A proposal for Vail
There were strongly held opinions in support of both of the possible electoral outcomes.
It was a very close election, and my guy lost.
Did I pout? Did I rant and rave? Did I demand a new election?
No, because of my profound respect for democracy and trust in the wisdom of a majority vote, I instantly embraced the victor.
No matter how I may have voted myself, I was immediately proud to say George Bush is my president and my commander-in-chief.
Oh, but if that confidence in democracy were only true in Vail, Colorado.
The people voted on whether to raise taxes to build a conference center. There were strongly held opinions in support of both of the possible electoral outcomes. It was a very close election, and the opponents of the conference center lost.
Literally, as soon as the votes were counted, those opponents started voicing quite publicly their continued and passionate opposition to the conference center proceeding.
Merely to refight the election that they lost, they have thrown forward distorted arguments, one after another, into the public arena.
Among these distortions are that Vail Resorts is somehow reneging on the promise that we made before the election to support the conference center, and that there are a whole host of conditions that make that support somehow evil, ill-intended, or disingenuous.
So, let me once and for all clarify for one and for all exactly where Vail Resorts stands.
Vail Resorts is prepared to do now exactly and precisely what we said we would do, both verbally and in writing, prior to the election.
We believe the conference center will be a tremendous asset for Vail, improving Vail’s economy all year long. Equally exciting, most of the cost of the conference center is being paid for by out-of-towners and not locals, through the collection of increased lodging and sales taxes.
Tellingly, Vail’s lodging community, which ordinarily would be opposed to any increase in lodging taxes, was overwhelmingly in support of the conference center even if lodging taxes had to be increased to pay for it.
So to support that effort, we have committed to do two things: giving land for the conference center on the so-called Holy Cross site to the town of Vail absolutely free – land that is worth millions of dollars. Additionally, what very few in the public talk about is that Vail Resorts will also have to spend $5.5 million in cash to relocate the current ski operations facilities that now are on the Holy Cross site.
In the haze of smoke the detractors are trying to create, it is voiced that the amount of land that Vail Resorts will be donating is changing to the town’s detriment. Nonsense.
As we always have said, we will give to the town of Vail free whatever amount of our owned land is needed to build the envisioned world-class conference center on the Holy Cross, not more and not less.
Similarly, it is also charged that Vail Resorts was too cute by half to issue a letter on only October 29, close to the election, formally codifying all the legal and business issues associated with the land donation.
Actually, we had no plans to write any such letter at that time. The truth is in the fall, such a letter was responsibly requested by the town of Vail, precisely to prevent any future misunderstandings, and we complied with their request on a very complex issue in a short time.
Also, it is unfairly alleged that we are “hoodwinking and snookering” the town into building more than $12 million in parking solely for the benefit of Vail Resorts. Again, nonsense.
Here are the facts. You be the judge.
1. If no conference center were to be built on the Holy Cross site, Vail Resorts could build there at any time 300 new surface parking spaces at a cost of $1.2 million.
2. The conference center budget of $46 million already includes about $7.7 million (not $12 million) million to build 350 new structured parking spaces being built solely for the benefit of the conference center staff and conference guests.
3. The spaces are going be used by the conference center primarily in the spring and fall shoulder seasons, in the summer, and in the evenings throughout the year. In the winter during the daytime, this conference center parking garage will be most often empty, empty, empty.
Why? Because winter guests fly here; summer guests drive. Because winter conference fly-in guests will get to the conference center by hotel shuttles, not private cars.
Because winter conference guests will want to spend most of their daytime skiing on the best ski mountain in America, rather than sitting in enclosed windowless meeting rooms. And because local functions with wide local attendance are held mostly at night.
4. Seemingly, everyone wants Lionshead to be redeveloped. That redevelopment will mean we have to give up the hundreds of spaces we now have on the west day lot and elsewhere in Lionshead. With no conference center, that’s no problem. We could replace them on the Holy Cross site at a cost of $1.2 million. But if a conference center is there, that option is foreclosed.
5. So, we asked (prior to the election!) to share the use of the conference center parking garage. We want to use it when we need 300 of the 350 spaces – in the winter only, in the day only. The conference center would get these spaces when the conference center needs them – all evenings throughout the year, and in the spring, summer and fall. By sharing this parking garage in this way, it will always be productively used.
Vail Resorts benefits for sure, but we are donating land and spending $5.5 million in cash to move our ski operation facilities to do so. And, how much do we benefit from getting to use 300 already built and most likely unused spaces during winter daytimes? Certainly not $12 million, or $7.7 million.
One way of looking at the benefit to Vail Resorts is $6.6 million, the cost to build 300 of the 350 spaces. But that can’t be fair, because the conference center would then be paying nothing for spaces it will be using three-fourths of the year.
A fairer analysis would be $1.65 million (the $7.7 million construction cost times six-sevenths of the spaces used, times our using them one-fourth of the year). Another is only $1.2 million (the savings we would not have to incur to build 300 surface spaces on Holy Cross). And yet another would be $450,000 per year (what it would cost to “rent” the spaces in bulk at $10 per daytime use times 150 days times 300 spaces).
In summary, I ask you, is it so unreasonable for Vail Resorts to be able to share in the use of this parking, which would otherwise likely be empty, on land where we could have built 300 parking spaces for a modest $1.2 million anyway, in exchange for giving the town a multi-million dollar parcel of land for free and for spending the $5.5 million in cash it will cost us to vacate the donated land?
Vail Resorts also believes we need more skier parking in Vail. We have been working with the town and community leaders to figure out creative ways to do so. It is now time that we put our money where our mouth is.
We have heard from some in Vail that they think the so-called Hub site, east of the Lionshead parking structure and west of Dobson Arena, is a significantly better location for the conference center, as it is more centrally located to all of Vail. And because it could then use the entire existing Lionshead parking structure in the spring, summer and fall, and year-round at night when the current structure is little used and when the conference center has its highest need.
If that were to happen, of course, Vail Resorts would be “off the hook.” The conference center would get built anyway, while we would not have to donate our land or spend the $5.5 million we will have to spend to relocate ski operation facilities off the Holy Cross site.
So here is what we will do if the conference center is built on the Hub site: We will spend the $1.2 million to build the 300 new spaces on the Holy Cross site, which we would then own and use for employees and skiers.
AND WE WILL DONATE $4.3 MILLION TO THE TOWN OF VAIL TO HELP FUND THE CONSTRUCTION OF A FOURTH LEVEL AND 400 NEW PARKING SPACES AT THE LIONSHEAD STRUCTURE.
Vail Resorts will still be spending $5.5 million, but instead of 350 new parking spaces being built, 700 new parking spaces will be built.
How much would a fourth plate at the Lionshead structure cost? The town’s parking consultants say about $10 million. Remember, the conference center has $7.7 million in its budget for parking. Add in Vail Resorts’ $4.3 million cash donation and that’s $12 million to pay for more parking in the Lionshead structure.
What’s more, under this proposal, the conference center and/or the town of Vail would be allowed to keep 100 percent of the new parking revenues in the larger Lionshead structure, certainly worth hundreds of thousand of dollars per year on top.
The combination of all these revenues should be enough to pay for a conference center on the Hub site, even if construction costs there are higher.
As an alternative, we have seen in the papers many people calling for the creation of as much as 700 new winter daytime parking spaces in Ford Park in a way that does not put at risk the current spring, summer and fall sporting uses there.
While we know this alternative is fraught with proponents and opponents, and that such a debate would be emotionally charged to say the least, if the town decided after vigorous public debate to do so, we would be willing to make a sizable financial contribution in such an event and still build at our expense 300 new parking spaces on the Holy Cross site (if a conference center is not built there).
Whichever option is chosen by the elected leaders of Vail, Vail Resorts will spend $5.5 million in cash to get a conference center and/or additional parking built.
In these very difficult economic times, where money is very tight even for companies the size of Vail Resorts, we believe this is a dramatic offer for the betterment of Vail.
Vail is the community in which our flagship resort is based, and in fact is the source of the name of our company itself. We hope our offer is seen to be generous and that someone takes us up on it.
Adam Aron is the chairman and CEO of Vail Resorts.
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