Improving communities through innovative financing: A case study of the Baileys Trail System

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Issue Date
2020
Authors
Twilley, Danny
McCarthy, Dawn
Brown, Seth
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Abstract
This chapter focuses on how one Appalachian community in southeast Ohio is turning to outdoor recreation for economic repositioning due to the long-term fallout from extractive industries leaving the region. Utilizing a collaborative approach, built on community buy-in, a multilayered working group is attempting to build a large-scale multi-use human powered trail system on National Forest System land to diversify its economy through tourism, while enhancing the quality of life of the local communities. The collaborative approach led to the project being selected as the first recreation infrastructure project in the nation to utilize the Pay for Success (PFS) financing model for funding. Pay for Success is an innovative financing tool where investors provide upfront capital for a project with repayment tied to the successful achievement of those outcomes. Pay for Success offers several benefits for developing recreation infrastructure as it provides access to impact capital, reduces risk, links funding directly to outcomes, requires data collection, and builds off stakeholder engagement. Due to the ability to access upfront private capital, the PFS model can dramatically reduce the time it takes to build infrastructure and facilitate a quicker return on investment. Private investment allows for flexibility in the use of funds that is rarely found in government appropriations, grants or philanthropic funding. If Pay for Success can be successfully piloted, the model could be designed for scalability and replicated across the country to address the United States Forest Service (USFS) deferred maintenance backlog while also allowing for new infrastructure development.
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