By Kenneth Boone
From Lake magazine, July 2009
For years, area residents have had a gut-level feeling about the economic importance
of Lake Martin. Now, based on a new independent analysis, we’ve got the numbers to
back up that feeling – and many will be shocked to learn just how much Lake Martin
impacts east central Alabama’s economy.
For instance:
Existing development on the lake and in waterfront subdivisions now has a total
appraised value of $3.4 billion.
In Tallapoosa County, lakefront properties account for half of all the assessed
property value, even though lake homes make up less than a quarter of the county’s
residences.
Lake Martin development supports 1,600 total jobs, and if construction employment
is included, that figure jumps to 3,170 jobs. Permanent jobs tied to the lake total 449,
while retail and personal services jobs related to lake development add another 1,100-
1,200 jobs.
Lake Martin residents and guests now account for about $89 million per year in
retail sales in Tallapoosa, Coosa and Elmore counties.
Since 2000, the value of new development on the lake totaled $918 million.
By the year 2044, projections based on growth patterns in comparable locations
show that Lake Martin could support an additional 6,200 homes, four new golf courses,
two new hotels, more than a quarter million square feet of retail stores and 3,900 new
jobs in our area.
Over the next 35 years, projections show lake development will add $4.8 billion in
new investment to the area’s economy.
These are just a few of the eye-opening findings established by a new economic
analysis from Robert Charles Lesser & Co. (RCLCO), which is known as the largest
independent real estate advisory firm in the U.S.
A coalition of seven Lake Martin organizations engaged RCLCO to research both the
current economic impact of Lake Martin and the potential for future growth. The
coalition is made up of the City of Alexander City, the Elmore County Commission, Lake
Martin Area Economic Development Alliance, Lake Martin Resource Association,
Middle Tallapoosa River Basin Clean Water Partnership, Russell Lands and the
Tallapoosa County Commission. LMRA and Russell Lands initially spearheaded the
project, but all the organizations funded and provided data for the study.
LMRA President Charles Borden said, “We are very pleased with the results. We
knew that the impact of Lake Martin on the economy of the three-county area and the
state was large, but this proves it, this sets it out in terms of dollars and figures and jobs
and information that is factual.”
Borden said the study, which reveals the lake’s current impact on Tallapoosa, Coosa
and Elmore counties as well as projects its economic impact for the next 35 years, would
initially be used to provide information to state lawmakers and the Alabama Power Co.
re-licensing effort for Lake Martin. The analysis also projected the economic value
created when the lake is at full pool as opposed to winter pool levels, which LMRA will
present to Alabama Power Co. to support its request to add more full pool days before
and after the current summer season.
“The results are interesting, exciting … as factual as you can be when you put a lot of
assumptions into a study,” Borden said. “The assumptions were guided by RCLCO and
their experience doing this kind of work and the desire to come up with a product that
would be defendable, that would not be exaggerated. Basically I think it’s a conservative
report.”
“I think the impact is greater than anybody could have imagined,” said Don
McClellan, head of the Lake Martin Area Economic Development Alliance. “Jobs, retail
and taxes are the three areas of concentration … Being involved with economic
development and going back to when I was mayor (of Alexander City), we always
wondered what the economic impact was, and this really brings it down to dollars and
cents.”

Lake Martin’s Economic Impact Last Year
In fiscal year 2007-2008, revenues taken in by local governments as a result of
development on Lake Martin are impressive. These revenues come from a number of
sources including taxes, city water revenue, funds received for road and bridge work and
other sources depending on the governmental entity.
Tallapoosa County received $7.4 million as a result of Lake Martin development
last year. That figure includes $4 million in school district revenue and $1.4 million in
property taxes.
Elmore County took in $3.33 million, including $764,500 for property tax and $1.5
million for its school district.
Coosa County netted $563,000 in funds, about half for its school district and
$110,000 in property tax.
The City of Alexander City received a total of $1.75 million, including $1.12
million in sales tax, as well as monies from lodgings tax, city water revenue and other
sources.
The City of Dadeville took in about $311,000 in revenue related to lake
development, including $231,000 in sales tax.
McClellan said even though Lake Martin encompasses less than a quarter of
Tallapoosa County’s development, the new analysis shows that lake properties account
for more than half of the county’s ad velorum tax. It’s a fact that, while not readily
available before this analysis, was apparent to Tallapoosa County lawmakers.
“The county already knows that,” McClellan said, “When they lost the tax revenue
from Russell Corp., the lake is what made that difference up, if you want to get down to
the nitty gritty. And it’s going to get better because of the lake. In the next two or three
years you’re going to see a remarkable difference in the county’s finances.”
The study showed the assessed value of all current improvements on the lake is $3.4
billion – and that figure does not include the value of undeveloped land around the lake.
“It would include a little bit of interior development,” said Russell Lands President
Tom Lamberth, citing the Stillwaters development where a number of homes are located
around the golf course, or interior lots at River Oaks, both areas that would not be
developed without the influence of Lake Martin. “But it’s 99.9 percent just waterfront.”
As for employment created by lake development, the study identified three different
categories that total 3,170 jobs.
Lake Martin is now directly responsible for 449 permanent jobs in businesses that
operate on the lake or would not exist without the lake.
Indirect or “spinoff” employment adds another 1,100-1,200 jobs, such as retailers in
Alexander City or Dadeville that depend on shoppers from Lake Martin or the service
jobs that are supported by Lake Martin residents.
Construction employment is the third category. Since 2000, the lake has brought an
average of 764 construction jobs to our area and supports an additional 827 indirect
construction jobs, such as those involved in selling building supplies or transporting
materials.

Projections for Future Development
Some of the most intriguing findings of the RCLCO report are related to future
development on Lake Martin, projected out 35 years from now, in 2044, when
development around the lake is expected to be mature.
Major projections include:
Developments in the next 35 years will add an estimated appraised value of $4.8
billion in 2009 dollars.
Most of that appraised value, $4.6 billion, will be related to 6,211 new housing units
with an average value of $745,000.
Commercial development is expected to add $199 million in appraised value over
the next 35 years. Growth in similar locations in the U.S. show it is likely that by 2044,
Lake Martin would have four new golf courses, two new hotels, two new marinas and
expansion of two existing marinas, as well as an additional 274,000 square feet of retail
shopping.
Lake development in the next 35 years is projected to add about 3,900 jobs,
including 1,033 permanent jobs and 299 indirect jobs and an average of 1,150
construction jobs each year. Lake development and construction is expected to indirectly
support another 1,500 jobs in the state.
Lamberth said when The Ridge development is completed, it will contain 700 rooftops
with an average appraised value per home of well over $1 million, which puts the total
appraised value of Lake Martin’s largest neighborhood in the range of $1 billion.
“That’s not counting the commercial development like The Ridge Marina,” he said.
“And I think 700 rooftops might be conservative.”
Lamberth said a majority of Lake Martin’s future development will not be on the
shoreline, but will be interior homes built on golf courses and off-water lots.
“Sixty-two hundred new homes on the lake is not responsible development,” he said.
“You’ve got to offer a different kind of product that’s off-water.”
To make its projections, RCLCO analyzed broad economic and demographic trends as
well as similar communities in the southeast. Two other lakes in the southeast were of
particular focus, Lake Oconee in Georgia, and Lake Keowee in South Carolina.
RCLCO Senior Principal Sarah Kirsch said Lake Keowee is a particularly good model
because of its proximity to Clemson University, which is similar to Lake Martin’s
proximity to Auburn University. Both lakes are more mature markets than Lake Martin
and provided some interesting findings as to how they developed over time, she said.
“They’re much farther along in the development cycle,” Kirsch said. “The way we
looked at it was, where on or around the lake could accommodate planned communities
and planned development,” she said, explaining that the vast majority of Alabama Power
Co. land will remain undeveloped, as will a significant portion of the lake property that is
privately owned.

The Economic Value of a Full Lake
Borden said LMRA is proposing increasing the number of days when the level of
Lake Martin is kept at full pool by 62 percent, stretching the “summer tourist season”
from April 1 to Oct. 15. Under current management guidelines, Alabama Power is
required to maintain a full pool in Lake Martin from May through August.
According to the RCLCO analysis, by 2044, residents and tourists on Lake Martin will
generate $121.5 million in retail sales each year in Tallapoosa, Coosa and Elmore
Counties if the lake continues to be full from May through the end of August.
However, if the lake hits full pool on April 1 and remains full though Oct. 15, RCLCO
estimates that retail sales from visitors and residents spending more time at the lake
would increase by $27.8 million to $149.3 million each year.
McClellan said that finding makes lots of sense, and graphically shows how a longer
season at full pool will bring in more tax revenue for all government agencies in the area.
“If the lake is at full pool longer, people are going to spend more time down there and
there will be more sales tax,” McClellan said. “And hopefully it will entice more people
to buy and build homes there.”
He said the analysis also shows how important it is for everybody in the area that Lake
Martin is preserved and kept clean so that it will remain a major quality of life factor.
“The lake separates us from anybody else in the entire area,” he said. “Auburn/Opelika
has an interstate, but they don’t have Lake Martin. When Russell restructured and moved
off shore, a lot of people lost their jobs, but they didn’t want to leave because of the
quality of life here.”

The Importance of Factual Economic Analysis
The RCLCO analysis was originally developed as a presentation for the Lake Martin
Re-licensing effort and Alabama Water Resource Committee.
However, Borden said the Lake Martin Economic Analysis report will be important
for many future decisions.
“When we take it to the legislature, we can say this is what the lake generates – if you
decrease our water … there would be a significant impact economically,” Borden said.
“You only have to look back to 2007 and see what kind of impact it would have.”
The solid economic data provided by the new analysis has the potential to help shape
Lake Martin’s growth in many areas, such as water, sewer, road construction, fire
protection or building guidelines.
“Generally speaking, our business leaders and our elected officials are lacking
information to make informed decisions about the lake,” Lamberth said. “Lots of
decisions are going to be made, or not made, over the next five or 10 years that are going
to affect Lake Martin permanently.”
Lamberth said the report will serve as a “baseline for where we are today and what the
potential is for the future. And there’s obviously a lot of potential growth here.”
The economic analysis by Robert Charles Lesser & Co. represents a significant
financial investment that took about eight months to complete, according to those
involved.
“We work across all markets and land uses and really study economic and market
issues,” Kirsch said. “On all the assumptions and all the future development, our job is to
err on the conservative side so as not to overstate the impact.”
RCLCO conducts about 500 studies a year and its clients include counties,
municipalities, developers and financial institutions.