Bodie Island Lighthouse waited 138 years for its first major overhaul, more than $3 million worth of work that started last year with the goal of finally opening the historic structure to the climbing public.
The beloved beacon may now have met a force more corrosive than wind, rain, salt, shifting sand, lightning, rust, termites and neglect: a tight federal budget.
With about 85 percent of the work on the original contract complete, progress will halt next week unless the government can find $1.6 million to fix problems that weren't discovered until the overhaul was begun. Without the money, the tower will be mothballed indefinitely, while the cost of the repairs goes up. ...
"It could be a tourist attraction," said Holda, like Hatteras Lighthouse down the coast, which often draws 800 people on a busy summer day, each paying up to $7 to make the breathless ascent.
The Cape Hatteras Lighthouse received a lot of attention when it was moved back from the water about 10 years ago. The Bodie Island Lighthouse will never be such a tourist draw (and is much less likely to fall into the ocean), but let's assume that it could generate 800 visitors for 100 days out of the year, each paying $7. That is revenue equal to $560k. Since about 85% of the $3m work has been completed, it is irrelevant for a benefit-cost analysis of whether society should pay an additional $1.6m. The $2.55m is "sunk" -- already gone down the crapper -- so we only need to justify $2.05m. Five years of revenue, discounted at a 10% rate, justifies completion of the orginal expenditure plus the additional $1.6m. Fourteen years of discounted revenue is enough justify the entire $4.6m expenditure.
This would make a fun stated preference demand study. We would be assessing the 80,000 annual visitor number and also adding in the nonmarket benefits of the project (i.e., visitors might be willing to pay more than the $7 entrance fee).
