Vail Valley Voices: Bottom of the bear?
Vail, CO, Colorado
Editor’s note: The following is an excerpt from the Vail Homeowners Association monthly report in February. We plan to publish weekly excerpts from the association, which keeps a close eye on economic and political trends in and outside of the town.
Expectations are high for an upturn in the local economy during this year. There are early indications that real estate sales are on the rise, stimulated by heavy discounting.
The bankruptcy proceeding of the Vail Plaza Hotel has been resolved, with the new owners in the position to turn around the debt-burdened project.
Eagle County unemployment claims are bumping along month-to-month, rather than spiking dramatically upward.
The ski resort industry, according to a New York Times report, is increasing business during the recession with a 2.3 percent gain in 2009 and a 6 percent gain predicted for 2010.
Thanks to sizable holiday season spending by Mexican visitors, the town of Vail is projected to see only a 4.2 percent decrease in December sales tax receipts, which was an improvement on the month-to-month double digit decline it had experienced for most of 2009.
Day visitor traffic has been strong on Fridays and Saturdays, particularly if there is fresh snow on the ski slopes.
The refrain, “We need to do something to attract the “destination guest,” is working its way into the political discourse as Vail’s government revenues continue their decline.
The prediction of a year ago that Vail would be caught in a “perfect storm” of cascading economic challenges is being confirmed, perhaps even more than the prognosticators anticipated.
In the long run, Vail will do fine because of the lure of Vail Mountain. In the short term, for those caught up in the current economy, success will be determined by their agility in navigating the perils and opportunities of the new economy.
The Vail Homeowners Association is focused on contributing constructive insights that may assist in motivating a continuation in value appreciation of those assets that benefit the community’s residential property owners.
The town’s total revenues for 2009 were down by 26.7 percent, subject to a potential 5 percent gain based upon outstanding 2009 revenues.
Budget adjustments were made by the Town Council partially in response to the recommendations by a citizen group initiative. The town stayed within its budget and continued to preserve $50.6 million in reserves. After nearly 18 months of revenue declines, the town of Vail is preparing for even deeper budget cuts.
To keep some holdover projects from the billion-dollar boom in the “revenue pipeline,” town authorities are giving an 18-month extension to development projects that have lapsing town approvals that are lapsing. Some of these projects have already been given a one-year administrative extension. These projects in total represent $5.6 million in revenues to the Town, excluding property taxes. Even with extensions, there are those who say, there are no guarantees that the market will return any time soon to the highflying exuberance that spawned these projects.
Post-holiday season business fell into a decline after mid-January, some merchants said. Some merchants are predicting an increase in empty storefronts, not dissimilar to what has already occurred in Aspen, setting off another round of calls for landlords to cut lease rates. Aspen historically has trended ahead of Vail.
The town of Vail has not publicly discussed any strategies to combat empty stores.
Sources say because of economic conditions the town is turning a blind eye to the enforcement of regulated window signs in stores, even though some signs may convey a counterproductive message.
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