North House brings money to community

Many of us are familiar with North House Folk School and the brightly colored buildings adjacent to the Grand Marais harbor and the steady flow of human activity at its site. People may be not knowledgeable about how significant this activity is to our local economy.

The school was originally conceived by local artisans to teach old school crafts and enrich the lives of all participants. From its origins in 1997, it now reaches more than 1,500 students each year (from 36 states) through more than 130 different instructors. North House hosts 5,000 other guests through its sailing excursions, and its principal seasonal programs, the Wooden Boat Show (June) and Unplugged (September).

To measure the economic impact on our local economy we used conventional research methodology to reflect the spending of visitors who come to Cook County principally to: attend conventional or custom classes; instruct or assist in teaching; participate in sailing or other special events.

The aggregate economic impact of these visitor days is calculated by using an average visitor’s spending during visits to Northeast Minnesota conducted by the University of Minnesota Tourism Center in 2006. That survey data identified the following spending patterns for each visit day:

To determine the direct economic impact we calculated course days, additional days before or after class days, accompanying visitors, instructors and their parties, and volunteer visitor days. When we account for those visitor days and others attributable to ticketed events (sailing, Boat Show, Unplugged, Winterer’s Gathering, etc.) we total 21,425 visitor days.

At $157.40/visitor day, this translates into direct spending of $3.4 million dollars. When you add the direct spending of the school on wages, goods and services ($559,000), the total direct economic impact on our economy is just under $4,000,000.

Theimpact of direct spending of $4,000,000 on local businesses (ignoring the impact on the hospital and clinic) creates additional spending by the recipients of these revenues. This “indirect” impact has been measured by economists at the University of Minnesota and determined to be 55% of the direct purchases. This additional “recycling” of traveler dollars generates an additional $2.2 million in revenues (55% of $4 million) for a total impact on our economy of $6.2 million. According to the Minnesota Department of Revenue, this represents 4.51% of total countywide retail sales.

Certainly the impact on the Grand Marais economy is significantly higher. For example, the lodging component ($707,025) represents 12% of aggregate spending on lodging during 2007 in Grand Marais.

From its humble origins and lofty vision in 1997, this staff, its instructors, volunteers, donors and its board have developed its physical plant, programming and personnel to implement its vision. Not only is North House Folk School a significant source of cultural events, which help rejuvenate our community artistically and spiritually, its economic impact on our community is substantial and growing.

Scott Harrison

Chair North House Folk School board