Gypsum soars, Eagle glides
EAGLE COUNTY, Colorado ” It’s the tale of two towns and how their sales tax scenarios have drastically changed over the past decade.
Up until 2005, the town of Eagle ” the county seat with a prominent downtown and more retail development ” brought in larger sales tax dollars than neighboring Gypsum. That scenario started changing in 1999 when Gypsum annexed the Eagle County Airport and began collecting revenues from fuel sales and car rentals. The apple cart tipped in 2006 when Costco opened its Gypsum store.
Last year, Gypsum’s sales tax revenues topped $5.3 million. The most visible result of that increased revenue is the new $12 million Gypsum Recreation Center. The town contributed $8 million toward construction and the Western Eagle County Metropolitan Recreation District chipped in $3 million.
Additionally, Gypsum planned to subsidize the rec center to ensure success, but last year it actually turned about a $100,000 profit.
While Eagle hasn’t seen the same revolutionary jumps in sales tax revenue, from 2003 to the present, the community has recorded healthy increases from year to year.
In Colorado, towns are heavily dependent upon sales tax to fund operations. A natural outgrowth of that reality is competition for commercial development and sales tax.
In Gypsum, the Towers development could include up to 500,000 square feet of commercial space on a site south of U.S. Highway 6 and adjacent to the Eagle County Regional Airport. Lowe’s has signed a letter of intent to build on the site.
In Eagle, the much debated Eagle River Station plan, a proposal that includes 552,000 square feet of commercial space and 581 housing units, is currently being reviewed by the Eagle Town Board.
When Jeff Shroll began work as Gypsum’s town manager in 1994, sales tax revenues tallied about $100,000 annually. While Gypsum has a much bigger budget due to sales tax increases, it also has many more responsibilities. Topping the list is the rec center.
“We’ve also put millions of dollars into roads over the past few years,” Shroll said.
Last year the town completed $2.2 million in improvements to Cooley Mesa Road. This year Gypsum is extending Jules Drive from U.S. Highway 6 to Cooley Mesa, a $1.4 million project.
New growth required the town to increase road maintenance and remove more snow. That meant hiring more people. Likewise, various development proposals prompted staffing increases in the planning department.
But with a dicey national economy, Shroll plans a freeze on capital projects for 2009.
“I’m just as conservative as a private businessman in this economy,” he says.
Anita Denboske of Active Communications says business in Gypsum is up slightly this year. “But we know we have to work a lot harder with the national economy the way it is,” she said.
Gypsum anticipates increased revenue next year and into the future as a result of taking over its own sales tax collections. In July, the town hired a tax collector. Gypsum businesses now send their sales taxes directly to the town instead of to the state.
Shroll says the change will help the community keep better tabs on revenue and react more nimbly than the state can if a collections are delinquent.
With Costco opening, supermarkets and liquor stores suffered in Eagle. But those numbers are starting to rebound, Eagle Town Manager Willy Powell said.
This year’s biggest hit came from the construction slowdown ” a national trend.
But Annie Colby, owner of the Nearly Everything Store in downtown Eagle, actually credited the national economy, particularly the increase in fuel prices, with bringing a bump in her business.
“We sort of win when people don’t drive out of town and find we have what they need,” she said.
In many ways, 2008 has been an opportunity for Eagle to experience what it will look like as a “mature” community, Powell said.
When there’s no room left to grow, there won’t be big spikes in revenue from building frees. The town will depend more heavily on sales tax, Powell said.
“The disappointing thing for the town is, on a per capita basis, people are spending less in Eagle annually than they did 10 years ago,” Powell said.
And while the town’s population has increased, new residents aren’t necessarily shopping in town.
“Some of that is because we are getting out-competed by other neighboring towns, particularly in the area of large format stores,” Powell says.
Eagle has several economic development initiatives underway. Property owners have taken incentives to spruce up buildings downtown and the town is now looking at a similar program for Chambers Avenue and west Eagle.
Then, of course, there’s the Eagle River Station proposal which would bring national retailers to the community. That project is generating a mixed reaction in town.
Some residents question whether Eagle River Station can generate enough traffic to survive and provide Eagle with a reliable sales tax stream while others say the shopping is too big for the town.
Still others cite it as an economic engine for the town’s future.
The final decision on the project is likely to be made by voters.