ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Sunday, July 14, 1996 TAG: 9607120010
SECTION: BUSINESS PAGE: 1 EDITION: METRO
SOURCE: GREG EDWARDS STAFF WRITER
SPECTATORS who watch horses negotiate the jumps each June at the Roanoke Valley Horse Show have something in common with visitors who make Colonial Williamsburg the state's major tourism mecca.
They all contribute to $1 billion-a-year industries.
The impact of horses on Virginia's economy is equal to the contribution of Williamsburg's enormous tourism industry, said Don Messmer, economist and co-author of a new study of the state's horse business.
The Roanoke Valley show, held annually for the past 25 years, pumps an estimated $11 million into the regional economy. As big as it is, the weeklong event accounts for only about 1 percent of the annual contribution of horses to Virginia's overall commerce. The figure comes from a new study by economists Messmer and Roy Pearson, of the College of William and Mary. They found that nearly 25,000 Virginians have jobs that support the 225,400 horses stabled in the state.
Horses provide part or all of the income for a number of Virginia businesses, ranging from tack shops, stables and feed stores to veterinarians, farriers and breeders. A race track in New Kent County and off-site betting parlors including perhaps one in Roanoke soon are to be added to that mix.
Regionally, the Virginia Horse Center has developed into a major contributor to the economy, particularly around Rockbridge County and Lexington. Besides providing income for motels, restaurants and horse suppliers, shows like those held at the center and in the annual Roanoke Valley show in Salem help build interest and value in horses.
If horses were viewed simply as a farm commodity, they'd rank sixth in the state with cash receipts of $158.5 million annually, trailing chicken, cattle, milk, turkeys and tobacco and leading much-touted Virginia farm staples such as soybeans, peanuts, hogs and apples.
But considering horses solely as a farm product vastly understates their significance, Messmer said. Taking into account their use for shows and entertainment, horses "generate revenue well beyond the sale of the animal," he said.
His conclusions come from the study commissioned by the Virginia Equine Educational Foundation Inc., a relatively new cooperative effort of the Virginia Horse Council and the Virginia Thoroughbred Association. The study was done by The Wessex Group, a private research firm run by Messmer and Pearson. The $100,000 study was paid for with private donations from individuals and horse-related businesses.
Bette Brand, a member of the foundation's study committee and past president of the Virginia Horse Council, said private research was needed because state government doesn't do economic studies of the business. Brand is a Roanoke horse owner and a judge of horse shows.
The horse industry, itself, lacked a good idea of its economic importance to Virginia, Brand said. One of the key reasons the industry undertook the study, she said, was to be able to talk accurately when trying to influence public decisions affecting it.
One such issue involves money that the General Assembly puts into the state's horse-breeder incentive fund, which in the past ran as high as $62,000 a year. The current appropriation is about half that; but the horse industry would like to see it restored to previous levels, Brand said.
The incentive money goes toward prizes in shows for purebred horses that are born in the state. It encourages people who have their horses bred in Virginia to keep them in the state until they give birth. That, in turn. means more money for Virginia businesses that service and supply the industry.
The new research, which was two years in the making, involved extensive telephone surveys of both the general public and of horse owners. Researchers then interviewed people attending major horse shows around Virginia last summer, including the Roanoke Valley show. Brand said the foundation hopes to update the research every five years.
Researchers concluded that the horse industry touches almost every sector of the Virginia economy with a total annual impact of $1.074 billion, even though only 2.65 percent of the state's households own horses. Virginia horse owners each have an average of 3.07 horses. Thoroughbreds were the most popular breed, followed closely by Quarter Horses.
The most popular use of horses is for recreation or trail-riding with over three-fourths of horse owners saying they used horses for those purposes. Nearly three-fifths said they competed in horse shows and about a third said they used the animals for breeding. Virginia ranks 13th in the nation in the number of registered newborn horses. |n n| Virginians have used horses since 1609, just two years after the first permanent settlement at Jamestown. The Quarter Horse breed was developed in Virginia by crossing Spanish horses with English Thoroughbreds, according to the state Farm Bureau.
The first horse show in America was held in Upperville in Fauquier County in 1853. Virginia ranks first in the nation in steeplechase races with 25.
Virginia - unlike neighboring Kentucky, West Virginia and Maryland - has no track racing but that may soon change. Colonial Downs, a proposed track in New Kent County, was issued an operating license about two years ago.
A legal challenge by the Virginia Jockey Club, a competitor for the racing license, held up construction of the race track; but the challenge was dropped in April after the Jockey Club lost in appeals court. With the challenge out of the way, the track should open next summer.
Stansley Racing Corp. of Toledo, Ohio, operator of Colonial Downs, has already opened in Chesapeake the first of six affiliated off-track betting parlors. Roanoke is being considered as a location for one.
A study earlier this year by the Federal Reserve Bank of Richmond, reported that track racing nationally has been an "unpromising industry" of late. Total betting revenues at existing tracks have been stagnant for the past 10 years and only one of six new race tracks, Trinity Meadows in Texas, has been successful in the past decade, the report said.
If Colonial Downs' business strategy, which includes satellite betting parlors and a deal with the owner of Maryland tracks at Pimlico and Laurel Park to close them while Virginia's track is open, proves successful, the New Kent track could have a significant impact on the state's economy. One study by accounting firm Coopers and Lybrand shows that during its first year the track should account for $85 million in direct spending, the creation of 3,139 jobs and $2 million in tax revenue, as well as millions more in indirect benefits.
At The Tack Room, a riding-equipment shop on Williamson Road near Hollins College, manager Cindy Quick was looking forward earlier this year to the Roanoke Valley Horse Show because of the extra business it would bring. But also on her mind was the future of a number of smaller horse shows in the area.
The small local shows with their family atmosphere are where many people get hooked on horses, but these shows have been threatened lately because of the rising cost of insurance, Quick said. A new organization called the Horse Force has been formed to promote and encourage participation in the local shows, she said.
The interest in horses seems to be growing in the area, Quick said. "We see so many more people getting into horses than there used to be," she said.
Ronnie Yopp, manager of the Southern States Cooperative in Troutville agrees with Quick that the horse business in the Roanoke area is growing. "We sell a good bit of horse feed [$82,000 worth during the first half of the year] and tack," he said.
The Virginia Horse Center in Lexington may lay claim to having the largest economic impact of any horse-related business in Western Virginia.
A 1995 study by the University of Virginia's Weldon Cooper Center for Public Service shows that spending by participants in events at the horse center resulted in direct sales of $22.8 million statewide and an overall impact of $56.6 million. More than half of that amount came from out-of-state visitors with the major beneficiaries being restaurants, hotels and service stations, the report said.
The study, conducted by economists Samuel Kaplan and John Knapp, found that the horse center was responsible for 1,024 new Virginia jobs, $2.1 million in state and local taxes and $21.7 million in earnings, including $13.7 million in the Lexington-Rockbridge area.
"It's had a very positive impact; I think I can say that unequivocally," said Sammy Moore, executive director of the Lexington-Rockbridge County Chamber of Commerce. The center's benefits have fallen upon the hospitality industry in particular, he said.
The center, which sits in a wedge of land between Interstate 64 and Virginia 39, is composed of six large barns and several show rings, including a large indoor arena.
This year, 96 separate events covering 230 event-days are scheduled at the horse center compared with 92 events last year. The events include competitions, clinics and workshops and horse auctions.
Horse-related events make up 90 percent of the center's programming with such things as concerts, the Rockbridge County Fair and charity accounting for the rest, Robert Reel, the center's executive director, explained. Local college and high school athletic teams also use the center's enclosed spaces for practice when the weather is bad.
Reel, who joined the center 11 years ago at its beginning, describes it as a "non-state agency."
None of the center's 27 employees are on the state payroll. The center directly employs about 60 people when food service and security vendors are included in the count.
The state matched money raised by the private Virginia Horse Center Foundation to help build the center, and the governor appoints a board to oversee its operation. However, the center raises 90 percent of its $800,000 annual operating budget through user fees, primarily on the rental of its 600 stalls. The private foundation raises any additional money needed to cover operations. The center has raised $5.5 million privately, primarily from individuals and businesses, Reel said.
The center has become a major factor in the East Coast horse industry, Reel said. Even some horse organizations from West Virginia and Pennsylvania hold their state shows at the Lexington facility. A quick tour of the parking lot during a recent Arabian horse show found roughly 20 other states represented.
The growth of the state's horse industry has been greatly enhanced by the creation of the center, Reel said. None of the 96 events planned for this year were stolen from any other location in Virginia, he said.
"We're a force in the industry," he said.
LENGTH: Long : 191 lines ILLUSTRATION: PHOTO: GENE DALTON Staffby CNB1. A farrier works on a horse at Stoevener Training Stables in
Montgomery County. Farriers are a few of the many people who owe
their jobs to a $1 billion horse industry in Virginia.
WAYNE DEEL Staff< 2. Cindy Quick, manager of The Tack Room in
Roanoke, says interest in horses seems to be growing in the area.|
3. Robert Reel, executive director of the Virginia Horse Center
near Lexington, says the state's horse industry has been greatly
enhanced by the creation of center. color.
4. Horses by county. 5. 1995 Economic impact of Virginia Horse
Industry (charts) color.