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Time to move forward

Frank Johnson

Forty years ago, Vail’s founders implemented an innovative and original idea for a U.S. resort: Keep property taxes low for the local population by charging visitors for municipal services and public improvements through sales taxes. As Vail rode the wave of skiing’s enormous popularity and growth through the 1960s, ’70s, and early ’80s, sales tax income rose dramatically while our population and business base rose steadily, providing ample income to add facilities and provide civic infrastructure and services. Concurrently, Vail Associates invested money to attract ever-increasing numbers of skiers to shop in our stores and dine in our restaurants. The visitor-fueled sales tax collections kept pace with our enormous appetite for a world class resort community.Now we’re almost 20 years into a different reality. Vail Associates has morphed into Vail Resorts. While they have continued to invest huge dollars into maintaining Vail’s pre-eminent position in the world of skiing, they are investing in a sport and lifestyle that no longer enjoys growth in participation. While summer business has increased dramatically over those 20 years, much of that growth has come in longer summer “occupancy” by our part-time resident population. Our full-time year round population has largely migrated west, taking their base of retail and restaurant business, and the sales tax generation that goes with it, into other towns and Eagle County. And so, that deal we made over 40 years ago to make ourselves almost totally dependent on increased numbers of visitors and increased visitor spending to fuel Vail’s economy is a real challenge as we look to the future. There is plenty to be excited about with the multitude of projects that make up Vail’s billion dollar renewal over the next several years. However, with the huge expansion of retail space included in the plans, we must remember the economic success of that retail explosion will be dependent on significantly more visitors than have EVER visited Vail before. That’s right, without a huge influx of additional visitors, the new lodging products will simply draw their business from the existing lodging enterprises, and we’re caught in a zero-sum game for the restaurant and retail community, collectors of over 60 percent of our sales tax revenue.In my opinion, there are only two projects on the docket that really have a chance of providing the kind of economic boost through increased visitor spending that Vail will need to feed the doubling of retail and restaurant space that accompanies our renaissance. Of course, I’m talking about the Crossroads project and the conference center. Crossroads is important because it provides recreational amenities not currently available in Vail (or in close proximity), adding a much-needed boost to our attractiveness to our “suburban” population, as well as our visitors. In surveys of our 1,000-plus business members, even prior to the shrinking of the project, the support for moving forward with this retail center was overwhelming. The developer has been willing to scale down the aboveground portions of the building to suit his neighbors, which, unfortunately takes some of the major recreational attractions out of the project. But the time has come to push the project through to completion, beginning with their Planning and Environmental Commission hearing on March 28 at 2 p.m.The construction of a conference center has become a much more complex political issue, while the business case remains straightforward. The fundamental purpose of the conference center is to increase the number of visitors to Vail, period. Because of the unique dynamics of the meetings industry, and our own seasonal business patterns, it has been shown by several independent analyses that most of this increase is likely to occur in the spring, summer and fall, when there is already an oversupply of vacant lodging units. Meeting business is already being courted heavily by our most successful lodging enterprises. In fact, over 60 percent of our non-ski season visitor base can be attributed to customers here attending meetings. And, though the percentage is somewhat less in the winter time, close to 30 percent of our winter business success is attributable to meeting guests.The addition of a conference center that is larger than existing hotel meeting spaces gives the Vail business community the opportunity to capitalize on a market that clearly already loves our destination and host groups that can not currently be accommodated . The Vail business community, led by the lodging properties, created a plan to build and fund the operation of a conference Center by a dedicated revenue stream that is collected largely from our guests. Two years of due diligence by a task force appointed to study the issue in depth have resulted in reams of data supporting the demand for the center, its likely positive economic impacts on the community, and the fact that operating losses can adequately be covered by the dedicated sales and lodging taxes that were originally set in place by the voters for this purpose. The business case supporting the center is crystal clear to the 81 percent of the Vail business community that responded positively to our survey six weeks ago. The Vail Town Council has been prudent in examining the specifics of the conference center. The evidence is clear this project has the potential to reinvigorate the business environment, attract those visitors that we are dependent upon for our sales tax-fueled community services and create yet another extraordinary reason to visit our community. Let’s move forward while we have a window in the bond-interest and construction industry and begin to create our own positive destiny.Frank Johnson is the president of the Vail Valley Chamber & Tourism Bureau.Vail, Colorado


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