Rosenthal Townsend: Can’t afford Eagle River Station
Vail CO, Colorado
From what we deduce from last week’s work session, Eagle River Station is still highly speculative and is a huge risk to the Town of Eagle and Eagle County.
Eagle River Station still encompasses 100 acres with a total retail square footage of 649,000. There are 150 condos above the “lifestyle” center, 431 dwelling units, 260,000 square feet of institutional, commercial space and a 150-room hotel (also above the lifestyle center?). Eagle River Station would be set up as an urban renewal authority and would have a (tax-increment financing) of 4 percent ” however, only 1 percent goes to the town over a 25-year period (unless it’s paid back earlier, which is highly unlikely.) So, we wouldn’t see the bulk of the money until 2034?
Urban renewal authorities were originally set up to rehabilitate “blighted” areas in urban cities ” they are not usually the best type of financing for small towns and studies prove that they can have a negative impact on small business outside the district (i.e., downtown and the other four shopping districts in Eagle.) The developer talks about an “original, unique, tenant mix” but all of their projects have been in large cities and are just like any other urban mall. Our take is, if the developer, Trinity/RED, is so successful nationally, why can’t they build this center without the Town of Eagle’s financial input?
Sales tax “projections” are at $4 million per year, although there aren’t any “real” tenants to base this on. If the sales tax figures are at $4 million per year, every person in this county (51,000) would have to spend $4,000-plus a year at Eagle River Station ” highly unlikely once again. There is also a 1-percent PIF ” an add-on sales tax which the consumer pays. Shoppers will not take kindly to a 9.5-percent tax. This 1-percent PIF is supposed to help the Town of Eagle pay for services in the beginning. One major change is now the Town of Eagle is expected to SHARE costs of the “extra” infrastructure. This includes the new interchange, new Eby Creek roundabout, Highway 6 widening, railroad crossings, new water tank and sewer system. When asked how much this will all cost, the answer was “we don’t know yet,” but it’s “estimated” at $38 million ” in today’s dollars. There was no mention of the overall costs of the project either. Two years ago it was $68 million. There would be a lot of incremental “extra” expenses like water, police, firemen, security, snow removal, etc. Why should we pay for ANY of that? And, they had no figures for any of those expenses. Bottomline, we don’t know the real costs and Eagle River Station is clearly NOT paying their own way (like they said they would.) They also need preliminary approval (vested rights) to secure tenants. That is outrageous!
There was a lot of gray area including feasibility, actual market area, the “real” tenants in question and taking into account the various major projects coming online all over the county that would compete for consumer’s dollars (and employees). If opened in the fall of 2009, they contend that Eagle River Station would be 100-percent leased by 2011. That is very wishful thinking. We, as a community, must demand that they get a real model showing incremental expenses and revenues and stop talking ball-park figures. In addition, there was no mention of how many businesses may be put “out of business” by Eagle River Station, again skewing the overall sales-tax figures for the town. We should support the business districts we already have and encourage in-fill in them before even considering such a large-scale regional, retail project.
Questions that came up immediately and must be answered:
1) Feasibility? This subject wasn’t even broached. Given the current vacancy rate in Eagle County, the stock market situation and decline in national retail sales, Eagle River Station doesn’t look real promising.
2) Market area ” It’s questionable if people will pay $3.50 gallon to drive 50 miles-plus to Eagle to shop at a yet another strip mall (and one that has 9.5 percent sales tax). They certainly wouldn’t on a weekly basis. Eagle River Station’s initial market study talked about a secondary market area (Steamboat, Summit County, Aspen, Leadville, etc.) If this secondary market area doesn’t really exist, the projected sales numbers are once again totally skewed.
3) The annual sales “projections” ” Costco is the best analogy to dispute their sales “projections.” Costco is way off their projections ” they were the “elephant” everyone wanted, yet they haven’t met their first year’s numbers (plus, they can’t retain employees like every other business in the county.)
All in all, just like we have been saying all along, these developers are clearly NOT paying their own way. Eagle River Station is actually way worse than Merv’s deal at Red Mountain Ranch several years ago.
Why would we even “consider” such a bad deal? If we don’t make the right decision ” which is to deny this project as proposed “we may very well end up with empty buildings and acres of asphalt as the gateway to our small town.
Quite simply, we can’t afford Eagle River Station, either visually or financially.
Jan Rosenthal Townsend writes on behalf of the Citizens for the Future of Eagle. E-mail comments to email@example.com.