Vail under a microscope
When Vail Town Councilman Dick Cleveland convened a Vail economic summit for local businesses Thursday, he knew it would be a pretty tense meeting. Businesses in Vail, after all, have been struggling through a changing economy, and things have not been improving.
Sales-tax collections, which tend to mirror local economic activity, are down, and their rate of growth has been slowing for nearly a decade.
In Vail Village, fewer destinations skiers are booking hotels than in years past while empty storefronts are show the result of increasing downvalley competition. Business as usual doesn’t appear to be working, many merchants have said, and the meeting was called to explore what needs to change.
Ironically last season’s combined skier count for Vail and Beaver Creek, 2.3 million, is the largest ever recorded, indicating, perhaps, the profile of the typical skier and/or snowboarder have changed, as well as their spending habits.
Aim to fix
Cleveland attempted to deflect some of the tension early on by holding up a flack vest, saying he would don it if necessary.
But the topic was serious, indeed, attracting 75 members of the Vail business community for the first of what is expected to be many meetings aimed at attempting to fix what ails Vail’s economy.
A two-part, open-topic collaborative process outlined what Vail is doing right and what it is doing wrong. As might be expected, a lot of frustration was vented.
Cleveland suggested everyone look at themselves first.
“Everybody wants to change everyone else,” he said. “That’s going to be a tough nut to crack.”
The venting appeared to aimed primarily at Vail Resorts, which operates the ski resort, as well as the municipal government and its regulations, the arrival of big-box stores, the town’s growing old, landlords, even the Internet.
“I know there is distrust between the business community and the town of Vail,” Cleveland said. “My solution is to try and talk about it.”
A lot of talk
And for two hours there was a lot of talk.
“The problems (with Vail) run deeper than just empty storefronts,” said lodge owner Bob Fritch, adding he attempted to rent a retail space for $54 a square foot a month and was unable to fill it for more than a year.
Colleen McCarthy of the Baggage Cheque pointed a finger squarely at town government, saying some of Vail’s problems may lie in the fact there is a “lame duck” Town Council, as five of seven seats are subject to reelection.
“We need something done yesterday”,” she said.
“The world is geared around Wal-Mart,” added longtime Vail retailer George Knox of the Moose’s Caboose. “We need to bring people here.”
Pete Feistman suggested part of the change in the business dynamic has come from Vail Resorts’ objective of getting more dollars from the skiers who visit town.
“They’ve been successful and have done a better job of it than the Vail business community,” he said, adding the decline in area business could be in part attributed to that factor.
“Too many roadblocks’
Part of the solution is redevelopment of the aging properties in town, some of which are 40 years old, but that’s not easily accomplished.
“We need to expedite development,” said Pam Stenmark of the Evergreen Lodge. “We have too many (regulatory) roadblocks.”
Vail Resorts’ Bill Jensen suggested the town government consider relaxing its regulations – while adding one more.
“We’re working with ordinances and guidelines developed with lessons learned in the ’60s and ’70s. Things change,” he said. “The town should consider relaxing some of its policies.”
Jensen also suggested the town impose an impact fee on landlords who don’t fill storefronts and leave them vacant.
“At some point rents will start to moderate,” he said.
Jensen and other community leaders, meanwhile, were angrily chastised by second-home owner James Unland for not collaborating monetarily or sharing marketing information for the greater benefit.
“A hospital without patients is worthless,” he said. “Your asset value is the desire (on the part of tourists) to come here. All this stuff here is junk if people don’t come here. This is a small goddamn town. You should be sharing information.”
“We’re all in this together’
“We’re not going to solve any problems tonight,” Cleveland said. “We’re all in this together. The only way to solve this is together.”
“Maybe our spirit is broken and we need to to something about it,” added Suzanne Silverthorn, the town’s communications officer, after the meeting.
A second meeting will be held next month to present information gathered at the first meeting and distilled.
Cleveland said the aim of the next meeting will be to focus on two or three issues and develop recommendations on how to resolve them.
The following items were identified by those who attended Thursday’s discussion of Vail’s economy.
15 things Vail is or has done right:
– Free bus system and parking structures
– Lots of cultural events, such as Bravo! and Hot Summer Nights.
– A well-run ski mountain, an airport and good transportation.
– Great restaurants.
– Packy Walker.
– Excellent scenery and open space.
– Dobson Arena, the Vail Golf Course and the Colorado Ski Museum.
– Lots of hiking and biking trails and access to open space.
– 40 plus years of history.
– Involved citizens.
– A sense of security and safety and an excellent medical center.
– A good town government and zoning regulations.
– Two pedestrian areas within town.
– Locals are beginning to return to town as affordable housing is built.
– Plenty of youth recreation programs.
15 things Vail is doing or has done wrong
– Town has too many regulations and its business license fees are too pricey.
– Town and businesses haven’t adapted to a changing business climate.
– Lease prices are too high.
– Town is suffering from the flight of locals.
– There’s a lack of affordable, permanent housing options.
– The town has an aging infrastructure with truck delivery conflicts.
– The town needs a better information system for visitors.
– The business mix is dysfunctional, causing a loss of vitality.
– Empty storefronts discourage shopping.
– A shortage of quality hotel rooms.
– Retail and informational signs in town are too small.
– Town processes discourage remodelling and redevelopment.
– A lack of a central focus in town to draw visitors.
– Shoulder-season business has dwindled.
– The entrance to town is dark due to two empty hotels.
Searching for affordable rent in Vail
One businessman’s experience with landlords in Vail has done little to dispel the belief that landlords are charging ruinous rates and, indeed, are the primary cause of Vail’s decline.
Robert Aikens, 43, manager of Verbatim Booksellers for the last three years, has been attempting to purchase the Lionshead business from Alli Mayer, who has said she will be leaving the area later this year. He said he wants to relocate the 4,000-square-foot store to a better location – and pare expenses.
To date, he says, his conversations with landlords has not been fruitful.
“Almost across the board, they want a certain amount and they’re unwilling to negotiate,” Aikens says. “Most of them were absentee. They tell me they can’t rent for what we can survive on. One landlord told me he would not negotiate; that he did not need the money and he would leave the space empty. It’s already been empty for two years.”
Aikens says the issue is time. If he can’t find a suitable location for the store, he says, it will probably close unless someone else purchases the store in the next few weeks. He continues to search, however, saying he has had some calls from landlords seeking to lease space.
“I love book-selling and I love Vail,” he says. “It’s a damn good store.”
Aikens says he understands landlords have the right to expect a certain return on their money.
“(But) if a landlord can tell me he doesn’t need the money,” he asks, “why won’t he rent it at a reasonable rate?”
Aikens has looked at relocating downvalley, to Edwards, but says the rates there aren’t that much cheaper than Vail. There seems to be more retail activity there, however, he adds.
Aikens says he believes Vail landlords should structure their rates at between 6 and 10 percent of a business’s gross sales.
“That way it gives everyone an incentive,” he says. “(But) Vail just doesn’t do that kind of volume any more. That’s why you have jewelry shops and real estate offices.”
Aikens says his store’s business has suffered since Vail Resorts began aggressively courting Front Range skiers, who do not spend as freely as do destination skiers.
“When the mountain is full and the parking structures are full, we don’t have the business,” he says. (Day skiers) come up and ski, and they might have a beer or have dinner then they leave.”
“It’s a sad commentary that a store that has been there for 20 years isn’t able to survive anymore,” adds Verbatim’s owner, Mayer.
Vail’s decline not unique
Ten years ago, when Bob McLaurin first arrived in Vail, one of the first things he did as the town manager was to chart the town government’s revenues and expenses.
He wanted to get a handle on sales taxes because they supplied 50 percent of the town’s annual revenue. What he saw raised his eyebrows.
The figures showed the early symptoms of a malaise that today has reached critical proportions. The chart showed retail sales-tax growth tapering off while expenses continued to grow.
The situation, a reversal of the resort’s fortunes in the first 25 years may well have been an early sign of the end of the heyday of booming ski towns in general.
In a nutshell, perhaps, there’s not enough money being spent in Vail by visitors, and it’s changing the resort experience.
“There’s a migration of retail downvalley,” says Ford Frick, an economic and marketing consultant who studies Rocky Mountain ski towns. “The market is living downvalley, in subdivisions and along the golf courses.”
In Eagle County, that’s evident in Avon and Edwards, where businesses are generally healthier than in Vail.
Fact is, Frick says, the business of doing business has changed, too.
“Retailing now is so ubiquitous that even if you’re from a small town in Arkansas you have a lot of retail opportunities available to you,” Frick says. “The uniqueness of ski resorts has diminished.”
Part of that may be due to the advent of the Internet, which allows shoppers to purchase things anywhere, online and, coincidentally, without paying taxes.
But Frick suggests there may well be a third socio-demographic factor affecting the businesses in resort towns.
“The function of a core downtown in resorts has changed. You would always go downtown when you were in Vail or Aspen,” he says. “The market has gotten older and now. Not only do they not ski as much, the story of the next decade will be that they can’t drink as much and can’t stay out as late as they used to. It’s marginalizing downtowns.”
On top of that, this is the third year of recession for the national economy and tourism-dependant industries and towns are feeling the pinch of thinner wallets.
Ironically, McLaurin, now town administrator in Jackson, Wyo., said that town, too, is experiencing the same thing.
Cliff Thompson can be reached at 949-0555 ext 450 or email@example.com.