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The Miley Report
A not-so-clear perspective

Warwick Jones

The Miley report does not impress us.

Commissioned by the Historic Charleston Foundation (HCF) and entitled The Cruise Industry in Charleston; A Clear Perspective, its purpose as defined in the introduction was “to provide an assessment of the positive and negative, short-term and long-term impacts that the cruise industry has, or may have, on Charleston’s economy and quality of life as they relate to the historical, architectural and cultural character of the City”.

The foregoing is a reasonable objective. But our interest in the report dulled when we read further - “However, as we point out several times in this report, the truth about the industry’s impacts – good or bad – on the City of Charleston can only be determined with a comprehensive analysis based on extensive, real data collected from Charleston’s residents and businesses”. Which the Miley report was not! The report can bee seen on the HCF website under Preservation/ Cruiseships. Press here.

There are many things of interest in the report but nothing that causes us to feel uneasy about the present level of cruise ship activity. Much of the report focuses on discrediting the study by the College of Charleston (CofC) professors, Crotts and Heffner, and which the State Port Authority (SPA) commissioned. According to the Miley report, the $66.32 and $43.25 estimate by the professors of local spending by a Port of Call cruise passenger and a Cruise Origination passenger respectively were too high. The Miley report made no estimate itself though gave many reasons why the professors erred.

The Miley report might be correct in that the CofC estimates were too high. But so what? Are we to reduce or eliminate cruise ship activity because the local benefit is less that originally thought? A judgment on benefits goes much further than the parameters of the Miley report.

And did Historic Charleston Foundation pay money to be told so much of what we already know. Some of the conclusions are simplistic. Of course the historic ambience of Charleston is important and must be protected? And that “City should ensure that the cruise industry is managed and controlled like virtually all other attractions and activities governed by the City to the best of its ability” Isn’t this essentially the issue before the Supreme Court – the extent of the City’s powers? And that a committee should be formed to monitor cruise ships. Doesn’t one exist in the HCF/City Task Force?

But we will come back to these things. Let’s first look at the economics of cruise ships in Charleston as per the Miley report. It spends much time assessing the local economic impact. It tries to define the benefit and cost to the City which it says is difficult. But notwithstanding the difficulty, it claims the benefit is less than that estimated by the College of Charleston professors. But in its analysis, the benefits that accrue to the passengers are totally ignored. Let’s confine the math to just the cruises that originate and end in Charleston. I don’t know what passengers pay but say it is an average of $800 per voyage. If there are 80 voyages a year with an average of 2000 passengers, then they pay something of the order of $128 million a year. In economic terms, this is the measure of the enjoyment or utility they receive.

Remember this phrase "Life, liberty and the pursuit of happiness"? It is one of citizens’ unalienable rights in the Declaration of Independence. That some 2000 persons every 5 days or so choose of their own free will to take a cruise out of Charleston, is exercising their right to pursue happiness. The passengers are not aliens; they are generally citizens of the US, many from South Carolina and perhaps the City. They are often the parents or children of citizens of the City. An analysis as performed by Miley & Associates cannot ignore the enjoyment of passengers on cruises in assessing the benefits of cruises.

To illustrate my point, let’s look at say a concert sponsored by the Concert Association. It brings in to Charleston an international artist or group of artists. The cost of a performance may well exceed $100,000. Ticket sales probably won’t cover the cost and in tune with Dr Miley’s analysis, there would be no net economic benefit for Charleston. Most of the money would leave Charleston in the pockets of the performers. Indeed, the net economic benefit of the City would probably be negative. But that is to ignore the great enjoyment of the performance by the citizens of the City and other municipalities.

It also is a bit much for the report to brush off the fact that many people that take cruises stay outside the city, in North Charleston or Mount Pleasant. That these communities benefit is only a note in the report. Lordy, these municipalities are part of our community. You can’t ignore them. Is the City of Charleston indifferent to Boeing’s investment in North Charleston? Hell no!

The report makes much out of the limited local sourcing of goods by cruise ships. The conclusion of the report may well be correct. But running a cruise line is little different from running most businesses – minimize costs so charges can be kept low and customers encouraged. Yes, it would be great if Carnival bought all its supplies from local growers and suppliers. And I’m sure Carnival would do so if local supplies were cheaper but they aren’t. If it had to buy all local, how much higher would costs be and how much higher passenger charges? And if the charges were that much higher, would Carnival attract the same number of passengers? Indeed would cruises be viable?

Reflecting on the above, I am happy that there are federal regulations that inhibit the ability of municipalities and States to impinge on free trade.

The report calls for a committee to monitor the impact of Cruise ships. How can the HCF support this when it, with the City, has already created a Task Force to do this and other things? If the executive director of HCF thinks that the Task force is not doing its job, she should say so. She is a moderator.

The report, like the HCF and others, ignores State Law when it suggests what the City should do. The City believes that State and Federal Law puts the SPA and cruise ships beyond its ability to impose controls. The suit brought by the Southern Environment Law Association and now before the SC Supreme Court should ultimately settle the power and reach of the City. At least we hope so.

After the Mayoral election in November last, it was reasonable to think that cruise ship opponents would realize that their view was not widely shared. Arguably, voting on the Peninsula was effectively “for” or “against” cruise ships. The high voter turnout in the “below Broad” precincts and the strong support for the Mayor in these precincts, Ansonborough and most of the City, was an endorsement of City policy, we believe.

And let’s do away with the hypocrisy. Maybe some of the cruise ship opponents will be satisfied if cruise ship visits (104 a year) and the size of vessels (3500 passengers) are codified. But even if they say otherwise, the majority just wants cruise ships out of Charleston! And it is interesting that the Miley Report recognizes the expected decline in the number of cruise ship visits – “The decline could be an indication that 2011 was a peak and the proposed limit of 104 cruise visits a year may never be an issue”. So why are opponents making it an issue?

The Miley report is a diversion and certainly not an indictment of cruise ships. Most of the recommendations have been made before, by others. We doubt the Report will have any impact on City policy.

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