Contemplating renaissance |

Contemplating renaissance

Jim Lamont

Following is an excerpt of a report by Jim Lamont, executive director of the Vail Village Homeowners Association, assessing Vail’s economic and community development. We will run parts of the report each day in this space until completed. This is part 1.Adam Smith, the father of modern economics, published the “Wealth of Nations,” in 1776. His principles guide business and economic thought to this day. He wrote, when government interferes with business, it increases the inefficiencies of the marketplace. It is these inefficiencies that cause an economic system to lose its competitive edge, resulting in a fall of productivity. The rise and fall of productivity is the yardstick by which progress is measured toward improving the standard of living for the inhabitants of a country or community. Smith recognized the need for a limited degree of governmental interference to promote the common well-being. He proposed if government is to intervene, it should do so only when it is necessary to promote the interests of the consumer. The purpose of this white paper is to briefly view the rise, decline, and anticipated renaissance of the Vail community and its economy, as measured against the economic principles penned by Adam Smith. It is recognized that for a renaissance to be more than cosmetic, the factors that contribute to stagnation in Vail’s productivity must undergo reform and adaptation. Discussion of the reformation of these factors is addressed in this report. History as Prologue, Cause and Effects: Beginning with its birth in 1963 through to the late 1970s, Vail’s economy exploded. Its dynamic growth began to slowly ebb in the 1980s, when the construction boom moved westward and the rate of growth in the ski industry flattened. Vail sat on its laurels becoming complacent toward its customers, because it held what appeared to be a near monopoly on the best skiing in the Americas. Criticism that Vail was not keeping pace with its competition went unheeded. The erosion of Vail’s economy became readily apparent in the early 1990s, when sales tax receipt slowed precipitously, a condition that continues into the present. Several factors contributed to the malaise. Prolonged drought conditions ignited tumultuous wildfires in the region, reducing snow accumulations, skiers, and summer visitors. Unsettling geopolitical events and wars took their toll. The consumer voted, in significant numbers, by going elsewhere, dissenting against Vail’s rising prices and a qualitative decline in accommodations, services, and attractions. Sales taxes slumped in the destination guest markets, because of better accommodations in Beaver Creek and as retail customers, they learned tax avoidance by shipping their purchases back home. Simultaneously, many in the labor force followed their customers to the competition, seeking better jobs, cheaper housing, lower sale tax receipts from bars, and nightclubs reflected the out-migration. In the face of challenges in the destination guest market, the second-home real estate market has continued its upward surge, dramatically increasing property values. Enhancement of residential property values, during the 1990s was tied directly to the improving amenities on the Vail’s ski mountain. It was recognized that Vail Mountain is one-of-a-kind and known for its excellence throughout the world.The Perils of the Recovery Process: The community’s leadership, through trial and error, devised a two-prong strategy that sought to stem the out-migration of the labor force and restore sales tax revenues by regenerating quality accommodations (bed base) for the destination guests. Some of the more benign strategies had positive impact with minimal government intrusion. Others had unintended and counterproductive consequences. Those intended to have the greatest effect have yet to be measured. With the recent approval of several large redevelopment projects and the beginning of construction on some, there is now a clearer direction charted for the future of the community. Back to the Future: Vail is returning to its roots, becoming once again a resort with the cosmopolitan destination guest as its primary clientele. Vail’s 40 years have created both a community as well as a resort. The local community, over the past 15 years, has matured at the expense of the resort. Looking inward, the community is passing through a prodigal journey of self-discovery. It returns to its touchstone with a more profound understanding of its strengths and vulnerabilities. The wisdom gained is that Vail can thrive both as a community and resort. The longevity of its success lies in balancing the needs of both. The Renewal of Vail’s Cosmopolitan Vision: The plans, approved and being put into effect, will cause Vail to continue on its path to become the most sophisticated Europeanized lifestyle mecca in the Americas. The “new” Vail will become the most cosmopolitan resort community in America and an international capital of alpine recreation, sport, and culture.Vail’s founders tied the community’s destiny to the romantic snowbound ski villages of the Bavarian Alps. They knew the romanticized image of an urbane European mountain village could be a powerful and enduring foundation on which to build a compelling marketing identity. They instilled in it the evocative cosmopolitan intimacies of comfort, camaraderie, charm, meticulous personal service, and high culture. Its shopping, entertainment, and restaurants were to be a reflection of refined sensibilities. These urbane European features were the foundation of its amazing burst of success. The amorphous high-density mega ski resort that evolved, and gracelessly aged, overwhelmed many of these sophistications. Nonetheless, there were antecedents sufficiently preserved that Vail continues to draw cosmopolitans from throughout the Americas. There are however, risks and challenges ahead. Vail, Colorado

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