For or Against New Orleans - Assignment Example

?The Case For, or Against, New Orleans Part A The Economics of New Orleans: New Orleans is one of the main ports of the United s and it is the biggest city in the state of Louisiana. It is a very significant state for the country both financially and economically. “Strategically located near the mouth of the Mississippi River, New Orleans was one of the busiest ports in the U.S, serving more than 6,000 ocean-going ships annually” (Gagne, 2007, p.2). About 20% of all US exports are done via New Orleans, and furthermore, Louisiana is home to an important amount of natural gas and domestic oil production with a key access point for imported oil. “The port generated 107,000 jobs, with over $2 billion in earnings. In addition, thirty percent of U.S. seafood came from the Louisiana coast” (Gagne, 2007, p.2). In the year 2004, studies revealed that the tourists spent about $4.9 billion in the city of New Orleans. In the year 2010, leaders opened a master plan with the objective of attracting almost 13.7 million tourists and creating about $11 billion by the approaching year of 2018. Cost-Benefit Analysis (CBA) for Rebuilding: To assess and provide advice on whether or not to rebuild the New Orleans I will be evaluating the cost and benefits of rebuilding the city as well as the benefits and impact it will have on New Orleans. In the CBA, I will be assessing the cost of rebuilding the city of New Orleans to pre Katrina situations without creating any extra upgrades to the infrastructure and levees. This will provide more accurate cost. I will observe the benefits of improved losses when contrasting the data of pre Katrina to post Katrina situation. The parts that I will be assessing are tourism recovered, wages recovered, port operations recovered, taxes recovered and spending recovered. The future value of these benefits will then be discounted with respect to the present value and later contrasted to the cost of rebuilding to signify the net present value of the possible amount to be lost or gained by working the recovery. If the net profit value is below the cost, after that rebuilding the city of New Orleans will yield a loss and the recommendation will not help a recovery. If the contrary is correct then the proposal will be in support of the recovery. Following is the cost basis analysis: Costs (In Billions) Departments and facilities Cost (in billion $) Transportation cost 17 Agriculture 16 Army Corps of Engineers 12 Atmospheric Administration 5 Defense department 9 Levees to withstand level 5 Hurricanes 35 Government agencies 6 Total Costs 100 The table above shows the cost benefit analysis of the city of New Orleans. The expenses for the category building are 5 flood protection methods, which are estimated to incur around $35 billion. The redeveloping benefit of New Orleans can be mainly divided into three groups that include financial, economic and miscellaneous benefits. The financial part of the benefits contains the cash generated by the city. The main financial benefits discussed here are connected to the funds generated by the port of the city, as these are direct benefits. The economic condition of New Orleans shows huge development due to the flourishing seafood and other trade opportunities. Miscellaneous benefits include the rise in the population as well as the development of the economy of New Orleans, continuation of port business, preservation of coastal wildlife and maintenance of seafood business. Decision Tree and Analysis of its Results: Decision trees are graphical demonstrations of alternative options that may be made by a business and “which enable the decision maker to identify the most suitable option in a particular circumstance” (The Times 100: Business Case Studies, 2013). Following are the assumptions that are to be considered while preparing the decision tree constituents: Probability of occurring Katrina like event is 64% Probability of occurring lower than Katrina is 36% Levees protecting the city raise the risk of nearby regions to 25 %. The new levees which were incorporated response to Katrina cost about $14 billion dollars The cost basis analysis based on 100 billion. The benefit of the rebuilding of the city is estimated to be around $50 billion and the benefit quantity consists of only direct profit for future years. The Decision Tree Model: The above chart is the decision tree of the city of New Orleans. It specifies two categories they are Katrina like event and Lower than Katrina event. The main goal of this decision tree analysis is to decide the possibility of the redevelopment of the city of New Orleans. As explained by Hallegatte, the probability of occurrence of a Katrina like event is 63% greater, as these have the probability of causing total damage to New Orleans, thus resulting in entire loss of federal savings kept for redevelopment of the city. The redevelopment of the city in the event of less than Katrina like event earnings positive results with the city better prepared with level 5 flood protection system. It contains benefits and losses of the residents, mayor, nearby regions and federal government. The estimated cost in rebuilding of New Orleans is $35 billion. Decision trees are commonly used to identify the plan which is most probable to reach an objective. It influences diagrams, functions of utility, and other tools of decision analysis. Discussion of the decision Pitfalls: All constituencies, while determining the preferred method, are susceptible to a variety of decision pitfalls. Decision pitfalls are the main part of decision tree. “These pitfalls are hard to discern since they are part of our normal decision making process. They include misconceptions in the decisions we make, a bias in favor of one option, falling prey to the status quo, and continuance with sunk decisions” ("Major Pitfalls in Decision Making," n.d.). The important pitfall influencing the decision of the federal government is the higher expenses connected with the redevelopment of the city. The redevelopment of the city stands with a direct cost of $100 billion. Another possible pitfall is the anticipation of the mayor and government of city to start reaping increasingly financial and economic benefits from the city, which will cause problems in its redevelopment. The Relevant Expected Utility for the Interested Constituencies: The “Expected utility” originates from the decision tree, which has been arranged based on the Cost benefit analysis (Johansson, 1993, p.158). The expected utility of the federal government is the sustained financial and economic benefit to the country from the city’s competitive benefit in terms of seafood and trade. The residents imagine a safer life with the completion of level 5 flood protection method. “A utility function that measures the welfare gain or loss that is associated with any financial gain or loss” (Hallegatte, n.d., p.11). The expected utility for the near parts are negative and they are against the finishing point of level 5 flood protection process in the city of New Orleans. In contrast, the redevelopment of the city will positively give financial and economic benefits to the nearby areas in terms of better access to seafood, better job opportunities and improved trade opportunities. PART B CASE STUDY: BAYOU ROAD Executive Summary: Firstly, I would like to provide a brief evaluation of the political atmosphere of the city for the rebuilding of New Orleans at the time the storm strikes, and also explore the rationale for main incidents that are unfolded as a the result of the storm. Studies show the experience of stakeholders in the Bayou Road community, and also detail the history of various arrangements made in the pre-Katrina community, and further explains attempts undertaken in the outcome of the storm to execute projects and priorities. I also examine post-Katrina’s planning process of New Orleans, pinpointing major key aspects of each and every plan that was built. The need to reinforce capacity of the community turned out to be crucial for both shareholders and communities to evaluate what resources existed there on respective communities and find out who should reinforce and build up capacities that are needed to be acquired. I recommend a set of strategies that local government and rebuilding communities should prioritize in order to target various issues specific to fighting barriers of the communication, permitting access to resources and strengthening capacity of the community. Major milestones Bayou road for the community during the execution period consist of the diverse sources of private financial support businesses received, the grand starting of businesses of’ The Belles of Bayou Road,’ the brick repaving of the corridor and the progressively more successful stages to acquiring a property of the church to home a community center in the area. Below five miles east of Ferret Street and only minutes from downtown, the picture of The Bayou Road Cultural Corridor in the years right away leading up to Hurricane Katrina was of an enclave progressively emerging, although on a different scale from Ferret. Entrepreneurs of the small business were on the cusp of increasing the profile of Bayou Road and the immediately surrounding areas when the storm hit. Along the area of disinvestment, persons seeing potential in the region had slowly started to invest by rehabilitating and purchasing old decrepit properties and re-opening storefronts alongside the corridor. The devastation of Katrina brought with it terrific damage from fire, storm and vandalism as even regions that were not flooded were still significantly impacted by these subsequent effects of the storm. The response of this area was distinctive in that they rallied jointly to communally reconstruct the corridor, looking first internally for the resources essential to reestablish them. It was a powerful and unique method in which the Bayou Road community came jointly and eventually drew the attention of investors and onlookers, fundamentally providing a great chance for Bayou Road to compellingly place itself on the map, reinvent its image, and start to recollect the thriving cultural region it had once been. Bayou Road was designated a target region because in the months after the storm, the power and resilience of the area promised a future with rising potential. The core of stakeholders involved in the renewal of Bayou Road is key persons who have been long time inhabitants in the surrounding area and are also mainstay advocates. Among them are Vera Warren-Williams, holder of the Community Book Center on Bayou Road, and a long time voice of the community. What makes Bayou Road mainly unique is that it interconnects multiple neighborhoods. So, although Bayou Road is mainly a commercial corridor, three key associations of neighborhood have played a fundamental role in the recovery efforts of the area. Previous to the storm, the Downtown Neighborhood Improvement Association (DNIA) was possibly the body that came close to being a representative association of the neighborhood for the community. Started a little over 43 years before the storm hit, efforts of the DNIA to build membership and set up credibility suddenly halted in the wake of the storm. The broad environmental area DNIA symbolizes spans far away from Bayou Road into much of what is known traditionally as Treme and the Sixth and Seventh Wards. Numerous efforts today to refresh Bayou Road are expected to have catalytic impacts that would impact these neighborhoods. The Neighborhood Partnership Network (NPN), an umbrella of associations of neighborhood across the city, was established subsequent to the storm and its office is situated close by on the Esplanade Avenue. Though not an organization formed to solely symbolize the Bayou Road community, because of this strategic location, NPN is frequently capable of providing resources such as meeting space and is further capable of drawing citizens to the area for its various proceedings. This case study was a timeline of what happened in the Bayou Road community in the outcome of the storm, representing the nature of the reply both to the process of planning as it unfolded, and the attempts to execute priorities in the first complete year following the completion of the planning process. References Gagne, D. (2007). Rebuilding New Orleans. Retrieved from https://faculty.fuqua.duke.edu/~dm121/papers/07.125.Rebuilding%20New%20Orleans.pdf Hallegatte, S. (n.d.). A Cost-Benefit Analysis of the New Orleans Flood Protection System. Retrieved from http://hal.cirad.fr/docs/00/16/46/28/PDF/Hallegatte_NewOrleans_CBA9.pdf Johansson, P. -O. (1993). Cost-benefit analysis of environmental change. Cambridge: Cambridge University Press. Major Pitfalls in Decision Making. (n.d.). Retrieved October 14, 2013, from http://www.exinfm.com/board/pitfalls_in_decision_making.htm The Times 100: Business Case Studies (2013). Decision Tree Analysis. Retrieved October 14, 2013, from http://businesscasestudies.co.uk/business-theory/strategy/decision-tree-analysis.html#axzz2hSFkdT3h Read More