Introduction

Highway 29: A Historical Perspective

Wisconsin State Highway 29, a once hilly and curvy two-lane highway in north central Wisconsin, is now a major east-west route. Highway 29 was commonly referred to as "Bloody 29", as crash data revealed that portions of the highway had nearly twice the average fatality rate for two-lane highways in Wisconsin. Many sections of the highway had poor sight distances, curves and hills, heavy truck volumes, and dangerous at-grade intersections.

Historically, Highway 29 served as an important transportation link for many of the manufacturers, food processors, and transportation service providers in communities along the corridor. The highway connects over 20 Wisconsin communities of varying sizes, including Green Bay, Wausau, Chippewa Falls, and Eau Claire to domestic and international markets in Canada and Mexico. The Highway 29 route intersects with Interstate 94 and continues on to Minnesota, providing direct access to the Minneapolis-St. Paul Metropolitan Area, one of the largest trade centers in the Midwest. Additionally, Highway 29 serves as a major connector to many of the state's tourism attractions and recreational centers.

Over the years, as the economies of the state and the communities along the corridor grew and diversified, the highway became more dangerous and as traffic, perceived as heavy, flowed through smaller communities at all hours of the day. These safety hazards were not only claiming lives but also hindering the ability of communities on the corridor to achieve their full economic and growth potential.

Shortly after his election as Governor in 1986, Tommy Thompson vowed that Highway 29 would be converted to a four-lane highway between Green Bay and Chippewa Falls by the end of 2000.

Planning for this highway-capacity improvement began in 1989, and construction of the new highway facility began in 1992. Portions of the highway were rebuilt to freeway standards with new interchanges, on and off-ramps, and at-grade intersections with acceleration and deceleration lanes for the rural stretches along the corridor. Several bypasses were built that resulted in the reduction of downtown truck traffic and better access to businesses in the Main street communities.

On August 16, 2000, Governor Thompson led a ceremony opening the 182-mile highway for traffic. The $450 million, four-lane expressway conversion was completed on schedule after years of planning, design, and construction.

Initial data indicates that despite the over 75% rise in vehicle miles traveled on segments of the highway, the fatality rate has dropped by about half, resulting in saved lives and significantly safer driving conditions. This study will evaluate, from an economic development perspective, the benefits of the Highway 29 freeway conversion.

The map in Figure 1 illustrates the Highways 29 and 10 study areas.

According to data from the Wisconsin Departments of Commerce and Workforce Development, improvements to Highway 29 have paid dividends to the communities along the corridor. From 1996 through 2001, new and expanding manufacturers in counties along the corridor created 4,871 jobs, more than twice the number of jobs created in the previous six years.

Additionally, from 1996 through 2001, total employment along the entire Highway 29 corridor increased by 11.3% exceeding the statewide employment growth of 8.7% during the same time period.

Figure 1 Study Area

Purpose of the Study

The purpose of this study is to identify the actual and potential economic impacts of a recently constructed four-lane highway facility in Wisconsin. With the recent completion of Highway 29, the Department of Transportation (WisDOT) believed that the timing was appropriate for an economic impact study. A major justification for upgrading the highway was the possible gains in economic benefits that would result from a freeway conversion in north-central Wisconsin. An important factor motivating this highway improvement was a belief, promoted by community and business leaders, that a high-quality four-lane highway connecting cities across the corridor could significantly enhance economic growth in the region.

In 1989, these potential benefits were outlined in an economic impact study. Now that the highway expansion is complete, it is important to verify the extent to which these benefits were achieved. One of the goals of this study is therefore to determine whether some of the forecasted economic benefits have been realized.

Although the construction of the highway project was phased over an eight-year timeframe, many of the communities experienced development pressures both during and after the completion of their respective highway segment. One goal of the study was to determine the level of economic activity that has occurred during the eight-year construction of the new freeway. It is therefore necessary to establish a current baseline of economic and land-use information, in order to compare it to the 1989 data in future analysis, as well as to track new economic development during the various phases of the highway improvement project. From a land-use planning perspective, it was also deemed important to evaluate how the communities along the corridor responded with land use planning to the highway improvement.

Transportation agencies and economic development professionals often refer to economic benefits of transportation improvements. These benefits include the ability of the communities along the highway to attract more development, improve the productivity and expand the customer base of existing businesses along the corridor, and increase the tourism expenditures in the region. The purpose of this study is to quantify as many of these and other economic benefits as possible. This study will assist WisDOT and other transportation agencies to understand how economic and secondary land-use impacts are related to highway expansion projects.

Due to the length of Highway 29, the study was divided into two phases. The first phase included the 55-mile highway corridor between Chippewa Falls and Abbottsford. A future second phase of the study will extend the analysis area from Abbotsford to Green Bay, an additional 127 miles. Highway 10, a two-lane corridor parallel to Highway 29, was selected for comparison purposes. The Phase I analysis area along Highway 10 included the 55-mile corridor between the communities of Osseo and Marshfield. During Phase II, the additional 104-mile long two-lane comparison corridor will include the communities between Marshfield and Appleton.

The 1989 Highway 29 Corridor Study

In 1989, WisDOT commissioned a study on the potential economic impact of expanding Highway 29 from two to four lanes. Highway 29 was the first in the nation to be analyzed using an economic model to forecast the economic development benefits of a highway capacity improvement. Using the forecasted economic benefits, a benefit/cost analysis was subsequently conducted and the results were used to justify the financial resources needed to build the project.

The most notable aspect of this study was its breadth. The analysis included an integrated set of simulation and forecasting models of the economic and transportation network to evaluate potential impacts. In addition to projecting benefits to automobile travelers, the study focused on estimating impacts on expansion of existing businesses, attraction potential for new businesses, and the possibility of tourism growth for communities along the corridor. Particular attention was focused on providing a rigorous framework for benefit assessment that avoids double-counting, a common problem in economic impact assessments.

Attention was also given to providing a methodology for estimating transportation and economic impacts that adequately recognizes implications of business efficiency benefits, a shortcoming of some prior economic assessment studies. It is important to note that the linkage between business productivity and transportation investments is better understood today because of the Federal Highway Administration's (FHWA) interest in researching this relationship.

FHWA's Recommended Study Methodology

In 2001, FHWA provided funding for a research project titled Using Empirical Information to Measure the Economic Impact of Highway Investments. The purpose of this research was to broaden the knowledge of economic benefits that may have occurred from highway capacity improvements, and propose a methodology for assessing these economic benefits. The research contract was awarded to Cambridge Systematics, Inc. and Economic Development Research Group (Glen Weisbrod) and a draft report was completed in April 2001. [2]

Results of the study are published in a two-volume report. Volume 1 is a literature review of empirical studies quantifying economic benefits of transportation projects. This volume also discusses the data requirements needed to conduct the analysis as well as interview results with various state DOT staff and university researchers regarding the methods and data sources necessary to conduct the research. This volume also contains recommendations regarding the general principles to be followed by researchers in future highway impact studies.

One of the key observations and conclusions of the study was that, "there has been a lack of post-project studies documenting the actual economic impacts of built highway projects." The results of the Wisconsin Highway 29 study will help to fill in the knowledge-gap by the proposed methodology.

Volume 2 of the report proposes research methods and outlines data collection requirements needed to conduct the economic impact analysis. The proposed research methods and data collection requirements were subsequently adopted by WisDOT and modified for the Highway 29 study.

In collaboration with FHWA, WisDOT agreed to serve as a test case to determine the usefulness and applicability of the methodology and data requirements for the Highway 29 study. In return for WisDOT participation, FHWA provided funding for the Economic Development Research Group to serve as a consultant for the research.

Wisconsin Department of Transportation's Methodology

The research focused on building computerized geographic representations and databases of the current and anticipated economic activity along the highway corridors. This data includes locating the businesses and levels of employment, as well as the anticipated land uses in each of the communities along the highway. The research will analyze the data collected in the 1989 Economic Study and compare and contrast this information with the current level of business and land-use activity along the corridor. The gathered current economic and land-use information will also serve as a baseline to measure the incremental economic and land-use impacts along highways in the future. No economic forecasting is proposed for this phase of the study; however, economic modeling will be part of Phase II, in which the entire length of the Highway 29 corridor will be studied. The future phase of the study will also determine the model's predictive validity for measuring and anticipating economic activity along Highway 29.

The following are analytical tools used in the research project:

• GIS applications to locate and map business addresses and land use activities;
• Sample survey of distributors and manufacturers along the highway corridor to determine any additional market reach occurring as a result of the transportation improvement, to determine if businesses are able to serve or sell products over longer distances and into new markets because of the efficiency of the new four-lane facility;
• Survey of municipal leaders and local economic development professionals to determine economic impacts on communities during and after construction;
• Data on tourism expenditures to measure regional tourism spending patterns;
• Business information to measure increases in the number of businesses and manufacturing facilities along the highway corridors;
• County per capita income data to evaluate income growth for communities along the highway corridors;
• Property tax assessments and transfers to measure land value changes before and after highway construction; and
• Analysis of average daily traffic volumes before, during, and after the construction of the four-lane highway.

To obtain this data, community profiles were developed and land-use plans were gathered from interviews with community leaders. Phone interviews were conducted with businesses along the corridor to determine the economic impact of the highway improvement. Property assessors were also contacted by phone to determine changes in property values along the four-lane highway. Many community development issues that may have influenced economic development decisions along the corridor were reported in the study.

It would have been beneficial to compare retail sales patterns for the businesses between along the two highway corridors during specific timeframes; however, this information was not available from the Wisconsin Department of Revenue. County commuting patterns were not available either and may be included in next phase of the study.

An ad hoc advisory group, convened for this study, also recommended that another two-lane highway, parallel to Highway 29, serve as a basis for comparison. US Highway 10 was chosen to serve as a "control" corridor since it is located just south of Highway 29 and is approximately the same length and geographic location as the four-lane highway. Due to data limitations, comparisons between the two highways were limited to population growth, new business establishment, location of new and expanded manufacturers, average daily traffic counts, and per capita income levels, and traveler expenditures.

The following are community profiles developed by the study research group. The resources utilized are listed in Appendix 1, and the interview form is shown in Appendix 2.