0

 

ECONOMIC IMPACT OF 

ROCKSLIDES IN 

TENNESSEE AND NORTH 

CAROLINA 

Prepared for

Appalachian Regional Commission

Prepared by

HDR | Decision Economics

May 2010
1

Contents 

1. Introduction .......................................................................................................................... 2 

1.1 Local and Regional Impacts ........................................................................................... 3 

1.2 Transportation Costs ...................................................................................................... 3 

1.3 Summary of Findings ...................................................................................................... 4

2. Approach .............................................................................................................................. 5 

2.1 Local and Regional Impacts ........................................................................................... 5 

2.2 Transportation Costs ...................................................................................................... 6

3. Local and Regional Impacts ............................................................................................... 8

3.1 Interstate 40 (I-40) Rockslide Background ..................................................................... 8 

3.2 US-64 Rockslide Background ....................................................................................... 13

4. Transportation Impacts of Rockslides on Tennessee and North Carolina .................. 19 

4.1 I-40 Rockslide Transportation Costs ............................................................................ 19 

4.2 US-64 Rockslide Transportation Costs ........................................................................ 20 

4.3 Total Transportation Costs ........................................................................................... 20 

 
2

ECONOMIC IMPACT OF ROCKSLIDES IN TENNESSEE 

AND NORTH CAROLINA 

1. Introduction 

Two major rockslides occurred in the southwestern portion of North Carolina (NC) and 

southeastern portion of Tennessee (TN) during the fall of 2009. The first rockslide occurred on 

October 25th in Haywood County, NC, resulting in the closure of a section of Interstate 40 (I-40) 

at mile marker 2.6, about 50 miles west of Asheville, North Carolina, near the Tennessee 

border.1

 The second rockslide occurred on November 10th in Polk County, TN. This rockslide 

closed a section of U.S. Route 64 (US-64). Figure 1 shows the location of these rockslides and 

the associated detours. 

Figure 1: I-40 and US-64 Rockslides and Detours 

The objective of this study for the Appalachian Regional Commission (ARC) is to estimate the 

economic impacts of these rockslides and the resulting road closures. To expedite the study, 

the analysis focused on two categories of economic and transportation impacts: 

                                                           

1 Rockslide Closes I‐40 Near Tennessee, by Ely Portillo, Charlotte Observer, Posted: Monday, Oct. 26, 2009,

http://www.charlotteobserver.com/2009/10/26/1019615/rockslide‐closes‐i‐40‐near‐tennessee.html
3

 Local and Regional Economic Impacts – the loss in business sales, visitors, tourism 

spending, and jobs for areas directly impacted by road closures and loss of 

transportation access and traffic volumes. 

 Transportation Costs – extended road closures of key highways in Appalachia can 

result in significant detours leading to longer trips (more miles traveled), less direct trips, 

and additional congestion on the detour routes. Transportation costs impact both auto 

travel (personal, commuting, tourism) as well as longer distance freight shipments. 

1.1 Local and Regional Impacts 

Rockslides in mountainous areas can have a significant impact on our transportation system, 

national trade flows, local and regional economies, and the commuters who rely on these 

routes. Because of the terrain in rockslide prone areas, the alternate routes to travel between 

communities can be limited. 

The closure of one route due to a rockslide can severely limit the ability of residents to get to 

work and school, receive the medical care they require, and purchase the items they need. 

These road closures often impose additional costs on businesses by forcing them to take longer 

routes to deliver their products to markets and ports, or serve their clients. People may also 

have difficulty reaching a business, which means fewer customers and clients. As a result, 

business revenue may decrease. In some cases, the financial burden associated with these 

additional costs and overall reduction in business requires the elimination of jobs. 

The impact of a disruption to the transportation system can be devastating to a local or regional 

economy, particularly if the disruption continues for a long period of time. This report 

investigates the impact to the economies of the communities in the rockslide impacted areas. A 

complete discussion of our approach and our findings are provided in subsequent sections. 

1.2 Transportation Costs 

In addition to the impact on the “bottom line” of businesses in the area, there are direct costs 

that are imposed on the region in terms of transportation costs. The longer alternate routes 

mean longer commute times for workers, as well as heavier traffic for the region in which the 

detours are located. 

Even if an alternate route is shorter in distance, the speed limit may be lower which means total 

travel time is higher. In addition, the increased traffic on the alternate routes impacts incumbent 

drivers. Their travel time is now increased. Because people’s time has value, it is important to 

incorporate this value of time into any discussion of the rockslides’ impact to the region. 

The rockslides and corresponding detours also contribute to increased congestion on those 

alternate routes. Because vehicles are being required to run for longer periods of time when 

traffic is increased, the wear and tear on the vehicles, not to mention the increased fuel and oil 

consumption, imposes an additional cost on drivers. 

The additional traffic also means higher maintenance costs for those alternate roadways, as 

well as an increase in the level of pollutants being emitted by automobiles and trucks. These 

costs impact more than just the vehicle drivers; they affect the entire region. 

A complete discussion of the transportation costs estimated in the analysis is provided in the 

report. The estimates of costs by rockslide-impacted area, as well as the total costs to the 

region, are also provided. 
4

1.3 Summary of Findings 

The negative economic effect of the rockslides is measurable for the communities in closest 

proximity to the rockslide site. Business revenue has decreased, employees have been laid off, 

and businesses are experiencing transportation cost increases. Whether the rockslide impacts 

are substantial enough to influence the countywide unemployment rates is uncertain; sufficient 

data are not yet available to make this determination. 

Communities located farther away from the rockslide area have noticed more vehicles on roads, 

likely due to the detoured traffic. Businesses located in those areas where traffic has increased 

may actually be temporarily benefiting from the rockslides. 

The focus of this analysis is on the net effects due to the road closures and loss of access to 

markets. It also facilitates an understanding of the negative local effects. It is worth noting that 

the combination of the economic recession and the rockslides makes the impact to the area all 

the more significant. Because of the start-up costs required to open a business, it is much more 

difficult to reopen a business than it is to close one. As a result, businesses that are forced to 

close are not likely to reopen, even after the rockslides are cleared. 

Based on findings from interviews with nearly 30 businesses in Bradley, Cherokee, Cocke, 

Hamilton, Haywood, and Polk Counties, economic activity has decreased in the areas most 

impacted by the rockslides, as compared to the same time period last year. More specifically: 

 Revenue has decreased by 50 to 80 percent for hotels, motels and inns. 

 Restaurant and retail business is down a range of 30 to 90 percent. 

 Gas stations are pumping 25 percent less fuel. 

 A local hospital is losing $200,000 per month in revenue. 

Throughout the interview process, businesses made a point of saying how thankful they were 

that the rockslides occurred during their typically slower season. US-64 is expected to be 

reopened in mid-April, and the road affected by the I-40 rockslide is anticipated to be opened by 

the end of April. Businesses involved in tourism indicated numerous times that an extended 

road closure, much beyond March, would impact their revenue. They also indicated that they 

were concerned about the lag between the reopening of the roads and the public’s perception 

that the road, and their business, was open. There was a real sense that these businesses were 

going to get by, but barely. 

Several businesses and organizations that were interviewed suggest that the rockslides and 

road closures are reasons that alternate routes need to be considered.2

 Specifically, the 

November rockslides may strengthen the case for completing Corridor K, which would connect 

Cherokee County to Cleveland, Tennessee.3

 

Transportation Cost Impacts. In addition to the rockslide impact on businesses, significant 

transportation costs have been imposed on the region due to the transportation system 

                                                           

2 Officials seeking help for stores on U.S. 64 West, Business owners say rockslide is causing hardships, by Dwight

Otwell, February 23, 2010, Cherokee Scout,

CSThttp://cherokeescout.com/articles/2010/02/26/news/doc4b8447195860d291659023.txt

3 Rock slides shut down gorge, U.S. 64 West through Ocoee Gorge closed for at least 8 weeks , by Scott Wallace,

November 18, 2009, Cherokee Scout,

http://www.cherokeescout.com/articles/2009/11/19/news/doc4b031fe9280ef374408117.txt
5

disruption that the rockslides caused. Because sections of US-64 and I-40 have closed, traffic 

has been diverted. This has increased the vehicles miles traveled, and the congestion and 

travel time for users of the region’s roadways. It’s estimated that during the course of the road 

closures, $197 million in transportation costs have been imposed on the region based on an 

increase of 132.9 million miles of travel and 2.6 million additional hours of travel. 

Total transportation costs imposed on the region as a result of the I-40 and US-64 rockslides 

are shown in Table 1. As a result of the rockslides and associated detours, $197 million in costs 

have been imposed on the region. These transportation costs are based on an increase of 

132.9 million miles of travel and 2.6 million additional hours of travel. Nearly 90 percent of these 

costs are associated with the I-40 rockslide and detour routes. The costs imposed on the more 

rural US-64 rockslide-impacted area are not insignificant, however. More than $22 million in 

costs are attributable to the rockslide in that area and the diversion of traffic to alternate routes. 

Of note, 28 percent of the VHT impacts are to truck travel but 47 percent of the economic value 

of costs is estimated to be borne by trucks. This is an indication of the impact to trade and the 

important role these Appalachian highway facilities play in connecting markets regional and 

national markets. The higher costs are due to higher values of time for business travel plus 

higher per miles costs in terms of fuel consumption, emissions and pavement damage. 

Table 1: Total Transportation Costs of I-40 and US-64 Rock Slides 

 I-40 Rockslide US-64 Rockslide TOTAL 

Vehicle Operating Costs $56.9 $7.2 $64.1 

Diversion Travel Time Costs $65.2 $10.7 $75.9 

Emissions Costs $4.5 $0.5 $5.0 

Congestion Travel Time Costs $43.8 $3.5 $47.2 

Pavement Maintenance Costs $4.6 $0.3 $4.9 

TOTAL $174.9 $22.1 $197.0 

Source: HDR Decision Economics calculations

The following section details the approach used to determine the economic and transportation 

impacts of the I-40 and US-64 rockslides. 

2. Approach 

HDR|Decision Economics was engaged by the Appalachian Regional Commission (ARC) to 

study the economic and transportation costs of the two rock slides and road closures connecting 

eastern Tennessee and western North Carolina. 

2.1 Local and Regional Impacts 

To gauge the extent of the local and regional economic impact on the areas around the 

rockslides, HDR: 

 Obtained information from and observations of Local Development Districts (LDD) 

directors; 

 Conducted phone interviews of businesses in the region; 

 Collected historical and current economic data for the counties most likely impacted by 

the rockslides; and 

 Compiled articles and other materials related to the rockslides. 
6

HDR worked with the ARC and selected local development districts (LDDs) in Tennessee and 

North Carolina to help determine the extent of the economic impact on the rockslide areas. 

LDDs provided their observations and information related to the rockslide areas. The purpose of 

the interviews was to determine recent business trends and to isolate the economic and 

transportation effects of the closure from the broader economic recession. The LDDs contacted 

were: 

 Land-of-Sky Regional Council, Asheville, NC 

 Southwestern Commission, Sylva, NC 

 High Country Council of Governments, Boone, NC 

 East Tennessee Development District, Alcoa, TN 

 First Tennessee Development District, Johnson City, TN 

 Southeast Tennessee Development District, Chattanooga, TN 

 Cocke County Partnership, Newport, TN 

The LDDs included in the study were chosen by ARC because they are closest to the rockslide 

impacted areas. Several of the LDDs provided contacts for businesses they believed to be 

potentially impacted by the rockslides. In some cases, the LDD director reported that the district 

had not been significantly impacted by the rockslides and associated detours. The LDDs 

indicating significant economic impacts from the road closures include: 

 Southeast Tennessee Development District – affected by the US-64 rockslide 

 Southwestern Commission – affected by both US-64 and I-40 rockslides 

 East Tennessee Development District – affected by the I-40 rockslide 

Through a series of phone interviews with businesses and local economic development experts, 

HDR collected information on the economic impacts of the rock slides on business sales, jobs, 

access to markets, and shipping cost premiums. The results of these interviews are a 

combination of qualitative and quantitative findings based on contacting 54 businesses and 

receiving input or feedback from 32 local business organizations. The economic impacts 

represent changes in economic activity during the road closure compared to the prior year. 

Economic data for those counties located in closest proximity to the rockslides was compiled 

with detailed analysis provided in Appendix A. A list of the businesses that were contacted for 

interviews, as well as a list of those that responded, is provided in Appendix B of this report. A 

review of articles related to the rockslides was also conducted, and the results of this research 

are included throughout the report. 

2.2 Transportation Costs 

The US-64 and I-40 rockslides have closed sections of these routes for nearly six months 

resulting in a significant loss of transportation mobility, connectivity and access in the region. 

Tourists, residents, and businesses that rely on these roadways are being diverted to alternate 

routes. For most of these diverted travelers, the alternate routes are longer distances and more 

time-consuming. These factors increase costs on: the diverted traveler; the traveler who had 

been using the alternate routes prior to the rockslides; and the region as a whole. 

HDR applied standard traffic modeling equations and analysis to estimate the costs to autos 

and trucks for each road closure and the diverted routes. The transportation costs are 

measurable, based on traffic counts on the affected roadways before and after the rockslides. 
7

When combined with other data related to speed of travel and route length, estimates of the 

change in vehicle hours traveled (VHT) and vehicle miles traveled (VMT) can be made. 

The Tennessee Department of Transportation (TDOT) and the North Carolina Department of 

Transportation (NCDOT) conduct annual counts of traffic on the states’ roadways. The DOTs 

provided traffic count data for 2008, which was adjusted to reflect the 2009 pre-rockslide levels 

of traffic on the affected roadways. They also provided traffic count data that was collected postrockslide. This information was then used to estimate the change in traffic and miles traveled 

attributable to the rockslides and associated detours. 

Combined with Federal Highway Administration (FHWA) and other industry-accepted data, HDR 

estimated the most relevant transportation costs: 

Vehicle Operating Costs: The rockslides have altered the way that travelers reach their 

destinations in the region. Vehicles that traveled the now closed sections of I-40 and US-64 are 

increasing the traffic on alternate routes. This impacts the diverted vehicles in that fuel and oil 

expenses, the costs associated with vehicle maintenance and repair, vehicle depreciation, and 

the costs of vehicle tire wear and tear are increased when vehicles must travel longer distances 

to reach their destinations. 

Diversion Travel Time Costs: The time to travel (VHT) increases for users of the I-40 and US64 sections of road that have been closed. These diverted roadway users must use alternate 

routes that are more time consuming for them. Their time has a value and, if it is taking longer 

for them to reach their destination, this is a cost that needs to be considered when evaluating 

the total effect of the rockslides on the region. 

Emissions Costs: Because of the road closures, the total truck and auto vehicle miles traveled 

(VMT) increases. There are emissions costs that are imposed on society as a result. Emissions 

measured in this report include Volatile Organic Compounds (VOC), Carbon Monoxide (CO), 

Carbon Dioxide (CO2), Nitrogen Oxide (NOX), Sulfur Dioxide (SO2), and Particulate Matter 

(PM), varying by auto and truck. Truck emission costs are greater than auto emission costs. 

Congestion Travel Time Costs: The detour routes were being utilized by some roadway 

users, even before the rockslides. These users are now being affected by the influx of new 

roadway users who are utilizing these roads to divert around the rockslide impacted area. This 

increased congestion on the roads has a cost to incumbent users. It now takes these users 

longer to reach their destination and this extra time imposes a cost on those users due to the 

value of their time. 

Pavement Maintenance Costs: When traffic increases on a particular roadway, pavement 

maintenance increases as well. The increased maintenance requirements come with a cost, 

based on the number of additional miles that roadway users are adding to their trips when they 

opt to use one of the routes currently serving as a rockslide detour. Additional trucks impose a 

greater cost to pavement maintenance than do additional autos. 

The transportation costs described above are measurable, based on traffic counts on the 

affected roadways before and after the rockslides. When combined with other data related to 

speed of travel and route length, estimates of the change in vehicle hours traveled (VHT) and 

vehicle miles traveled (VMT) can be made. 

The Tennessee Department of Transportation (TDOT) and the North Carolina Department of 

Transportation (NCDOT) conduct annual counts of traffic on the states’ roadways. The DOTs 
8

provided traffic count data for 2008, which was adjusted to reflect the 2009 pre-rockslide levels 

of traffic on the affected roadways. They also provided traffic count data that was collected postrockslide. This information was then used to estimate the change in traffic attributable to the 

rockslides and associated detours. 

Using Federal Highway Administration (FHWA) and other industry-accepted data, vehicle 

operating costs, travel time costs, and pavement maintenance costs were calculated. The 

results of this estimation are provided later in the report. 

3. Local and Regional Impacts 

This section of the report discusses the impact of the rockslides and detours on the local and 

regional economies. Information gathered through the interview and research process is 

included, and the effect on jobs, business sales revenue, and other factors is described. 

3.1 Interstate 40 (I-40) Rockslide Background 

A 150 foot tall rockslide buried a portion of I-40 near the Tennessee line on October 25, 2009, 

and detours were established to divert traffic. The North Carolina Department of transportation 

indicates that I-40 will not open before late April because winter weather has slowed work on 

clearing the rockslide debris. Originally, the rockslide clean up was to be finished and the 

interstate reopened by the end of March. The cost of the cleanup still stands at $10 million.4

 

There are several detours in the area to divert travelers away from the rockslide: 

 Official detour: From North Carolina to Tennessee, travelers divert to Route 19/23 

north to I-26 until they intersect with Interstate 81. Once they meet I-81, they travel 

southwest on I-81 reconnecting with I-40. This route diverts travelers out of Haywood 

and Cocke Counties. 

 Alternate route #1 (no commercial traffic): Directs travelers from North Carolina to 

Tennessee to take I-240 to Route 19/23 to Route 25/70. This takes them through 

Newport, Tennessee, and reconnects them with Route 40. This route diverts travelers 

around Haywood County. 

 Alternate route #2 (partially closed to commercial traffic): This detour traverses part of 

the Blue Ridge Parkway and directs travelers from NC to TN to take Route 276 to Route 

19 through Cherokee, North Carolina. Travelers then connect to Route 321/441, 

connecting to Route 66 and ultimately to Route 40. This route diverts travelers around 

Cocke County. 

Figure 2 shows the location of the I-40 rockslide, the official detour, and the roads associated 

with the alternate detours. 

                                                           

4 Bad weather pushes I‐40 opening to April, by Jon Ostendorff, February 23, 2010 , Citizen‐Times.com,

http://www.citizen‐times.com/apps/pbcs.dll/article?AID=2010100223045
9

Figure 2: Interstate 40 Rockslide Detours

Source: Tennessee Department of Transportation 

The I-40 rockslide occurred in Haywood County, North Carolina, between NC exit 15 and TN 

exit 451. It is approximately 50 miles away from Asheville, NC, and the section of the interstate 

that is closed is located in Haywood County. In much of Cocke County, Tennessee, travel on I40 is limited to local traffic only. Not surprisingly, the LDDs and other individuals familiar with 

the area and the rockslide detours indicate that the counties most adversely impacted are 

Cocke and Haywood Counties. 

As a first step in the interview process, the top ten largest employers in Haywood (see Table 2), 

and Cocke Counties (see Table 3) were determined. For our analysis, government and 

educational facilities were not contacted. Evergreen and Haywood Regional Medical Center 

were contacted, however, because they employ large numbers of people and rely significantly 

on a well-functioning transportation system to provide their products and services. 

Evergreen is the second largest employer in the county, with more than 1,000 employees. This 

pulp and paper mill and manufacturer of paper and paper products has been significantly 

impacted by the I-40 rockslide. Product delivery takes longer and is more costly than it was 

prior to the rockslide. In contrast, Haywood Regional Medical Center has not been impacted by 

the rockslides. A complete discussion of the impact to these employers and others is provided 

later in the report. 
10

Table 2: Haywood County Top Ten Largest Employers 

Business Industry Employees 

Haywood County Schools Education 1,380 

Evergreen, Inc. (Canton & Waynesville) Paper Products 1,116 

Haywood Regional Medical Center Health Care 729 

Haywood County Government County Services 603 

Haywood Vocational Opportunities Disp. Med. Supplies 320 

Lake Junaluska Assembly Resort, Conf. Center 200 

Haywood Community College Higher Education 158 

Consolidated Metco Plastic Molding, Truck Parts 141 

General Dynamics Defense Contractor 134 

Mountain Projects Community Action Ag. 122 

Source: Haywood County Economic Development Commission 

Businesses also have been impacted in Cocke County, Tennessee, which abuts Haywood 

County. Some of those businesses are included in Table 3, which presents the largest 

employers in Cocke County. Schools and government entities were not contacted for this 

analysis. Neither were “big box” stores such as Wal-Mart and Lowes. Efforts were made to 

include the remaining businesses in the analysis, but contact information for some of the 

businesses was not readily available. For example, Food City and American Appliance Products 

were not included in the analysis. Although larger businesses were contacted, many of the 

businesses most impacted by the rockslides were smaller in size than these employers. A 

complete discussion of the interview results is provided later in the report. 

Table 3: Cocke County Top Ten Largest Employers 

Business Industry Employees 

Cocke County Schools Education 661 

ConAgra Grocery Products Packaged Food Products 475 

Wal-Mart Retail 375 

Baptist Hospital of Cocke County Religion 335 

Cocke County Government Government 220 

Food City Grocery 214 

Sonoco Products Manufacturer 171 

Lisega, Inc. Manufacturer 170 

American Appliance Products Appliances 165 

Lowes Home Improvement Retail 145 

Source: Cocke County Partnership 

3.1.1 I-40 Rockslide Economic Impact Interview Findings 

The I-40 rockslide occurred at mile marker 2.6, about 50 miles west of Asheville, North Carolina, 

near the Tennessee border. The highway is one of the state’s key trucking routes and is used 
11

by tourists and others traveling to the mountains, Tennessee and beyond. The recommended 

detour for vehicles traveling west takes travelers about 135 miles out of their way.5

 

The closure of a section of I-40 has impacted businesses, residents, and tourists in the area. 

The businesses that appear to have been most adversely affected are the restaurants, gas 

stations, motels and tourist-oriented businesses that rely heavily on traffic using I-40. 

Economic development professionals in the area have indicated that most restaurants and 

hotels in Cocke County have suffered a 25 to 30 percent decline since the rockslide.6

 Cocke 

County motels that typically make $500,000 to $700,000 in annual revenue are reporting that 

their revenue since the rockslide is down 50 to 80 percent as compared to the same time last 

year. The impact to hotels is corroborated by the 30 percent decrease in hotel tax revenue for 

Cocke County during the first full month following the rockslide.7

 Staffing has been affected as 

well. One motel that typically has 10 employees is now down to only three. 

Manufacturers and businesses that rely on the transportation of goods also have experienced 

adverse economic impacts due to the I-40 rockslide. A local distributor has experienced 

transportation cost increases in the range of $3,000 to $5,000 monthly for additional fuel, 

maintenance, and related transportation expenses. A large manufacturer, Evergreen Packaging, 

has incurred an additional $60,000 per month in transportation costs since the I-40 rockslide. 

These impacts and others are described more completely in the following section. 

Tourism and Recreation 

This region in North Carolina and Tennessee relies heavily on tourism and with sections of I-40 

closed, some communities are not being reached by visitors. Several tourism reliant 

businesses that have been able to stay in business at expressed concern about a “lag” between 

the roadway reopening and the tourists realizing that it is open. With I-40 not expected to 

reopen before the end of April, some tourist-oriented businesses will be hurt during the 

beginning of their busiest season. 

A charter bus company located in the area reduced the number of trips it makes to Harrah’s 

Casino in Cherokee, in response to the rockslides. The trip usually takes two hours, but it now 

takes between four and five hours because of the rockslide detours and extreme weather 

experienced this winter. Some of the alternate routes are treacherous with poor weather 

conditions. The business usually employs 11 people, but has had to let go of five individuals. 

Since January 2010, the company estimates it has lost $2,500 per week in revenue. 

A recreational vehicle park in Haywood County estimates that its revenue is down $6,000 in 

March 2010 alone. Approximately 40 percent of this decrease is attributable to the rockslide, 

according to the park. The RV park’s camping nights were down 40 percent post-rockslide, and 

this reduction in business has been sustained. The RV park receives a large percentage of its 

campers from Florida, and these visitors tend to travel north in the early Spring. The park 

                                                           

5 Rockslide Closes I‐40 Near Tennessee, by Ely Portillo, Charlotte Observer, Posted: Monday, Oct. 26, 2009,

http://www.charlotteobserver.com/2009/10/26/1019615/rockslide‐closes‐i‐40‐near‐tennessee.html

6 ARC to fund study: On rockslide's impact on Cocke County, The Newport Plain Talk, March 12, 2010,

http://www.newportplaintalk.com/story/31153

7 Rock slide's economic impact a 'mixed bag' for Cocke County, by Jim Matheny, 1/18/2010,

http://www.wbir.com/money/story.aspx?storyid=111081&catid=92.
12

anticipates that the impact on revenue will increase as their busy season approaches, unless 

the rockslides and road are cleared relatively soon. 

A golf resort in the area indicated that they have spent more on advertising this year than last 

year, in an effort to target customers in the Atlanta, Raleigh, and Charleston area. The 

additional advertising expense is a direct consequence of the rockslide. Despite these efforts, 

the resort has had to lay off 10 people since the rockslide and business is down 15 to 20 

percent. According to the owner, they anticipate a 30 percent revenue reduction moving into 

April, which tends to be a busier time of year for the resort. The resort estimates that it has lost 

approximately 500 room nights due to the rockslide. Although specific transportation cost 

increases were not available, the resort owner indicated that suppliers were charging more 

because of the transportation cost increases they were incurring. For example, the resort’s food 

supplier comes from Knoxville. Typically this is a one hour trip, and it is now three hours. 

Hotels and Motels 

Hotels and motels in Cocke and Haywood counties have experienced significant losses in 

revenue as compared to last year due, in large part, to the rockslides. Several have reduced 

their staff by more than half, and all those interviewed are booking fewer rooms since the 

rockslide. 

One motel indicated that they are booking 10-12 fewer rooms each night since the rockslide, 

which is significant because this motel normally sells 20 rooms each night. In Haywood County, 

inns have been significantly impacted by the road closure. Owners are completing the 

maintenance, painting, and yard work themselves, because revenues are so reduced. One inn 

reported that business was down 50 percent since the rockslide. The business of another is 

down 70 percent. 

Restaurants and Local Services 

Restaurants in the area also have suffered. Brandywine Creek, a restaurant just off the 

interstate in Newport, opened two months before the rockslide. The restaurant has a small 

staff, but still had to let 2 people go.8

 Shortly after the rockslide occurred, business at the 

restaurant dropped by 50 percent and has been recovering very slowly since. Pilot Travel 

Center, a truck stop in Waynesville near exit 24, and the Pilot convenience store have 

experienced a decline in business as well.9

 

A Cocke County gas station has lost $555,000 in revenue since the rockslide. According to the 

owner, the diesel business is very weak. They typically have 10 to 12 employees, and they now 

have 8 to 10. In addition, they close two hours earlier than they have historically. 

Manufacturers 

Some manufacturers in the area have experienced measurable transportation cost increases as 

a result of the rockslide and associated detours. One company indicates that their 

transportation costs have increased by $1,000 per week since the rockslide. A local distributor 

has experienced similar cost increases, in the range of $3,000 to $5,000 monthly for additional 

fuel, maintenance, and related transportation expenses. Fortunately, neither of those 

businesses has had to lay employees off. Other local manufacturers have indicated that they 

                                                           

8 I‐40 rockslide still hurting Cocke County businesses, by Josh Ault, February 23, 2010, 6 News Reporter,

http://www.wate.com/Global/story.asp?S=12032772; follow up call with Brandywine Creek. 9 Haywood County braces for economic impacts of prolonged I‐40 closure, by Bibeka Shrestha, October 28, 2009,

http://www.smokymountainnews.com/issues/10_09/10_28_09/fr_I40_impact.html.
13

have shifted their distribution to other facilities or passed the additional transportation costs on 

to their customers. This reaction to the current situation suggests that logistics and alternative 

transportation options may be sub-optimal. 

One of the largest employers in Haywood County, Evergreen Packaging, has incurred an 

additional $60,000 per month in transportation costs since the I-40 rockslide. Evergreen is a 

pulp and paper mill and paper products manufacturer with approximately 20 percent of its 

inbound and outbound freight using I-40 through the gorge. Evergreen has been directing its 

drivers to divert to I-26 until they intersect with Interstate 81. Once they meet I-81, they travel 

southwest on I-81 and reconnect with I-40. The detour means that trucks travel an additional 

110 miles one way. 

Evergreen attributes this additional transportation cost entirely to the rockslide and associated 

road closure. Despite the cost increase, Evergreen has not experienced any revenue 

decreases or laid off any of its employees. In terms of commuting time, only a few of the 

company’s employees reside in Cocke County and most are familiar with back road routes that 

avoid the rockslide impacted area. 

Oaks Unlimited, also located in Haywood County, has incurred additional transportation costs 

since the rockslide as well. Trips from Tennessee that used to take an hour and a half are now 

taking three and a half hours. This represents a $200 per truckload additional cost for this 

business and five trucks travel daily on the affected route. 

3.2 US-64 Rockslide Background 

A second rockslide, which occurred on November 10, 2009, in the Ocoee Gorge buried a 

portion of US 64 in Polk County under 30,000 cubic yards of rock and debris.10 The Tennessee 

Department of Transportation expects the clean-up of the rockslide to be complete by mid-April. 

The US-64 rockslide closed the road connecting Cleveland and Chattanooga, Tennessee, to 

Cherokee County in North Carolina. Several detours are available and shown in Figure 3: 

 Suggested detour through Tennessee: Travelers from North Carolina take US 74 to 

State Route 68 north through Polk and Monroe Counties to I-75 in Sweetwater. From 

Chattanooga and Cleveland, Tennessee, travelers take I-75 north to Exit 60, State 

Route 68. Travelers then go south on Route 68 through Monroe County then Ducktown 

into Polk County. 

 Suggested detour through Georgia: Travelers take State Route 5 south to US76. 

From there, travelers head north on US411 into Tennessee. 

                                                           

10 Rock slides shut down gorge, U.S. 64 West through Ocoee Gorge closed for at least 8 weeks , by Scott Wallace,

November 18, 2009, Cherokee Scout,

http://www.cherokeescout.com/articles/2009/11/19/news/doc4b031fe9280ef374408117.txt
14

Figure 3: US-64 Rockslide Detours 

Source: Tennessee Department of Transportation 

The US-64 rockslide near the Ocoee2 Dam in November occurred in Polk County, TN, closing 

the road at mile marker 17.6.11 The counties most impacted by the rockslide are Polk County, 

TN, and Cherokee County, NC. 

The largest employers in Cherokee County are presented in Table 4, and Table 5 lists the top 

ten largest employers in Polk County. 

Murphy Medical Center and the Cherokee County Board of Education are the two largest 

employers in Cherokee County. Several manufacturing businesses also employ a significant 

number of people. Although several of these larger employers were contacted for this report, 

those that responded indicated that they had not been negatively impacted by the rockslides. In 

this county, it seems that the smaller businesses have suffered more significantly. 

                                                           

11 http://www.visitnc.com/advisories/view/6
15

Table 4: Cherokee County Top Ten Largest Employers 

Business Industry Employees 

Murphy Medical Center Inc Education & Health Services 500-999 

Cherokee County Board Of 

Education Education & Health Services 500-999 

Wal-Mart Associates Inc Trade, Transportation, & Utilities 250-499 

Cherokee County Public Administration 250-499 

Tri County Community 

College Education & Health Services 100-249 

Sioux Tools Inc Manufacturing 100-249 

Ingles Markets Inc Trade, Transportation, & Utilities 100-249 

Ioi Enterprises Inc Manufacturing 100-249 

Indian Head Industries Inc Manufacturing 100-249 

Lowes Home Centers Inc Trade, Transportation, & Utilities 100-249 

Source: Cherokee County Government 

Polk County’s top ten largest employers (Table 5) are led by Copper Basin Community Hospital. 

Based on interviews conducted for the report, this hospital has suffered tremendously from the 

rockslides and road detours. For example, their monthly revenue has declined by $200,000 

since the rockslides. K&S Tank Lines also has been impacted by the rockslides. 

Transportation costs to this company are approximately $1,500 per day more than they were 

prior to the rockslides. Of the employers shown in the table, only the hospital and K&S were 

contacted. Contact information was available for these two businesses, and the LDDs 

recommended including them in the analysis. A complete discussion of the experiences of these 

businesses and others is provided later in the report.
16

Table 5: Polk County Top Ten Largest Employers 

Business Industry Employees 

Copper Basin Community 

Hospital General Hospital 110 

Angio Systems, Inc. Manufacturer - cotton surgical drapes 58 

Cg Roxane, LLC Manufacturer - pasteurized water 50 

Powell Army Navy Surplus, 

Inc. 

Manufacturer - textile military insignia; 

manufactures women's & misses' 

outerwear; manufactures men's & boys' 

work clothing 50 

Growth Management 

Services, Inc. Holding Company 48 

Preferred Medical Products 

Manufacturer - plastic containers; 

manufactures plastic bags 45 

Nantahala Outdoor Center Sport/Recreation Camp 40 

Horn's Creek Cabins & 

Lodge Hotel/Motel Operation 30 

Terry Woody, Inc. Wholesale Books/Newspapers 30 

K & S Tank Lines, Inc. 

Trucking Operator-Nonlocal Local 

Trucking Operator 21 

Source: TN Chamber of Commerce & Industry, Department of Economic & Community Development 

3.2.1 US-64 Rockslide Economic Impact Interview Findings 

The US-64 rockslide occurred in Polk County, TN, and blocks the shortest route from the 

eastern communities of Copperhill, TN, and Ducktown, TN, to the western communities of 

Cleveland and Chattanooga. This is significant because Cleveland and Chattanooga are the 

region’s principal shopping, health care and employment hubs. Travel on US-64 usually takes 

50 minutes from Ducktown to Cleveland. The two best alternates take more than an hour and 

45 minutes and require an additional 90-100 miles of driving.12 

Economic development professionals in the US-64 rockslide impacted area have suggested that 

there will be relatively little long term detrimental impact on the region’s economy. Short term, 

however, this is not the case. Some businesses have been substantially impacted and are 

relying heavily on the swift removal of rockslide debris to stay in business. If the roads remain 

closed for much longer, several businesses are likely to close their doors or experience drastic 

decreases in the level of business. 

Businesses in the communities of Copperhill and Ducktown have had to close or significantly 

shorten their hours due to a lack of customers. Trade at markets and convenience stores has 

been significantly reduced. One store is losing $7,000 per week, and the owner has been 

cutting employee hours. Another store has indicated that business is down by 80 percent. 

                                                           

12 Economic “devastation” in Polk after rockslide, by Adam Crisp, Friday, Dec. 4, 2009, Chattanooga Times Free

Press, http://www.timesfreepress.com/news/2009/dec/04/economic‐devastation‐in‐polk‐after‐rock‐slide/
17

Overall business in Ducktown is down 30 to 40 percent since the rockslide, and tax revenues 

are down 25 to 30 percent.13 

Polk County is relatively isolated even when US-64 is open. With it closed, eastern Polk 

County’s isolation is amplified. In fact, Polk County’s County Executive has emphasized that 

every business in the eastern part of the county has been negatively impacted by the rockslides. 

For example, a retailer at the Ocoee Adventure Center typically reduces its hours during the 

winter months. This year, however, it closed completely for the winter because patrons were 

not reaching the store due to the rockslides. The store plans to reopen once the rockslides are 

cleared, but the complete closure of the store means that business revenues have decreased 

100 percent due to the rockslide. 

A trucking company in the region has incurred an additional $1,500 per day in transportation 

costs due to the rockslides. The company also has noted that it has lost several business 

opportunities because they are unable to offer a competitive bid. Each of these possible job 

opportunities was worth $250,000. 

Health Care 

One of the most striking impacts of the rockslide has been on the local hospital, the Copper 

Basin Medical Center. It is very difficult for patients and employees to reach the hospital 

because the travel time post-rockslide is substantially longer. In fact, one physician has been 

flying himself to the hospital at his own expense so that he can see his patients. 

The number of clinic visits at the hospital has dropped by 70-75 percent since the rockslides, 

and emergency room visits have increased. One possible explanation for the latter observation 

is that patients are not seeing their specialists on a regular basis. As a result, their conditions 

are worsened and they require emergent care. The number of swing bed patients, who receive 

care in other hospitals and recover at Copper Basin, are also down by 50 percent. In terms of 

revenue, the hospital has lost $200,000 per month since the rockslide. They have reduced their 

staff from 119 to 90, a loss of 29 full-time positions. 

Retail 

As mentioned previously, retailers in the rockslide area have been significantly impacted. 

Payne Tire & Grocery in Hot House reports that their business is down by as much as 80 

percent. Ducktown Express oil lube is on the verge of bankruptcy.14 King’s Leathercraft, which 

is also located on US-64, indicates that business has been reduced by 30 percent since the 

rockslides. The Wolf Creek Corner reports that business is down by 80 to 90 percent. 

Typically, this convenience store anticipates a decrease in business of approximately 20 to 30 

percent during the winter months. 

Restaurants have also experienced declines in business. Herb’s Barbecue reported that 

business was down 50 percent due to the recession. The rockslide has resulted in another 40 

                                                           

13 Officials seeking help for stores on U.S. 64 West, Business owners say rockslide is causing hardships, by Dwight

Otwell, February 23, 2010 8:05 PM CST, Cherokee Scout. 14 Polk County Executive
18

percent decrease in business for this restaurant as compared to last year.15 The Gondolier 

Restaurant also has experienced a 40 percent reduction in sales.16 

A local gas station in Ducktown, Tennessee, reported that business was down 25 percent since 

the rock slide. Ocoee Express, a gas station with a Subway sandwich shop, has been impacted 

as well. Cougar Express has lost an average of $50,000 in revenue per month.17 

Mercier Orchards, located in Blue Ridge, Georgia, also indicates that business has been 

affected. Regular customers have told the orchard that the alternate routes are simply too long. 

This is reflected in the number of orchard visitors, which is down approximately 15 percent. In 

addition, their transportation costs have doubled due to the additional time required for them to 

make wholesale deliveries. Fortunately for the orchard, the rockslides occurred after their busy 

time of year.18 

Tourism and Recreation 

The Ocoee River in Tennessee is a popular whitewater rafting destination, and there are 

numerous whitewater rafting companies in the Ducktown area. Rafting trips on the Ocoee River 

were scheduled to begin mid-March, but TDOT officials say I-64 will not reopen until mid-April, 

leaving rafting companies with a month of limited business. 

If the road remains closed into late spring or early summer, the rafting industry will be 

significantly impacted.19 That is not to suggest that this industry has not already been impacted 

by the rockslides and road closure. For example, the retail store owned by Ocoee Adventure 

Center and located at the Whitewater Center was closed for the entire Winter. There were 

attempts to keep the store and Whitewater open, but business was slow and the decision was 

made to close the store for five months. In addition, the hours of one employee were reduced 

by 40 percent. The store typically reduces its hours during the Winter, but it does not close. 

The result is a loss of 100 percent of sales revenue when compared to last year since the 

rockslides occurred. 

Although the road is scheduled to be opened mid-April, rafting businesses have expressed their 

concern about the “lag” between the reopening of US-64 and the public’s awareness of the road 

reopening. This “lag” is quite likely to affect the early part of the rafting industry’s season. 

Trucking 

A trucking business in the area has reported no change in revenue but a significant increase in 

transportation costs. They transport approximately 10 truckloads per day and have incurred an 

additional $1,500 per day since the rockslides. This company also noted that they have lost 

several business opportunities because they cannot offer a competitive bid. Each of these jobs 

was worth $250,000. Some other trucking businesses in the region have not been impacted 

because they did not use US-64 in the past, or did so sparingly. As a result, they have not had 

to reroute or incur additional transportation costs. 

                                                           

15 Officials seeking help for stores on U.S. 64 West, Business owners say rockslide is causing hardships, by Dwight

Otwell, February 23, 2010,

CSThttp://cherokeescout.com/articles/2010/02/26/news/doc4b8447195860d291659023.txt

16 Polk County County Executive 17 Polk County County Executive 18 Economic “devastation” in Polk after rockslide, by Adam Crisp, Friday, Dec. 4, 2009, Chattanooga Times Free

Press, http://www.timesfreepress.com/news/2009/dec/04/economic‐devastation‐in‐polk‐after‐rock‐slide/ 19 Polk County Executive
19

4. TRANSPORTATION IMPACTS OF ROCKSLIDES ON TENNESSEE 

AND NORTH CAROLINA 

The most direct impacts imposed on the area due to the rockslides and subsequent closures of 

portions of I-40 and US-64 are transportation costs. The diversion of traffic off of the affected 

roadways and onto alternate routes results in greater traffic congestion on the alternate routes, 

which increases total travel time and miles traveled. This means that vehicle operating costs 

increase, as do the costs associated with driver and passenger travel time. More wear and tear 

on the highways is anticipated with heavier traffic, and the increased congestion results in 

higher levels of pollutants being emitted by trucks and automobiles that use the detours. 

The transportation cost analysis in this report is based on traffic counts before and after the 

rockslides, as well as other data. For example, the Federal Highway Administration (FHWA) 

provides standards for the value of traveler time, vehicle operating costs, and other variables. 

This information, along with our estimates of the VHT and VMT change resulting from the 

rockslides and detours, enabled the calculation of transportation costs as shown in Tables 6 and 

7. 

4.1 I-40 Rockslide Transportation Costs 

The total transportation cost increase due to the rockslide on I-40 is estimated to be $174.9 

million. These costs are based on over 111 million additional miles traveled and 2.2 million 

additional hours of travel. Based on I-40’s role as a key freight and trade shipping route, the 

transportation costs are approximately evenly split between trucks ($86.9 million) and autos 

($88 million). 

Because of the rockslides, associated detours and additional miles of travel, vehicle operating 

costs in the I-40 region have increased by $56.9 million. Fifty-two percent of these additional 

costs to automobiles are due to increased fuel and oil consumption. Another 47 percent of the 

costs are for tire wear and tear on automobiles. For trucks, 40 percent of the total vehicle 

operating costs are for additional diesel. Nearly 50 percent of the increased costs are for truck 

maintenance and repair. 

More than $100 million in costs have also been imposed on the region as a result of the 

increase in travel time experienced by users of I-40 and the alternate routes. Diversion travel 

time costs comprise $65.2 million, and $43.8 million is attributable to users of the alternate 

routes whose trips are slowed because of the heavier traffic. 

Emissions costs are estimated to be $4.5 million and pavement maintenance is estimated to 

cost an additional $4.6 million as a result of the I-40 rockslide. 
20

Table 6: Transportation Costs – I-40 Road Closure ($Millions) 

 I-40 Rockslide 

Vehicle Operating Costs $56.9 

Diversion Travel Time Costs $65.2 

Emissions Costs $4.5 

Congestion Travel Time Costs $43.8 

Pavement Maintenance Costs $4.6 

TOTAL $174.9 

Source: HDR Decision Economics calculations

4.2 US-64 Rockslide Transportation Costs 

Most of the businesses in Polk County are locally owned and not affiliated with a large 

corporation. With no major employer in Polk County, roughly 70 percent of the community 

travels outside of the county for work. Many of those commuters travel west to Cleveland, TN 

for their employment, which means that their commute has increased substantially. Other 

drivers have been impacted as well. The result is increased vehicle operating costs, travel time 

costs, and roadway maintenance costs estimated to total over $22 million. These costs are 

reflective of 21.8 million extra miles of travel and almost 425,000 hours of travel and delay. 

Auto travel costs are estimated to be over $17 million with truck costs comprising $4.7 million. 

Based on the analysis, vehicle operating costs are estimated to have increased by $7.2 million 

in the area since the rockslide. For automobiles, the largest component of these costs is for fuel 

and oil (52%). Nearly 50 percent of the truck operating cost increase is due to increased 

maintenance and repair expenses, and 40 percent is for additional diesel fuel. 

Diversion travel time costs associated with travelers of US-64 now utilizing alternate routes is 

$10.7 million. Another $3.5 million in travel time costs is attributable to the increased traffic on 

the detours. Finally, emissions costs to the region are estimated to be $500,000. Another 

$300,000 in pavement maintenance costs is also estimated. 

Table 7: Transportation Costs – US-64 Road Closure ($Millions) 

 US-64 Rockslide 

Vehicle Operating Costs $7.2 

Diversion Travel Time Costs $10.7 

Emissions Costs $0.5 

Congestion Travel Time Costs $3.5 

Pavement Maintenance Costs $0.3 

TOTAL $22.1 

Source: HDR Decision Economics calculations

4.3 Total Transportation Costs 

Total transportation costs imposed on the region as a result of the I-40 and US-64 rockslides 

are shown in Table 8. As a result of the rockslides and associated detours, $197 million in costs 

have been imposed on the region. These transportation costs are based on an increase of 

132.9 million miles of travel and 2.6 million additional hours of travel. Nearly 90 percent of these 

costs are associated with the I-40 rockslide and detour routes. The costs imposed on the more 
21

rural US-64 rockslide-impacted area are not insignificant, however. More than $22 million in 

costs are attributable to the rockslide in that area and the diversion of traffic to alternate routes. 

Thirty-three percent of the total costs are due to the increased wear and tear on the vehicles, 

fuel and oil expenses, and other vehicle operating expenses. More than 62 percent of the costs 

are associated with the increase in travel time experienced by users of the impacted roadways. 

The remaining five percent of costs are the result of emissions and pavement maintenance cost 

increases. 

Table 8: Total Transportation Costs of I-40 and US-64 Road Closures 

 I-40 Rockslide US-64 Rockslide TOTAL 

Vehicle Operating Costs $56.9 $7.2 $64.1 

Diversion Travel Time Costs $65.2 $10.7 $75.9 

Emissions Costs $4.5 $0.5 $5.0 

Congestion Travel Time Costs $43.8 $3.5 $47.2 

Pavement Maintenance Costs $4.6 $0.3 $4.9 

TOTAL $174.9 $22.1 $197.0 

Source: HDR Decision Economics calculations
22

Appendix A – Analysis of Economic Conditions and Unemployment Rates 

Economic Condition of the I-40 Rockslide Impacted Area 

The unemployment rate in the State of Tennessee was 10.2 percent in September and October 

of 2009 and decreased to 10 percent in November. The unemployment rate increased to 10.6 

percent for the state in December. In North Carolina, the unemployment rate was 10.7 percent 

in November. It also increased in December, reaching 10.9 percent by the end of the year. 

Cocke County 

Unlike the State of Tennessee, the unemployment rate in Cocke County decreased since 

January. Specifically, the rate went down by 12 percent during that time period as compared to 

the state’s increase of 11 percent. This is quite significant, given that during the last two months 

of the year the unemployment rate in Cocke County grew by 10 percent. 

As shown in Table 9, the November unemployment rate for the county crept up to 12.4 percent 

from the October rate of 12.1 percent. The December rate was 13.6 percent. The state’s rate 

of growth during that same period was six percent. The only other county in the state to 

experience double digit growth in the unemployment rate during the last few months of 2009 is 

Sevier, which abuts Cocke County west of the rockslide. 

Table 9: TN Counties in LDDs Affected by Rockslides 

County JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

Change

Since Nov

Jan‐Oct

Change

Cocke 13.8% 14.3% 15.1% 13.2% 12.9% 13.3% 12.7% 12.7% 12.2% 12.1% 12.4% 13.6% 10% ‐12%

State of TN 9.2% 9.5% 9.9% 9.7% 10.3% 11.1% 10.7% 10.7% 10.2% 10.2% 10.0% 10.6% 6% 11%

Bledsoe 13.1% 12.8% 12.9% 12.4% 13.4% 14.6% 14.1% 13.9% 13.7% 13.7% 13.8% 14.8% 7% 5%

Blount 9.1% 9.6% 10.0% 9.7% 10.1% 10.5% 10.2% 9.9% 9.3% 8.9% 9.2% 9.6% 4%  ‐2%

Bradley 8.3% 8.5% 9.4% 9.3% 9.5% 9.9% 9.8% 10.1% 9.3% 9.1% 9.0% 9.4% 4% 10%

Grainger 12.4% 12.9% 13.9% 13.5% 13.7% 14.2% 13.7% 14.1% 13.5% 13.3% 13.1% 13.3% 2% 7%

Grundy 12.7% 13.2% 13.7% 13.4% 14.1% 15.5% 14.9% 13.7% 13.0% 13.6% 13.2% 13.8% 5% 7%

Hamblen 10.3% 10.7% 12.1% 12.1% 12.6% 13.3% 13.0% 12.8% 12.5% 12.3% 11.9% 12.3% 3% 19%

Hamilton 7.3% 7.9% 8.0% 8.2% 8.7% 9.3% 9.1% 9.4% 8.7% 8.7% 8.4% 8.9% 6% 19%

Jefferson 11.7% 12.5% 12.9% 12.1% 12.2% 12.7% 11.8% 12.1% 11.7% 11.4% 11.7% 12.5% 7%  ‐3%

Knox 6.6% 7.1% 7.3% 7.4% 7.9% 8.5% 8.2% 8.7% 8.1% 7.8% 7.7% 8.1% 5% 18%

Loudon 7.7% 8.4% 9.3% 9.5% 9.6% 10.1% 10.5% 10.1% 9.5% 9.7% 9.7% 9.7% 0% 26%

Marion 10.6% 11.3% 10.7% 10.9% 12.0% 12.4% 12.2% 11.9% 12.1% 12.2% 11.8% 12.2% 3% 15%

McMinn 12.4% 12.4% 13.7% 13.6% 14.4% 14.9% 14.0% 13.8% 13.0% 12.7% 12.7% 13.1% 3% 2%

Meigs 13.6% 13.1% 14.3% 14.0% 14.7% 15.2% 14.2% 14.3% 13.6% 13.6% 13.5% 14.5% 7% 0%

Monroe 14.7% 15.9% 17.5% 17.8% 18.1% 18.6% 18.4% 16.6% 16.1% 16.0% 15.8% 15.7%  ‐1% 9%

Polk 11.5% 12.3% 13.5% 12.4% 12.9% 12.6% 11.9% 12.0% 11.4% 11.8% 12.3% 13.2% 7% 3%

Rhea 13.5% 12.8% 13.2% 12.6% 13.4% 14.3% 13.6% 13.9% 12.7% 12.5% 12.9% 14.0% 9%  ‐7%

Sequatchie 10.2% 10.8% 11.2% 11.5% 12.5% 12.3% 11.9% 12.6% 12.9% 13.2% 12.4% 13.0% 5% 29%

Sevier 12.5% 14.1% 13.3% 10.2% 9.7% 9.7% 9.1% 9.3% 9.2% 9.3% 9.5% 10.7% 13%  ‐26%

Source: Bureau of Labor Statistics, December 2009 data are preliminary, data are not seasonally 

adjusted. 
23

Although some of the late 2009 increase in the unemployment rate for Cocke County may be 

attributable to the economic impact of the rockslide, it is important to note that an increase in the 

unemployment rate toward the end of the year is not uncommon for the county. Figure 4 

compares the unemployment rate index for the county from 2004 through 2009. The index 

shows how significantly the unemployment rate has varied from the November, post-rockslide 

rate. With the limited data available, it is difficult to discern between annual trends and an 

actual increase in the unemployment rate due to the rockslides. 

Overall, the unemployment rate for the year was relatively more stable than it had been the 

previous two years. As shown in the figure, the uptick in unemployment after the rockslide is 

actually less significant in 2009 than it was in 2007 or 2008. However, the growth in the 

unemployment rate is greater than it was for 2004, 2005 and 2006. As unemployment rate data 

for 2010 become available, it will become clearer whether the rockslide has impacted the overall 

rate of unemployment in the county. 

Figure 4: Cocke County Unemployment Rate Index 2004-2009 

Source: Bureau of Labor Statistics, December 2009 data are preliminary, data are not seasonally 

adjusted. 

 

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2004 2005 2006 2007 2008 2009
24

Haywood County 

The unemployment rate for North Carolina fluctuated between 10 and 11 percent during 2009 

(Table 10). In contrast, the Haywood County unemployment rate decreased steadily from 

February through September. In October, the rate began to tick upward from 8.5 percent in 

September to 8.9 percent in October. It continued to increase through the end of the year, 

reaching 10.3 percent in December. During the last two months of the year, North Carolina’s 

rate increased two percent; the Haywood County rate increased eight percent. 

The county unemployment rate is the result of several factors, including layoffs and generally 

slow growth in the county. An overall decline in tourism, due to the economic climate and I-40 

rock slide, is also a contributor.20 Jackson and Swain Counties, which border Haywood, also 

experienced an increase in the unemployment rate after the rockslides. Like Haywood, these 

counties had been experiencing declining rates of unemployment prior to the fall. 

Table 10: NC Counties in LDDs Affected by Rockslides 

Source: Bureau of Labor Statistics, December 2009 data are preliminary, data are not seasonally 

adjusted. 

Figure 5 provides the unemployment rate index for Haywood County. Although the 

unemployment rate increased post-rockslide, this trend is not uncommon for the county. As 

shown in the figure, the increase in the unemployment rate was actually less significant in 2009 

than it had been the previous two years. Prior to 2007, however, the unemployment rate at the 

end of the year grew more slowly than it did in 2009. 

                                                           

20 Haywood jobless rate inches higher, by Beth Pleming, The Mountaineer,

http://www.themountaineer.com/index.php?option=com_content&view=article&id=5671:haywood‐jobless‐rate‐

inches‐higher&catid=25:the‐project&Itemid=27

County JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

Change

Since Nov

Jan‐Oct

Change

Haywood 10.5% 11.2% 11.1% 10.0% 9.8% 9.6% 9.4% 8.8% 8.5% 8.9% 9.5% 10.3% 8% ‐15%

State of NC 10.2% 11.2% 11.0% 10.5% 11.0% 11.2% 11.1% 10.7% 10.4% 10.6% 10.7% 10.9% 2% 4%

Cherokee 15.8% 17.0% 15.4% 14.3% 15.1% 14.9% 15.0% 14.9% 14.2% 14.7% 15.0% 15.5% 3%  ‐7%

Clay 11.4% 12.6% 11.5% 11.2% 11.3% 11.0% 11.4% 11.0% 10.9% 11.5% 11.8% 11.6%  ‐2% 1%

Graham 16.4% 18.0% 16.1% 13.7% 13.3% 13.2% 13.9% 13.3% 13.3% 15.6% 15.8% 17.6% 11%  ‐5%

Henderson 8.8% 9.8% 9.4% 9.4% 9.7% 9.4% 9.2% 8.8% 8.6% 8.8% 8.8% 8.8% 0% 0%

Jackson 9.9% 10.5% 9.6% 8.6% 9.0% 9.1% 8.3% 7.9% 7.8% 8.2% 8.4% 9.4% 12%  ‐17%

Macon 11.8% 13.0% 12.2% 10.5% 10.2% 10.0% 9.6% 9.0% 9.2% 10.2% 10.7% 11.4% 7%  ‐14%

Madison 9.3% 10.3% 9.6% 9.4% 9.8% 9.8% 9.5% 9.5% 9.4% 9.3% 9.5% 9.7% 2% 0%

Swain 15.0% 15.8% 14.5% 12.2% 11.5% 10.0% 9.6% 9.0% 9.1% 10.1% 11.7% 14.5% 24%  ‐33%

Transylvania 9.4% 10.3% 9.5% 8.7% 8.9% 8.6% 9.0% 8.4% 8.5% 9.0% 9.5% 10.0% 5%  ‐4%

Buncombe 8.2% 9.1% 9.0% 8.5% 8.8% 9.1% 8.8% 8.4% 8.2% 8.3% 8.2% 8.3% 1% 1%
25

The county unemployment rate data do not indicate an unusually significant change postrockslide. However, the effect of events like rockslides often lag. The true impact of the 

rockslide on the level of unemployment in the area may not become clear until 2010. 

Figure 5: Haywood County Unemployment Rate Index 2004-2009 

Source: Bureau of Labor Statistics, December 2009 data are preliminary, data are not seasonally 

adjusted 

Figure 6 compares the unemployment rates of Haywood and Cocke Counties to the average 

unemployment rate for counties considered potentially impacted by the rockslide, North 

Carolina, and Tennessee. As shown in the figure, the unemployment rates for the state are 

more stable than those for the counties. The average unemployment rates for the counties 

included in the study area are also relatively lower than either Cocke or Haywood County. 

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2004 2005 2006 2007 2008 2009
26

Figure 6: 2009 Unemployment Rates 

Cocke and Haywood Counties vs. States of NC and TN, Rest of Area 

Source: Bureau of Labor Statistics, December 2009 data are preliminary, data are not seasonally 

adjusted. 

Although economic data for the counties in closest proximity to the I-40 rockslides do not 

definitively indicate that the rockslides have impacted their overall economies, the business 

interviews suggest that some businesses in the area have been dramatically impacted. The 

following section presents the interview findings for the I-40 rockslide impacted area. 

Economic Condition of the US-64 Rockslide Impacted Area 

The unemployment rate in the State of Tennessee has been slowly increasing since September. 

Polk County’s October rate was 11.8 percent and increased by seven percent post-rockslide to 

the December rate of 13.2 percent. Table 11 shows the unemployment rates for Polk County 

and the State of Tennessee. Also shown in the table are the rates for counties considered to be 

potentially impacted by the rockslides. 

0%

2%

4%

6%

8%

10%

12%

14%

16%

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

Cocke Haywood Rest of Area State of NC State of TN
27

Table 11: TN Counties in LDDs Affected by Rockslides 

County JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

Change

Since Nov  

Jan‐Oct  

Change

Polk 11.5% 12.3% 13.5% 12.4% 12.9% 12.6% 11.9% 12.0% 11.4% 11.8% 12.3% 13.2% 7% 3%

State of TN 9.2% 9.5% 9.9% 9.7% 10.3% 11.1% 10.7% 10.7% 10.2% 10.2% 10.0% 10.6% 6% 11%

Bledsoe 13.1% 12.8% 12.9% 12.4% 13.4% 14.6% 14.1% 13.9% 13.7% 13.7% 13.8% 14.8% 7% 5%

Blount 9.1% 9.6% 10.0% 9.7% 10.1% 10.5% 10.2% 9.9% 9.3% 8.9% 9.2% 9.6% 4%  ‐2%

Bradley 8.3% 8.5% 9.4% 9.3% 9.5% 9.9% 9.8% 10.1% 9.3% 9.1% 9.0% 9.4% 4% 10%

Cocke 13.8% 14.3% 15.1% 13.2% 12.9% 13.3% 12.7% 12.7% 12.2% 12.1% 12.4% 13.6% 10%  ‐12%

Grainger 12.4% 12.9% 13.9% 13.5% 13.7% 14.2% 13.7% 14.1% 13.5% 13.3% 13.1% 13.3% 2% 7%

Grundy 12.7% 13.2% 13.7% 13.4% 14.1% 15.5% 14.9% 13.7% 13.0% 13.6% 13.2% 13.8% 5% 7%

Hamblen 10.3% 10.7% 12.1% 12.1% 12.6% 13.3% 13.0% 12.8% 12.5% 12.3% 11.9% 12.3% 3% 19%

Hamilton 7.3% 7.9% 8.0% 8.2% 8.7% 9.3% 9.1% 9.4% 8.7% 8.7% 8.4% 8.9% 6% 19%

Jefferson 11.7% 12.5% 12.9% 12.1% 12.2% 12.7% 11.8% 12.1% 11.7% 11.4% 11.7% 12.5% 7%  ‐3%

Knox 6.6% 7.1% 7.3% 7.4% 7.9% 8.5% 8.2% 8.7% 8.1% 7.8% 7.7% 8.1% 5% 18%

Loudon 7.7% 8.4% 9.3% 9.5% 9.6% 10.1% 10.5% 10.1% 9.5% 9.7% 9.7% 9.7% 0% 26%

Marion 10.6% 11.3% 10.7% 10.9% 12.0% 12.4% 12.2% 11.9% 12.1% 12.2% 11.8% 12.2% 3% 15%

McMinn 12.4% 12.4% 13.7% 13.6% 14.4% 14.9% 14.0% 13.8% 13.0% 12.7% 12.7% 13.1% 3% 2%

Meigs 13.6% 13.1% 14.3% 14.0% 14.7% 15.2% 14.2% 14.3% 13.6% 13.6% 13.5% 14.5% 7% 0%

Monroe 14.7% 15.9% 17.5% 17.8% 18.1% 18.6% 18.4% 16.6% 16.1% 16.0% 15.8% 15.7%  ‐1% 9%

Rhea 13.5% 12.8% 13.2% 12.6% 13.4% 14.3% 13.6% 13.9% 12.7% 12.5% 12.9% 14.0% 9%  ‐7%

Sequatchie 10.2% 10.8% 11.2% 11.5% 12.5% 12.3% 11.9% 12.6% 12.9% 13.2% 12.4% 13.0% 5% 29%

Sevier 12.5% 14.1% 13.3% 10.2% 9.7% 9.7% 9.1% 9.3% 9.2% 9.3% 9.5% 10.7% 13%  ‐26%

Source: Bureau of Labor Statistics, December 2009 data are preliminary, data are not seasonally 

adjusted. 

Although the unemployment rate for the county rose after the rockslide, an increase in the rate 

toward the end of the year is not uncommon for the county. As shown in Figure 7, the 

unemployment rates for 2007 through 2009 experienced increases beginning in October. The 

2009 rate grew less after October than the 2007 rate but roughly the same as the 2008 rate. 

While this increase is not insignificant, the historical trend for the county makes it difficult to 

determine whether the 2009 post-rockslide increase is even partially attributable to the 

rockslide. As data become available for the early part of 2010, it will be more clear whether this 

end-of-year increase is due to the rockslides or consistent with the general trend for this county. 
28

Figure 7: Polk County Unemployment Rate Index 2007-2009 

Source: Bureau of Labor Statistics, December 2009 data are preliminary, data are not seasonally 

adjusted. 

As shown in Table 12, Cherokee County experienced an overall decrease in its unemployment 

rate from January through October. During the months of November and December, the rate 

increased three percent. While it is noteworthy that the rate direction changed after the 

rockslide, Cherokee County, like Polk, generally experiences an increase in the unemployment 

rate the last few months of the year (Figure 8). 

 

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2004 2005 2006 2007 2008 2009
29

Table 12: TN Counties in LDDs Affected by Rockslides 

Source: Bureau of Labor Statistics, December 2009 data are preliminary, data are not seasonally 

adjusted. 

Figure 8 presents the unemployment rate index, which shows the variability of the 

unemployment rate during the year as compared to the November rate. As is the case with 

many of the counties in the rockslide impacted area, the Cherokee County unemployment rate 

does typically increase toward the end of the year. The 2009 rate increase is more significant 

than the increases experienced in 2005 and 2006. It is less significant than 2004, 2007 and 

2008. Because of this historic trend, it is difficult to say whether the increase in the 

unemployment rate experienced in the county at the end of the year is attributable to the 

rockslide. As 2010 data become available, the correlation between the rockslide and 

unemployment rate may become more apparent.

County JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

Change

Since Nov

Jan‐Oct

Change

Cherokee 15.8% 17.0% 15.4% 14.3% 15.1% 14.9% 15.0% 14.9% 14.2% 14.7% 15.0% 15.5% 3% ‐7%

State of NC 10.2% 11.2% 11.0% 10.5% 11.0% 11.2% 11.1% 10.7% 10.4% 10.6% 10.7% 10.9% 2% 4%

Clay 11.4% 12.6% 11.5% 11.2% 11.3% 11.0% 11.4% 11.0% 10.9% 11.5% 11.8% 11.6%  ‐2% 1%

Graham 16.4% 18.0% 16.1% 13.7% 13.3% 13.2% 13.9% 13.3% 13.3% 15.6% 15.8% 17.6% 11%  ‐5%

Haywood 10.5% 11.2% 11.1% 10.0% 9.8% 9.6% 9.4% 8.8% 8.5% 8.9% 9.5% 10.3% 8%  ‐15%

Henderson 8.8% 9.8% 9.4% 9.4% 9.7% 9.4% 9.2% 8.8% 8.6% 8.8% 8.8% 8.8% 0% 0%

Jackson 9.9% 10.5% 9.6% 8.6% 9.0% 9.1% 8.3% 7.9% 7.8% 8.2% 8.4% 9.4% 12%  ‐17%

Macon 11.8% 13.0% 12.2% 10.5% 10.2% 10.0% 9.6% 9.0% 9.2% 10.2% 10.7% 11.4% 7%  ‐14%

Madison 9.3% 10.3% 9.6% 9.4% 9.8% 9.8% 9.5% 9.5% 9.4% 9.3% 9.5% 9.7% 2% 0%

Swain 15.0% 15.8% 14.5% 12.2% 11.5% 10.0% 9.6% 9.0% 9.1% 10.1% 11.7% 14.5% 24%  ‐33%

Transylvania 9.4% 10.3% 9.5% 8.7% 8.9% 8.6% 9.0% 8.4% 8.5% 9.0% 9.5% 10.0% 5%  ‐4%

Buncombe 8.2% 9.1% 9.0% 8.5% 8.8% 9.1% 8.8% 8.4% 8.2% 8.3% 8.2% 8.3% 1% 1%
30

Figure 8: Cherokee County Unemployment Rate Index 2007-2009 

Source: Bureau of Labor Statistics, December 2009 data are preliminary, data are not seasonally 

adjusted. 

Figure 9 shows the unemployment rates for Polk and Cherokee Counties, North Carolina, 

Tennessee, and the rest of the area located in relatively close proximity to the rockslide. Not 

surprisingly, the state rates are relatively lower than the county rates. Polk and Cherokee rates 

are also higher than the average rate experienced by the other study area counties. 

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2004 2005 2006 2007 2008 2009
31

Figure 9: 2009 Unemployment Rates 

Polk and Cherokee Counties vs. States of NC and TN, Rest of Study Area 

Source: Bureau of Labor Statistics, December 2009 data are preliminary, data are not seasonally 

adjusted. 

Although the county-wide data do not definitively indicate that unemployment has increased as 

a result of the rockslides, numerous businesses in the area have been negatively impacted. 

The following section presents the interview findings for the US-64 rockslide impacted area. 

 

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

Polk Cherokee Rest of Area State of NC State of TN
32

Appendix B – Businesses Contacted and Interviewed for Study 

Business Contacted

Information 

Obtained 

Employees 

Laid Off 

Business 

Sales 

Decreased 

Abitibi Bowater Paper Co. √ 

Arch Chemicals √

Baptist Hospital Cocke County √

Bella's Country Kitchen √

Biltmore Estate √

Brandywine Creek √ √ √ √

Cataloochee Ski Area √ 

Christmas Is Here √ √ √ √

Comfort Inn/Parkway Inn √ √ √ 

ConAgra Foods √ 

Copper Basin Medical Center √ √ √ √

Covenant Transportation Group √ 

Creekwood Farm RV Park √ √ √

Downtown Hartford Citgo √ √ √ √

Eastern Band of Cherokee Indians √ 

Evergreen Packaging √ √ 

Fun Things to Do in the Mountains √ 

Harrah's Cherokee Casino √

Haywood Insurance Svces √

Haywood Regional Medical Center √ √ 

Hearth and Home Inn √ √ √

Herb's Barbecue √ √ 

Herren House √ √ √ √

Jackie Evans Trucking √ √ 

K and S Tanklines √ √ √

King's Leathercraft √ √ 

Lisega, Inc. √ √

Lomo Grill √ 

Manufacturers Chemical Corporation √ √ 

Mercier Orchards √ √

MGM Brakes/Indian Head Industries √ √

Motel 6 √ √ √ √

Oaks Unlimited √ √ 

Ocoee Adventure Center √ √ √ √

Ocoee Inn Motel √ 

Ocoee River Transport √

Olin Chemicals √ √ 

Payne Tire & Grocery √ √

Peyton Southeastern √ 

Piggly Wiggly √ √ √ √
33

Rocky Top Tours √ √ √ √

Sagebrush Steakhouse √ 

Sioux Tools/Snap-on Power Tools √

Sonoco Products √

Tarver Distributing √ √ 

The Mustard Seed √ 

USXpress √ √ 

Waynesville Inn √ √ √ √

White House B&B √ 

Willis Oil Company √ √ √

Windover Inn √ √ √

Wolf Creek Corner √ √ 

Xoxloma LLC/Cougar √ √ √

 

TOTAL 54 32