Vail grapples with building a conference center
The successful ballot question authorizes the town to begin collecting $3.8 million in estimated additional taxes starting Jan. 1.
The half percent and 1.5 percent increase in sales and lodging taxes, respectively, is earmarked for the construction and operation of $46 million meeting facility. Grocery purchases are excluded from the sales-tax increase.
While the voters have spoken and the needed revenue stream is tapped and just one ordinance away from flowing, almost every other detail of the proposed center remains in question.
Councilwoman Diana Donovan, who spoke out against the center proposal during before the election, cautions against blindly building a facility just because the money is there.
“If if fails,” she says, “we are just in a heap of trouble.”
Donovan says her biggest concern is finances. Without any true assurances that conventions will come, she says, the $46 million debt, which will cost close to $50 million in interest over 25 to 30 years, is too big a commitment for the town.
If the center doesn’t attract as many as 250 events per year, no extra income will go towards retiring the debt and the town may have to chip in to pay for as much as $200,000 a year in operating expenses, according to Donovan.
According to a preliminary budget, the center is expected to cost between $3 million and 4 million annually to run. Based on about 250 events a year, the center would fall short of breaking-even for the first three years before turning a modest profit of about $5,000 to $70,000 in its fourth and fifth years.
The operation budget, however, does not include hiring an operator to run the center, which could widen the operational deficit margin to as much as $300,000 in the center’s initial year and $70,000 by the time the center celebrates its fifth birthday.
Donovan says supporters of the proposal drowned out any critical observations regarding the proposal.
“It was a one-sided campaign,” Donovan says, adding that “voters didn’t get all the information to make an informed choice.”
Supporters of the project, namely lodge operators who lobbied for it, said during the election the center potentially could bring as much as $34 million in additional revenues to local hotels, restaurants and shops during the off seasons, along with $10 million in salaries to local employees. The operations budget, supporters pointed out, includes a contingency fund to cover the debt payments for seven years – even if the center stands empty.
“A conference center is the single most impactful thing we can do to improve the year-round economy,” says Rob LeVine, general manager of the Antlers at Vail.
Donovan, who was left waving the red flag on the conference center issue mostly by herself, says the planning process for the center will be as one-sided as the campaign for it was because “we can’t get straight answers from those who are for this project.”
Other council members, however, take a less dim view. Chuck Ogilby, for example, suggests a sub-committee – similar to the one working on the Donovan Park Pavilion project coupled with a knowledgeable project manager – could come up with a conference center that fits the needs of meetings planners and not just the desires of convention center supporters.
“And I think Diana should be on it, because she will be critical of it and ask the right questions,” Ogilby says.
Vail Mayor Ludwig Kurz, who along with fellow-councilmen Greg Moffet and Rod Slifer, lobbied for the center. He says supporters want the center to succeed and will ask critical questions with or without Donovan in attendance.
While the makeup of the sub-committee will remain unclear until the next next month, the council has instructed town staff to begin the search for a project manager familiar with conference centers.
“All of us have our own prejudice of what we want,” said councilman Dick Cleveland, “but we need a knowledgeable professional to tell us what we need, so we don’t build a white elephant.”
Additionally, the council instructed Vail Town Manager Bob McLaurin to return with more details regarding the conveyance of Vail Resorts’ 6-acre Holy Cross Maintenance Site property for the project.
The company has pledged to donate the $9 million parcel, currently housing grooming equipment, in the event of the conference center proposal passing.
Geraldine Haldner covers Vail, Minturn and Red Cliff. She can be reached at 949-0555, ext. 602, or at email@example.com.