Conference center a good bet
Several studies support the projections of success for the town, and the crafters of the proposal for the center have a number of safety measures built in even if the economy stays sour for longer than anyone projects.
Rainy day funds are calculated to cover the town for seven long years of 15 percent lower than projected sales and lodging tax revenue. That would amount to about 9 percent worse business than this past post-9/11 year. This doom-and-gloom scenario is just not going to happen.
Other than the past year’s understandable dip in conference business, the longer trend has been more, not less. We believe fear that the 9/11 lull is the marker for years to come is incorrect. And, talking with lodge operators, we recognize that Vail would catch more of the existing market with this conference center rather than compete with its private hoteliers for what is available now.
That the town’s lodging community is full-square behind the ballot proposal is a favorable sign, even recognizing that the ski company would benefit from proximity of its Marriott and other hotel it may build close to the proposed convention center site on the 6-acre Holy Cross property. Other lodging operators believe there would be plenty of business for them, too.
The town easily turns away more than enough conference business to make this endeavor successful for Vail. The benefit to the town lies less in the business of the center itself, which is forecast conservatively to turn a small profit after three years, than in the ancillary gains for the community, its lodges and other businesses. Convention centers as a rule function less as a direct profit center than as a way to bring people to town to stay in hotel rooms, eat at least some meals in town restaurants, shop in stores, and plan their own trips later as individuals.
Resort communities in such tucked away places as Snowmass, Keystone, Jackson Hole, Whistler and on and on have shown a precedent of benefit from conference centers – Keystone and Whistler even have expanded in a big fat sign their business hardly is going south. The indicators show Vail, consistently ranked among the more accessible ski towns, would likewise succeed. But there is risk.
Vail’s voters are asked to approve a 1.5 percent increase in the lodging tax and 0.5 percent in the sales tax other than groceries to fund the construction of the $46 million conference center on 6 acres of land donated to the town by Vail Resorts. An approval from the town’s voters would authorize the town to borrow up to $50 million, with total repayment of $95.6 million.
Opponents throw up their hands at this amount, noting that Vail seeks the second highest amount of longterm indebtness among municipalities statewide in this election. And they fear for the town’s credit rating if the debt payments over the next quarter century cannot be met.
It is a big chunk, but not an unreasonable amount, in our view. We’re convinced the plan is sufficiently conservative in estimated revenue – potential parking revenue is not even counted in the projections, for example – and the safeguards strong enough that while the worst can happen, this is as solid a convention plan for success as exists.
The 40,000 square feet of contiguous meeting space would be about five times the largest currently available space in Vail, and would enable the town to host groups of up to 2,000 people, although most groups that come to Vail assuredly will be smaller.
n Vail, in the current economic climate, would not attract such groups anyway, given its distance from a major airport and from a hotel on the other side of the frontage road.
n This is just a sop for Vail Resorts, which is investing some $500 in other projects in the town, which wouldn’t help the community. The ski company ought to build its own, as it did in Keystone, which by the way isn’t a town.
n The venture would pile up too much debt than is prudent for the town.
They make make worthy points.
But do they decry the town benefitting from the ski company investing $125 million or so worth of improvements directly on the mountain? The two hold a symbiotic, rather than parasitic, relationship by necessity. The ski company would be the ultimate loser in running down its golden goose town, and we see recognition of this fact among ski company leaders.
Of course it would be great if VR just built its own convention center instead of donating the better part of 6 acres. But the ski company isn’t in position to build everything for the town.
The municipality and its voting community – thankfully! – yet have a role to play in the town’s future.
The “poor economy” talk unfortunately says more about the somewhat irrational-sounding fear among some of the opposition. The convention center isn’t on the table for today. It’s about strengthening Vail’s economic position in the future.
The engine for the raft of cultural and social amenities depends on the success of the town as a great place for visitors. The conference center is not something apart from Vail’s core business – it’s central, as in other tourist destinations.
The proposal is based on conservative estimates of future business. The safety funds built into the proposal would cover the town for seven years of business much worse than this past poor year. The funding is calculated to handle three years before the center is expected to break even. The town receives receives enough inquiries it now must turn away from the groups the center would attract.
The business attracted by the conference center would dovetail nicely with the peaks and valleys of the ski season-dominated economy. The best apparent months of conference business for Vail – which currently must be turned away for lack of the facility – are May, June, July, September and October.
In short, this represents a best shot at that more year-round economy, filling in slow spots between the peaks of ski season and golfing season.
Vail’s voters would be wisest to be mindful of their pioneers three and four decades ago and vote for a practical step to keep this community at the forefront of resort towns – instead of heading into that long decline so common of towns that frankly have lost their nerve.