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Economic Impact of the
Coalfields Expressway in the
CFX Corridor in Virginia and
West Virginia

The construction and ongoing existence of the Coalfields
Expressway (CFX) will inject hundreds of millions of dollars into the
CFX Corridor and provide jobs for workers in construction, retail,
service, and warehouse industries. The annual economic impact is
estimated to be $215.3 million that sustains 1,067 jobs in 2035 after
construction is complete.
Prepared
for
Virginia Department of Transportation
(VDOT)
870 Bonham Road
Bristol, VA 24201
Date 1/15/13
Cleveland, Ohio
1025 East Huron Road
Cleveland, Ohio 44115
216.357.4730 (phone)
216.357.4730 (fax)
Richmond, Virginia
1309 East Cary Street
Richmond, Virginia 23219
804.649.1107 (phone)
804.644.2828 (fax)
Economic Impact of the
Coalfields Expressway in the
CFX Corridor in Virginia and
West Virginia
CHMURAI & The construction and ongoing existence of the Coalfields
Expressway (CFX) will inject hundreds of milions of dollars into the
CFX Corridor and provide jobs for workers in construction, retail,
service, and warehouse industries. The annual economic impact is
estimated to be $215.3 million that sustains 1,067 jobs in 2036 after
construction is complete.
COALFIELDS Virginia Department of Transportation
EXPRESSWAY (VDOT)
870 Bonham Road
Bristol, VA 24201
Richmond, Virginia Cleveland, Ohio
1309 East Cary Street 1025 East Huron Road
Richmond, Virginia 23219 Cleveland, Ohio 44115
804.649.1107 (phone) 216.357.4730 (phone)
804.644.2828 (fax) 216.357.4730 (fax)
CHMURAECONOMICS&ANALYTICS
2
2
Table of Contents


EXECUTIVE SUMMARY … 4


BACKGROUND … 9


COMMUNITY PROFILE OF THE CFX CORRIDOR … 11


3.1. DEMOGRAPHIC PROFILE … 11
3.1.1. Population and Growth Trend … 11
3.1.2. Age Distribution … 11
3.1.3. Race Distribution … 12
3.2. ECONOMIC PROFILE … 13
3.2.1. Employment and Wages … 13
3.2.2. Unemployment Rate… 15
3.2.3. Industry Mix … 16
3.2.4. High-tech Industry … 17
3.3. SOCIAL INDICATORS … 18
3.3.1. Educational Attainment … 18
3.3.2. Poverty … 19
3.3.3. Disability … 20
3.3.4. Health Indicators … 21

LOCATION OF CFX AND TRAFFIC PROJECTION … 23

4.1. LOCATION OF CFX … 23
4.1.1. CFX in Virginia … 23
4.1.2. CFX in West Virginia … 24
4.2. ACCESS POINTS AND TRAFFIC PROJECTION … 25

ECONOMIC IMPACT OF CFX IN THE CORRIDOR… 27

5.1. ONE-TIME IMPACT OF CONSTRUCTION … 27
5.2. TRAVEL EFFICIENCY, COST SAVINGS, AND SAFETY BENEFITS … 29
5.3. ECONOMIC IMPACT OF SERVICE BUSINESSES … 32
5.3.1. Job Creation in Service Businesses … 32
5.3.2. Economic Impact of Service Businesses … 34

FISCAL IMPACT … 35

6.1. STATE FISCAL IMPACT… 35
6.1.1. Virginia State Fiscal Impact … 35
6.1.2. West Virginia State Fiscal Impact … 36
6.2. LOCAL FISCAL IMPACT … 37
6.2.1. Virginia Local Governments… 37
6.2.2. West Virginia Local Governments … 37
6.3. POTENTIAL PAYBACK PERIOD FOR INVESTMENT … 38

OTHER BENEFITS OF CFX … 40

7.1. CFX AND MARKET ACCESS … 40
CHMURAECONOMICS&ANALYTIC:
Table of Contents


EXECUTIVE SUMMARY


BACKGROUND.


COMMUNITY PROFILE OF THE CFX CORRIDOR


3.1. DEMOGRAPHIC PROFILE
3.1.1. Population and Growth Trend.
3.1.2. Age Distribution. 1
3.1.3, Race Distribution…
3.2. ECONOMIC PROFILE. .
3.2.1. Employment and Wages 13
3.2.2. Unemployment Rate…
3.2.3. Industry Mix…
3.2.4. High-tech Industry 17
3.3. SOCIAL INDICATORS…
3.3.1. Educational Attainment
3.3.2. Poverty
3.3.3. Disability.
3.3.4. Health Indicators
4, LOCATION OF CFX AND TRAFFIC PROJECTION …
4.1, LOCATION oF CFX.
4.1.1. CFX in Virginia …
4.1.2. CFX in West Virginia…
4.2. ACCESS POINTS AND TRAFFIC PROJECTION
5, ECONOMIC IMPACT OF CFX IN THE CORRIDOR.
5.1. ONE-TIME IMPACT OF CONSTRUCTION 27
5.2. TRAVEL EFFICIENCY, COST SAVINGS, AND SAFETY BENEFITS, 29
5.3. ECONOMIC IMPACT OF SERVICE BUSINESSES. 32
5.3.1. Job Creation in Service Businesses.
5.3.2. Economic Impact of Service Businesses

FISCAL IMPACT.

6.1. STATE FISCAL IMPACT.
6.1.1. Virginia State Fiscal Impact…
6.1.2. West Virginia State Fiscal Impact…
6.2. LOCAL FISCAL IMPACT.
6.2.1. Virginia Local Governments…
6.2.2. West Virginia Local Governments
6.3. POTENTIAL PAYBACK PERIOD FOR INVESTMENT…

OTHER BENEFITS OF CFX seeenseens 0

7.1. CFX AND MaRKeT ACCESS,
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3
3
7.2. OTHER ECONOMIC DEVELOPMENT BENEFITS … 42
7.3. ASSESSMENT OF RISKS … 43
7.3.1. Downside Risks … 43
7.3.2. Upside Risks … 44
7.4. BENCHMARK ANALYSIS OF RURAL HIGHWAYS … 44

SUMMARY … 47

APPENDIX 1: IMPACT STUDY GLOSSARY … 48
APPENDIX 2: INTERCHANGE DEVELOPMENT CATEGORIES … 49
CHMURAECONOMICS&ANALYTI
7.2. OTHER ECONOMIC DEVELOPMENT BENEFITS
7.3. ASSESSMENT OF RISKS…
7.3.1. Downside Risks
7.3.2. Upside Risks. .
7.8, BENCHMARK ANALYSIS OF RURAL HIGHWAYS…
42
3
AB
44
8, SUMMARY sstnssenes AT
APPENDIX 1: IMPACT STUDY GLOSSARY
APPENDIX 2: INTERCHANGE DEVELOPMENT CATEGORIES
‘crm
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Executive Summary

The Coalfields Expressway (CFX) is a highway project located in the states of Virginia and West Virginia.
1
The aim
of CFX is to provide improved highway access for regional businesses and residents in the regions of those two
states. In Virginia, the Coalfields Expressway will be located in the counties of Wise, Dickenson, and Buchanan. In
Buchanan County, the highway will connect with West Virginia’s portion of CFX, which is located in Wyoming,
Raleigh, and McDowell Counties.
2
This study evaluates the economic impact of the proposed CFX on all six
counties that make up the CFX Corridor. Economic impacts are also segregated into both the Virginia and West
Virginia portions of the CFX Corridor. The findings of this study are summarized below.
Economic literature indicates that highway networks are beneficial to regional economies. The following
sustainable economic benefits are generally associated with a highway network:
 Travel efficiency. The construction of a highway can reduce travel time for area businesses and residents
alike. Trade, manufacturing, and construction sectors will benefit more from a new highway than other
sectors such as healthcare and education.
 Attraction of service businesses. Oftentimes, businesses such as hotels, gas stations, retail stores, and
restaurants cluster around interstate interchanges to serve motorists and local residents.
 Economic development benefits such as improved market access, firm relocations, and
expansions. Highways can reduce travel time and transportation costs, thus expanding market reach for
regional businesses. Case studies have found that rural counties with an interstate highway enjoy faster
population and employment growth than similar counties without an interstate highway.
The CFX Corridor region has slow population growth, an aging population, and an economy that relies
heavily on coal mining.
 The population in the CFX Corridor declined at a 0.5% annual pace from 2000 to 2010, compared with
statewide growth of 1.2% for Virginia and 0.2% for West Virginia.
 The CFX Corridor has a smaller share of younger individuals below age 30 than the state averages of
Virginia and West Virginia.
 The CFX Corridor has a much higher percentage of whites and a much lower concentration of minority
groups, such as African-Americans, compared with the Virginia average. However, the racial distribution of
the Corridor is similar to that of the West Virginia average.
 From 2000 to 2011, overall employment in the Corridor expanded at an average 2.0% per year, higher than
both the 0.4% rate for Virginia and the 0.2% rate for West Virginia. Job growth in the Corridor outperformed
the state averages due to the expansion of the mining industry.
1
CFX has been designated as U.S. Route 121 in the national highway system.
2
These six counties are referred as the CFX Corridor region in this report.
CHMURAECONOMICS&ANALYTICS

Executive Summary

The Coalfields Expressway (CFX) is a highway project located in the states of Virginia and West Virginia.’ The aim
of CFX is to provide improved highway access for regional businesses and residents in the regions of those two
states. In Virginia, the Coalfields Expressway will be located in the counties of Wise, Dickenson, and Buchanan. In
Buchanan County, the highway will connect with West Virginia’s portion of CFX, which is located in Wyoming,
Raleigh, and McDowell Counties.” This study evaluates the economic impact of the proposed CFX on all six
counties that make up the CFX Corridor. Economic impacts are also segregated into both the Virginia and West
Virginia portions of the CFX Corridor. The findings of this study are summarized below.
Economic literature indicates that highway networks are beneficial to regional economies. The following
sustainable economic benefits are generally associated with a highway network:

Travel efficiency. The construction of a highway can reduce travel time for area businesses and residents
alike, Trade, manufacturing, and construction sectors will benefit more from a new highway than other
sectors such as healthcare and education.



Attraction of service businesses. Oftentimes, businesses such as hotels, gas stations, retail stores, and
restaurants cluster around interstate interchanges to serve motorists and local residents.


Economic development benefits such as improved market access, firm relocations, and
‘expansions. Highways can reduce travel time and transportation costs, thus expanding market reach for
regional businesses. Case studies have found that rural counties with an interstate highway enjoy faster
population and employment growth than similar counties without an interstate highway.


The CFX Corridor region has slow population growth, an aging popul
heavily on coal mining.
ion, and an economy that relies


The population in the CFX Corridor declined at a 0.5% annual pace from 2000 to 2010, compared with
statewide growth of 1.2% for Virginia and 0.2% for West Virginia.


The CFX Corridor has a smaller share of younger individuals below age 30 than the state averages of
Virginia and West Virginia



The CFX Corridor has a much higher percentage of whites and a much lower concentration of minority
groups, such as African-Americans, compared with the Virginia average. However, the racial distribution of
the Corridor is similar to that of the West Virginia average.

From 2000 to 2011, overall employment in the Corridor expanded at an average 2.0% per year, higher than
both the 0.4% rate for Virginia and the 0.2% rate for West Virginia. Job growth in the Corridor outperformed
the state averages due to the expansion of the mining industry.
" CFX has been designated as U.S, Route 121 in the national highway system,

These six counties are referred as the CFX Corridor region inthis report

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5
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 The CFX Corridor has a higher unemployment rate than both the averages of Virginia and West Virginia.
The latest data indicate that in September 2012, the unemployment rate for the region was 7.9%, higher
than the Virginia average of 5.6% and the West Virginia average of 6.9%.
 Regional employment is heavily concentrated in the mining sector. Based on 2011 employment data,
15.1% of regional employment was in mining, compared with 0.3% and 4.7% in Virginia and West Virginia,
respectively.
 The CFX Corridor has little presence of high-tech industries. The percentage of high-tech employment in
the CFX Corridor was below 2% during the past eleven years. For the same period, the percentage of high-
tech employment in Virginia was around 16%, while West Virginia averaged over 7%.
 Educational attainment of the CFX Corridor is below state averages. Based on U.S. Census estimates,
11.6% of regional residents age 25 and over from 2006-2010 had a four-year degree or higher. Over the
same period, 33.8% of Virginia residents, and 17.3% of West Virginia residents, age 25 and older, had a
four-year degree or higher.
 The CFX Corridor has a higher percentage of individuals living in poverty compared to the state averages
of Virginia and West Virginia. The Census Bureau’s 2006-2010 American Community Survey (ACS)
estimated that 20.4% of individuals in the Corridor were in poverty compared to 10.3% in Virginia and
17.4% in West Virginia.
 Due to the high concentration of coal mining employment in the region, the CFX Corridor also has a higher
percentage of individuals with disabilities. Based on the 2000-2011 Census ACS, an estimated 25.0% of
individuals in the Corridor were disabled, compared to 10.9% in Virginia and 18.9% in West Virginia.
The one-time economic impact of the Coalfields Expressway construction is expected to reach $5.3 billion
in the Corridor from 2013 to 2029.
 The estimated total cost of CFX in Virginia is $2.8 billion in 2013 dollars, taking into consideration
significant cost savings from public-private partnerships. The 2012 cost estimate for the West Virginia
portion of CFX was $822.2 million.
 From 2013 to 2029, the construction of CFX is projected to generate $5.3 billion in cumulative economic
impact in the Corridor. Of this total, $3.7 billion will be direct construction spending while $1.6 billion will be
the ripple economic impact of the construction.
3
Construction can support 38,055 cumulative jobs (both
direct and ripple) in the Corridor.
 On an annual average basis, CFX construction can generate an economic impact of $313.0 million that can
support 2,239 jobs per year in the CFX Corridor from 2013 to 2029.
3
The direct impact is economic activity generated by a project or operation. For construction, this represents activity of the
contractor. The indirect impact is the secondary economic activity that is generated by a project or operation. An example is a
new office building generating demand for parking garages. The induced or household impact is economic activity that occurs
when households employed by the construction firm or its suppliers spend their income in the region. The ripple effect is the
sum of induced and indirect impacts.
CHMURAECONOMICS&ANALYTICS

The CFX Corridor has a higher unemployment rate than both the averages of Virginia and West Virginia.
The latest data indicate that in September 2012, the unemployment rate for the region was 7.9%, higher
than the Virginia average of 5.6% and the West Virginia average of 6.9%.


Regional employment is heavily concentrated in the mining sector. Based on 2011 employment data,
15.1% of regional employment was in mining, compared with 0.3% and 4.7% in Virginia and West Virginia,
respectively.


The CFX Corridor has little presence of high-tech industries. The percentage of high-tech employment in
the CFX Corridor was below 2% during the past eleven years. For the same period, the percentage of high-
tech employment in Virginia was around 16%, while West Virginia averaged over 7%.

‘* Educational attainment of the CFX Corridor is below state averages. Based on U.S. Census estimates,
11.6% of regional residents age 25 and over from 2006-2010 had a four-year degree or higher. Over the
same period, 33.8% of Virginia residents, and 17.3% of West Virginia residents, age 25 and older, had a
four-year degree or higher.

The CFX Corridor has a higher percentage of individuals living in poverty compared to the state averages
of Virginia and West Virginia. The Census Bureau’s 2006-2010 American Community Survey (ACS)
estimated that 20.4% of individuals in the Corridor were in poverty compared to 10.3% in Virginia and
17.4% in West Virginia.


Due to the high concentration of coal mining employment in the region, the CFX Corridor also has a higher
percentage of individuals with disabilities. Based on the 2000-2011 Census ACS, an estimated 25.0% of
individuals in the Corridor were disabled, compared to 10.9% in Virginia and 18.9% in West Virginia,

The one-time economic impact of the Coalfields Expressway construction is expected to reach $5.3 billion
the Corridor from 2013 to 2029.

The estimated total cost of CFX in Virginia is $2.8 billion in 2013 dollars, taking into consideration
significant cost savings from public-private partnerships. The 2012 cost estimate for the West Virginia
portion of CFX was $822.2 million.


From 2013 to 2029, the construction of CFX is projected to generate $5.3 billion in cumulative economic
impact in the Corridor. Of this total, $3.7 bilion will be direct construction spending while $1.6 billion will be
the ripple economic impact of the construction.® Construction can support 38,055 cumulative jobs (both
direct and ripple) in the Corridor.



Onan annual average basis, CFX construction can generate an economic impact of $313.0 million that can
support 2,239 jobs per year in the CFX Corridor from 2013 to 2029.


The direct impact is economic activity generated by a project or operation. For construction, this represents activity of the
contractor. The indirect impact is the secondary economic activity that is generated by a project or operation. An example is a
new office building generating demand for parking garages. The induced or household impact is economic activity that occurs
when households employed by the construction firm or its suppliers spend their income in the region. The ripple effect is the
sum of induced and indirect impacts.


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 The Virginia portion of the CFX Corridor is expected to receive over seventy percent of the construction
impact due to larger construction spending projections for Virginia.
In 2035, CFX can provide $96.5 million in annual user benefits for regional businesses and residents, as a
result of improved travel efficiency and cost savings.
 On average, CFX can provide 50% time savings for businesses and residents traveling the entire length of
the road, with time savings reaching 49% in Virginia and 50% in West Virginia.
 The total user benefits for the region are estimated to reach $96.5 million per year in 2035. Among those,
$49.6 million is the estimated value of time saving for motorists. The estimated savings in vehicle operation
costs is $31.2 million, while $15.7 million is the estimated cost savings in accident reduction.
 Over seventy percent of user benefits are expected to take place in the West Virginia portion of the
Corridor due to higher traffic volume and more significant time savings in West Virginia.
In 2035, CFX can support 77 service businesses and 880 jobs in the Corridor, with a total annual economic
impact (both direct and ripple) of $118.8 million that can support 1,067 jobs.
 Based on traffic projections and patterns, it is estimated that CFX can support approximately 77 businesses
in the Corridor in 2035: 22 motels/hotels, 28 gas stations, and 27 restaurants.
 The direct output of these businesses is estimated to be $86.8 million in 2035, with ripple effects of $31.9
million. In terms of job creation, service businesses will directly employ 880 workers with a ripple effect of
an additional 178 jobs per year in 2035.
 In 2035, about 35% of the economic impact from service businesses is expected to occur in Virginia’s
section of the CFX Corridor, and 65% of the total economic impact will occur in West Virginia.
The cumulative economic impact of CFX, during its 50-year life span, is estimated to be $10.5 billion in
2013 dollars.
 Each dollar of investment in CFX can result in $2.9 dollars in economic impact in the Corridor during its life
span.
 The potential payback period for CFX is estimated to be 30 years after the road completion.
After CFX is completed, it is estimated that Virginia will receive $1.9 million in annual tax revenue while the
fiscal benefit for West Virginia’s state government will be $4.9 million per year.
 After construction is completed, both state governments are expected to collect corporate and personal
income taxes from service businesses along CFX, in the amount of $1.9 million per year for Virginia, and
$4.9 million per year for West Virginia.
 For local governments, those in Virginia can collect an estimated $0.5 million in annual tax revenue, from
sales, meal, and lodging taxes. West Virginia’s local governments can collect an estimated $0.9 million in
annual tax revenue from lodging and business and occupation (B&O) taxes.
CHMURAECONOMICS&ANALYTICS

The Virginia portion of the CFX Corridor is expected to receive over seventy percent of the construction
impact due to larger construction spending projections for Virginia.

In 2035, CFX can provide $96.5 million in annual user benefits for regional businesses and residents, as a
result of improved travel efficiency and cost savings.

Onaverage, CFX can provide 50% time savings for businesses and residents traveling the entire length of
the road, with time savings reaching 49% in Virginia and 50% in West Virgini


The total user benefits for the region are estimated to reach $96.5 million per year in 2035. Among those,
$49.6 million is the estimated value of time saving for motorists. The estimated savings in vehicle operation
costs is $31.2 million, while $15.7 million is the estimated cost savings in accident reduction.


Over seventy percent of user benefits are expected to take place in the West Virginia portion of the
Corridor due to higher traffic volume and more significant time savings in West Virginia.

In 2035, CFX can support 77 service businesses and 880 jobs in the Corridor, with a total annual economic
impact (both direct and ripple) of $118.8 million that can support 1,067 jobs.
‘+ Based on traffic projections and patterns, it is estimated that CFX can support approximately 77 businesses
in the Corridor in 2035: 22 motels/hotels, 28 gas stations, and 27 restaurants.
‘* The direct output of these businesses is estimated to be $86.8 million in 2035, with ripple effects of $31.9
million. In terms of job creation, service businesses will directly employ 880 workers with a ripple effect of
‘an additional 178 jobs per year in 2035.

In.2035, about 35% of the economic impact from service businesses is expected to occur in Virginia’s
section of the CFX Corridor, and 65% of the total economic impact will occur in West Virginia.

The cumulative economic impact of CFX, during its 50-year life span, is estimated to be $10.5 billion in
2013 dollars.

Each dollar of investment in CFX can result in $2.9 dollars in economic impact in the Corridor during its life
span.


The potential payback period for CFX is estimated to be 30 years after the road completion.

After CFX is completed, it is estimated that Virginia will receive $1.9 million in annual tax revenue while the
fiscal benefit for West Virginia’s state government will be $4.9 million per year.


After construction is completed, both state governments are expected to collect corporate and personal
income taxes from service businesses along CFX, in the amount of $1.9 million per year for Virginia, and
$4.9 million per year for West Virginia.


For local governments, those in Virginia can collect an estimated $0.5 million in annual tax revenue, from
sales, meal, and lodging taxes. West Virginia’s local governments can collect an estimated $0.9 million in
annual tax revenue from lodging and business and occupation (B&O) taxes.


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 During the construction phase, Virginia’s state government can receive $62.8 million in cumulative tax
revenue, while West Virginia’s government can receive $19.9 million in cumulative tax revenue from 2013
to 2029.
The economic impact of CFX in the CFX Corridor is summarized in Table 1.1.
Table 1.1: CFX Economic Impact Summary
Total Economic Impact
($MM)
Total Job
Creation
State Tax Revenues
($MM)
Local Tax Revenues
($MM)
Average Annual One-time Construction Impact (2013-2029)
CFX Virginia $241.4 1,727 $3.7 $0.0
CFX West Virginia $71.5 512 $1.2 $0.7
CFX Corridor $313.0 2,239 $4.9 $0.7
Ongoing Impact (2035)-CFX Virginia
Total Use Benefits $28.3
Roadside Services $41.4 372 $1.9 $0.5
Total CFX Virginia Corridor
(2035) $69.8 372 $1.9 $0.5
Ongoing Impact (2035)-CFX West Virginia
Cost Savings (Productivity) $68.1
Roadside Services $77.4 695 $4.9 $0.9
Total CFX West Virginia
Corridor (2035) $145.5 695 $4.9 $0.9
Ongoing Impact (2035)-CFX Corridor
Total User Benefits $96.5

Roadside Services $118.8 1,067 $6.8 $1.4
Total CFX Corridor (2035) $215.3 1,067 $6.8 $1.4
Source: Chmura Economics & Analytics
Other benefits of CFX are better market access, increased appeal for business expansion and relocations,
faster population growth, increased tourism, and improved quality of life.
 While the Coalfields Expressway would enhance long-term economic development efforts for the eventual
replacement of lost coal mining employment, the new highway also would serve the short-term needs of
the mining industry that remains an important part of the local economy. CFX would improve vehicular
access to and from existing mines.
 CFX provides benefits to regional agricultural and manufacturing industries, increasing their market access
to the District of Columbia, North Carolina, Maryland, and Ohio.
 CFX will have a positive effect on regional tourism as it can improve access to tourist attractions such as
the Appalachian Trail, New River Gorge, and Jefferson National forest.
 CFX will also have a positive effect on population growth in the region.
CHMURAECONOMICS&ANALYTICS

During the construction phase, Virginia’s state government can receive $62.8 million in cumulative tax
revenue, while West Virginia’s government can receive $19.9 million in cumulative tax revenue from 2013
to 2029.

The economic impact of CFX in the CFX Corridor is summarized in Table 1.1.
Table 1.1: CFX Economic Impact Summary
Total Economic Impact TotalJob State TaxRevenues__Local Tax Revenues
(smu) Creation (smm) (sm)
‘Average Annual One-time Construction Impact (2013-202)
CFX Virginia $20.4 4727 $3.7 $0.0
CFX West Virginia ss 512 saz $0.7
FX Corridor $313.0 2,239 $49 $0.7
Ongoing Impact (2035)-CFX Virginia
Total Use Benefits $28.3
Roadside Services sana 372 $19 $05
$69.8 372 $19 $08
‘Ongoing Impact (2035)-CFX West Virginia
Cost Savings (Productivity) $68.1
Roadside Services S778 695 $49 $0.9
Total CFX West Virginia
Corridor (2035) $145.5 695 $49 $09
‘Ongoing Impact (2035)-CFX Corridor
Total User Benefits $965
Roadside Services sss 1,067 $68 sia
‘Total CFX Corridor (2035) $215.3 1,067 $68 sua
Source: Chmura Economies & Analytics
Other benefits of CFX are better market access, increased appeal for business expansion and relocations,
faster population growth, increased tourism, and improved quality of life.
mun


While the Coalfields Expressway would enhance long-term economic development efforts for the eventual
replacement of lost coal mining employment, the new highway also would serve the short-term needs of
the mining industry that remains an important part of the local economy. CFX would improve vehicular
access to and from existing mines.


CX provides benefits to regional agricultural and manufacturing industries, increasing their market access
to the District of Columbia, North Carolina, Maryland, and Ohio.




CFX will have a positive effect on regional tourism as it can improve access to tourist attractions such as
the Appalachian Trail, New River Gorge, and Jefferson National forest.


CFX will also have a positive effect on population growth in the region


8
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Benchmark analysis of rural highways identified economic success stories of highway projects across
America.
 A study by Chandra and Thompson examined historical data on interstate highway construction and
economic activity in the United States from 1969 to 1993. New interstate highways raised earnings in
counties that directly benefitted from new construction compared to counties without new construction.
Benefits of new highway construction varied according to each sector, with services and retail fairing
particularly well.
 One case study examined ten rural counties in Georgia that benefitted from the Governor’s Road
Improvement Program (GRIP). In general, it was found that the “ten nonmetropolitan counties in the study
group experienced pronounced economic improvements in comparison to their nonmetropolitan
counterparts.”
 A strong highway system is a crucial piece of infrastructure for regions looking to attract prospects. Many
cities from Chico, California to Danville, Virginia provided examples where lack of direct access to interstate
highways prevents those cities from being competitive in the attraction and recruitment of new businesses.
CHMURAECONOMICS&ANALYTI
Benchmark analysis of rural highways identified economic success stories of highway projects across
America.


Astudy by Chandra and Thompson examined historical data on interstate highway construction and
‘economic activity in the United States from 1969 to 1993. New interstate highways raised earnings in
counties that directly benefitted from new construction compared to counties without new construction
Benefits of new highway construction varied according to each sector, with services and retail fairing
particularly well.


One case study examined ten rural counties in Georgia that benefitted from the Governor’s Road
Improvement Program (GRIP). In general, it was found that the “ten nonmetropolitan counties in the study
‘group experienced pronounced economic improvements in comparison to their nonmetropolitan
counterparts.”


Astrong highway system is a crucial piece of infrastructure for regions looking to attract prospects. Many
cities from Chico, California to Danville, Virginia provided examples where lack of direct access to interstate
highways prevents those cities from being competitive in the attraction and recruitment of new businesses.


‘crm
9
9

Background

The Coalfields Expressway (CFX) is a highway project located in the states of Virginia and West Virginia. The aim
of CFX is to provide improved highway access for businesses and residents in the regions of those two states. In
Virginia, the Coalfields Expressway will be located in the counties of Wise, Dickenson, and Buchanan. It will run
from Route 23 near Pound, Virginia to the West Virginia state line east of Slate, Virginia. There, the highway will
connect with West Virginia’s portion of CFX, which is located in Wyoming, Raleigh, and McDowell Counties. CFX in
West Virginia starts at the Virginia/West Virginia border and runs northeast to Beckley, West Virginia, where it links
with Interstates 64 and 77.
4
Currently, traveling in this area involves two-lane roadways, such as Route 83 in Virginia, and Routes 83 and 16 in
West Virginia. Steep slopes, geometric constraints, and heavy truck traffic make traveling on those roadways both
time-consuming and sometimes difficult. There is no major four-lane divided highway in this region. The lack of safe
and efficient access to a national highway network is often cited as a major impediment to the economic
development in the region.
5
The Coalfields Expressway has been twenty years in the making. In 1991, the U.S. Congress defined West
Virginia’s portion of CFX and appropriated $50 million for the design and construction of the project.
6
In 1995,
Congress designated CFX in Virginia as a Congressional High-Priority Corridor and included it in the National
Highway system.
In Virginia, the General Assembly passed three resolutions supporting the project in 1999. Also, local governing
bodies overwhelmingly supported the project. In 2001, the Virginia Department of Transportation (VDOT)
completed the Final Environmental Impact Statement (FEIS) for Virginia’s portion of the CFX. In November 2001,
the Federal Highway Administration (FHWA) issued its Record of Decision, selecting the preferred route for the
expressway.
In 2006, VDOT announced that it had formed Public-Private partnership with both Pioneer Group and Alpha Natural
Resources, under the Virginia Public-Private Transportation Act (PPTA), to advance the project. Since forming
PPTA, the selected route location approved by FHWA in 2001 has been modified, and the Corridor has been
divided into five sections: Section I, II, IIIA, IIIB and IIIC. Each section is of sufficient length and will provide a
serviceable facility regardless of whether or not other CSX sections are constructed.
7
Since forming the PPTA in
2006, state funding has been appropriated to start site work on certain sections (Hawks Nest and Rockhouse) of
the roadway. VDOT is still in the process of securing funding for the remaining construction of CFX.
8
In West Virginia, the WVDOT initiated the Coalfields Expressway project with a location study in 1992. The location
study included an environmental inventory, corridor development, a cost analysis, and public informational
4
Source: Coalfields Expressway Final Environmental Impact Statement (FEIS). VDOT 2001. Available at:
http://www.virginiadot.org/projects/bristol/coalfields_expressway.asp
5
Ibid.
6
Source: Record of Decision, Coalfields Expressway Location Study, Federal Highway Administration, 2001. Available at:
http://www.virginiadot.org/projects/bristol/coalfields_expressway.asp
7
Source: Reevaluation for Coalfields Expressway, Section I (Pound Bypass).December 2008. VDOT. Available at:
http://www.virginiadot.org/projects/bristol/coalfields_expressway.asp
8
Source: CFX Project Timeline.  Available at:  http://www.virginiadot.org/projects/bristol/coalfields_expressway.asp
http://www.virginiadot.org/projects/bristol/coalfields_expressway.asp
http://www.virginiadot.org/projects/bristol/coalfields_expressway.asp
http://www.virginiadot.org/projects/bristol/coalfields_expressway.asp
http://www.virginiadot.org/projects/bristol/coalfields_expressway.asp
CHMURAECONOMICS&ANALYTICS

Background

The Coalfields Expressway (CFX) is a highway project located in the states of Virginia and West Virginia. The aim
of CFX is to provide improved highway access for businesses and residents in the regions of those two states. In
Virginia, the Coalfields Expressway will be located in the counties of Wise, Dickenson, and Buchanan. It will run
from Route 23 near Pound, Virginia to the West Virginia state line east of Slate, Virginia. There, the highway will
connect with West Virginia’s portion of CFX, which is located in Wyoming, Raleigh, and McDowell Counties. CFX in
West Virginia starts at the Virginia/West Virginia border and runs northeast to Beckley, West Virginia, where it links
with Interstates 64 and 77.
Currently, traveling in this area involves two-lane roadways, such as Route 83 in Virginia, and Routes 83 and 16 in
West Virginia. Steep slopes, geometric constraints, and heavy truck traffic make traveling on those roadways both
time-consuming and sometimes difficult. There is no major four-lane divided highway in this region. The lack of safe
and efficient access to a national highway network is often cited as a major impediment to the economic
development in the region.®
The Coalfields Expressway has been twenty years in the making. In 1991, the U.S. Congress defined West
Virginia’s portion of CFX and appropriated $50 million for the design and construction of the project. In 1995,
Congress designated CFX in Virginia as a Congressional High-Priority Corridor and included it in the National
Highway system.
In Virginia, the General Assembly passed three resolutions supporting the project in 1999. Also, local governing
bodies overwhelmingly supported the project. In 2001, the Virginia Department of Transportation (VDOT)
‘completed the Final Environmental Impact Statement (FEIS) for Virginia’s portion of the CFX. In November 2001,
the Federal Highway Administration (FHWA) issued its Record of Decision, selecting the preferred route for the
expressway.
In 2006, VDOT announced that it had formed Public-Private partnership with both Pioneer Group and Alpha Natural
Resources, under the Virginia Public-Private Transportation Act (PPTA), to advance the project. Since forming
PPTA, the selected route location approved by FHWA in 2001 has been modified, and the Corridor has been
divided into five sections: Section |, Il, IIA, IIIB and IIIC. Each section is of sufficient length and will provide a
serviceable facility regardless of whether or not other CSX sections are constructed.” Since forming the PPTA in
2006, state funding has been appropriated to start site work on certain sections (Hawks Nest and Rockhouse) of
the roadway. VDOT is still in the process of securing funding for the remaining construction of CFX.*
In West Virginia, the WVDOT initiated the Coalfields Expressway project with a location study in 1992. The location
study included an environmental inventory, corridor development, a cost analysis, and public informational


Source: Coalfields Expressway Final Environmental Impact Statement (FEIS). VDOT 2001. Available at:
http:/iwiww.virginiadot.org/projects/bristol/coalfields_expressway.asp


ibid.


© Source: Record of Decision, Coalfields Expressway Location Study, Federal Highway Administration, 2001. Available at:
http://www. virginiadot,org/projects/bristol/coalfields_expressway.asf
Source: Reevaluation for Coalfields Expressway, Section | (Pound Bypass).December 2008. VDOT. Available at
http:/iwinw.virginiadot,org/projects/bristol/coalfields_exoressway.asp
® Source: CFX Project Timeline. Available at: htto:/www.virainiadot ora/projectsibristoV/coalfields expressway.asp
roy
10
10
meetings. WVDOT completed the Final Environmental Impact Statement in 1999, and a Record of Decision was
issued by FHWA in 2000.
The Appalachian Regional Commission (ARC) will also play an important role in the development of the Coalfields
Expressway. ARC is an economic development agency made up of partners from federal, state, and local
governments. ARC’s mission is to be a strategic partner and advocate for sustainable community and economic
development in Appalachia
9
. ARC is establishing the Appalachian Development Highway System (ADHS). Corridor
Q of the system, running from Shelbiana, Kentucky to Christiansburg, Virginia
10
will intersect and overlap a
segment of CFX near the town of Grundy in Buchanan County, Virginia.
CFX can potentially play a significant role in improving both the economy and quality of life in the Corridor. The
construction of the project can inject millions of dollars into the local economy. After the road completion, CFX can
significantly reduce travel time and improve efficiency for regional businesses and residents. More importantly, the
Coalfields Expressway will improve safety for motorists and allow residents of the region to reach health and
educational institutions in the region more easily, greatly improving their quality of life. Chmura Economics &
Analytics (Chmura) was retained to provide a detailed economic impact analysis of The Coalfields Expressway on
the CFX Corridor in Virginia and West Virginia.
The remainder of this report is organized as follows:
 Section 3 provides a community profile of the CFX Corridor, including population, employment, education
and other social economic indicators.
 Section 4 details the location of the Coalfields Expressway, and summarizes both the traffic analysis data
and access points of CFX.
 Section 5 presents a detailed analysis of the economic impact of CFX, including both the one-time
construction impact and the ongoing impact due to cost savings and new service businesses.
 Section 6 estimates the fiscal benefits for state and local governments.
 Section 7 discusses other benefits of CFX, a benchmark/case study, and an assessment of risk.
 Section 8 offers a summary.
9
Source: http://www.arc.gov/about/index.asp
10
Source: http://www.arc.gov/program_areas/ADHSApprovedCorridorsandTermini.asp
http://www.arc.gov/program_areas/ADHSApprovedCorridorsandTermini.asp
CHMURAECONOMICS&ANALYTI
meetings. WVDOT completed the Final Environmental Impact Statement in 1999, and a Record of Decision was
issued by FHWA in 2000.
The Appalachian Regional Commission (ARC) will also play an important role in the development of the Coalfields
Expressway. ARC is an economic development agency made up of partners from federal, state, and local
governments. ARC’s mission is to be a strategic partner and advocate for sustainable community and economic
development in Appalachia’. ARC is establishing the Appalachian Development Highway System (ADHS). Corridor
Q of the system, running from Shelbiana, Kentucky to Christiansburg, Virginia’” will intersect and overlap a
segment of CFX near the town of Grundy in Buchanan County, Virginia.
CFX can potentially play a significant role in improving both the economy and quality of life in the Corridor. The
construction of the project can inject millions of dollars into the local economy. After the road completion, CFX can
significantly reduce travel time and improve efficiency for regional businesses and residents. More importantly, the
Coalfields Expressway will improve safety for motorists and allow residents of the region to reach health and
‘educational institutions in the region more easily, greatly improving their quality of life. Chmura Economics &
Analytics (Chmura) was retained to provide a detailed economic impact analysis of The Coalfields Expressway on
the CFX Corridor in Virginia and West Virginia.
The remainder of this report is organized as follows:


Section 3 provides a community profile of the CFX Corridor, including population, employment, education
and other social economic indicators.


Section 4 details the location of the Coalfields Expressway, and summarizes both the traffic analysis data
‘and access points of CFX.



Section 5 presents a detailed analysis of the economic impact of CFX, including both the one-time
construction impact and the ongoing impact due to cost savings and new service businesses.



Section 6 estimates the fiscal benefits for state and local governments.


Section 7 discusses other benefits of CFX, a benchmark/case study, and an assessment of risk.


Section 8 offers a summary.


° Source; http://www.arc.goviabout/index.asp

Source: httoviwww.arc.qovioroaram_areas/ADHSApprovedCorridorsandTermin.asp

10
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11
11

Community Profile of the CFX Corridor

This section summarizes the community profile of the CFX Corridor, in terms of population, employment and
wages, industry mix, and social indicators such as educational attainment, poverty, and disability.
3.1. Demographic Profile
3.1.1. Population and Growth Trend
Population growth is an important indicator of both an expanding economy and a vibrant community. A community
having both an expanding labor force and economy attracts new residents. Further, the influx of population into an
area stimulates the housing market, the retail industry, and overall consumption resulting in a larger tax base for the
community.
The total population in the CFX Corridor was 206,221 based on the 2010 Census, with 81,453 in Virginia and
124,768 in West Virginia.
11
From 2000 through 2010, the pace of population change in the CFX Corridor severely
lagged behind the state averages of both Virginia and West Virginia. The population of the Corridor declined at an
annual rate of 0.5% per year, compared with 1.2% population growth in Virginia and 0.3% annual growth in West
Virginia. Within the CFX Corridor, the highest growth rate was in Wise County (+0.3%), while all other counties lost
residents from 2000 to 2010. Population in McDowell County, West Virginia declined by 2.1% every year during
that same period. Both the remote location of and the lack of easy access to the region may have contributed to the
Corridor’s relative inability to retain its residents or attract new residents.
Table 3.1: CFX Corridor Population and Growth
Population

(2000)
Population

(2010)
Average Annual Growth Rate

(2000-2010)
Buchanan County, Virginia 26,978 24,098 -1.12%
Dickenson County, Virginia 16,395 15,903 -0.30%
Wise County, Virginia 40,123 41,452 0.33%
McDowell County, West Virginia 27,329 22,113 -2.10%
Raleigh County, West Virginia 79,220 78,859 -0.05%
Wyoming County, West Virginia 25,708 23,796 -0.77%
CFX Corridor-Virginia 83,496 81,453 -0.25%
CFX Corridor-West Virginia 132,257 124,768 -0.58%
CFX Corridor 215,753 206,221 -0.45%
Virginia 7,078,515 8,001,024 1.23%
West Virginia 1,808,344 1,852,994 0.24%
Source: U.S. Census
3.1.2. Age Distribution
Age distribution in a region can suggest patterns of growth. Age distribution is affected by birth, death, and
migration rates. An aging population implies more need for healthcare and related services for the region. On the
other hand, a younger population indicates that these individuals will flow into the workforce in the future. If the
regional economy cannot support them, the region may risk losing the young population.
11
Source: U.S. Census.
CHMURAECONOMICS&ANALYTICS

Community Profile of the CFX Corridor

This section summarizes the community profile of the CFX Corridor, in terms of population, employment and
wages, industry mix, and social indicators such as educational attainment, poverty, and disability.
3.4. Demographic Profile
3.1.1. Population and Growth Trend
Population growth is an important indicator of both an expanding economy and a vibrant community. A community
having both an expanding labor force and economy attracts new residents. Further, the influx of population into an
area stimulates the housing market, the retail industry, and overall consumption resulting in a larger tax base for the
‘community,
The total population in the CFX Corridor was 208,221 based on the 2010 Census, with 81,453 in Virginia and
124,768 in West Virginia." From 2000 through 2010, the pace of population change in the CFX Corridor severely
lagged behind the state averages of both Virginia and West Virginia. The population of the Corridor declined at an
annual rate of 0.5% per year, compared with 1.2% population growth in Virginia and 0.3% annual growth in West
Virginia. Within the CFX Corridor, the highest growth rate was in Wise County (+0.3%), while all other counties lost
residents from 2000 to 2010. Population in McDowell County, West Virginia declined by 2.1% every year during
that same period. Both the remote location of and the lack of easy access to the region may have contributed to the
Corridor’s relative inability to retain its residents or attract new residents,
‘Table 3.1: CFX Corridor Population and Growth
Population Population Average Annual Growth Rate
(2000) (2010) (2000-2010)
‘Buchanan County, Virginia 26978 24,098, “1.12%
Dickenson County, Virginia 16,395 15,903 030%
Wise County, Virginia 40,123 41,452 0.33%
‘McDowell County, West Virginia 27,329 2213, 2.10%
Raleigh County, West Virginia 79,220 78,859 0.05%
Wyoming County, West Virginia 25,708 23,796 0.77%
FX Corridor-Virginia 83,496, 81,453, 0.25%
FX Corridor-West Virgin 132,257 124,768 0.58%
FX Corridor 215,753 206,221 0.45%
Virginia 7,078,515 8,001,024 1.23%
West Virginia 1,808,344 1,852,994 0.24%
Source: US. Census
3.1.2. Age Distribution
‘Age distribution in a region can suggest pattems of growth. Age distribution is affected by birth, death, and
migration rates. An aging population implies more need for healthcare and related services for the region. On the
other hand, a younger population indicates that these individuals will flow into the workforce in the future. If the
regional economy cannot support them, the region may risk losing the young population
"’ Source: U.S. Census.
11
roy
12
12
The age distribution of the CFX Corridor reflects an area with fewer young people and more senior residents than
the state averages of Virginia and West Virginia. In 2010, 23.1% of the Corridor population was under age 20
compared to 26.5% in Virginia and 24.0% in West Virginia. Also in the same year, 21.9% of the Corridor’s
population was over age 60; that is similar to the state average (21.9%) in West Virginia, but higher than 17.1% in
Virginia. Only 11.9% of the Corridor’s population was between age 20 and 30, while 14.0% and 12.3% of Virginia
and West Virginia’s populations, respectively, belonged to that age group. These were young people in the phase
of both going to college and entering the workforce. The low percentage of this age group indicated a lack of
economic opportunities for the region, as young people had to seek employment elsewhere.
3.1.3. Race Distribution
The CFX Corridor has a much higher percentage of whites when compared to minority groups, such as African-
Americans, than the Virginia average. But the racial distribution of the Corridor is similar to that of West Virginia.
According to data from the 2010 Census, 92.5% of the CFX Corridor population was white and 5.7% was African-
American. By comparison, 69.9% of Virginia’s population was white and 19.5% was African-American in 2010. In
West Virginia, 94.2% of the population was white and 3.2% was African-American. The racial composition of the
counties in the Corridor varies greatly by locality as shown in Figure 4.3. Dickenson County in Virginia has the
lowest proportion of African-Americans at 0.4 percent in 2010, followed by Wyoming County in West Virginia with
African-Americans making up 0.7 percent of its population.
0
2
4
6
8
10
12
14
16
18
Under 10
Years
10 to 19
Years
20 to 29
Years
30 to 39
Years
40 to 49
Years
50  to 59
Years
60 to 69
Years
70 to 79
Years
80 Years
and Over
Figure 3.1: Age Distribution: CFX Corridor vs. Virginia and West Virginia
(2010)
Virginia
CFX
Corridor
Source: U.S. Census
West
Virginia
CHMURAECONOMICS&ANALYTICS
ts Figure 3.1: Age Distribution: CFX Corridor vs. Virginia and West Virginia
(2010)
West
16 Virginia Virginia
crx
a
2
10
Under 10 10t019 20029 30t039 401049 50 to59 60t069 70to79 80 Years
Years Years Years Years + Years + Years += Years_-~—-Years.— and Over
Source: US. Census
The age distribution of the CFX Corridor reflects an area with fewer young people and more senior residents than
the state averages of Virginia and West Virginia. In 2010, 23.1% of the Corridor population was under age 20
compared to 26.5% ia and 24.0% in West Virginia. Also in the same year, 21.9% of the Corridor’s
population was over age 60; that is similar to the state average (21.9%) in West Virginia, but higher than 17.1% in
Virginia. Only 11.9% of the Corridor’s population was between age 20 and 30, while 14.0% and 12.3% of Virginia
and West Virginia’s populations, respectively, belonged to that age group. These were young people in the phase
of both going to college and entering the workforce. The low percentage of this age group indicated a lack of
‘economic opportunities for the region, as young people had to seek employment elsewhere.
3.1.3. Race Distribution
‘The CFX Corridor has a much higher percentage of whites when compared to minority groups, such as African-
‘Americans, than the Virginia average. But the racial distribution of the Corridor is similar to that of West Virginia.
According to data from the 2010 Census, 92.5% of the CFX Corridor population was white and 5.7% was African-
American. By comparison, 69.9% of Virginia’s population was white and 19.5% was African-American in 2010. In
West Virginia, 94.2% of the population was white and 3.2% was African-American. The racial composition of the
counties in the Corridor varies greatly by locality as shown in Figure 4.3. Dickenson County in Virginia has the
lowest proportion of African-Americans at 0.4 percent in 2010, followed by Wyoming County in West Virginia with
African-Americans making up 0.7 percent of its population.
Bi i:
‘CHIMURA. = N0HICKNAN
13
13
3.2. Economic Profile
3.2.1. Employment and Wages
The economic base of the CFX Corridor, measured by total employment, has been growing in the past decade.
Overall employment in the region increased from 58,634 in 2000 to 72,582 in 2011, expanding at an average of
2.0% per year. Meanwhile, overall employment in Virginia grew an average 0.4% percent per year and grew in
West Virginia at 0.2% per year. Job growth in the Corridor outperformed both state averages. The reason is that the
most recent recession (2008-09) hurt the rest of Virginia and West Virginia more severely than the CFX Corridor.
Even during the recession, employment in the mining industry in the Corridor expanded. The overall employment
growth for the mining industry expanded 3.3% per year from 2000 to 2011.
2.0
0.4
5.2
10.6
8.3
0.7
3.3
7.2
5.7
19.5
3.2
0.00
5.00
10.00
15.00
20.00
25.00
B
u
c
h
a
n
a
n
C
o
u
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ty
,
V
ir
g
in
ia
D
ic
k
e
n
s
o
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C
o
u
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ty
,
V
ir
g
in
ia
W
is
e
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o
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ty
,
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ir
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in
ia
M
c
D
o
w
e
ll
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o
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ty
,
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e
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ir
g
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ia
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a
le
ig
h
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o
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ty
,
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e
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ir
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ia
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e
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ir
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ia
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X
C
o
rr
id
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r-
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ir
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ia
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F
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r-
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e
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V
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e
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ir
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in
ia
Figure 3.2: Racial Mix: Percentage of African-Americans in the CFX Corridor
(2010)
Source: U.S. Census
Percent
CHMURAECONOMICS&ANALYTICS
Percent Figure 3.2: Racial Mix: Percentage of African-Americans in the CFX Corridor
25.00 (2010)
20.00 19.5
15.00
10.6
10.00
72
5.2 ST
5.00
32
20 i
0.00
=
Is
he
Virginia
Virginia
Virginia
McDowell
Wise County,
Virginia
Raleigh County,
West Virginia
‘wyoming
‘County, West
GFX Corridor.
Virginia
CFX Corridor
West Virginia
CFX Corridor
West
Dickenson
County, Virginia
3.2. Economic Profile
3.2.4. Employment and Wages
The economic base of the CFX Corridor, measured by total employment, has been growing in the past decade.
‘Overall employment in the region increased from 58,634 in 2000 to 72,582 in 2011, expanding at an average of
2.0% per year. Meanwhile, overall employment in Virginia grew an average 0.4% percent per year and grew in
West Virginia at 0.2% per year. Job growth in the Corridor outperformed both state averages. The reason is that the
most recent recession (2008-09) hurt the rest of Virginia and West Virginia more severely than the CFX Corridor.
Even during the recession, employment in the mining industry in the Corridor expanded. The overall employment
growth for the mining industry expanded 3.3% per year from 2000 to 2011
13
14
14
In 2011, the wage level of the area lagged behind the Virginia state average, but was higher than the West Virginia
average (Figure 3.4). In 2011, the average wage of the CFX Corridor was $41,740, which is 82% of the Virginia
average wage of $50,711, but higher than West Virginia’s average of $39,167. From 2000 through 2010, the
average wage of the Corridor grew at an average pace of 4.4% per year nominally—higher than the 3.7% rate for
Virginia and the 3.8% rate for West Virginia. The expanding mining industry contributed to faster wage growth of
the Corridor, as annual average wages in this industry advanced 5.5% per year from 2000 to 2011.
-4.00%
-3.00%
-2.00%
-1.00%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Figure 3.3: Employment Growth
Virginia
Source: Virginia Employment Commission
CFX Corridor
West
Virginia
CHMURAECONOMICS&ANALYTICS
Figure 3.3: Employment Growth
5.00%
West
4.00% Virginia Virginia
00% CFX Corridor
2.00%
1.00%
0.00%
1.00%
2.00%
-3.00%
4.00%
2002 ©2003» 2004 ©» 2005-2006 += «2007S 2008» 2009 2010-2011,
Source: Virginia Employment Commission
In 2011, the wage level of the area lagged behind the Virginia state average, but was higher than the West Virginia
average (Figure 3.4). In 2011, the average wage of the CFX Corridor was $41,740, which is 82% of the Virginia
average wage of $50,711, but higher than West Virginia’s average of $39,167. From 2000 through 2010, the
average wage of the Corridor grew at an average pace of 4.4% per year nominally—higher than the 3.7% rate for
Virginia and the 3.8% rate for West Virginia. The expanding mining industry contributed to faster wage growth of
the Corridor, as annual average wages in this industry advanced 5.5% per year from 2000 to 2011.
14
‘crm
15
15
3.2.2. Unemployment Rate
The CFX Corridor has a higher unemployment rate than the averages of both Virginia and West Virginia. The latest
data indicate that in September 2012, the unemployment rate for the region was 7.9%,
12
higher than the Virginia
average of 5.6% and the West Virginia average of 6.9%. Among all localities in the Corridor, McDowell County in
West Virginia had the highest unemployment rate at 9.1% in September 2012, followed by Buchanan County in
Virginia at 9.0%. Raleigh County in West Virginia had the lowest unemployment rate in the Corridor at 7.1%, still
higher than both Virginia and West Virginia state averages. The higher unemployment rate in the Corridor implies
that creating employment opportunities for the regional workforce is of paramount importance for local
governments.
12
The state, Corridor, and county unemployment rates are not seasonally adjusted.
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
$50,000
$55,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Figure 3.4: Annual Average Wages
Virginia
Source: Virginia Employment Commission
CFX Corridor
West Virginia
CHMURAECONOMICS&ANALYTICS
Figure 3.4: Annual Average Wages
$55,000
$50,000
$45,000
$40,000 Virginia
West Virginia
$35,000
$30,000
CFX Corridor
$25,000
$20,000
$15,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: Virginia Employment Commission
3.2.2. Unemployment Rate
‘The CFX Corridor has a higher unemployment rate than the averages of both Virginia and West Virginia. The latest
data indicate that in September 2012, the unemployment rate for the region was 7.9%,” higher than the Virginia
average of 5.6% and the West Virginia average of 6.9%. Among all localities in the Corridor, McDowell County in
West Virginia had the highest unemployment rate at 9.1% in September 2012, followed by Buchanan County in
Virginia at 9.0%. Raleigh County in West Virginia had the lowest unemployment rate in the Corridor at 7.1%, still
higher than both Virginia and West Virginia state averages. The higher unemployment rate in the Corridor implies
that creating employment opportunities for the regional workforce is of paramount importance for local
governments.
"The state, Corridor, and county unemployment rates are not seasonally adjusted.
15
‘crm
16
16
3.2.3. Industry Mix
Compared to the state averages of Virginia and West Virginia, Corridor employment is heavily concentrated in the
mining sector (Table 3.2). Based on 2011 employment data, 15.1% of regional employment was in mining, with
0.3% and 4.7% in Virginia and West Virginia, respectively. The region has smaller percentages of employment in
manufacturing and professional, scientific, and technical services than the state averages.
Since 2000, industry mix in the Corridor has changed considerably. Most significantly, the sectors of mining,
healthcare, and construction have all experienced an increase in their share of total employment in the region. In
2000, 13.0% of regional employment was in mining, increasing to 15.1% in 2011. Employment shares for
manufacturing, transportation, and warehousing declined from 2000 to 2011. For Virginia and West Virginia, their
employment numbers experienced expansion in terms of employment share for healthcare and social assistance,
and for professional, scientific and technical services, but declined in manufacturing and construction sectors.
9.0 8.8
7.7
9.1
7.1
8.4 8.3
7.6
7.9
5.6
6.9
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2.00
3.00
4.00
5.00
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Figure 3.5: Unemployment Rate in the CFX Corridor (September 2012)
Source: U.S. Census
Percent
CHMURAECONOMICS&ANALYTICS
Percent Figure 3.5: Unemployment Rate in the CFX Corridor (September 2012)
10.00
9.00
8.00
90 gg oa
84 a3
W 7 (79
71 69
7.00
6.00 56
5.00
4.00
3.00
2.00
1.00
0.00
Virginia
CFX Corridor
West Virginia
‘Buchanan County, Virginia
Dickenson County, Virginia
Wise County, Virginia
McDowell County, West
Virginia
Raleigh County, West
Virginia
‘Wyoming County, West
Virginia
CFX Corrider-Vieginia
CFX Corridor-West Virginia
3.2.3, Industry Mix
Compared to the state averages of Virginia and West Virginia, Corridor employment is heavily concentrated in the
mining sector (Table 3.2). Based on 2011 employment data, 15.1% of regional employment was in mining, with
0.3% and 4.7% in Virginia and West Virginia, respectively. The region has smaller percentages of employment in
manufacturing and professional, scientific, and technical services than the state averages.
Since 2000, industry mix in the Corridor has changed considerably. Most significantly, the sectors of mining,
healthcare, and construction have all experienced an increase in their share of total employment in the region. In
2000, 13.0% of regional employment was in mining, increasing to 15.1% in 2011. Employment shares for
manufacturing, transportation, and warehousing declined from 2000 to 2011. For Virginia and West Virginia, their
‘employment numbers experienced expansion in terms of employment share for healthcare and social assistance,
and for professional, scientific and technical services, but declined in manufacturing and construction sectors.
16
17
17
Table 3.2: Industry Mix of the Region (2000 & 2011)
2000 2011
Major Industry Sector CFX Corridor Virginia
West
Virginia
CFX
Corridor Virginia
West
Virginia
Agriculture, Forestry, Fishing and Hunting 0.6% 0.4% 0.4% 0.2% 0.3% 0.2%
Mining 13.0% 0.3% 2.9% 15.1% 0.3% 4.7%
Utilities 0.7% 0.5% 1.3% 0.6% 0.5% 1.1%
Construction 5.7% 6.5% 5.6% 6.7% 5.2% 5.3%
Manufacturing 3.1% 10.7% 11.0% 2.6% 6.7% 7.0%
Wholesale Trade 3.3% 3.4% 3.5% 3.1% 3.1% 3.3%
Retail Trade 17.0% 12.1% 13.6% 12.9% 11.4% 12.4%
Transportation and Warehousing 3.9% 4.0% 3.4% 2.9% 3.4% 3.3%
Information 1.9% 3.6% 2.2% 1.1% 2.2% 1.6%
Finance and Insurance 2.4% 3.6% 3.1% 1.8% 3.5% 2.7%
Real Estate and Rental and Leasing 0.8% 1.6% 1.0% 0.6% 1.4% 1.0%
Professional, Scientific, and Technical Services 3.2% 8.5% 3.2% 3.1% 11.1% 3.7%
Management of Companies and Enterprises 0.5% 2.1% 0.4% 0.5% 2.0% 0.8%
Administrative and Support and Waste Management
and Remediation Services 3.9% 6.2% 4.6% 3.9% 5.8% 4.7%
Educational Services 6.6% 8.2% 9.4% 10.1% 10.0% 9.5%
Healthcare and Social Assistance 13.8% 9.4% 15.3% 16.9% 12.2% 18.4%
Arts, Entertainment, and Recreation 1.0% 1.6% 1.2% 0.9% 1.8% 1.1%
Accommodation and Food Services 7.3% 7.4% 7.9% 7.1% 8.5% 9.4%
Other Services (except Public Administration) 3.4% 3.6% 3.2% 2.2% 3.7% 3.0%
Public Administration 8.0% 6.2% 6.6% 7.7% 6.7% 6.9%
Unclassified 0.0% 0.1% 0.0% 0.0% 0.1% 0.1%
Source: JobsEQ
3.2.4. High-tech Industry
Growth of the high-tech industry in the CFX Corridor lagged behind both state averages. The region did not
capitalize on the high-tech boom in the late 1990s; consequently, the percentage of high-tech employment in the
CFX Corridor stayed below 2% during the past eleven years. For the same period, the percentage of high-tech
employment in Virginia was around 16%, while that of West Virginia averaged over seven percent.
13
13
There is no standard or widely-accepted definition of high-tech industries. The definition used here is the same one used by
Chmura’s Virginia Economic Trends. The high-tech employment for West Virginia was not available for 2011.
CHMURAECONOMICS&ANALYTIC:
Table 3.2: Industry Mix of the Region (2000 & 2011)
2000 2011
West crK West
Major Industry Sector CFXCorridor Virginia. Virginia Corridor Virginia Virginia
Agriculture, Forestry, Fishing and Hunting 0.6% 0.4% 0.4% 02% = 0.3% 0.2%
Mining 13.0% 0.3% 2.9% 151% 0.3% 47%
Utilities 0.7% 015% 13% 06% 0.5% 11%
Construction 5.1% 65% 5.6% 67% 5.2% 53%
‘Manufacturing 31% 107% 11.0% 26% 6.7% 7.0%
Wholesale Trade 3.3% 3.4% 35% BIm 31% 3.3%
Retail Trade 17.0% 12.1% 13.6% = 12.9% 411.4% 12.4%
Transportation and Warehousing 3.9% 4.0% 3.4% 29% 3.4% 3.3%
Information 1.9% 3.6% 22% 11% 22% 1.6%
Finance and Insurance 2.4% 3.6% 3.1% 18% 3.5% 2.7%
Real Estate and Rental and Leasing 0.8% 1.6% 1.0% 0.6% 1.4% 1.0%
Professional, Scientific, and Technical Services 3.2% 85% 3.2% 31% 11.4% 37%
‘Management of Companies and Enterprises 0.5% 21% 0.4% 05% 2.0% 0.8%
‘Administrative and Support and Waste Management
‘and Remediation Services 3.9% 6.2% 4.6% 3.9% 5.8% 47%
Educational Services 6.6% 8.2% 9.4% 101% 10.0% 95%
Healthcare and Social Assistance 13.8% 9.496 15.3% (16.9% 12.2% = 18.4%
Acts, Entertainment, and Recreation 1.0% 1.6% 12% 0.9% 1.8% 11%
‘Accommodation and Food Services 7.3% 7.4% 79% 71% 8.5% 9.4%
Other Services (except Public Administration) 3.4% 3.6% 3.2% 22% RIK 3.0%
Public Administration 8.0% 6.2% 6.6% 1% 6.1% 6.9%
Unclassified 0.0% 0.1% 0.0% 00% 0.1% 0.1%
Source: JobsEQ
3.2.4. High-tech Industry
Growth of the high-tech industry in the CFX Corridor lagged behind both state averages. The region did not
capitalize on the high-tech boom in the late 1990s; consequently, the percentage of high-tech employment in the
CFX Corridor stayed below 2% during the past eleven years. For the same period, the percentage of high-tech
employment in Virginia was around 16%, while that of West Virginia averaged over seven percent."*
’ There is no standard or widely-accepted definition of high-tech industries, The definition used here is the same one used by
Chmura’s Virginia Economic Trends. The high-tech employment for West Virginia was not available for 2011
17
‘crm
18
18
3.3. Social Indicators
3.3.1. Educational Attainment
Average educational attainment in the CFX Corridor is much lower than both state averages. Based on U.S.
Census estimates, 11.6% of regional residents age 25 and over from 2006-2010 had a four-year degree or higher.
Over the same period, 33.8% of Virginia residents and 17.3% of West Virginia residents (age 25 and older) had a
four-year degree or higher. Two of the most educated counties in the CFX Corridor are Raleigh and Wise Counties,
with 15.4% and 11.3%, respectively, of their residents age 25 and over having a four-year degree or higher. In
McDowell County, only 6.3% of residents age 25 and over had a four-year degree or higher. The implication of the
lower educational attainment for the CFX Corridor is that when the area has a need for highly-skilled occupations, it
becomes more likely that a firm will recruit from outside the region.
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Figure 3.6: Percentage of High-Tech Employment (of Total Employment)
Virginia
Source: Virginia Employment Commission
CFX Corridor
West Virginia
CHMURAECONOMICS&ANALYTICS
Figure 3.6: Percentage of High-Tech Employment (of Total Employment)
18%
16% —~____
14% Virginia
12%
10%
8%
West Virginia
6% id
4%
CFX Corridor
2%
0%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: Virginia Employment Commission
3.3. Social Indicators
3.3.1. Educational Attainment
‘Average educational attainment in the CFX Corridor is much lower than both state averages. Based on U.S.
Census estimates, 11.6% of regional residents age 25 and over from 2006-2010 had a four-year degree or higher.
Over the same period, 33.8% of Virginia residents and 17.3% of West Virginia residents (age 25 and older) had a
four-year degree or higher. Two of the most educated counties in the CFX Corridor are Raleigh and Wise Counties,
with 15.4% and 11.3%, respectively, of their residents age 25 and over having a four-year degree or higher. In
McDowell County, only 6.3% of residents age 25 and over had a four-year degree or higher. The implication of the
lower educational attainment for the CFX Corridor is that when the area has a need for highly-skilled occupations, it
becomes more likely that a firm will recruit from outside the region.
18
‘crm
19
19
3.3.2. Poverty
Due to the region’s lower average wages and higher unemployment rate, the CFX Corridor has a higher
percentage of individuals living in poverty compared to the states of Virginia and West Virginia. The Census
Bureau’s 2006-2010 American Community Survey estimated that 20.4% of individuals in the Corridor were in
poverty compared to 10.3% in Virginia and 17.4% in West Virginia. The highest poverty rate occurred in McDowell
County, with almost a third of the county’s population living in poverty. The poverty rates for Buchanan and Wise
Counties were over twenty percent.
8.9 8.6
11.3
6.3
15.4
9.3
10.0
12.6
11.6
33.8
17.3
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5.00
10.00
15.00
20.00
25.00
30.00
35.00
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Figure 3.7 : Educational Attainment: Percentage of Adults with Bachelor’s
Degree or Higher (2006-2010)
Source: U.S. Census
CHMURAECONOMICS&ANALYTICS
Figure 3.7 : Educational Attainment: Percentage of Adults with Bachelor’s
35.00 Degree or Higher (2006-2010) 33.8
30.00
25.00
20.00
173
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3.3.2. Poverty
Due to the region’s lower average wages and higher unemployment rate, the CFX Corridor has a higher
percentage of individuals living in poverty compared to the states of Virginia and West Virginia. The Census
Bureau’s 2006-2010 American Community Survey estimated that 20.4% of individuals in the Corridor were in
poverty compared to 10.3% in Virginia and 17.4% in West Virginia. The highest poverty rate occurred in McDowell
County, with almost a third of the county’s population living in poverty. The poverty rates for Buchanan and Wise
Counties were over twenty percent.
19
20
20
3.3.3. Disability
Due to the high concentration of coal mining in the region, the CFX Corridor also has a higher percentage of
individuals with disabilities. Based on the Census Bureau’s 2010-2011 American Community Survey, an estimated
25.0% of individuals in the Corridor were disabled, compared to 10.9% in Virginia and 18.9% in West Virginia. The
disability rates for McDowell and Buchanan Counties were over 30%, with Wyoming County not far behind.
14
14
Disability data for Dickenson County was not provided by American Community Survey.
21.8
19.1
20.3
32.6
17.5 17.3
20.5 20.3 20.4
10.3
17.4
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
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Figure 3.8: Percentage of Individuals Living in Poverty (2006-2010)
Source: U.S. Census
Percent
CHMURAECONOMICS&ANALYTICS
Figure 3.8: Percentage of Individuals Living in Poverty (2006-2010)
Percent
36.0 26
30.0
25.0
218
10.3
20.0
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10.0
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3.3.3. Disability
Due to the high concentration of coal mining in the region, the CFX Corridor also has a higher percentage of
individuals with disabilities. Based on the Census Bureau’s 2010-2011 American Community Survey, an estimated
25.0% of individuals in the Corridor were disabled, compared to 10.9% in Virginia and 18.9% in West Virginia. The
disability rates for McDowell and Buchanan Counties were over 30%, with Wyoming County not far behind."
Disability data for Dickenson County was not provided by American Community Survey.
20
21
21
3.3.4. Health Indicators
The CFX Corridor has a slightly higher percentage of individuals without health insurance when compared to the
Virginia average, but this percentage is similar to the West Virginia average. Based on the Census Bureau’s 2010-
2011 American Community Survey, an estimated 14.5% of individuals in the Corridor were without health
insurance, compared to 12.5% in Virginia and 14.5% in West Virginia. The percentage of individuals without health
insurance is the highest in McDowell County, at 20.3%.
15
Despite higher poverty and disability rates, there is only a
slightly higher percentage of uninsured individuals. For both low-income and disabled individuals, they can obtain
health insurance from programs such as Medicaid if they meet certain eligibility requirements.
15
Disability data for Dickenson County was not provided by American Community Survey.
31.0
22.2
32.0
21.2
29.1
25.4 24.7 25.0
10.9
18.9
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
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Figure 3.9: Percentage of Individuals with Disabilities (2009-2011)
Source: U.S. Census
Percent
CHMURAECONOMICS&ANALYTICS
escent Figure 3.9: Percentage of Individuals with Disabilities (2009-2011)
31.0 32.0
30.0 29.1
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3.3.4, Health Indicators
‘The CFX Corridor has a slightly higher percentage of individuals without health insurance when compared to the
Virginia average, but this percentage is similar to the West Virginia average. Based on the Census Bureau’s 2010-
2011 American Community Survey, an estimated 14.5% of individuals in the Corridor were without health
insurance, compared to 12.5% in Virginia and 14.5% in West Virginia. The percentage of individuals without health
insurance is the highest in McDowell County, at 20.3%." Despite higher poverty and disability rates, there is only a
slightly higher percentage of uninsured individuals. For both low-income and disabled individuals, they can obtain
health insurance from programs such as Medicaid if they meet certain eligibility requirements.
'® Disability data for Dickenson County was not provided by American Community Survey.
2
22
22
In summary, social and economic indicators in the CFX Corridor lagged behind other parts of both Virginia and
West Virginia during the past decade in terms of population, employment, income, and high-tech industries. The
expanding coal industry helped the Corridor through the most recent recession. But lack of diversity can pose risks
for future economic development. Disparities exist among the Corridor counties. The region had lower educational
attainment, higher poverty rates, and higher rates of disabled individuals.
11.8
15.0
20.3
14.6
11.4
13.8
15.0
14.5
12.5
14.5
0.00
5.00
10.00
15.00
20.00
25.00
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ia
C
F
X
C
o
rr
id
o
r
V
ir
g
in
ia
W
e
s
t
V
ir
g
in
ia
Figure 3.10: Percentage of Individuals Without Health Insurance (2009-2011)
Source: U.S. Census
Percent
CHMURAECONOMICS&ANALYTICS
Percent Figure 3.10: Percentage of Individuals Without Health Insurance (2009-2011)
25.00
208
20.00
150 150
1500 146 ine 14s 45
Rs
us 14
10.00
5.00
0.00 | ___
z 2 2, 2 # £¢ 2 #8 € #
Bo 2 32 5 32 B ’ 6 6
Se 8s 5s §& Zo OF = be 8 S s
cs Ss = ¢ SF ¢ 3 3
2 > 2 3 Se 2 5 25 x z
gs #5 § 8% 88 #8 =€ B85 & s
£7 3 g g& 25 52 § 8
= g $8 gF 5° $ 8 x
a 6 g = s x 6
‘Source: .S. Consus = fo 5
In summary, social and economic indicators in the CFX Corridor lagged behind other parts of both Virginia and
West Virginia during the past decade in terms of population, employment, income, and high-tech industries. The
‘expanding coal industry helped the Corridor through the most recent recession. But lack of diversity can pose risks
for future economic development. Disparities exist among the Corridor counties. The region had lower educational
attainment, higher poverty rates, and higher rates of disabled individuals.
22
23
23

Location of CFX and Traffic Projection

4.1. Location of CFX
4.1.1. CFX in Virginia
In Virginia, CFX extends from U.S. Route 23 near Pound in Wise County to the West Virginia border; there it
connects with CFX in West Virginia. CFX extends approximately 52 miles through Wise, Dickenson, and Buchanan
Counties.
Section I of CFX (Pound Bypass) extends from U.S. Route 23 west of Pound. From there, CFX travels to the north
of Pound and connects with U.S. Route 83 east of Pound.
Section II of the proposed Coalfields Expressway is approximately 26 miles long and would extend from the Pound
Bypass near its connection with U.S. Route 83 in Wise County, to the Route 460 Connector in Buchanan County.
From Pound, CFX would continue east generally north of and parallel to U.S. Route 83 to the town of Clintwood.
The connections serving the Clintwood area are provided at U.S. Route 72 to the west, at U.S. Route 83 to the
south, and at U.S. Route 672 to the east of Clintwood. From the Clintwood area, CFX passes the Cranes Nest
River. It then turns in a northerly direction and has two connections with U.S. Route 63 before turning in a more
easterly direction. It connects with U.S. Route 63 again before crossing the Russell Fork about one mile north of the
town of Haysi, providing a direct connection to the town. The eastern terminus at Section II connects with Section
IIIA at the Route 460 Connector. The Route 460 Connector is part of Corridor Q of the Appalachian Development
Highway System that was created by Congress in 1965.
16
The western terminus of Section IIIA (Hawks Nest) starts at the U.S. Route 460 Connector, and ends at State
Route 614 in Buchanan County, located west of Grundy, Virginia. This section would overlap with Corridor Q of the
Appalachian Development Highway System. For Section IIIB, CFX passes Grundy to the north, travels eastward,
and ends at State Route 643. Section IIIC (Rockhouse) extends from Route 643 to Route 83 at the West Virginia
state line.
16
Environmental Assessment, Coalfields Expressway Section II. FHWA and VDOT. June 2012.
CHMURAECONOMICS&ANALYTICS

Location of CFX and Traffic Projection

4.1. Location of CFX
4.1.1. CFX in Virginia
In Virginia, CFX extends from U.S. Route 23 near Pound in Wise County to the West Virginia border; there it
connects with CFX in West Virginia. CFX extends approximately 52 miles through Wise, Dickenson, and Buchanan
Counties.
Section | of CFX (Pound Bypass) extends from U.S. Route 23 west of Pound. From there, CFX travels to the north
of Pound and connects with U.S. Route 83 east of Pound.
Section Il of the proposed Coalfields Expressway is approximately 26 miles long and would extend from the Pound
Bypass near its connection with U.S. Route 83 in Wise County, to the Route 460 Connector in Buchanan County.
From Pound, CFX would continue east generally north of and parallel to U.S. Route 83 to the town of Clintwood.
The connections serving the Clintwood area are provided at U.S. Route 72 to the west, at U.S. Route 83 to the
south, and at U.S. Route 672 to the east of Clintwood. From the Clintwood area, CFX passes the Cranes Nest
River. It then tums in a northerly direction and has two connections with U.S. Route 63 before turning in a more
easterly direction. It connects with U.S. Route 63 again before crossing the Russell Fork about one mile north of the
town of Haysi, providing a direct connection to the town. The eastern terminus at Section II connects with Section
IIA at the Route 460 Connector. The Route 460 Connector is part of Corridor Q of the Appalachian Development
Highway System that was created by Congress in 1965."°
The western terminus of Section IIIA (Hawks Nest) starts at the U.S. Route 460 Connector, and ends at State
Route 614 in Buchanan County, located west of Grundy, Virginia. This section would overlap with Corridor Q of the
Appalachian Development Highway System. For Section IIIB, CFX passes Grundy to the north, travels eastward,
and ends at State Route 643. Section IIIC (Rockhouse) extends from Route 643 to Route 83 at the West Virginia
state line.
‘ Environmental Assessment, Coalfields Expressway Section Il. FHWA and VDOT. June 2012,
23
roy
24
24
Figure 4.1: Location of CFX in Virginia
4.1.2. CFX in West Virginia
In West Virginia, the Coalfields Expressway has been designed to serve Interstates 77 and 64 near Beckley. It
travels a southwest direction through West Virginia to U.S. Route 83 in Buchanan County, Virginia. CFX will
generally follow West Virginia Route 16 through Raleigh and Wyoming Counties and West Virginia Route 83 in
McDowell County. This four-lane highway project is approximately 65 miles long. Sections of the highway in
Raleigh (Sophia area) and McDowell County in West Virginia have been constructed or are already under
construction.
17
17
Source: http://www.coalfieldsexpressway.com/route/index.html
CHMURAECONOMICS&ANALYTICS
Figure 4.1: Location of CFX in Virginia
Coalfields Expressway
US Route 121
ARC Corridor Q
wyoMInc
FLoYD
DICKENSON
RUSSELL
ry
4.1.2. CFX in West Virginia
In West Virginia, the Coalfields Expressway has been designed to serve Interstates 77 and 64 near Beckley. It
travels a southwest direction through West Virginia to U.S. Route 83 in Buchanan County, Virginia. CFX will
generally follow West Virginia Route 16 through Raleigh and Wyoming Counties and West Virginia Route 83 in
McDowell County. This four-lane highway project is approximately 65 miles long. Sections of the highway in
Raleigh (Sophia area) and McDowell County in West Virginia have been constructed or are already under
construction.”

Source: http:/www.coalfieldsexpressway.com/routelindex.htm!

24
25
25
Figure 4.2: Location of CFX in West Virginia
4.2. Access Points and Traffic Projection
Both the increased economic efficiency and business attraction will be affected by projected traffic volume on CFX
and the surrounding roads. Consequently, the first step in analyzing the economic impact of CFX is to determine
where the access points will be. Then the traffic pattern and volume on the new road are estimated.
There will be 24 preliminary access points along the CFX Corridor in Virginia and 16 in West Virginia (Table 4.1). In
Virginia, thirteen of the access points will be located in Dickenson County, eight in Buchanan, and three in Wise.
These access points along CFX will provide access to towns within the region such as Pound, Clintwood, Haysi,
Grundy, and Slate. Interchanges are also planned where CFX crosses major roadways such as U.S. Route 23,
U.S. Route 83, and U.S. 460. In West Virginia, the access points provide access to towns such as Bradshaw,
Welch, Mullens, Sophia, and Beckley. In addition, CFX also intersects with major roads such as the proposed King
Coal Highway, Interstate I-77/I-64, U.S. Route 83, and U.S. Route 16.
CHMURAECONOMICS&ANALYTICS
m enced
ow?
& —_—
BUCHA\ pl
5 ve
4.2. Access Points and Traffic Projection
Both the increased economic efficiency and business attraction will be affected by projected traffic volume on CFX
‘and the surrounding roads. Consequently, the first step in analyzing the economic impact of CFX is to determine
where the access points will be. Then the traffic pattern and volume on the new road are estimated.
There will be 24 preliminary access points along the CFX Corridor in Virginia and 16 in West Virginia (Table 4.1). In
Virginia, thirteen of the access points will be located in Dickenson County, eight in Buchanan, and three in Wise.
These access points along CFX will provide access to towns within the region such as Pound, Clintwood, Haysi,
Grundy, and Slate. Interchanges are also planned where CFX crosses major roadways such as U.S. Route 23,
U.S. Route 83, and U.S. 460. In West Virginia, the access points provide access to towns such as Bradshaw,
Welch, Mullens, Sophia, and Beckley. In addition, CFX also intersects with major roads such as the proposed King
Coal Highway, Interstate I-7/I-64, U.S. Route 83, and U.S. Route 16.
| 25
‘crm
26
26
Table 4.1: Number of CFX Preliminary Access Points
in Corridor Counties
Wise, VA 3
Dickenson, VA 13
Buchanan, VA 8
McDowell, WV 9
Wyoming, WV 4
Raleigh, WV 3
Total 40
Source: VDOT and WVDOT
Table 4.2 shows the projected average daily traffic (ADT) volumes for 2035.
18
The forecasts were calculated
utilizing a travel demand model by VDOT and WVDOT. In Virginia, it is projected that ADT volume will range from
4,567 in sections of Wise County to 6,705 in Buchanan County. The heaviest traffic will occur where CFX meets
U.S. Route 460 near the town of Grundy in Buchanan County, and where CFX meets U.S. Route 23 near the town
of Pound in Wise County. ADT volume will reach over 10,000 vehicles in 2035 near those two intersections. In
West Virginia, the projected traffic volume will be higher in Wyoming and Raleigh Counties, and highest traffic
volume will occur near the intersection of CFX, King Coal Highway, and I-77/I-64.
19
CFX also passes through some
sparsely populated areas, and ADT is projected to be less than 5,000 in many sections along the CFX Corridor.
Table 4.2: CFX Corridor Average Daily Traffic (ADT) Volumes
County 2035 Traffic Projection
Wise, VA 4,567
Dickenson, VA 7,347
Buchanan, VA 6,705
McDowell, WV 8,517
Wyoming, WV 14,517
Raleigh, WV 15,098
Average 8,561
Source: VDOT and WVDOT
Traffic in the CFX Corridor will experience moderate growth in the future. It is estimated that from 2020 to 2035,
traffic is expected to grow by 0.5 percent per year.
20
This modest growth forecast is based on modest population
and economic growth projections in the region and historic traffic trends. For example, during the six-year time
frame of 2000 to 2006, traffic rates on U.S. Route 83 (which parallels the proposed CFX) were unchanged over the
past few years.
21
18
The original FEIS for Virginia CFX has traffic projection for 2020. Since then, Year 2035 was chosen by VDOT in its updated
travel projection.
19
The FEIS for West Virginia CFX has only traffic projection for 2020. Chmura uses the growth rate from 2020 to 2035 for
Virginia CFX to estimate the 2035 traffic for West Virginia CFX.
20
Source: CFX Traffic Forecast Memo. VDOT, July 28, 2008.
21
Ibid.
CHMURAECONOMICS&ANALYTI
Table 4.1: Number of CFX Preliminary Access Points
in Corridor Counties
Wise, VA 3
Dickenson, VA a
Buchanan, VA a
‘MeDowell, WV 9
Wyoming, WV
Raleigh, WV 3
Total 40
Source: VOOT and WvOOT
Table 4.2 shows the projected average daily traffic (ADT) volumes for 2035. "° The forecasts were calculated
utilizing a travel demand model by VDOT and WVDOT. In Virginia, itis projected that ADT volume will range from
4,567 in sections of Wise County to 6,705 in Buchanan County. The heaviest traffic will occur where CFX meets
U.S. Route 460 near the town of Grundy in Buchanan County, and where CFX meets U.S. Route 23 near the town
of Pound in Wise County. ADT volume will reach over 10,000 vehicles in 2035 near those two intersections. In
West Virginia, the projected traffic volume will be higher in Wyoming and Raleigh Counties, and highest traffic
volume will occur near the intersection of CFX, King Coal Highway, and I-77/I-64."° CFX also passes through some
sparsely populated areas, and ADT is projected to be less than 5,000 in many sections along the CFX Corridor.
Table 4.2: CFX Corridor Average Daily Traffic (ADT) Volumes
County 2035 Traffic Projection
Wise, VA 4567
Dickenson, VA 7347
Buchanan, VA 6,705
McDowell, WV ou
wyoming, WV 14517
Raleigh, WV 15,098
Average 8,561
Source: VOOT and WvoOT
Traffic in the CFX Corridor will experience moderate growth in the future. Its estimated that from 2020 to 2035,
traffic is expected to grow by 0.5 percent per year.” This modest growth forecast is based on modest population
and economic growth projections in the region and historic traffic trends. For example, during the six-year time
frame of 2000 to 2006, traffic rates on U.S. Route 83 (which parallels the proposed CFX) were unchanged over the
past few years.”"
© The original FEIS for Virginia CFX has traffic projection for 2020. Since then, Year 2035 was chosen by VDOT in its updated
travel projection.
’ The FEIS for West Virginia CFX has only traffic projection for 2020. Chmura uses the growth rate from 2020 to 2035 for
Virginia CFX to estimate the 2035 traffic for West Virginia CFX.
° ‘Source: CFX Traffic Forecast Memo, VDOT, July 28, 2008,

Ibid.

26
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27
27

Economic Impact of CFX in the Corridor

This study uses the methodology employed in several studies, such as 1998 Appalachian Development Highway
System (ADHS) for the Appalachian Regional Commission.
22
Since CFX has not been built, a before/after analysis
is not feasible. As a result, prior studies were used to create assumptions regarding service business jobs and user
benefits that may result from CFX. Generally speaking, the sources of regional economic impact attributable to a
new highway can be grouped into the following three categories: (1) temporary construction impact, (2) increased
economic efficiency and cost savings, and (3) economic development or business-attraction effects. Estimates from
both direct construction and economic developments are input into the IMPLAN model
23
to measure the multiplier
impacts of CFX on regional industries.
5.1. One-time Impact of Construction
The construction phase of CFX will create jobs in construction and related industries such as design and site
development. In turn, the construction companies will boost their purchasing from regional suppliers. As a result,
CFX construction will bring more sales to local suppliers, some of which will see enough sales to add employees.
24
In addition, area restaurants and shops will benefit as the construction workers spend their income at local
establishments.
25
The economic impact of construction is temporary, however, lasting only during the construction
phase.
The most recent estimate put total construction cost of CFX at $2.8 billion for the Virginia section in 2013 dollars.
26
As Table 5.1 indicates, this figure includes costs such as pre-construction engineering work, right-of-way,
mobilization, construction engineering and inspection (CEI), excavation, drainage, erosion and sediment (E&S),
pavement, and construction of bridges. For CFX in West Virginia, total project costs were estimated to be $822.2
million based on the latest 2012 estimate. Of this, $182.9 million has been expended on the project.
27
Different
types of spending will impact industries in the region with varying magnitudes. For example, the money spent on
rights-of-way represents a transfer of property which will not generate additional economic impact on the CFX
Corridor region. In estimating the economic impacts of construction, Chmura mapped spending categories in Table
22
Wilbur Smith Associates. 1998. Appalachian Development Highways Economic Impact Studies, Prepared for Appalachian
Regional Commission, 1998.
23
IMPLAN is an economic impact assessment modeling system. It allows the user to build economic models to estimate the
impacts of economic changes in states, counties, or communities. It was created in the 1970s by the Forestry Service and is
widely used by economists to estimate the impact of specific events on the overall economy. It is one of the two most commonly
used models to estimate the economic impact of an event. The other often-used model is REMI.
24
This is referred to as the indirect impact.

25
This is referred to as the induced impact. The sum of the indirect and induced impact is referred to as the ripple impact.
26
Source: Coalfields Expressway Decision Document. The estimate was completed in 2008, which was escalated to 2013
dollars using the VDOT escalator. This number includes the cost of connection. The decision document only provided cost
breakdowns on CFX without connection ($2.1 billion in 2008 dollars). Chmura assumes the cost breakdown for the connection is
the same as for the mainline CFX. This estimate reflects the considerable cost savings resulting from coal synergy and large-
scale earth-moving techniques. The construction cost for the road, based on traditional construction methods, is estimated to be
$5.1 billion in 2013 dollars
27
Source: West Virginia DOT. According to the West Virginia CFX website, (http://www.coalfieldsexpressway.com/), the cost to
construct the remaining road is estimated to be $1.0 billion. However, the website did not indicate which year this estimate was
made. Chmura chose to use the West Virginia DOT 2012 estimate in this study.
http://www.coalfieldsexpressway.com/
CHMURAECONOMICS&ANALYTICS

Economic Impact of CFX in the Corridor

This study uses the methodology employed in several studies, such as 1998 Appalachian Development Highway
System (ADHS) for the Appalachian Regional Commission.” Since CFX has not been built, a before/after analysis
is not feasible. As a result, prior studies were used to create assumptions regarding service business jobs and user
benefits that may result from CFX. Generally speaking, the sources of regional economic impact attributable to a
new highway can be grouped into the following three categories: (1) temporary construction impact, (2) increased
‘economic efficiency and cost savings, and (3) economic development or business-attraction effects. Estimates from
both direct construction and economic developments are input into the IMPLAN model” to measure the multiplier
impacts of CFX on regional industries.
5.1. One-time Impact of Construction
The construction phase of CFX will create jobs in construction and related industries such as design and site
development. In turn, the construction companies will boost their purchasing from regional suppliers. As a result,
CFX construction will bring more sales to local suppliers, some of which will see enough sales to add employees. ”*
In addition, area restaurants and shops will benefit as the construction workers spend their income at local
establishments.” The economic impact of construction is temporary, however, lasting only during the construction
phase.
The most recent estimate put total construction cost of CFX at $2.8 billion for the Virginia section in 2013 dollars.”°
‘As Table 5.1 indicates, this figure includes costs such as pre-construction engineering work, right-of-way,
mobilization, construction engineering and inspection (CE), excavation, drainage, erosion and sediment (E&S),
pavement, and construction of bridges. For CFX in West Virginia, total project costs were estimated to be $822.2
million based on the latest 2012 estimate. Of this, $182.9 million has been expended on the project.”” Different
types of spending will impact industries in the region with varying magnitudes. For example, the money spent on
rights-of-way represents a transfer of property which will not generate additional economic impact on the CFX
Corridor region. In estimating the economic impacts of construction, Chmura mapped spending categories in Table
22 wilbur Smith Associates. 1998. Appalachian Development Highways Economic Impact Studies, Prepared for Appalachian
Regional Commission, 1998.
? IMPLAN is an economic impact assessment modeling system. It allows the user to build economic models to estimate the
impacts of economic changes in states, counties, or communities. It was created in the 1970s by the Forestry Service and is.
widely used by economists to estimate the impact of specific events on the overall economy. It is one of the two most commonly
used models to estimate the economic impact of an event. The other often-used model is REMI
2* This is referred to as the indirect impact.
® This is referred to as the induced impact. The sum of the indirect and induced impact is referred to as the ripple impact.
®° Source: Coalfields Expressway Decision Document. The estimate was completed in 2008, which was escalated to 2013
dollars using the VDOT escalator. This number includes the cost of connection. The decision document only provided cost
breakdowns on CFX without connection ($2.1 billion in 2008 dollars). Chmura assumes the cost breakdown for the connection is
the same as for the mainline CFX. This estimate reflects the considerable cost savings resulting from coal synergy and large-
scale earth-moving techniques. The construction cost for the road, based on traditional construction methods, is estimated to be
$5.1 billion in 2013 dollars
7” Source: West Virginia DOT. According to the West Virginia CFX website, (hitp:/iwww.coalfieldsexpressway.com/), the cost to
construct the remaining road is estimated to be $1.0 billion. However, the website did not indicate which year this estimate was
made. Chmura chose to use the West Virginia DOT 2012 estimate in this study.
27
roy
28
28
5.1 into different IMPLAN sectors and estimated their indirect and induced impacts, before aggregating them into
the overall economic impacts of construction in the Corridor.
Table 5.1: Virginia CFX Construction Cost Estimate - 2013 Dollars
($Million)
Project Costs Estimate Cost Distribution
Preliminary Engineering $180.6 6.4%
Rights-of-Way $82.1 2.9%
Mobilization  $65.7 2.3%
CEI  $234.6 8.3%
Excavation  $1,411.1 50.1%
Drainage  $166.3 5.9%
E&S  $61.0 2.2%
Pavement  $138.9 4.9%
Bridge Construction $254.5 9.0%
Traffic Controls $13.7 0.5%
Incidentals $58.0 2.1%
Contingencies $152.5 5.4%
Total $2,819.0
Source: VDOT
For the project timeline, the project officially started in 2002 after FHWA issued its Record of Decision (ROD). FEIS,
completed in 2001, envisioned that the construction would last for 17 years from 2003 to 2019. But the majority of
the work in Virginia has not been completed. The Coalfields Expressway Decision Document, drafted in 2008,
estimated a 14-year project schedule from 2008 to 2021. But this schedule has been delayed. The latest estimate
shows that the near-term projects (about 20 miles of CFX) will last from 2013 to 2024.
28
The estimated year for the
completed project will be beyond that. Without further information on the CFX completion schedule in Virginia,
Chmura assumes that even if construction starts in 2013, it will take 17 years, from 2013 to 2029, to complete the
project in Virginia, as estimated in the original FEIS. In West Virginia, some sections of the road have been
completed, and Chmura assumes that the remaining costs will also be spent from 2013 to 2029, to be consistent
with the Virginia time line.
Table 5.2 presents the estimated one-time economic impact of road construction in the CFX Corridor for the
Virginia portion, West Virginia portion, and the entire Corridor. From 2013 to 2029, it is estimated that the
construction activities will generate a total economic impact (including direct, indirect, and induced impacts) of $5.3
billion, measured in current dollars, which can support 38,055 cumulative jobs in the Corridor. Of the total economic
impact, $3.7 billion is derived from direct spending during the construction phase.
29
This spending can directly
support 24,318 cumulative jobs in the Corridor from 2013 to 2029, with the majority in construction trades. The
indirect impact in the state is estimated to be $721 million, supporting 5,894 cumulative jobs during the construction
phase. This is from activities in other industries supporting construction, such as equipment rental or truck
transportation. The induced impact is expected to be $920 million, which can support 7,843 cumulative jobs during
28
Source: VDOT.
29
The cost estimated by VDOT is in 2011 dollars. The measured impact is smaller than the $350.0 million total cost, because
some of the spending is assumed to be paid to companies outside Virginia. Chmura uses IMPLAN Pro model to estimate the
percentage of construction spending outside Virginia.
CHMURAECONOMICS&ANALYTI
5.1 into different IMPLAN sectors and estimated their indirect and induced impacts, before aggregating them into
the overall economic impacts of construction in the Corridor.
Table 5.1: Virginia CFX Construction Cost Estimate - 2013 Dollars
(Smillion)
Project Costs Estimate Cost Distribution
Preliminary Engineering $180.6 6.4%
Rights-of. Way $82.4 2.9%
Mobilization $657 23%
cel $2346 83%
Excavation s14i…a 50.1%
Drainage $166.3 5.9%
ERs $610 22%
Pavement $138.9 4.9%
Bridge Construction $254.5 9.0%
Traffic Controls $13.7 0.5%
Incidentals $58.0 21%
Contingencies $1525 5.4%
Total $2,819.0
Source: VDOT
For the project timeline, the project officially started in 2002 after FHWA issued its Record of Decision (ROD). FEIS,
‘completed in 2001, envisioned that the construction would last for 17 years from 2003 to 2019. But the majority of
the work in Virginia has not been completed. The Coalfields Expressway Decision Document, drafted in 2008,
estimated a 14-year project schedule from 2008 to 2021. But this schedule has been delayed. The latest estimate
shows that the near-term projects (about 20 miles of CFX) will last from 2013 to 2024.” The estimated year for the
‘completed project will be beyond that. Without further information on the CFX completion schedule in Virginia,
Chmura assumes that even if construction starts in 2013, it will take 17 years, from 2013 to 2029, to complete the
project in Virginia, as estimated in the original FEIS. In West Virginia, some sections of the road have been
‘completed, and Chmura assumes that the remaining costs will also be spent from 2013 to 2029, to be consistent
with the Virginia time line.
Table 5.2 presents the estimated one-time economic impact of road construction in the CFX Corridor for the
Virginia portion, West Virginia portion, and the entire Corridor. From 2013 to 2029, it is estimated that the
construction activities will generate a total economic impact (including direct, indirect, and induced impacts) of $5.3
billion, measured in current dollars, which can support 38,055 cumulative jobs in the Corridor. Of the total economic
impact, $3.7 billion is derived from direct spending during the construction phase.” This spending can directly
support 24,318 cumulative jobs in the Corridor from 2013 to 2029, with the majority in construction trades. The
indirect impact in the state is estimated to be $721 million, supporting 5,894 cumulative jobs during the construction
phase. This is from activities in other industries supporting construction, such as equipment rental or truck
transportation. The induced impact is expected to be $920 million, which can support 7,843 cumulative jobs during
® Source: VDOT.
® The cost estimated by VDOT is in 2011 dollars. The measured impact is smaller than the $350.0 million total cost, because
‘some of the spending is assumed to be paid to companies outside Virginia. Chmura uses IMPLAN Pro model to estimate the
percentage of construction spending outside Virginia.
28
roy
29
29
the construction phase—these jobs are expected to be concentrated in consumer service-related industries such as
restaurants, hospitals, and retail stores.
Table 5.2: Economic Impact of CFX Construction in the CFX Corridor (Cumulative, 2013-2029, Current Dollars)
Direct Indirect Induced Total
Virginia Spending ($Million) $2,839 $556 $709 $4,105
Employment 18,761  4,547  6,051  29,359
West Virginia Spending ($Million) $841  $165  $210  $1,216
Employment 5,557  1,347  1,792  8,696
Total Spending ($Million) $3,680  $721  $920  $5,320
Employment 24,318  5,894  7,843  38,055
Note: Figures may not sum due to rounding
Source: IMPLAN Pro 2010
On an annual average basis, CFX construction could generate an economic impact of $313.0 million that can
support 2,239 jobs per year in the CFX Corridor from 2013 to 2029. The annual economic impact in the Virginia
portion is estimated to be $241.4 million that can support 1,727 jobs in the Corridor, while annual economic impact
in the West Virginia portion is estimated to be $71.5 million that can support 512 jobs in the Corridor. The impact of
construction is primarily driven by construction cost. It is estimated that more construction money will be spent in
the Virginia portion, resulting in a higher economic impact than in West Virginia.
Table 5.3: Economic Impact of CFX Construction in the CFX Corridor (Annual Average 2013-2029, Current Dollars)
Direct Indirect Induced  Total
Virginia Spending ($Million) $167.0 $32.7 $41.7 $241.4
Employment 1,104  267  356  1,727
West Virginia Spending ($Million) $49.5  $9.7  $12.4  $71.5
Employment 327  79  105  512
Total Spending ($Million) $216.5  $42.4  $54.1  $313.0
Employment 1,430  347  461  2,239
Note: Figures may not sum due to rounding
Source: IMPLAN Pro 2010
5.2. Travel Efficiency, Cost Savings, and Safety Benefits
While the economic impact of construction activity only lasts during the construction phase, CFX will generate
sustained benefits for the CFX Corridor communities after it is built. All existing businesses and residents located in
the CFX Corridor can benefit from CFX.
30
There are three major categories of benefits associated with road
construction. First is time savings and efficiency improvement. CFX is expected to reduce travel time in the Corridor
significantly, which can in turn provide cost savings for businesses and residents. Different industries benefit to
varying degrees; those requiring a significant amount of travel, such as retail, real estate, and manufacturing, could
see a bigger impact in terms of productivity improvement. Other service industries, such as financial and
professional services, may see limited improvement. The second benefit is vehicle maintenance cost savings for all
30
Businesses outside the CFX Corridor will also benefit. Estimating those benefits is beyond the scope of this study.
CHMURAECONOMICS&ANALYTICS
the construction phase—these jobs are expected to be concentrated in consumer service-related industries such as
restaurants, hospitals, and retail stores.
Table 5.2: Economic Impact of CFX Construction in the CFX Corridor (Cumulative, 2013-2029, Current Dollars)
Direct Indirect. ~— Induced =Total
Virginia Spending ($Milion) $2839 $556 $703 $4,105
Employment 183761 4,547 6051 29,359
West Virginia Spending ($Milion) $841 $165 $210 $1,216
Employment 59571347 1,792 8,696
Total ‘Spending ($Million) $3,680 $721 $920 $5,320
Employment 24318 5,894 7.843 38,055
Note: Figures may not sum due to rounding
Source: IMPLAN Pro 2010
On an annual average basis, CFX construction could generate an economic impact of $313.0 million that can
support 2,239 jobs per year in the CFX Corridor from 2013 to 2029. The annual economic impact in the Virginia
portion is estimated to be $241.4 million that can support 1,727 jobs in the Corridor, while annual economic impact
in the West Virginia portion is estimated to be $71.5 million that can support 512 jobs in the Corridor. The impact of
construction is primarily driven by construction cost. It is estimated that more construction money will be spent in
the Virginia portion, resulting in a higher economic impact than in West Virginia.
‘Table 5.3: Economic Impact of CFX Construction in the CFX Corridor (Annual Average 2013-2029, Current Dollars)
Direct Indirect Induced Total
Virginia Spending (Million) $167.0 $32.7 Sau7 sana
Employment 1,104 267 356 4727
West Virginia Spending (SMillion) $49.5 $97 sia $715
Employment 327 3 105 512
Total Spending ($Million) ses $42.4 $541 $313.0
Employment 1,430 347 461 2,239
Note: Figures may not sum due to rounding
Source: IMPLAN Pro 2010
5.2. Travel Efficiency, Cost Savings, and Safety Benefits
While the economic impact of construction activity only lasts during the construction phase, CFX will generate
sustained benefits for the CFX Corridor communities after it is built. All existing businesses and residents located in
the CFX Corridor can benefit from CFX.” There are three major categories of benefits associated with road
construction, First is time savings and efficiency improvement. CFX is expected to reduce travel time in the Corridor
significantly, which can in turn provide cost savings for businesses and residents. Different industries benefit to
varying degrees; those requiring a significant amount of travel, such as retail, real estate, and manufacturing, could
‘see a bigger impact in terms of productivity improvement. Other service industries, such as financial and
professional services, may see limited improvement. The second benefit is vehicle maintenance cost savings for all
® Businesses outside the CFX Corridor will also benefit. Estimating those benefits is beyond the scope of this study.
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motorists using CFX. Less travel time can reduce fuel usage for motorists. In addition, smoother road conditions
can also reduce wear and tear on vehicles. The third category is safety benefits. CFX will be a 4-lane, partially
limited-access highway that will be an improvement to 2-lane highways in the Corridor, such as U.S. Route 83—the
main east-west highway in the Corridor. CFX has the potential to reduce accident rates due to enhanced safety
features.
31
Cost savings are usually estimated through a simulation model based on the amount of traffic and total time saved
traveling on CFX versus the current road system. The simulation model indicates that CFX will provide significant
time savings for businesses and residents in the region. In Virginia, from Pound in Wise County to the West Virginia
state line, CFX can reduce travel time by 49%—from 124 minutes on the current roads (under a no-build scenario)
to 63 minutes on the completed CFX.
32
The improvement in travel time for the West Virginia portion of CFX can
reach 50%, from 155 minutes (under a no-build scenario) to 77 minutes on the completed CFX (Table 5.4).
Table 5.4: Travel Time Savings (Minutes)
No-Build Proposed CFX Time Savings
CFX Virginia 124 63 49%
CFX West Virginia  155 77 50%
Total CFX 279 140 50%
Source: VDOT and WVDOT
Chmura used secondary research to convert time savings into a dollar amount. The total value of travel efficiency,
vehicle maintenance cost, and safety cost savings are estimated to be $86.9 million in 2035 for the CFX Corridor
(Table 5.5). If businesses use their cost savings to expand and hire more people, the cost savings could potentially
support over 193 new jobs in the CFX Corridor in Virginia in 2035.
33
The efficiency gain refers to the benefits of the travel time savings for motorists utilizing the new CFX. For
commuters, less time commuting means they can reduce work delays. For businesses, less travel time means
goods and services can be delivered faster, and there will be less missed appointments, missed meetings, or other
business disruptions. All those result in efficiency improvement. Efficiency improvement is estimated based on both
the reduced travel time and the value of time. As Table 5.4 shows, CFX can reduce travel time for the whole length
of the road by 50%, or more than two hours (140 minutes). Based on the average daily traffic in 2035, the total
vehicle hours traveled can be reduced by 8.3 million hours per year for all vehicles if they travel the whole length of
CFX. In addition, 61% of traffic is assumed to either originate or terminate in the Corridor.
34
A little over 8.0% of
traffic is assumed to be trucks, while the remainder is assumed to be cars.
35
The value of travel time is assumed to
31
There will be benefits of market access, which are explained qualitatively in Section 7.
32
Source: Coalfields Expressway Final Environmental Impact Statement (FEIS). VDOT 2001. Available at:
http://www.virginiadot.org/projects/bristol/coalfields_expressway.asp
33
In 2010, total economic output of the CFX Corridor in Virginia (based on the IMPLAN model) was $11.5 billion. In addition,
employee compensation was 36.0% of total output. So, when travel efficiency and cost savings provides a total economic
impact of $96.5 million in 2035, 38.0% of it will be employee compensation ($96.5 million * 38.0% = $36.7 million).
34
Since both Virginia and West Virginia CFX FEIS do not have such information, Chmura uses the percentage from Economic
Impact Study of Completing Appalachian Development Highway System.

35
Source: CFX FEIS for Virginia and West Virginia.
http://www.virginiadot.org/projects/bristol/coalfields_expressway.asp
CHMURAECONOMICS&ANALYTI
motorists using CFX. Less travel time can reduce fuel usage for motorists. In addition, smoother road conditions
can also reduce wear and tear on vehicles. The third category is safety benefits. CFX will be a 4-lane, partially
limited-access highway that will be an improvement to 2-lane highways in the Corridor, such as U.S. Route 83—the
main east-west highway in the Corridor. CFX has the potential to reduce accident rates due to enhanced safety
features.”
Cost savings are usually estimated through a simulation model based on the amount of traffic and total time saved
traveling on CFX versus the current road system. The simulation model indicates that CFX will provide significant
time savings for businesses and residents in the region. In Virginia, from Pound in Wise County to the West Virginia
state line, CFX can reduce travel time by 49%—from 124 minutes on the current roads (under a no-build scenario)
to 63 minutes on the completed CFX.* The improvement in travel time for the West Virginia portion of CFX can
reach 50%, from 155 minutes (under a no-build scenario) to 77 minutes on the completed CFX (Table 5.4).
‘Table 5.4: Travel Time Savings (Minutes)
No-Bulld Proposed CFX Time Savings
CFX Virginia 124 63 4956
CFX West Virginia 155 n 503%
Total CFX 279 140 50%
Source: VDOT and WVDOT
Chmura used secondary research to convert time savings into a dollar amount. The total value of travel efficiency,
vehicle maintenance cost, and safety cost savings are estimated to be $86.9 million in 2035 for the CFX Corridor
(Table 5.5). If businesses use their cost savings to expand and hire more people, the cost savings could potentially
‘support over 193 new jobs in the CFX Corridor in Virginia in 2035.°°
The efficiency gain refers to the benefits of the travel time savings for motorists utilizing the new CFX. For
‘commuters, less time commuting means they can reduce work delays. For businesses, less travel time means
goods and services can be delivered faster, and there will be less missed appointments, missed meetings, or other
business disruptions. All those result in efficiency improvement. Efficiency improvement is estimated based on both
the reduced travel time and the value of time. As Table 5.4 shows, CFX can reduce travel time for the whole length
of the road by 50%, or more than two hours (140 minutes). Based on the average daily traffic in 2035, the total
vehicle hours traveled can be reduced by 8.3 million hours per year for all vehicles if they travel the whole length of
CFX. In addition, 61% of traffic is assumed to either originate or terminate in the Corridor. A little over 8.0% of
traffic is assumed to be trucks, while the remainder is assumed to be cars.” The value of travel time is assumed to
“There willbe benefits of market access, which are explained qualitatively in Section 7.

Source: Coalfields Expressway Final Environmental Impact Statement (FEIS). VDOT 2001. Available at:
hitpiiwww.virginiadot.ora/projects/bristol/coalfields_expressway.asp

*In 2010, total economic output of the CFX Corridor in Virginia (based on the IMPLAN model) was $11.5 billion. In addition,
‘employee compensation was 36.0% of total output. So, when travel efficiency and cost savings provides a total economic
impact of $96.5 milion in 2035, 38.0% of it wll be employee compensation ($96.5 million * 38.0% = $36.7 milion).

Since both Virginia and West Virginia CFX FEIS do not have such information, Chmura uses the percentage from Economic
Impact Study of Completing Appalachian Development Highway System.

*® Source: CFX FEIS for Virginia and West Virginia.
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be $13 per hour for cars and $29 per hour for trucks in 2006.
36
Inflating those values to 2035 dollars using the
consumer price index, the completed CFX can provide an annual efficiency savings to Corridor residents and
businesses in the amount of $49.6 million per year. Among those, $16.0 million will occur in the Virginia section and
$33.7 million will occur in the West Virginia section. The West Virginia section of CFX has higher projected traffic
that can result in more time savings.
Table 5.5: Annual Travel Efficiency and Cost Savings ($Million, 2035)
Virginia West Virginia Total
Efficiency Improvement $16.0 $33.7 $49.6
Vehicle Maintenance Cost Saving $10.1 $21.1 $31.2
Safety $2.3 $13.4 $15.7
Total Benefits $28.3 $68.1 $96.5
Source: Chmura Economics & Analytics
All existing businesses and residents located in the CFX Corridor can benefit from the road as a result of reduced
vehicle maintenance costs. To estimate the cost savings, Chmura first identifies assumptions of vehicle operation
cost per hour and per mile from prior studies, before applying those costs to reduced time traveled. Based on the
average daily traffic in 2035, total vehicle hours traveled can be reduced by 1.6 million hours per year in 2035. The
vehicle maintenance cost is assumed to be $19 per hour in 2035 dollars.
37
As a result, CFX can provide an
estimated annual cost savings to Corridor motorists in the amount of $31.2 million, with $10.1 million in Virginia and
$21.1 million in West Virginia.
CFX can also improve safety. In 1997, accident rates in the Virginia section of the CFX Corridor was 1.53 per
million vehicle miles travelled (VMT); this is higher than 1.35 per million VMT for the state average.
38
It is assumed
that with 4-lanes and limited access of CFX, accident rates on the roads can be reduced to the state average of
1.35 per million VMT. This represents a reduction in the accident rate of 12%. This is consistent with prior studies
that similar projects can reduce the accident rate by 10%.
39
The average cost per accident is assumed to be
$203,332 in 2035 dollars.
40
As a result, the completed CFX can provide annual benefits in terms of accident
reduction in the amount of $15.7 million per year in 2035.
36
Source: Economic Impact Study of Completing the Appalachian Development Highway System.  Prepared for Appalachian
Regional Commission. Prepared by Cambridge Systematics, Inc, Economic Development Research Group, and HDR Decision
Economics, June 2008.
37
This is inflated based on $10 per hour for 2010. Source: Economic Benefits of Road Improvement from I-95 Toll Revenues-
Phase 2.  Prepared by Chmura Economics & Analytics, August 2012.
38
Source: CFX FEIS for Virginia. Accident rates for West Virginia were not available. Chmura assumes that they are higher than
Virginia’s CFX due to higher traffic volume. The relationship between accident and traffic volume is based on the following study:
Interactions Between Accident Rate and Traffic Volume, available at:
http://www.balticroads.org/downloads/25BRC/25brc_d1_pakalnis_1.pdf
39
Source: Economic Benefits of Road Improvement from I-95 Toll Revenues-Phase 2.  Prepared by Chmura Economics &
Analytics, August 2012.
40
This is inflated based on 2010 accident cost. Source: Economic Benefits of Road Improvement from I-95 Toll Revenues-
Phase 2. Prepared by Chmura Economics & Analytics, August 2012.
CHMURAECONOMICS&ANALYTI
be $13 per hour for cars and $29 per hour for trucks in 2006. Inflating those values to 2035 dollars using the
‘consumer price index, the completed CFX can provide an annual efficiency savings to Corridor residents and
businesses in the amount of $49.6 million per year. Among those, $16.0 milion will occur in the Virginia section and
$33.7 million will occur in the West Virginia section. The West Virginia section of CFX has higher projected traffic
that can result in more time savings.
ancy and Cost Savings ($Million, 2035)
Virginia West Virginia Total
Efficiency improvement $160 $33.7 $49.6
Vehicle Maintenance Cost Saving $10.1 said $312
Safety $23 $134 $15.7
Total Benefits $28.3 soa. $965
Source: Chmura Economics & Analytics
All existing businesses and residents located in the CFX Corridor can benefit from the road as a result of reduced
vehicle maintenance costs. To estimate the cost savings, Chmura first identifies assumptions of vehicle operation
cost per hour and per mile from prior studies, before applying those costs to reduced time traveled. Based on the
average daily traffic in 2035, total vehicle hours traveled can be reduced by 1.6 millon hours per year in 2035. The
vehicle maintenance cost is assumed to be $19 per hour in 2035 dollars.*” As a result, CFX can provide an
estimated annual cost savings to Corridor motorists in the amount of $31.2 million, with $10.1 million in Virginia and
$21.1 million in West Vit
CFX can also improve safety. In 1997, accident rates in the Virginia section of the CFX Corridor was 1.53 per
million vehicle miles travelled (VMT); this is higher than 1.35 per million VMT for the state average.” It is assumed
that with 4-lanes and limited access of CFX, accident rates on the roads can be reduced to the state average of
1.35 per million VMT. This represents a reduction in the accident rate of 12%. This is consistent with prior studies
that similar projects can reduce the accident rate by 10%.” The average cost per accident is assumed to be
$203,332 in 2035 dollars.“° As a result, the completed CFX can provide annual benefits in terms of accident
reduction in the amount of $15.7 million per year in 2035,

Source: Economic Impact Study of Completing the Appalachian Development Highway System. Prepared for Appalachian
Regional Commission. Prepared by Cambridge Systematics, Inc, Economic Development Research Group, and HDR Decision
Economics, June 2008,

"This is inflated based on $10 per hour for 2010. Source: Economic Benefits of Road Improvement from |-95 Toll Revenues-
Phase 2. Prepared by Chmura Economics & Analytics, August 2012.

Source: CFX FEIS for Virginia. Accident rates for West Virginia were not available. Chmura assumes that they are higher than
Virginia’s CFX due to higher traffic volume. The relationship between accident and traffic volume is based on the following study:
Interactions Between Accident Rate and Traffic Volume, available at:
http:/www.balticroads.orgidownloads/25BRC/25brc_d1_pakalnis_1.pdf

*® Source: Economic Benefits of Road Improvement from I-95 Toll Revenues-Phase 2. Prepared by Chmura Economics &
Analytics, August 2012.

This is inflated based on 2010 accident cost. Source; Economic Benefits of Road Improvement from I-95 Toll Revenues-
Phase 2. Prepared by Chmura Economics & Analytics, August 2012,

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5.3. Economic Impact of Service Businesses
5.3.1. Job Creation in Service Businesses
The most direct and visible new jobs created by CFX will be in businesses along CFX serving motorists.
Entrepreneurs and established corporations will build gas stations, hotels, and restaurants near access points
along CFX to serve drivers who pass through, as well as locals who live nearby. To estimate potential service
businesses that could be located along CFX in the Corridor, this study utilizes a “model-by-analogy” approach.
Essentially, Chmura considered previous regression models built with service business data on roads in rural
regions. In particular, Chmura utilized a study of businesses at rural interchanges for North Carolina because it
most resembles the CFX Corridor in both economic size and structure. The following five variables have an impact
on the development of service businesses at interchanges along an interstate highway:


Average daily traffic (ADT) on CFX


ADT on crossroads


Distance to the nearest major urban center


Design type (diamond or cloverleaf) of the interchange


Distance to the next interchange or intersecting interstate


Based on the projected traffic on CFX, roads crossing CFX, the distance to towns, and interchange design, Chmura
classified the access points along CFX into the following categories: residential, light tourist service, economically
competitive, economic integration, and heavy tourist.
41
 Residential interchanges generally are located in a rural setting, have lower traffic volume, and are not
close to a town. They normally have some development in single-family homes and nothing else. The
majority of access points along CFX are classified as residential.
 Light tourist service interchanges usually have one gas station, one small motel, and support moderate
traffic flow. One access point in Dickenson County near the town of Haysi, and a couple of access points in
Wyoming County near the town of Mullens are classified as this type.
 Economically competitive interchanges usually have two to four gas stations, one to two fast food
restaurants, and two or more hotels. They typically have high traffic flow and are within three miles of
nearby towns. One access point in Wise County close to the town of Pound, one access point to the east of
town of Grundy in Buchanan County, and one access point in McDowell County near the town of Welch are
classified as this type.
 Economic integration interchanges are located close to a town and have a high volume of traffic. These
access points have more gas stations, hotels, and restaurants because they serve motorists as well as
local residents. The access point in Buchanan County crossing U.S. 460 Connectors, the access point
crossing the King Coal Highway, and the access point in Raleigh County near the town of Sophia belong to
this category.
 Heavy tourist intersections have the highest traffic volume and are in close proximity to another interstate.
The eastern terminus of CFX in Raleigh County, where it connects with I-77 and I-64 belongs to the heavy
tourist category. Each heavy tourist intersection can support more than six hotels, over six restaurants, and
multiple gas stations.
41
Appendix 2 lists the criteria and business activities of each access point category.
CHMURAECONOMICS&ANALYTICS
5.3. Economic Impact of Service Businesses
5.3.1. Job Creation in Service Businesses
The most direct and visible new jobs created by CFX will be in businesses along CFX serving motorists.
Entrepreneurs and established corporations will build gas stations, hotels, and restaurants near access points
along CFX to serve drivers who pass through, as well as locals who live nearby. To estimate potential service
businesses that could be located along CFX in the Corridor, this study utilizes a “model-by-analogy” approach,
Essentially, Chmura considered previous regression models built with service business data on roads in rural
regions. In particular, Chmura utilized a study of businesses at rural interchanges for North Carolina because it
most resembles the CFX Corridor in both economic size and structure. The following five variables have an impact
‘on the development of service businesses at interchanges along an interstate highway:
Average daily traffic (ADT) on CFX
ADT on crossroads
Distance to the nearest major urban center
Design type (diamond or cloverleaf) of the interchange
Distance to the next interchange or intersecting interstate
@ReONS
Based on the projected traffic on CFX, roads crossing CFX, the distance to towns, and interchange design, Chmura
classified the access points along CFX into the following categories: residential, light tourist service, economically
‘competitive, economic integration, and heavy tourist.*?

Residential interchanges generally are located in a rural setting, have lower traffic volume, and are not
close to a town. They normally have some development in single-family homes and nothing else. The
majority of access points along CFX are classified as residential.

‘+ Light tourist service interchanges usually have one gas station, one small motel, and support moderate
traffic flow. One access point in Dickenson County near the town of Haysi, and a couple of access points in
‘Wyoming County near the town of Mullens are classified as this type.

Economically competitive interchanges usually have two to four gas stations, one to two fast food
restaurants, and two or more hotels. They typically have high traffic flow and are within three miles of
nearby towns. One access point in Wise County close to the town of Pound, one access point to the east of
town of Grundy in Buchanan County, and one access point in McDowell County near the town of Welch are
classified as this type.


Economic integration interchanges are located close to a town and have a high volume of traffic. These
‘access points have more gas stations, hotels, and restaurants because they serve motorists as well as
local residents. The access point in Buchanan County crossing U.S. 460 Connectors, the access point
crossing the King Coal Highway, and the access point in Raleigh County near the town of Sophia belong to
this category.


Heavy tourist intersections have the highest traffic volume and are in close proximity to another interstate.
The eastern terminus of CFX in Raleigh County, where it connects with |-77 and |-64 belongs to the heavy
tourist category. Each heavy tourist intersection can support more than six hotels, over six restaurants, and
multiple gas stations.

*" Appendix 2 lists the criteria and business activities of each access point category.
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Table 5.6 lists the projected service establishments that can be supported by CFX. In 2035, it is estimated that CFX
can support 77 businesses in the Corridor, comprising 22 motels, 28 gas stations, 18 fast food restaurants, and 9
full-service restaurants.
42
Table 5.6: Projected Businesses Establishments in Roadside Services
Wise Dickenson Buchanan McDowell Wyoming Raleigh CFX Corridor
Number of Interchanges 3 13 8 9 4 3 40
Motels 2 1 4 4 3 8 22
Gas Stations 3 1 7 7 3 7 28
Fast food Restaurants 2 0 5 5 0 6 18
Full-service Restaurants 0 0 2 2 0 5 9
Total 7 2 18 18 6 26 77
Source: Chmura Economics & Analytics
In terms of job creation, service businesses are estimated to support 880 jobs in 2035 in the Corridor, with 307 in
Virginia and 573 in West Virginia (Table 5.7).
43
By jurisdiction, Raleigh County in West Virginia is likely to land the
most of those jobs along CFX, due to the high traffic volume at the eastern terminus of the CFX. This is followed by
McDowell and Buchanan Counties. To arrive at these estimates, Chmura calculated the average employment per
business in the CFX Corridor in Virginia.
44
For example, an average gas station in the CFX Corridor in Virginia
employs nine workers and an average motel employs 8 workers. The average number of workers is 17 for
restaurants.
Table 5.7: Projected Employments in Roadside Services
Wise Dickenson Buchanan McDowell Wyoming Raleigh CFX Corridor
Number of Interchanges 3 13 8 9 4 3 40
Motels 15 8 30 30 23 60 165
Gas Stations 28 9 66 66 28 66 264
Fast food Restaurants 33 0 83 83 0 100 300
Full-service Restaurants 0 0 33 33 0 83 150
Total 77 17 213 213 51 310 880
Note: Numbers may not sum due to rounding
Source: Chmura Economics & Analytics
42
Due to the fact that CFX closely follows several current roads in the area, the projected businesses are not entirely new.
Some businesses may have existed, especially along the current Route 83 or Route 16, and they may relocate to CFX.

43
It is likely that those jobs are incremental to the existing service jobs in the region to serve the increased motorists. Anecdotal
examples indicate that such a project may not have a negative impact on existing businesses. For example, a recently built
road/bridge bypasses the town of Clarksville on Buggs Island. While local merchants were initially concerned that businesses on
the original road in downtown Clarksville would suffer, that proved to be unwarranted. Conversation with the town official
showed that the merchants in town have not experienced a drop-off in activity since the new bridge was built and takes traffic
away from the town’s main street.

44
Chmura has firm-level information from the Quarterly Census of Employment and Wages (or ES202) database to calculate
the average business size. No firm-level data are available for West Virginia.
CHMURAECONOMICS&ANALYTI
Table 5.6 lists the projected service establishments that can be supported by CFX. In 2036, it is estimated that CFX
can support 77 businesses in the Corridor, comprising 22 motels, 28 gas stations, 18 fast food restaurants, and 9
full-service restaurants.”
Table 5.6: Projected Businesses Establishments in Roadside Services
Wise Dickenson Buchanan McDowell Wyoming Raleigh CFX Corridor
Number of interchanges 3 B 8 9 4 3 40
Motels 2 HT 4 4 3 8 2
Gas Stations 3 1 7 7 3 7 28
Fast food Restaurants 2 o 5 5 oO 6 18
Full-service Restaurants 0 0 2 2 0 5 9
Total 7 2 18 18 6 26 ”
Source: Chmura Economics & Analytics
In terms of job creation, service businesses are e: 2035 in the Corridor, with 307 in
Virginia and 573 in West Virginia (Table 5.7).*° By jurisdiction, Raleigh County in West Virginia is likely to land the
most of those jobs along CFX, due to the high traffic volume at the easter terminus of the CFX. This is followed by
MeDowell and Buchanan Counties. To arrive at these estimates, Chmura calculated the average employment per
business in the CFX Corridor in Virginia.“ For example, an average gas station in the CFX Corridor in Virginia
‘employs nine workers and an average motel employs 8 workers. The average number of workers is 17 for
restaurants.
Table 5.7: Projected Employments in Roadside Services
Wise Dickenson Buchanan McDowell Wyoming Raleigh CFX Corridor
Number of interchanges. 3 3B 8 9 4 3 40
Motels 15 8 30 30 23 60 165
Gas Stations 28 9 66 66 28 66 264
Fast food Restaurants 3B ° 83 83 o 100 300
Full-service Restaurants 0 0 33 33 0 83 150
Total ” 7 213 213 51 310 880
Note: Numbers may not sum due to rounding,
Source: Chmura Economics & Analytics

Due to the fact that CFX closely follows several current roads in the area, the projected businesses are not entirely new.

Some businesses may have existed, especially along the current Route 83 or Route 16, and they may relocate to CFX.
© itis likely that those jobs are incremental to the existing service jobs in the region to serve the increased motorists. Anecdotal
‘examples indicate that such a project may not have a negative impact on existing businesses. For example, a recently built
road/bridge bypasses the town of Clarksville on Buggs Island. While local merchants were initially concerned that businesses on
the original road in downtown Clarksville would suffer, that proved to be unwarranted. Conversation with the town official
showed that the merchants in town have not experienced a drop-off in activity since the new bridge was bullt and takes traffic
away from the town’s main street
“* Chmura has firm-level information from the Quarterly Census of Employment and Wages (or ES202) database to calculate
the average business size, No firm-level data are available for West Virgina.
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5.3.2. Economic Impact of Service Businesses
While spending by motorists at service businesses can bring millions of dollars into the economy, service
businesses can also have ripple effects throughout the region. These ripple effects are summarized as indirect and
induced. Indirect effects are generated because there are many local industries supporting restaurants, gas
stations, and other visitor-service businesses. Money spent by customers in roadside restaurants and hotels also
increases the sales of the suppliers for these industries. The induced effect is caused by increased income of
workers employed by service businesses. These workers will in turn spend some of their income in the region, thus
injecting more money into the economy.
The annual economic impact of service businesses in the CFX Corridor is estimated to be $118.8 million, which can
support 1,067 jobs in the Corridor in 2035 (Table 5.8). Of this, $86.8 million is direct spending on food, lodging, and
gas at service establishments, which can support 880 jobs in the region. Indirect impact is estimated to be $15.6
million which can support 89 jobs in the Corridor. Induced economic impact generates $16.3 million which can
support 99 jobs in the Corridor.
Table 5.8: Annual Economic Impact of  Service Businesses in CFX Corridor (2035 Onward)
Direct Indirect Induced Total
Virginia Spending ($Million) $30.3 $5.4 $5.7 $41.4
Employment 307  31  35  372
West Virginia Spending ($Million) $56.6  $10.2  $10.6  $77.4
Employment 573  58  64  695
Total Spending ($Million) $86.8  $15.6  $16.3  $118.8
Employment 880  89  99  1,067
Note: Figures may not sum due to rounding
Source: IMPLAN Pro 2010
In 2035, about 35% of the economic impact, in terms of total spending and job creation, is expected to occur in
Virginia’s portion of the CFX Corridor, which is estimated to be $41.4 million in spending that can support 372 jobs.
The West Virginia portion of CFX is longer, carries more traffic, and passes through more towns and cities,
resulting in larger economic impact in West Virginia. Of the total economic impact from service businesses, 65%
will occur in the West Virginia section of the Corridor.
CHMURAECONOMICS&ANALYTI
5.3.2. Economic Impact of Service Businesses
While spending by motorists at service businesses can bring millions of dollars into the economy, service
businesses can also have ripple effects throughout the region. These ripple effects are summarized as indirect and
induced. Indirect effects are generated because there are many local industries supporting restaurants, gas
stations, and other visitor-service businesses. Money spent by customers in roadside restaurants and hotels also
increases the sales of the suppliers for these industries. The induced effect is caused by increased income of
workers employed by service businesses. These workers will in turn spend some of their income in the region, thus
injecting more money into the economy.
The annual economic impact of service businesses in the CFX Corridor is estimated to be $118.8 million, which can
support 1,067 jobs in the Corridor in 2035 (Table 5.8). Of this, $86.8 million is direct spending on food, lodging, and
gas at service establishments, which can support 880 jobs in the region. Indirect impact is estimated to be $15.6
million which can support 89 jobs in the Corridor. Induced economic impact generates $16.3 millon which can
‘support 99 jobs in the Corridor.
Table 5.8: Annual Economic Impact of Service Businesses in CFX Corridor (2035 Onward)
Direct. Indirect. Induced Total
Virginia Spending ($Million) $303 $5.4 $57 sana
Employment 307 31 35 an.
West Virginia Spending (SMiillion) $966 © $102 $106 $774
Employment 573 38 64 695
Total Spending ($Million) $86.8 © $15.6 = $16.3. sis
Employment 880 89 99 1,067
Note: Figures may not sum due to rounding
Source: IMPLAN Pro 2010
In 2035, about 35% of the economic impact, in terms of total spending and job creation, is expected to occur in
Virginia’s portion of the CFX Corridor, which is estimated to be $41.4 million in spending that can support 372 jobs.
The West Virginia portion of CFX is longer, carries more traffic, and passes through more towns and cities,
resulting in larger economic impact in West Virginia. Of the total economic impact from service businesses, 65%
will occur in the West Virginia section of the Corridor.
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Fiscal Impact

In addition to creating jobs and injecting millions of dollars into the economy, CFX will produce tax revenue for the
counties located in the CFX Corridor region and for Virginia and West Virginia state governments. For both states,
the main tax sources are from sales tax, personal income tax, and corporate income tax. For counties along the
CFX Corridor, major revenue sources for Virginia localities are sales, meal, and lodging taxes. For West Virginia
localities, the main revenue sources are business and occupation (B&O) taxes, and for some counties, hotel and
motel taxes.
45
To be conservative, only tax revenues from the direct impact are quantified.
46
6.1. State Fiscal Impact
6.1.1. Virginia State Fiscal Impact
During the construction phase, Virginia can collect corporate income tax from companies involved in the
construction of CFX, including architecture firms and construction companies. The state also collects personal
income tax from wages and salaries paid to individuals working on the project. After the construction is complete,
the state will collect corporate income tax from service businesses located along CFX. Similarly, people working in
these businesses will be subject to personal income tax. In addition, Virginia assesses 5% sales tax on receipts
from service businesses such as gas stations, hotels, and restaurants, with 4% going to state government, and 1%
going to local governments.
Chmura utilized the following methodology to estimate corporate and personal income taxes for both states. In
Section 5, Chmura estimated the total output value of construction and service businesses. The IMPLAN model
provides profit margins and the relative weight of wages and salaries in total output for each industry in the CFX
Corridor. For example, for construction businesses in the CFX Corridor, IMPLAN shows that profits account for
6.3% of the total output while wages and salaries account for 39.4%. From this information, Chmura estimates the
total profits and wages and salaries that can be attributed to CFX. The state corporate income tax rate is 6% and
the average personal income tax rate is 5%.
Table 6.1 presents the tax revenues for the state of Virginia. CFX is estimated to bring the state government a total
of $62.8 million during the construction phase. The majority of state tax revenue will come from personal income
tax, amounting to $53.8 million from 2013 to 2029. Corporate income tax is estimated to total $9.0 million during the
construction phase.
Table 6.1: State Tax Estimate-Virginia ($Million)
Construction Corporate Income Tax Personal Income Tax
State Sales
Tax Total
Construction (Total 2013-2029) $9.0 $53.8
$62.8
Roadside Services (Annual 2035) $0.3 $0.4 $1.2 $1.9
Source: Chmura Economics & Analytics
45
None of the Virginia localities charge Business, Professional, and Occupational License (BPOL) tax.
46
This approach is recommended by Burchell and Listokin in The Fiscal Impact Handbook.
CHMURAECONOMICS&ANALYTICS

Fiscal Impact

In addition to creating jobs and injecting millions of dollars into the economy, CFX will produce tax revenue for the
counties located in the CFX Corridor region and for Virginia and West Virginia state governments. For both states,
the main tax sources are from sales tax, personal income tax, and corporate income tax. For counties along the
CFX Corridor, major revenue sources for Virginia localities are sales, meal, and lodging taxes. For West Virginia
localities, the main revenue sources are business and occupation (B&O) taxes, and for some counties, hotel and
motel taxes.“° To be conservative, only tax revenues from the direct impact are quantified.*°
6.1. State Fiscal Impact
6.1.1. Virginia State Fiscal Impact
During the construction phase, Virginia can collect corporate income tax from companies involved in the
construction of CFX, including architecture firms and construction companies. The state also collects personal
income tax from wages and salaries paid to individuals working on the project. After the construction is complete,
the state will collect corporate income tax from service businesses located along CFX. Similarly, people working in
these businesses will be subject to personal income tax. In addition, Virginia assesses 5% sales tax on receipts
from service businesses such as gas stations, hotels, and restaurants, with 4% going to state government, and 1%
going to local governments.
Chmura utilized the following methodology to estimate corporate and personal income taxes for both states. In
Section 5, Chmura estimated the total output value of construction and service businesses. The IMPLAN model
provides profit margins and the relative weight of wages and salaries in total output for each industry in the CFX
Corridor. For example, for construction businesses in the CFX Corridor, IMPLAN shows that profits account for
6.3% of the total output while wages and salaries account for 39.4%. From this information, Chmura estimates the
total profits and wages and salaries that can be attributed to CFX. The state corporate income tax rate is 6% and
the average personal income tax rate is 5%.
Table 6.1 presents the tax revenues for the state of Virginia. CFX is estimated to bring the state government a total
of $62.8 million during the construction phase. The majority of state tax revenue will come from personal income
tax, amounting to $53.8 million from 2013 to 2029. Corporate income tax is estimated to total $9.0 milion during the
construction phase.
State Sales
Construction Corporate Income Tax Personal Income Tax. Tax Total
Construction (Total 2013-2029) $9.0 $53.8 $62.8
Roadside Services (Annual 2035) $03 $0.4 siz $19
Source: Chmura Economics & Analytics

None of the Virginia localities charge Business, Professional, and Occupational License (BPOL) tax.
“© This approach is recommended by Burchell and Listokin in The Fiscal Impact Handbook.

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After construction is complete, the state of Virginia is expected to collect sales tax, corporate tax, and personal
income tax from service businesses along CFX. Virginia’s sales tax is 5%, with 4% going to the state government
and 1% going to local governments. In 2035, the total state tax revenue from service businesses is estimated to be
$1.9 million with sales tax accounting for more than 1.2 million. Personal and corporate income taxes are estimated
to be $0.3 and $0.4 million per year, respectively, from 2035 onward.
6.1.2. West Virginia State Fiscal Impact
During the construction phase, the state of West Virginia can collect corporate income tax from companies involved
in the construction of CFX, including architecture firms and construction companies. The state also collects
personal income tax from wages and salaries paid to individuals working on the project. After the construction is
complete, the state of West Virginia will collect corporate income tax from service businesses located along CFX.
Similarly, people working in these businesses will be subject to personal income tax. West Virginia has a state
corporate income tax rate of 8.75%, and the average personal income tax rate is 4.5%.
47
In addition, West Virginia
assesses 6% sales tax on receipts from service businesses such as gas stations, hotels, and restaurants.
48
Table 6.2 presents the tax revenues for the state. The construction of CFX is estimated to bring the state
government a total of $19.9 million during the construction phase. The majority of state tax revenue will come from
personal income tax, amounting to $15.9 million. Corporate income tax is estimated to total $4.0 million during the
construction phase.
Table 6.2: State Tax Estimate-West Virginia ($Million)
Construction Corporate Income Tax
Personal Income
Tax
State Sales
Tax Total
Construction (Total 2013-2029) $4.0 $15.9
$19.9
Roadside Services (Annual 2035) $0.7 $0.8 $3.4 $4.9
Source: Chmura Economics & Analytics
After construction is complete, the state is expected to collect sales tax, corporate tax, and personal income tax
from service businesses in the Corridor. State sales tax for West Virginia is 6%, resulting in annual sales tax
revenue of $3.4 million. Adding corporate and personal income taxes, the total state tax revenue from service
businesses is estimated to be $4.9 million.
47
West Virginia has a progressive state income tax system where higher income individuals pay higher percentages of their
income as income tax. The rate is 4.5% for an individual earning $25,000 to $40,000 per year and 6.5% for an individual earning
more than $60,000 per year. Therefore, 4.5% is a reasonable and conservative average assumption for construction and service
jobs created by this project.
48
Source: West Virginia Tax Department.
CHMURAECONOMICS&ANALYTICS
After construction is complete, the state of Virginia is expected to collect sales tax, corporate tax, and personal
income tax from service businesses along CFX. Virginia’s sales tax is 5%, with 4% going to the state government
and 1% going to local governments. In 2035, the total state tax revenue from service businesses is estimated to be
$1.9 million with sales tax accounting for more than 1.2 million. Personal and corporate income taxes are estimated
to be $0.3 and $0.4 million per year, respectively, from 2035 onward.
6.1.2. West Virginia State Fiscal Impact
During the construction phase, the state of West Virginia can collect corporate income tax from companies involved
in the construction of CFX, including architecture firms and construction companies. The state also collects
personal income tax from wages and salaries paid to individuals working on the project. After the construction is
complete, the state of West Virginia will collect corporate income tax from service businesses located along CFX.
Similarly, people working in these businesses will be subject to personal income tax. West Virginia has a state
corporate income tax rate of 8.75%, and the average personal income tax rate is 4.5%.” In addition, West Virginia
assesses 6% sales tax on receipts from service businesses such as gas stations, hotels, and restaurants. “*
Table 6.2 presents the tax revenues for the state. The construction of CFX is estimated to bring the state
government a total of $19.9 million during the construction phase. The majority of state tax revenue will come from.
Personal income tax, amounting to $15.9 million. Corporate income tax is estimated to total $4.0 million during the
construction phase.
‘Table 6.2: State Tax Estimate-West Virginia (Million)
Personal Income _State Sales
Construction Corporate Income Tax Tax Tax Total
Construction (Total 2013-2029) $40 $15.9 $199
Roadside Services (Annual 2035) $07 sos $34 $43
Source: Chmura Economics & Analytics
After construction is complete, the state is expected to collect sales tax, corporate tax, and personal income tax
from service businesses in the Corridor. State sales tax for West Virginia is 6%, resulting in annual sales tax
revenue of $3.4 million. Adding corporate and personal income taxes, the total state tax revenue from service
businesses is estimated to be $4.9 milion.
*" West Virginia has a progressive state income tax system where higher income individuals pay higher percentages of their
income as income tax. The rate is 4.5% for an individual earning $25,000 to $40,000 per year and 6.5% for an individual earning
more than $60,000 per year. Therefore, 4.5% is a reasonable and conservative average assumption for construction and service
jobs created by this project
*° Source: West Virginia Tax Department.
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6.2. Local Fiscal Impact
6.2.1. Virginia Local Governments
Chmura utilized the following methodology to estimate local tax revenue:
49
since all local taxes are based on total
receipts, the direct spending impact estimated in Section 5 provides a sound basis for calculating tax revenue. In
Virginia, three related local tax sources are sales, lodging, and meal taxes. Chmura calculates the regional average
tax rate with the number of roadside service employment as the weight.
Since none of the localities have business, professional, and occupational licenses (BPOL), Virginia’s local
governments will not receive tax revenues during construction. After the construction of CFX is complete, the
service businesses in the CFX Corridor are estimated to generate $0.3 million in sales tax for local governments.
Only Dickenson County has a meal tax, while both Wise and Buchanan Counties have a lodging tax, but no meal
tax. The total lodging and meal taxes are estimated to be $0.19 million and $0.01 million for local governments.
Total annual local taxes will be $0.5 million per year for three localities in Virginia.
Table 6.3: Local Tax Estimate-Virginia Localities ($Million)
Construction Sales Meal Lodging Tax Total
Construction (Total 2013-2029)
$0.00
Roadside Services (Annual 2035) $0.30 $0.01 $0.19 $0.50
Source: Chmura Economics & Analytics
Localities in Virginia can also collect personal property taxes on the vehicles and equipment used for construction
within their jurisdictions. For example, Buchanan County is expected to receive sixty thousand dollars from this tax.
Wise and Dickenson Counties may also benefit.50
6.2.2. West Virginia Local Governments
In West Virginia, two local tax sources are B&O taxes and hotel/motel taxes. Chmura calculates the regional
average tax rate with roadside service employment as a weight.
During the construction phase, the West Virginia counties located in the CFX Corridor can collect B&O taxes from
construction spending. It is estimated that the average B&O tax revenue will total $11.8 million for three localities
(McDowell, Raleigh, and Wyoming) in the CFX Corridor during the construction phase (Table 6.4).
After the construction of CFX is complete, local governments will collect B&O taxes and hotel/motel taxes from
service businesses. In 2035, the service businesses in the West Virginia Corridor are estimated to generate $0.9
million in revenue for local governments. McDowell County has no hotel/motel tax while both Raleigh and Wyoming
49
Only county tax revenues are estimated in this study. In West Virginia, municipalities can also impose taxes on properties and
businesses. Those are not estimated here.
50
The exact tax amounts for those two counties depend on the construction equipment parked in those two counties at the
beginning of the year. They also depend on how aggressive those counties are in pursuing such tax revenues. Chmura does not
have sufficient information to quantify the tax revenues for Wise and Dickenson Counties.
CHMURAECONOMICS&ANALYTI
6.2. Local Fiscal Impact
6.2.1. Virginia Local Governments
Chmura utilized the following methodology to estimate local tax revenue:* since all local taxes are based on total
receipts, the direct spending impact estimated in Section 5 provides a sound basis for calculating tax revenue. In
Virginia, three related local tax sources are sales, lodging, and meal taxes. Chmura calculates the regional average
tax rate with the number of roadside service employment as the weight.
Since none of the localities have business, professional, and occupational licenses (BPOL), Virginia’s local
governments will not receive tax revenues during construction. After the construction of CFX is complete, the
service businesses in the CFX Corridor are estimated to generate $0.3 million in sales tax for local governments.
Only Dickenson County has a meal tax, while both Wise and Buchanan Counties have a lodging tax, but no meal
tax. The total lodging and meal taxes are estimated to be $0.19 million and $0.01 million for local governments.
Total annual local taxes will be $0.5 million per year for three localities in Virginia.
‘Table 6.3: Local Tax Estimate-Virginia Localities ($Million)
Construction Sales Meal Lodging Tax Total
Construction (Total 2013-2029) i $0.00
Roadside Services (Annual 2035) $030 $001 $0.19 $0.50
Source: Chmura Economics & Analytics
Localities in Virginia can also collect personal property taxes on the vehicles and equipment used for construction
within their jurisdictions. For example, Buchanan County is expected to receive sixty thousand dollars from this tax.
Wise and Dickenson Counties may also benefit."
6.2.2. West Virginia Local Governments
In West Virginia, two local tax sources are B&O taxes and hotel/motel taxes. Chmura calculates the regional
average tax rate with roadside service employment as a weight.
During the construction phase, the West Virginia counties located in the CFX Corridor can collect B&O taxes from
construction spending. It is estimated that the average B&O tax revenue will total $11.8 million for three localities
(McDowell, Raleigh, and Wyoming) in the CFX Corridor during the construction phase (Table 6.4).
After the construction of CFX is complete, local governments will collect B&O taxes and hotel/motel taxes from.
service businesses. In 2035, the service businesses in the West Virginia Corridor are estimated to generate $0.9
million in revenue for local governments. McDowell County has no hotel/motel tax while both Raleigh and Wyoming

Only county tax revenues are estimated in this study. In West Virginia, municipalities can also impose taxes on properties and
businesses. Those are not estimated here.

® The exact tax amounts for those two counties depend on the construction equipment parked in those two counties at the
beginning of the year. They also depend on how aggressive those counties are in pursuing such tax revenues. Chmura does not
have sufficient information to quantify the tax revenues for Wise and Dickenson Counties.
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Counties have a 6% hotel/motel tax.
51
The total hotel and motel taxes are estimated to be $0.6 million per year for
local governments, while B&O taxes are estimated to be $0.3 million in 2035.
Table 6.4: Local Tax Estimate-West Virginia ($Million)
Construction B&O Tax
Hotel/Motel
Tax Total
Construction (Total 2013-2029) $11.80
$11.80
Roadside Services (Annual 2035) $0.30 $0.60 $0.90
Source: Chmura Economics & Analytics
6.3. Potential Payback Period for Investment
The cumulative economic impact generated by, as well as the cost of CFX, is presented in Figure 6.1. The benefits
of CFX include travel efficiency, cost savings, and economic benefits of service businesses and potential
distribution centers. The direct impacts of all three types of benefits can reach $215.3 million in 2035. Prior to that,
the estimated annual economic impact of construction will average $313.0 million per year from 2013 to 2029.
Chmura used a 2.6% discount rate to calculate the net present value of the cumulative benefits of CFX.
52
The
cumulative economic impact will exceed the cost of CFX in 2027. The cumulative impact (discounted to 2013 value)
of CFX will reach $4.5 billion in 2030, $5.7 billion in 2040, $6.9 billion in 2050, $8.1 billion in 2060, and $9.4 billion
in 2070. Assuming that the life span of CFX is 50 years after its completion, from 2013 to the end of the life of the
road, the cumulative economic impact is estimated to be $10.5 billion in 2013 dollars. Each dollar of investment in
CFX can result in $2.90 dollars in economic impact in the Corridor.
51
Source: Raleigh, Wyoming, and McDowell County Economic Development Authority.
52
This is the CPI rate.
$0.0
$2,000.0
$4,000.0
$6,000.0
$8,000.0
$10,000.0
$12,000.0
2
0
1
3
2
0
1
6
2
0
1
9
2
0
2
2
2
0
2
5
2
0
2
8
2
0
3
1
2
0
3
4
2
0
3
7
2
0
4
0
2
0
4
3
2
0
4
6
2
0
4
9
2
0
5
2
2
0
5
5
2
0
5
8
2
0
6
1
2
0
6
4
2
0
6
7
2
0
7
0
2
0
7
3
2
0
7
6
2
0
7
9
Figure 6.1: Cumulative Economic Impact Over Time ($Million,
Discounted to 2013 Value)
CFX Cumulative Impact
CFX Cost
CHMURAECONOMICS&ANALYTICS
Counties have a 6% hotel/motel tax."’ The total hotel and motel taxes are estimated to be $0.6 million per year for
local governments, while B&O taxes are estimated to be $0.3 million in 2035.
Table 6.4: Local Tax Estimate-West Virginia ($MMillion)
Hotel/Motel
Construction B&O Tax Tax Total
Construction (Total 2013-2029) $11.80 $11.80
Roadside Services (Annual 2035) $0.30 $0.60 $0.90
Source: Chmura Economies & Analytics
}.3. Potential Payback Period for Investment
The cumulative economic impact generated by, as well as the cost of CFX, is presented in Figure 6.1. The benefits
of CFX include travel efficiency, cost savings, and economic benefits of service businesses and potential
distribution centers. The direct impacts of all three types of benefits can reach $215.3 million in 2035. Prior to that,
the estimated annual economic impact of construction will average $313.0 million per year from 2013 to 2029.
Chmura used a 2.6% discount rate to calculate the net present value of the cumulative benefits of CFX.” The
‘cumulative economic impact will exceed the cost of CFX in 2027. The cumulative impact (discounted to 2013 value)
of CFX will reach $4.5 billion in 2030, $5.7 billion in 2040, $6.9 billion in 2050, $8.1 billion in 2060, and $9.4 billion
in 2070. Assuming that the life span of CFX is 50 years after its completion, from 2013 to the end of the life of the
road, the cumulative economi pact is estimated to be $10.5 billion in 2013 dollars. Each dollar of investment in
CFX can result in $2.90 dollars in economic impact in the Corridor.
Figure 6.1: Cumulative Economic Impact Over Time ($Miillion,
ounted to 2013 Value)
$12,000.0
$10,000.0 CFX Cumulative Impact
$8,000.0
$6,000.0
$4,000.0
$2,000.0 CFX Cost
$0.0
2013 +
2016
2019
2022
2025
2028
2031
2034
2037
2040
2043
2046
2049
2052
2055
2058
2061
2064
2067
2070
2073
2076
2073
*’ Source: Raleigh, Wyoming, and McDowell County Economic Development Authority

This is the CPI rate.

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To calculate the payback period for investment, Chmura compared the cumulative impact of CFX after its
completion with the cost of CFX. The benefits of CFX include travel efficiency, cost savings, and economic benefits
of service businesses and potential distribution centers. The direct impacts of all three types of benefits can be
$215.3 million in 2035. The total cost of CFX was estimated at $3.7 billion (in 2013 dollars). Discounting total
economic impacts to 2013 dollars, the present value of the total economic impact will exceed the total cost in 2059,
or 30 years after road completion. As a result, the potential payback period is estimated to be 30 years after road
completion.
53
53
The payback time will be longer if a higher discount rate is assumed.
CHMURAECONOMICS&ANALYTICS
To calculate the payback period for investment, Chmura compared the cumulative impact of CFX after its
completion with the cost of CFX. The benefits of CFX include travel efficiency, cost savings, and economic benefits
of service businesses and potential distribution centers. The direct impacts of all three types of benefits can be
$215.3 million in 2035. The total cost of CFX was estimated at $3.7 billion (in 2013 dollars). Discounting total
‘economic impacts to 2013 dollars, the present value of the total economic impact will exceed the total cost in 2059,
or 30 years after road completion. As a result, the potential payback period is estimated to be 30 years after road
completion.
® The payback time will be longer if a higher discount rate is assumed.
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40
40

Other Benefits of CFX

Extensive economic literature on the impact of interstate highways enables Chmura to project growth opportunities
in service businesses and cost savings for current businesses. However, CFX can also bring other benefits to the
region, such as expanded market access, tourism, and business attractions. Many studies that address these
benefits are anecdotal in nature. As a result, while acknowledging that these benefits exist, Chmura does not
attempt a formal projection of the benefits. Sections 7.1 through 7.3 will discuss these benefits, and Section 7.4 will
provide a case study of other rural regions around the country that have benefited from new road construction.
7.1. CFX and Market Access
CFX will benefit mining, manufacturing, and agricultural businesses in the Corridor by providing improved access to
markets. One benefit to the region is improved access to the Port of Virginia. CFX connects to U.S. 460 at Grundy,
which leads to Roanoke, then to Virginia Beach, and the Port of Virginia. VDOT has started the project to construct
a new section of U.S. 460 from Petersburg to Suffolk according to interstate standard. This project, coupled with
CFX, will greatly reduce the travel time from the CFX Corridor to the Port of Virginia by nearly an hour.
54
Coal is the one of the top commodities exported from Virginia, in terms of commodity values.
55
The value of coal
exports reached $1.3 billion in 2011, the highest among all exported commodities (Table 7.1). In the past four
years, coal exports ranked either number one or number two in terms of values among all Virginia exports. Though
coal exports are shipped traditionally through rail service from Southwest Virginia to the Port of Virginia, CFX can
still reduce the cost to coal industries as a large amount of coal is transported by trucks before it is loaded into rail
cars.
Table 7.1: Top Ten Virginia Exports by Value ($Million)
2008 2009 2010 2011
Bituminous coal, not agglomerated $1,609 $889 $971 $1,281
Memories, electronic integrated circuits $2,083 $905 $1,231 $783
Civilian aircraft, engines, and parts $809 $529 $577 $596
Parts & accessories of printers, copiers, and fax machines $243 $266 $404 $477
Kraft paper $461 $449 $452 $447
Artificial filament tow $312 $353 $328 $372
Soybeans, whether or not broken $157 $328 $427 $327
Road tractors for semi-trailers $220 $85 $212 $285
Soybean oilcake & other solid residue $211 $258 $227 $249
Parts of airplanes or helicopters $153 $182 $229 $227
Source: U.S. Census
CFX can benefit regional agricultural and manufacturing industries reaching population centers in Virginia, West
Virginia, and surrounding states, increasing their market reach. With both CFX and the Corridor Q project, travel
54
This is the sum of 38 minutes for CFX and 15 minutes for U.S. 460. Source for U.S. 460 time savings is from: The Economic
Impact of the U.S. Route 460 Corridor Improvement Project, prepared by Chmura Economics & Analytics for VDOT. November,



55
Based on 6-Digit Harmonized System (HS) Commodities Classification. Source: http://www.census.gov/foreign-
trade/statistics/state/data/va.html
CHMURAECONOMICS&ANALYTI

Other Benefits of CFX

Extensive economic literature on the impact of interstate highways enables Chmura to project growth opportunities
in service businesses and cost savings for current businesses. However, CFX can also bring other benefits to the
region, such as expanded market access, tourism, and business attractions. Many studies that address these
benefits are anecdotal in nature. As a result, while acknowledging that these benefits exist, Chmura does not
attempt a formal projection of the benefits. Sections 7.1 through 7.3 will discuss these benefits, and Section 7.4 will
provide a case study of other rural regions around the country that have benefited from new road construction
7.1. CFX and Market Access
CFX will benefit mining, manufacturing, and agricultural businesses in the Corridor by providing improved access to
markets. One benefit to the region is improved access to the Port of Virginia. CFX connects to U.S. 460 at Grundy,
which leads to Roanoke, then to Virginia Beach, and the Port of Virginia. VDOT has started the project to construct
‘anew section of U.S. 460 from Petersburg to Suffolk according to interstate standard. This project, coupled with
CFX, will greatly reduce the travel time from the CFX Corridor to the Port of Virginia by nearly an hour.
Coal is the one of the top commodities exported from Virginia, in terms of commodity values.”* The value of coal
exports reached $1.3 billion in 2011, the highest among all exported commodities (Table 7.1). In the past four
years, coal exports ranked either number one or number two in terms of values among all Virginia exports. Though
coal exports are shipped traditionally through rail service from Southwest Virginia to the Port of Virginia, CFX can
still reduce the cost to coal industries as a large amount of coal is transported by trucks before it is loaded into rail
cars.
‘Table 7.1: Top Ten Virginia Exports by Value (SMillion)
2008 2009 2010 2011,
Bituminous coal, not agglomerated $1,609 $889 $971 $1,281
‘Memories, electronic integrated circuits $2,083, $905 $1,231 $783
CCulian aircraft, engines, and parts $809 $529 $577 $596
Parts & accessories of printers, copiers, and fax machines $243 $266 $404 $a77
Kraft paper $461 $449 $452 $aa7
Artificial filament tow $312 $353 $328 $372
Soybeans, whether or not broken $157 $328 $427 $327
Road tractors for semi-trallers $220 $85 $212 $285
Soybean oilcake & other solid residue saat $258 $227 $249
Parts of airplanes or helicopters $153 $182 $229 $227
Source: US. Census
CFX can benefit regional agricultural and manufacturing industries reaching population centers in Virginia, West
Virginia, and surrounding states, increasing their market reach. With both CFX and the Corridor Q project, travel
This is the sum of 38 minutes for CFX and 15 minutes for U.S. 460. Source for U.S. 460 time savings is from: The Economic
Impact of the U.S. Route 460 Corridor Improvement Project, prepared by Chmura Economics & Analytics for VDOT. November,
2011
® Based on 6-Digit Harmonized System (HS) Commodities Classification. Source: http://www.census.goviforeign-
tradelstatistics/state/datalva html
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time to the Roanoke metro area can be greatly reduced. From Roanoke, I-81 can reach population centers on the
eastern seaboard such as Washington D.C. and Baltimore. The connection of CFX with I-77 and I-64 also makes it
easier to reach Ohio and North Carolina. In addition, both CFX and the Corridor Q project can extend market
access to the west into Kentucky. Corridor Q will join Corridor B of the Appalachian Development Highway System
in Pikeville, Kentucky, which extends north to Ohio and south to North Carolina.
The projected freight movement data from the Appalachian Regional Commission can help illustrate the increased
market reach after the completion of CFX. County-to-county freight movement data indicated that in 2002, six
counties located in the CFX Corridor shipped 12 million tons of goods to other counties by trucks. The vast majority
(99%) of goods originating from the CFX Corridor were destined for other counties within the state of Virginia and
West Virginia. The District of Columbia emerged as the largest out-of-state market, especially for food and tobacco
products, and wood and paper products to a lesser degree. Sizable quantities of goods were shipped by trucks to
other neighboring states, including North Carolina, Ohio, and Maryland. The majority of shipments to those states
were petroleum and chemical products.
In terms of commodity, 89% of total tons from truck transportation were mining products, such as coal. All mining
products are transported within Virginia and West Virginia. As mentioned before, long-distance transportation of
coal is typically done by rail. Coal is usually trucked to collection points in Virginia and West Virginia before being
loaded to rail cars and shipped to out-of-state locations. Outside coal, the CFX Corridor also shipped 551,521 tons
of other durable manufacturing goods, and 363,874 tons of food and tobacco products in 2002.
Table 7.2: Freight Movement Originating from CFX Corridor (Tons by Truck, 2002)
Commodity Virginia West Virginia
District of
Columbia
North
Carolina Ohio Maryland
Other
States Total
Agriculture 98,576 0 0 0 0 0 0 98,576
Food and Tobacco 295,763 18,485 49,626 0 0 0 0 363,874
Mining 8,605,943 2,023,197 0 0 0 0 0 10,629,140
Petroleum and Chemicals 65,289 34,873 0 19,588 16,021 7,214 9,249 152,234
Other Durable Mfg. 496,082 55,439 0 0 0 0 0 551,521
Wood and Paper 135,477 20,024 1,892 0 0 0 0 157,393
Electrical Equipment 3,611 0 0 0 0 0 0 3,611
Transportation
Equipment 20,660 0 0 0 0 1,330 9,276 31,266
Other Nondurable Mfg 0 1,694 0 0 0 0 0 1,694
Total 9,721,401 2,153,712 51,518 19,588 16,021 8,544 18,525 11,989,309
Source: Appalachian Regional Commission
The ARC projection on freight movement data in 2035 does not take into consideration the completion of CFX, but
assumes the completion of the Appalachian Development Highway System (ADHS). Since the Coalfields
Expressway links the six counties in the CFX Corridor to the ADHS (via Corridor Q), it is projected that the market
reach due to CFX will be even larger than those projections made by ARC, as presented in Table 7.3.
Compared with 2002 and 2035, while the truck shipments to Virginia and West Virginia changed little, the freight
shipment to neighboring states increased dramatically. For example, the projected shipments to the District of
Columbia increased from 51,518 tons in 2002 to 146,637 tons in 2035. Almost all of those will be food and tobacco
products. Shipments to neighboring states such as North Carolina and Maryland are projected to double in 2035.
While overall shipment of mining products will decline by 4%, shipments of agricultural products, food and tobacco
CHMURAECONOMICS&ANALYTICS
time to the Roanoke metro area can be greatly reduced. From Roanoke, |-81 can reach population centers on the
eastern seaboard such as Washington D.C. and Baltimore. The connection of CFX with I-77 and I-64 also makes it
easier to reach Ohio and North Carolina. In addition, both CFX and the Corridor Q project can extend market
‘access to the west into Kentucky. Corridor Q will join Corridor B of the Appalachian Development Highway System
in Pikeville, Kentucky, which extends north to Ohio and south to North Carolina.
The projected freight movement data from the Appalachian Regional Commission can help illustrate the increased
market reach after the completion of CFX. County-to-county freight movement data indicated that in 2002, six
counties located in the CFX Corridor shipped 12 million tons of goods to other counties by trucks. The vast majority
(99%) of goods originating from the CFX Corridor were destined for other counties within the state of Virginia and
West Virginia. The District of Columbia emerged as the largest out-of-state market, especially for food and tobacco
products, and wood and paper products to a lesser degree. Sizable quantities of goods were shipped by trucks to
other neighboring states, including North Carolina, Ohio, and Maryland. The majority of shipments to those states
were petroleum and chemical products.
In terms of commodity, 89% of total tons from truck transportation were mining products, such as coal. All mining
products are transported within Virginia and West Virginia. As mentioned before, long-distance transportation of
coal is typically done by rail. Coal is usually trucked to collection points in Virginia and West Virginia before being
loaded to rail cars and shipped to out-of-state locations. Outside coal, the CFX Corridor also shipped 551,521 tons
of other durable manufacturing goods, and 363,874 tons of food and tobacco products in 2002.
‘Table 7.2: Freight Movement Originating from CFX Corridor (Tons by Truck, 2002)
District of North Other
Commodity Virginia West Virginia Columbia Carolina Ohio. Maryland States Total
Agriculture 98,576 o o ° o ° ° 98,576
Food and Tobacco 295,763 18,485 49,626, ° o ° ° 363,874
Mining 8,605,943 2,023,197 ° ° 0 ° 0 10,629,140
Petroleum and Chemicals 65,289 34,873 ° 19988 16021 7,218 93,249 152,234
Other Durable Mfg. 496,082 55,439 ° ° o ° ° 551,521
Wood and Paper 135,477 20,024 1,892 ° o ° ° 157,393
Electrical Equipment 3611 o ° ° o o o 3,611
Transportation
Equipment 20,660 ° ° ° 0 1330-9276 31,266
Other Nondurable Mfg o 1,694 ° ° o ° ° 1,694
Total 9,721,401 2,153,712 5151819588 16021-8544 «18,525 11,989,309
Source: Appalachian Regional Commission
The ARC projection on freight movement data in 2035 does not take into consideration the completion of CFX, but
assumes the completion of the Appalachian Development Highway System (ADHS). Since the Coalfields
Expressway links the six counties in the CFX Corridor to the ADHS (via Corridor Q), itis projected that the market
reach due to CFX will be even larger than those projections made by ARC, as presented in Table 7.3.
Compared with 2002 and 2035, while the truck shipments to Virginia and West Virginia changed little, the freight
shipment to neighboring states increased dramatically. For example, the projected shipments to the District of
Columbia increased from 51,518 tons in 2002 to 146,637 tons in 2035. Almost all of those will be food and tobacco
products. Shipments to neighboring states such as North Carolina and Maryland are projected to double in 2035.
While overall shipment of mining products will decline by 4%, shipments of agricultural products, food and tobacco
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products, petroleum and chemical products, and other durable manufacturing products are projected to increase by
more than thirty percent.
Table 7.3: Freight Movement Originating from CFX Corridor (Tons by Truck, 2035 Projection)
Commodity Virginia
West
Virginia
District of
Columbia
North
Carolina Ohio Maryland
Other
States Total
Agriculture 220,942 0 0 0 0 0 0 220,942
Food and Tobacco 279,217 54,775 142,697 0 0 0 0 476,689
Mining 7,722,871 2,136,622 0 0 0 0 0 9,859,493
Petroleum and Chemicals 109,748 31,619 0 42,223 14,977 30,189 12,888 241,644
Other Durable Mfg, 1,136,228 92,891 0 0 0 0 0 1,229,119
Wood and Paper 125,134 22,200 3,940 0 0 0 0 151,274
Electrical Equipment 813 0 0 0 0 0 0 813
Transportation
Equipment 29,663 0 0 0 0 1,995 11,151 42,809
Other Nondurable Mfg, 0 1,599 0 0 0 0 0 1,599
Total 9,624,616 2,339,706 146,637 42,223 14,977 32,184 24,039 12,224,382
Source: Appalachian Regional Commission
With the development of ADHS, the market of businesses in the CFX Corridor will be expanded significantly,
especially for out-of-state markets. With the completion of CFX, it is reasonable to project that freight movement
from the CFX Corridor will slightly exceed those data presented in Table 7.3.  Agriculture, food and tobacco
manufacturing, petroleum and chemicals manufacturing, and other durable goods manufacturing will benefit the
most from the improved market access to markets in the District of Columbia, North Carolina, and Maryland.
7.2. Other Economic Development Benefits
The presence of an interstate highway can increase the appeal of the region to expanding and relocating firms.
Traditionally, highway connectivity is a key consideration for many firms. However, with the development of
computer and communication technology as well as the declining role of manufacturing in the national economy, its
importance, relative to other factors, has diminished over time. Proximity to markets, quantity and quality of the
workforce, and quality of life factors are increasingly important. However, highway access is still critical for certain
industries. Aside from service businesses, manufacturing plants and distribution centers also tend to locate close to
major highways for transporting supplies and finished products. The CFX Corridor already has a strong mining and
manufacturing base. Low wages, a low cost of living, and a renewed emphasis on clean coal technology should
help CFX communities appeal to expanding mining and manufacturing firms.
Distribution centers are increasingly becoming an important business for communities along highways in this era of
big-box retailers, widespread internet commerce, and just-in-time inventory systems. For example, the I-81 Corridor
in western Virginia has attracted many distribution centers.
56
However, there is limitation for the CFX Corridor to
attract distribution centers, as there are no major metropolitan areas within easy driving distance of the Corridor.
56
Source: Economic Effects of Selected Rural Interstates at the County Level, 2005, by Jack Faucett Associates and Economic
Development Research Group. This study was prepared for Federal Highway Administration, U.S. Department of
Transportation.
CHMURAECONOMICS&ANALYTI
products, petroleum and chemical products, and other durable manufacturing products are projected to increase by
more than thirty percent.
‘Table 7.3: Freight Movement Originating from CFX Corridor (Tons by Truck, 2035 Projection)
West Districtof._-—North Other
Commodity Virginia Virginia Columbia Carolina. «Ohio. Maryland States, Total
Agriculture 220,942 ° ° ° o 0 o 220,942
Food and Tobacco 279,217 54,775 142,697 ° ° ° 0 476,689
Mining 7,722,871 2,136,622 ° ° ° ° ° 9,859,493
Petroleum and Chemicals 109,748 31,619 ° 42,223 «14977 30,189 12,888 241,644
Other Durable Mfg, 1,136,228 92,891 ° ° o ° o 1,229,119
Wood and Paper 125,134 22,200 3,940 ° o o oO 151,278
Electrical Equipment 213 ° ° ° o 0 o 813
Transportation
Equipment 29,663 ° ° ° ° 1,995 11,151 42,809
Other Nondurable Mfg, o 1599 ° ° ° ° o 1,599
Total 9,624,616 2,339,706 146,637 42,223 14,977 32,184 24,039 12,224,382
Source: Appalachian Regional Commission
With the development of ADHS, the market of businesses in the CFX Corridor will be expanded significantly,
especially for out-of-state markets. With the completion of CFX, itis reasonable to project that freight movement
from the CFX Corridor will slightly exceed those data presented in Table 7.3. Agriculture, food and tobacco
manufacturing, petroleum and chemicals manufacturing, and other durable goods manufacturing will benefit the
most from the improved market access to markets in the District of Columbia, North Carolina, and Maryland.
7.2. Other Economic Development Benefits
The presence of an interstate highway can increase the appeal of the region to expanding and relocating firms.
Traditionally, highway connectivity is a key consideration for many firms. However, with the development of
‘computer and communication technology as well as the declining role of manufacturing in the national economy, its
importance, relative to other factors, has diminished over time. Proximity to markets, quantity and quality of the
workforce, and quality of life factors are increasingly important. However, highway access is still critical for certain
industries. Aside from service businesses, manufacturing plants and distribution centers also tend to locate close to
major highways for transporting supplies and finished products. The CFX Corridor already has a strong mining and
manufacturing base. Low wages, a low cost of living, and a renewed emphasis on clean coal technology should
help CFX communities appeal to expanding mining and manufacturing firms.
Distribution centers are increasingly becoming an important business for communities along highways in this era of
big-box retailers, widespread internet commerce, and just-in-time inventory systems. For example, the I-81 Corridor
in western Virginia has attracted many distribution centers.®° However, there is limitation for the CFX Corridor to
attract distribution centers, as there are no major metropolitan areas within easy driving distance of the Corridor.

Source: Economic Effects of Selected Rural Interstates at the County Level, 2005, by Jack Faucett Associates and Economic
Development Research Group. This study was prepared for Federal Highway Administration, U.S. Department of
‘Transportation.

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Studies have found that distribution centers are usually located close to population centers, but also in less
populated areas where land is inexpensive
57
.
CFX will also have a positive effect on tourism in the region. A large part of the tourism boost is captured by service
business development along CFX, but tourism attractions elsewhere in the Corridor will also benefit from CFX. The
CFX Corridor provides ample attractions for recreational activities. The major attractions include the Appalachian
Trail, New River Gorge, and Jefferson National Forest. CFX can improve access to those attractions and result in
more visitors to the region.
Another benefit from road construction in mountainous areas is reclaimed land for development. Road construction
can create land suitable for development. Many educational institutions in the CFX Corridor have benefited from
land reclamation in the past. For example, the football fields and labs at the University of Virginia-Wise, and school
properties in Grundy in Buchanan County were built on reclaimed land. Land reclamation can also benefit
commercial and agricultural development. For example, there are shopping centers, an airport, farmland, and a
winery in the region that were developed on reclaimed land. The CFX project will also create land for further
development.
Population growth in the region can also be aided by CFX. Both the presence of an interstate highway and jobs
associated with it have a positive effect on population growth. Jobs created by service businesses and other
relocating/expanding firms can lure people to the area. In addition, the highway reduces commuting time and
enhances the attractiveness of a region as a destination for residential development.
Finally, CFX can also improve the quality of life for area residents. CFX can make it more convenient for residents
to reach destinations for work, education, health care, shopping, and entertainment.  For example, residents can
reach the Roanoke/Blacksburg area (an established healthcare and educational center) with relative ease after
CFX is completed.
7.3. Assessment of Risks
The economic impact of CFX attempts to project the regional economy more than twenty years from now in terms
of output and employment growth. These projections are based on a set of assumptions. As a result, the
projections are subject to forecasting risks as actual events may vary from the assumptions. Unpredictable events
create the potential for either larger (upside) or smaller (downside) effects than indicated here. Some of these
factors are discussed below.
7.3.1. Downside Risks
For the service businesses and associated employment to materialize, certain conditions need to be met. Since
one major requirement is the availability of water and sewer services to the site, development may require
additional investments by the counties along the CFX Corridor to bring these services to rural interchanges. If water
and sewer systems are not in place, it will deter the development of service businesses such as hotels, restaurants,
and gas stations.
57
Source: Retail Distribution Centers: How New Business Processes Impact Minority Labor Markets.
http://www.eeoc.gov/stats/reports/retaildistribution/index.html
CHMURAECONOMICS&ANALYTICS
Studies have found that distribution centers are usually located close to population centers, but also in less
populated areas where land is inexpensive”.
CFX will also have a positive effect on tourism in the region. A large part of the tourism boost is captured by service
business development along CFX, but tourism attractions elsewhere in the Corridor will also benefit from CFX. The
CFX Corridor provides ample attractions for recreational activities. The major attractions include the Appalachian
Trail, New River Gorge, and Jefferson National Forest. CFX can improve access to those attractions and result in
more visitors to the region.
‘Another benefit from road construction in mountainous areas is reclaimed land for development. Road construction
‘can create land suitable for development. Many educational institutions in the CFX Corridor have benefited from
land reclamation in the past. For example, the football fields and labs at the University of Virginia-Wise, and school
properties in Grundy in Buchanan County were built on reclaimed land. Land reclamation can also benefit
‘commercial and agricultural development. For example, there are shopping centers, an airport, farmland, and a
winery in the region that were developed on reclaimed land. The CFX project will also create land for further
development.
Population growth in the region can also be aided by CFX. Both the presence of an interstate highway and jobs
associated with it have a positive effect on population growth. Jobs created by service businesses and other
relocating/expanding firms can lure people to the area. In addition, the highway reduces commuting time and
‘enhances the attractiveness of a region as a destination for residential development.
Finally, CFX can also improve the quality of fe for area residents. CFX can make it more convenient for residents
to reach destinations for work, education, health care, shopping, and entertainment. For example, residents can
reach the Roanoke/Blacksburg area (an established healthcare and educational center) with relative ease after
CFX is completed.
7.3. Assessment of Risks
The economic impact of CFX attempts to project the regional economy more than twenty years from now in terms
of output and employment growth. These projections are based on a set of assumptions. As a result, the
projections are subject to forecasting risks as actual events may vary from the assumptions. Unpredictable events
create the potential for either larger (upside) or smaller (downside) effects than indicated here. Some of these
factors are discussed below.
7.3.1. Downside Risks
For the service businesses and associated employment to materialize, certain conditions need to be met. Since
‘one major requirement is the availability of water and sewer services to the site, development may require
additional investments by the counties along the CFX Corridor to bring these services to rural interchanges. If water
and sewer systems are not in place, it will deter the development of service businesses such as hotels, restaurants,
and gas stations
5" Source: Retail Distribution Centers: How New Business Processes Impact Minority Labor Markets.
hitp:/iwiww.eeoc.govistats/reports/retalldistribution/index.html
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Continued rises in oil prices could reduce the traffic projection and thus the economic impact. Oil prices have been
volatile over the past few years, but the long-term supply and demand trend indicates that it will increase in the long
run. Without the discovery of new oil reserves and with the demand for oil being forecast to increase, the long-term
trend is likely that the price of oil will continue to rise. Higher oil prices could have a negative effect on the projected
economic impact as high oil prices can reduce automobile travel.
The impact analysis is based on the assumption that no recession will occur in the study period, and business
output and employment can continue to grow. The downside risk is that if there is a recession, the projected service
businesses and overall cost savings would be less than estimated in this study. In addition, a recession would also
slow the pace of business expansion and relocation.
The traffic projection cited in this report is based on the assumption that CFX in Virginia and West Virginia is not a
toll road. Should a toll be imposed on the road, Chmura expects the traffic volume on CFX would be smaller, as
would the resulting economic impact of travel efficiency and service businesses. Some other public-private projects
in Virginia (such as U.S. 460 in southeast Virginia) are designed to be toll roads.
7.3.2. Upside Risks
This report does not incorporate several projects that are already in process, or are in the planning stage, that could
increase the traffic projection on the road. Buchanan County is developing a project at Poplar Gap right off CFX.
This project covers over 4,500 acres of land, and will host residential, retail, entertainment, and convention venues,
as well as business and government offices.
58
The economic impacts of those projects are not estimated here.
Similarly, any other retail or manufacturing projects in the Corridor have a potential to increase the traffic projection
significantly.
It is possible that traffic projections on CFX might be low. The traffic projection made by VDOT and WVDOT
focused only on CFX in the Corridor. It does not consider the boost in traffic from the network effect. CFX will
connect to the interstate network near Beckley in West Virginia, and it will also connect to the Appalachian
Development Highway System through Corridor Q. The network effect from these connections can boost the traffic
on CFX. For this reason, the traffic volume could be higher than currently projected when all road projects in the
region are completed. As a result, the economic impact will be higher than what is projected in this report.
7.4. Benchmark Analysis of Rural Highways
New and expanded highways have significant impacts in rural areas, both in terms of economic development and
quality of life. To quote the U.S. Transportation Secretary Ray LaHood, “We know that affordable transportation
choices in our rural communities give residents better access to jobs and health care, and provide an incentive for
much-needed economic development.”
59
This section contains a review of literature regarding these impacts with
specific regional examples where available.
A study by Chandra and Thompson examined historical data on interstate highway construction and economic
activity in the United States from 1969 to 1993.
60
Based upon this set of data, new interstate highways raised
58
Source: Buchanan County Poplar Gap Phase II Project, Buchanan County Industrial Development Authority.
59
“Rural Connections: Challenges and Opportunities in America’s Heartland,” September 2011, TRIP (tripnet.org).
60
“Does public infrastructure affect economic activity? Evidence from the rural interstate highway system,” Amitabh Chandra
and Eric Thompson, Regional Science and Urban Economics, 30 (2000).
CHMURAECONOMICS&ANALYTICS
Continued rises in oil prices could reduce the traffic projection and thus the economic impact. Oil prices have been
volatile over the past few years, but the long-term supply and demand trend indicates that it will ncrease in the long
run. Without the discovery of new oil reserves and with the demand for oil being forecast to increase, the long-term
trend is likely that the price of cil will continue to rise. Higher oil prices could have a negative effect on the projected
‘economic impact as high oil prices can reduce automobile travel.
The impact analysis is based on the assumption that no recession will occur in the study period, and business
‘output and employment can continue to grow. The downside risk is that if there is a recession, the projected service
businesses and overall cost savings would be less than estimated in this study. In addition, a recession would also
slow the pace of business expansion and relocation.
The traffic projection cited in this report is based on the assumption that CFX in Virginia and West Virginia is not a
toll road. Should a toll be imposed on the road, Chmura expects the traffic volume on CFX would be smaller, as
would the resulting economic impact of travel efficiency and service businesses. Some other public-private projects
in Virginia (such as U.S. 460 in southeast Virginia) are designed to be toll roads.
7.3.2. Upside Risks
This report does not incorporate several projects that are already in process, or are in the planning stage, that could
increase the traffic projection on the road. Buchanan County is developing a project at Poplar Gap right off CFX.
This project covers over 4,500 acres of land, and will host residential, retail, entertainment, and convention venues,
as well as business and government offices.®* The economic impacts of those projects are not estimated here.
Similarly, any other retail or manufacturing projects in the Corridor have a potential to increase the traffic projection
significantly.
Itis possible that traffic projections on CFX might be low. The traffic projection made by VDOT and WVDOT
focused only on CFX in the Corridor. It does not consider the boost in traffic from the network effect. CFX will
connect to the interstate network near Beckley in West Virginia, and it will also connect to the Appalachian
Development Highway System through Corridor Q. The network effect from these connections can boost the traffic
on CFX. For this reason, the traffic volume could be higher than currently projected when all road projects in the
region are completed. As a result, the economic impact will be higher than what is projected in this report.

Benchmark Analysis of Rural Highways

New and expanded highways have significant impacts in rural areas, both in terms of economic development and
quality of life. To quote the U.S. Transportation Secretary Ray LaHood, “We know that affordable transportation
choices in our rural communities give residents better access to jobs and health care, and provide an incentive for
much-needed economic development."® This section contains a review of literature regarding these impacts with
specific regional examples where available.
A study by Chandra and Thompson examined historical data on interstate highway construction and economic.
activity in the United States from 1969 to 1993. Based upon this set of data, new interstate highways raised

Source: Buchanan County Poplar Gap Phase Il Project, Buchanan County Industrial Development Authority.

®° “Rural Connections: Challenges and Opportunities in America’s Heartland,” September 2011, TRIP (tripnet.org).
° “Does public infrastructure affect economic activity? Evidence from the rural interstate highway system," Amitabh Chandra
land Eric Thompson, Regional Science and Urban Economics, 30 (2000),
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45
45
earnings in counties that directly benefitted from the new construction compared to counties without new
construction. The cumulative earnings growth premium ranged from 6-8% 24 years after the initial highway
opening. However, these data also showed a decrease in wages, especially in retail, in counties adjacent to the
new highway counties, resulting in no net regional growth. For highway counties, the benefit of the new highway
varied according to sector, with services and retail fairing particularly well.
Another case study examined ten rural counties in Georgia that benefitted from the Governor’s Road Improvement
Program (GRIP) which converted existing primary routes and truck connection routes into multi-lane highways.
62
The report listed three general ways that transportation infrastructure improvements benefit regional economies: (1)
by expanding markets and providing for increased specialization of labor, (2) by helping businesses decrease
shipping costs and expand their access to markets, and (3) by providing adequate infrastructure essential to
numerous sectors, including manufacturing, agriculture, tourism, and services. In the ten-county rural study region
benefiting from the GRIP investments in Georgia, specific economic improvements were gained, including: (1) an
increase in total retail sales greater than the state, metropolitan, or nonmetropolitan counties’ averages, (2) an
increase in per capita income at a rate above average for the state, metropolitan, and nonmetropolitan counties,
and (3) a decrease in total unemployment rate greater than that for the state, metropolitan, and nonmetropolitan
counties. In general, it was found that the “ten nonmetropolitan counties in the study group experienced
pronounced economic improvements in comparison to their nonmetropolitan counterparts.”
63
From an economic development perspective, a strong highway system is a crucial piece of infrastructure for
regions looking to attract prospects. One example is Chico, California, a city with population of 107,000 and 20
miles from Interstate 5. The mayor of Chico, Ann Schwab, sees this as a serious disadvantage for her city: “Even
though Chico is ideally located in the middle of the West Coast market, these 20 miles of separation from the
Interstate can make it challenging for Chico to retain and attract businesses that have a significant distribution
component.”
64
Closer to home, Danville, Virginia would also reap benefits from improved access. Laurie Moran,
president of the Danville Pittsylvania County Chamber of Commerce explains, “The lack of an Interstate Highway
System definitely impairs the Danville region’s ability to be competitive in the attraction and recruitment of new
businesses. While we have a good primary highway system serving our region, we know that we often are
eliminated from consideration by businesses that require Interstate access.”
65
One of the benefits of an improved rural highway system can be categorized as both an economic advantage as
well as a boost to the quality of life of residents, namely, connecting citizens to a wider array of employers. The
average (mean) travel time to work in the United States is 25.5 minutes, and is slightly higher in Virginia (27.7
minutes).
66
Improvements in the highway system that substantially cut down travel time will also reduce commuting
time and therefore open up a broader array of potential employers to workers. The benefits here are to both
workers and employers: workers can achieve higher wages as they have more job opportunities, and employers
have access to a wider pool of workers, which can lead to an increase in productivity.
62
“An Analysis of the Governor’s Road Improvement Road Program (GRIP) for the Georgia Department of Transportation,”
Douglas C. Bachtel et al, 2007.
63
Ibid.
64
“Connecting Rural and Urban America,” American Association of State Highway and Transportation Officials (AASHTO),



65
Ibid.
66
Mean travel time data are per the 2011 American Community Survey, based on workers 16 years and over who do not work
at home.
CHMURAECONOMICS&ANALYTICS
earnings in counties that directly benefitted from the new construction compared to counties without new
construction. The cumulative earnings growth premium ranged from 6-8% 24 years after the initial highway
opening. However, these data also showed a decrease in wages, especially in retail, in counties adjacent to the
new highway counties, resulting in no net regional growth. For highway counties, the benefit of the new highway
varied according to sector, with services and retail fairing particularly well.
‘Another case study examined ten rural counties in Georgia that benefitted from the Governor’s Road Improvement
Program (GRIP) which converted existing primary routes and truck connection routes into multi-lane highways."
The report listed three general ways that transportation infrastructure improvements benefit regional economies: (1)
by expanding markets and providing for increased specialization of labor, (2) by helping businesses decrease
shipping costs and expand their access to markets, and (3) by providing adequate infrastructure essential to
numerous sectors, including manufacturing, agriculture, tourism, and services. In the ten-county rural study region
benefiting from the GRIP investments in Georgia, specific economic improvements were gained, including: (1) an
increase in total retail sales greater than the state, metropolitan, or nonmetropolitan counties’ averages, (2) an
increase in per capita income at a rate above average for the state, metropolitan, and nonmetropolitan counties,
and (3) a decrease in total unemployment rate greater than that for the state, metropolitan, and nonmetropolitan
counties. In general, it was found that the “ten nonmetropolitan counties in the study group experienced
pronounced economic improvements in comparison to their nonmetropolitan counterparts."*°
From an economic development perspective, a strong highway system is a crucial piece of infrastructure for
regions looking to attract prospects. One example is Chico, California, a city with population of 107,000 and 20
miles from Interstate 5. The mayor of Chico, Ann Schwab, sees this as a serious disadvantage for her city: “Even
though Chico is ideally located in the middle of the West Coast market, these 20 miles of separation from the
Interstate can make it challenging for Chico to retain and attract businesses that have a significant distribution
‘component."** Closer to home, Danville, Virginia would also reap benefits from improved access. Laurie Moran,
president of the Danville Pittsylvania County Chamber of Commerce explains, "The lack of an Interstate Highway
System definitely impairs the Danville region’s ability to be competitive in the attraction and recruitment of new
businesses. While we have a good primary highway system serving our region, we know that we often are
eliminated from consideration by businesses that require Interstate access."°°
One of the benefits of an improved rural highway system can be categorized as both an economic advantage as
well as a boost to the quality of life of residents, namely, connecting citizens to a wider array of employers. The
average (mean) travel time to work in the United States is 25.5 minutes, and is slightly higher in Virginia (27.7
minutes). Improvements in the highway system that substantially cut down travel time will also reduce commuting
time and therefore open up a broader array of potential employers to workers. The benefits here are to both
workers and employers: workers can achieve higher wages as they have more job opportunities, and employers
have access to a wider pool of workers, which can lead to an increase in productivity.
© An Analysis of the Govemor’s Road Improvement Road Program (GRIP) for the Georgia Department of Transportation,”
Douglas C. Bachtel et al, 2007
° Ibid.
© Connecting Rural and Urban America,” American Association of State Highway and Transportation Officials (AASHTO),
2010.
© Ibid
°° Mean travel time data are per the 2011 American Community Survey, based on workers 16 years and over who do not work
at home.
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Similar to improved access to jobs, an expanded rural highway system that reduces travel time also boosts quality
of life by providing access to other services. One of the most important improvements is better access for residents
to critical services such as education and healthcare. Improved access to tourism and recreation spots is a benefit
to both residents and out-of-region visitors looking for access to those amenities. The improved transportation
system also gives residents easier access to other services and businesses such as retail and food services.
Another important quality of life benefit of improved rural highways is safety. According to the Federal Highway
Administration, rural roads account for 40% of all vehicle traffic in the national road network, and more than 57% of
traffic fatalities nationwide occur on rural roads.
67
Moreover, some contend that narrow, two-lane, rural roads (many
built in the 1960s and 1970s) cannot safely carry the kinds of trucks and commercial vehicles now using the
American roadways.
68
In summary, as stated by the Rural Policy Research Institute (RUPRI): “transportation is an essential component of
rural economic development and quality of life considerations.”
69
RUPRI also makes the important point that
economic development and quality of life both feedback and support growth in each other. For example, as noted
earlier, improved economic development translates into better job opportunities and higher wages, which in turn
supports a higher quality of life for residents from better jobs and higher wages. In addition, however, quality of life
improvements such as increased access to services boosts economic development since regions with a higher
quality of life will be more attractive to business investment and skilled workers. Thus, economic development,
quality of life, and transportation are all closely linked and support growth and improvements in each other.
70
67
“Rural Highways Underfunded, Pose Safety Risks, MU Experts Say,” News Bureau, University of Missouri, October 11, 2011.
68
“Connecting Rural and Urban America,” American Association of State Highway and Transportation Officials (AASHTO),



69
“Rethinking Federal Investments in Rural Transportation: Rural Considerations Regarding Reauthorization of the Surface
Transportation Act,” Brian Dabson et al, April 2011.
70
Ibid.
CHMURAECONOMICS&ANALYTI
Similar to improved access to jobs, an expanded rural highway system that reduces travel time also boosts quality
of life by providing access to other services. One of the most important improvements is better access for residents
to critical services such as education and healthcare. Improved access to tourism and recreation spots is a benefit
to both residents and out-of-region visitors looking for access to those amenities. The improved transportation
system also gives residents easier access to other services and businesses such as retail and food services.
‘Another important quality of life benefit of improved rural highways is safety. According to the Federal Highway
‘Administration, rural roads account for 40% of all vehicle traffic in the national road network, and more than 57% of
traffic fatalities nationwide occur on rural roads.°” Moreover, some contend that narrow, two-lane, rural roads (many
built in the 1960s and 1970s) cannot safely carry the kinds of trucks and commercial vehicles now using the
American roadways.
In summary, as stated by the Rural Policy Research Institute (RUPRI): “transportation is an essential component of
rural economic development and quality of life considerations."*” RUPRI also makes the important point that
economic development and quality of life both feedback and support growth in each other. For example, as noted
earlier, improved economic development translates into better job opportunities and higher wages, which in turn
supports a higher quality of life for residents from better jobs and higher wages. In addition, however, quality of life
improvements such as increased access to services boosts economic development since regions with a higher
quality of life will be more attractive to business investment and skilled workers. Thus, economic development,
quality of life, and transportation are all closely linked and support growth and improvements in each other.””
°"-Rural Highways Underfunded, Pose Safety Risks, MU Experts Say," News Bureau, University of Missouri, October 11, 2011.
«Connecting Rural and Urban America,” American Association of State Highway and Transportation Officials (AASHTO),
2010.
Rethinking Federal Investments in Rural Transportation: Rural Considerations Regarding Reauthorization of the Surface
Transportation Act,” Brian Dabson et al, April 2011
n
Ibid.
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Summary

The construction and ongoing operations of CFX will inject hundreds of millions of dollars into the CFX Corridor and
provide jobs for workers in construction, retail, service, and warehouse industries. This study estimates that the
construction of CFX will inject an annual average of $313.0 million in total economic impact (direct plus ripple
impacts) into the local economy from 2013 through 2029. The construction will also generate 2,239 jobs each year
during this period (Table 8.1).
Table 8.1: CFX Economic Impact Summary
Total Economic
Impact ($MM)
Total Job
Creation
State Tax Revenues
($MM)
Local Tax Revenues
($MM)
Average Annual One-time Construction Impact (2013-2029)
CFX Virginia $241.4 1,727 $3.7 $0.0
CFX West Virginia $71.5 512 $1.2 $0.7
CFX Corridor $313.0 2,239 $4.9 $0.7
Ongoing Impact (2035)-CFX Virginia
Total Use Benefits $28.3
Roadside Services $41.4 372 $1.9 $0.5
Total CFX Virginia Corridor (2035) $69.8 372 $1.9 $0.5
Ongoing Impact (2035)-CFX West Virginia
Cost Savings (Productivity) $68.1
Roadside Services $77.4 695 $4.9 $0.9
Total CFX West Virginia Corridor (2035) $145.5 695 $4.9 $0.9
Ongoing Impact (2035)-CFX Corridor
Total User Benefits $96.5

Roadside Services $118.8 1,067 $6.8 $1.4
Total CFX Corridor (2035) $215.3 1,067 $6.8 $1.4
Source: Chmura Economics & Analytics
After the completion of CFX, both existing businesses and residents can benefit from the highway. CFX can help
improve travel efficiency and provide cost savings. The total user benefits are estimated to reach $96.5 million in



The most immediate new businesses as a result of CFX are the service businesses clustering around access
points along CFX. These service businesses will serve both motorists on CFX and local residents. Chmura
estimates that a total of 77 service businesses can be supported by CFX in 2035. These service businesses can
generate an economic impact of $118.8 million and create 1,067 jobs in the CFX Corridor.
State and local governments of the region are expected to reap considerable fiscal benefits from this project. When
the project is complete, it is estimated that two state governments will receive $6.8 million in 2035 in sales tax and
corporate and individual income tax on an annual basis. The local governments in the CFX Corridor will receive
annual tax benefits totaling $1.4 million in 2035 in the form of local taxes.
CFX will benefit mining, manufacturing, and agricultural businesses in the CFX Corridor by providing easier access
to markets. The presence of an interstate highway can increase the appeal of the region to expanding and
relocating firms. CFX will also have a positive effect on population and tourism growth, as well as improving quality
of life in the region.
CHMURAECONOMICS&ANALYTICS

Summary

The construction and ongoing operations of CFX will inject hundreds of millions of dollars into the CFX Corridor and
provide jobs for workers in construction, retail, service, and warehouse industries. This study estimates that the
construction of CFX will inject an annual average of $313.0 million in total economic impact (direct plus ripple
impacts) into the local economy from 2013 through 2029. The construction will also generate 2,239 jobs each year
during this period (Table 8.1)
Table 8.1: CFX Economic Impact Summary
Total Economic Totaljob State Tax Revenues _Local Tax Revenues
Impact (SMM) Creation (sm) (sm)
‘Average Annual One-time Construction Impact (2013-2029)
CCFX Virginia $2414 unr $37 $0.0
CPX West Virginia sms, S22 siz $07
FX Corridor $313.0 2,239 $49 $0.7
(Ongoing Impact (2035)-CFX Virginia
Total Use Benefits $283
Roadside Services sana 372 S19 $05
Total CFX Virginia Corridor (2035) $69.8 37 $19 $05
Ongoing Impact (2035)-CFX West Virginia
Cost Savings (Productivity) $68.1
Roadside Services S774 695 $49 $09
Total CFX West Virginia Corridor (2035) suss 695 $49 $0.9
Ongoing Impact (2035)-CFX Corridor
Total User Benefits $965
Roadside Services $1188 1.067 $68 sia
Total CFX Corridor (2035) $215.3 1,067 $6.8 $14
Source: Chmura Economics & Analytics
After the completion of CFX, both existing businesses and residents can benefit from the highway. CFX can help
improve travel efficiency and provide cost savings. The total user benefits are estimated to reach $96.5 million in
2035.
The most immediate new businesses as a result of CFX are the service businesses clustering around access
points along CFX. These service businesses will serve both motorists on CFX and local residents. Chmura
estimates that a total of 77 service businesses can be supported by CFX in 2035. These service businesses can
generate an economic impact of $118.8 million and create 1,067 jobs in the CFX Corridor.
State and local governments of the region are expected to reap considerable fiscal benefits from this project. When
the project is complete, it is estimated that two state governments will receive $6.8 million in 2035 in sales tax and
corporate and individual income tax on an annual basis. The local governments in the CFX Corridor will receive
annual tax benefits totaling $1.4 million in 2035 in the form of local taxes.
CFX will benefit mining, manufacturing, and agricultural businesses in the CFX Corridor by providing easier access
to markets. The presence of an interstate highway can increase the appeal of the region to expanding and
relocating firms. CFX will also have a positive effect on population and tourism growth, as well as improving quality
of life in the region
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Appendix 1: Impact Study Glossary
IMPLAN Professional—an economic impact assessment modeling system. It allows the user to build economic
models to estimate the impacts of economic changes in states, counties, or communities. It was created in the
1970s by the Forestry Service and is widely used by economists to estimate the impact of specific events on the
overall economy.
Input-Output Analysis—an examination of business-business and business-consumer economic relationships
capturing all monetary transactions in a given period, allowing one to calculate the effects of a change in an
economic activity on the entire economy (impact analysis).
Direct Impact—economic activity generated by a project or operation. For construction, this represents activity of
the contractor; for operations, this represents activity by tenants of the property.
Overhead—construction inputs not provided by the contractor.
Indirect Impact—secondary economic activity that is generated by a project or operation. An example might be a
new office building generating demand for parking garages.
Induced (Household) Impact—economic activity generated by household income resulting from direct and indirect
impacts.
Ripple Effect—the sum of induced and indirect impacts. In some projects, it is more appropriate to report ripple
effects than indirect and induced impacts separately.
Multiplier—the cumulative impacts of a unit change in economic activity on the entire economy.
CHMURAECONOMICS&ANALYTICS
Appendix 1: Impact Study Glossary
IMPLAN Professional—an economic impact assessment modeling system. It allows the user to build economic.
models to estimate the impacts of economic changes in states, counties, or communities. It was created in the
1970s by the Forestry Service and is widely used by economists to estimate the impact of specific events on the
overall economy.
Input-Output Analysis—an examination of business-business and business-consumer economic relationships
capturing all monetary transactions in a given period, allowing one to calculate the effects of a change in an
‘economic activity on the entire economy (impact analysis).
Direct Impact—economic activity generated by a project or operation. For construction, this represents acti
the contractor; for operations, this represents activity by tenants of the property.
Overhead—construction inputs not provided by the contractor.
Indirect Impact—secondary economic activity that is generated by a project or operation. An example might be a
new office building generating demand for parking garages.
Induced (Household) Impact—economic activity generated by household income resulting from direct and indirect
impacts
Ripple Effect—the sum of induced and indirect impacts. In some projects, it is more appropriate to report ripple
effects than indirect and induced impacts separately.
Multiplier—the cumulative impacts of a unit change in economic activity on the entire economy.
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Appendix 2: Interchange Development Categories
Table A1: Interstate Interchange Classifications
Category Development Requirements for Classifications
0 Minimum no requirements
Forest
Agriculture
Agriculture-residential
1 Residential < 2,000 average daily traffic (ADT)
Single-family homes not close to town
Medium-sized lots rural setting
2A Light Tourist Service > 4,000 ADT
  1+  gas station water service availability 

  1 small motel moderate visibility 

within 10 miles of town
2B Economically Competitive > 8,000 ADT
  2-4 gas stations water & sewer availability 

  1-2 fast food restaurants town  within 3 miles 

  2+ hotels > 5 miles from next exit 

2C Economic Integration > 12,000 ADT
  4+ gas stations water and sewer availability 

  3+ fast food restaurants town within 2 miles 

  2+ full-service  restaurants   

  other business/malls   

3A Heavy Tourist water and sewer availability
  6+ hotels 2-3 miles from interchange 

  3+ full-service restaurants   

  3+ fast food restaurants   

  3+ gas stations   

Source: Hartgen, et al. "Growth at Rural Interchanges: What, Where, Why. Transportation Research and Record,
1359
CHMURAECONOMICS&ANALYTICS
Appendix 2: Interchange Development Categories
Category
o
2a
28
2
3A
‘Table Al: Interstate Interchange Classifications
Development
Minimum
Forest
Agriculture
Agriculture-residential
Residential
Single-family homes
Medium-sized lots
Light Tourist Service
1+ gas station
1 small motel
Economically Competitive
2-4 gas stations
12 fast food restaurants
2+ hotels
Integration
4+ gas stations
Econor
3+ fast food restaurants
2+ full-service restaurants
other business/malls
Heavy Tourist
Gt hotels
3+ full-service restaurants
3+ fast food restaurants
3+ gas stations
Requirements for Classifications
no requirements
< 2,000 average dally traffic (ADT)
not close to town
rural setting

4,000 ADT

water service availability
moderate visibility
within 10 miles of town,

8,000 ADT

water & sewer availabilty
town within 3 miles

5 miles from next exit


12,000 ADT

water and sewer availability
town within 2 miles
water and sewer availability
2-3. miles from interchange
Source: Hartgen, etal. "Growth at Rural interchanges: What, Where, Why. Transportation Research and Record,
1359
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