is the most troubling and decisive hurdle.
It is what I call "the elephant in our rain forest."
Central to this project having any chance at success is its ability to market itself as "the world's largest."
The rain forest began as a $300 million venture. After it was scaled back to a mere $225 million, even the project's own consultants advised that any further reduction risked financial failure.
Now it is a $180 million project (though, without detailed construction, pre-opening, and operating budgets, it is impossible to know just what is and is not covered by that figure).
But the grim reality is that, even accepting the promoters' financial generalizations, for the past few months the project has received not one dollar from a local donor and remains $90 million short. [See, e.g., Brian Sharp, "Rain Forest Progress Slow Going; Coralville Project Still Seeks Funds," Iowa City Press-Citizen, July 6, 2004.]
Even if it could be built, we're left with those troubling projections of attendance and income. But when we only have a half of our construction capital in hand, why are we even talking about any other issue at all?
The promoters have said that the ground breaking scheduled for this fall is now to be a "ceremonial ground breaking." But they have also said that, even if they are unsuccessful in raising the $180 million they are determined to "build something."
The problem, of course, is that their "something" -- whatever that may prove to be -- has even less chance to make it financially than a $180 million rain forest.
Vision Through the Fog
Iowans need vision. They need to think big. Few realists would dispute that.
But, as I've written elsewhere, the "vision" is the easy part. The hard part is making the numbers work.
Even those who are not members of the Sunrise Optimist Club, given the choice between optimists and pessimists, tend to prefer optimists.
But as George Carlin has observed, “Some say the glass is half empty. Some say the glass is half full. I say the glass is too big.”
In short, there’s a third group. Neither optimistic nor pessimistic, they are simply realistic.
These are the folks who say, “Show me the money.” “Let me see your business plan.” "Where's the data?" “What’s your projected cash flow?” “Where’s the benefit-cost analysis?” “What are the risks?" "Why are they worth it?”
Boosterism and cheerleading have their place, in business as well as on the athletic field.
But there’s a lot of fog surrounding our proposed rain forest. And it’s going to take a lot more than "The Music Man," Harold Hill [http://www.imdb.com/title/tt0056262/ ], or the “shoeshine and a smile” of salesman Willie Loman, to cut through it.
Nicholas Johnson's Web site devoted to the "Iowa Environmental Project" is found at http://www.nicholasjohnson.org/politics/IaChild
His most current and thorough review of the 14 remaining categories of issues, with supporting endnotes, is "The Coralville Rain Forest: A Brief Overview of Remaining Issues," added to this site April 9, 2004 (and most recently revised April 24).
His most recent published comments are his Des Moines Register op ed column of July 17, 2004, comparing the financially successful Henry Doorly Zoo in Omaha with the financially questionable plans for the Coralville Rain Forest: "Coralville Project Can't Match Up to Omaha's Zoo" and the Corridor Business Journal column based on this speech text, "Can't See the Forest Or the Trees," October 4, 2004.
The seven most recent op ed columns (as of October 2004) are:
Other pieces include, in reverse chronological order:
"Boosterism and the Fog of Rain Forests," (text of this talk to the Iowa City Sunrise Optimist Club, October 5, 2004).
"Iowa Child: Question About Questions," WSUI-AM "Talk of Iowa," January 26, 2004 (an exchange with the project's chief administrator, David Oman).One of his first efforts at exploring the range of issues (some of which have been modified by the promoters' revision of plans) is "Iowa Child' Concerns," January 22, 2001.
"A Great Return on Investment," Iowa City Press-Citizen, December 12, 2003. (And see, for supporting data regarding tie between campaign contributions and $50 million federal grant, Rob Bignell, "Your Congressman's Price Tag," Iowa City Press-Citizen, December 10, 2003.)
"More Needed on Iowa Child," Iowa City Press-Citizen, February 13, 2001.
"Whose Child is This?" January 22, 2001 (remarks at an Iowa City forum about the project).