Golden child or Trojan Horse?
Vail’s proposed conference center in west Lionshead would either be a cash cow or a white elephant, say those locked in debate over the issue.Referendum 2D asks Vail voters on Nov. 5 to approve or deny two tax increases a 1.5 percent hike of the lodging tax and a .5 percent bump to the sales tax to fund a $46 million conference center.Vail Resorts, in conjunction with the lodging community and the Vail Valley Chamber and Tourism Bureau (VVCTB), has led the charge for the facility, offering to donate the land and financing an advocacy group called Citizen’s for Vail’s Future (CVF) to push the project through.CVF believes the center will contribute $34 million annually to Vail’s economy, add up to 125,000 room nights per year by effectively doubling Vail’s off-season business.”I know in my heart that it’s the one thing that will help this economy,” says Antlers at Vail general manager Rob LeVine.Opponents, however, offer different numbers for the proposal. Vail resident Rick Scalpello, who monitors local commerce with his Vail Business Index, believes the Town of Vail taxpayers take a tremendous risk if they approve the project.He believes the town will be losing around $1 million a year in sales tax (through his perceived discrepancy between what locals will pay due to the increase and the sales tax revenues generated from conference center business) and will shoulder $87 million to $95 million in debt over the next 25 years, depending whose annual bond payment number is quoted. If the economy falters further, he says, that could ruin the town’s credit rating. “Vail Resorts is doing this for their stockholders,” says Scalpello, “and I don’t fault them for doing it, but it’s not what’s best for Vail.”Porter Wharton III, senior vice president of public affairs for Vail Resorts, disagrees that the company’s motives can be divorced from what’s good for the town. He says VR realizes that if the town is lagging, the amount of money the ski company invests on the mountain is meaningless, because no one will come anyway.”We need to play a part in helping the community,” he says. “I know some people will roll their eyes when they hear that, but it’s the truth.”Vail Town Council member Diana Donovan, who cast the lone dissenting vote when the measure was placed on the ballot, is sure to be one of those eye-rollers. She believes the ski company is attempting to con the town into paying for an amenity that will mostly benefit the company. Donovan cites how the center will be located across the street from the Marriott hotel, owned by VR, and another hotel that VR is planning to build.Originally, the center was to be located on the North Day Parking Lot in Lionshead, and the recent move has been called “a classic bait and switch” by Vail business owner Kaye Ferry, who spoke to The Trail as a private citizen and not in her capacity as president of the Vail Chamber and Business Association. She says the new site, on the VR maintenance yard, is not as centrally-located as North Day Lot, and the move reveals the motives of VR.”It’s clear who’s going to benefit,” she says. Wharton, in response, says that the move was made due to the larger size of the maintenance site (six acres) and the decreased construction costs.”Calling it a ‘bait and switch gives me too much credit,” he jokes.Wherever it’s located, Donovan doesn’t believe a conference center will work in Vail, due to the lack of amenities that large conferences demand, namely convenient air transportation, attached hotels, availability of employees and big-city shopping theater, and entertainment.”We’re trying to be something we’re not,” she says. “You can’t build a beach on Bridge Street and expect to fill it with sunbathers.”CVF admits that the distance between Vail and Denver International Airport eliminates some organizations, but counters with figures of 6 to 10 inquiries a month that the VVCTB receives from groups exceeding 800 delegates that Vail has to turn down because it cannot accommodate them.In two different marketing studies funded by CVF, each of which surveyed around 600 organizations, returns of positive interest were in the 7075-percent range when planners were asked if they’d consider coming to Vail. CVF says that’s because people want to come to Vail because it’s Vail.”People who tell you large groups won’t come here aren’t in the marketplace,” says VVCTB President Frank Johnson.Dissenters, however, are focusing on the larger marketplace, the U.S. economy. Ferry believes that conferences are the first thing to be cut in tough times and that, generally, conference centers lose money.Scalpello agrees, and adds that since the success of the center and the method by which the bonds would be paid back are both directly tied to the tourism industry, he believes the measure is too risky for the taxpayers to shoulder.”Since the businesses are going to benefit, they should pay for it,” he says.CVF says their debt service reserve fund has any further downturns in the economy covered. They’ve set $3.5 million aside, which would handle up to a 15 percent shortfall in lodging and sales tax revenue for a seven-year period. They’re also calculating that the center will break even in it’s first three years, and then begin to turn a profit in the fourth year.But Wharton says looking at a conference center’s profit margin is missing the point. He says the facilities are an economic engine to drive business into the town, and it’s what they bring, not what they are, that matters.Scalpello is skeptical of the degree to which business would be generated in Vail. He claims conference centers get 80 percent of their revenue from food and beverage sales, and he adds that that puts the facility in direct competition with local restaurants.CVF says that figure is high and notes that delegates hardly ever eat all of their meals at conference banquets. The important thing, says Wharton, is that the conferences will be bringing people to Vail when they otherwise wouldn’t be here. To illustrate his point, he also paints a picture of Bridge Street, but one in May that’s completely empty.”You could shoot a gun off and feel pretty safe that you won’t hit anyone,” he says. “The people who criticize (this proposal) don’t have any other ideas (for invigorating the stagnate Vail economy).”Donovan believes the way to bring people to Vail is through increased and more effective advertising, a solution that doesn’t involve debt and a building that would be difficult to get rid of.”It’s like getting pregnant,” she says. “You can’t send it back. You’ve got it. It’s all yours. Anybody who votes for it better make damn sure it’s the right thing for Vail.”
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