Vail Valley Voices: The outlook for Vail in June
Vail, CO, Colorado
Editor’s note: The following is an excerpt from the Vail Homeowners Association monthly report in June. 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.
Town of Vail projections for the summer months estimate a 20 percent decline in sales tax revenues. April saw an upward spike in sales tax revenues coming mainly from the Latin American market during Easter Week, but the town’s sales tax revenues were still down 12.6 percent for the ski season. (Town of Vail Business Review)
Year to date, Vail’s sales tax revenues are down 18.24 percent, mirroring other Colorado mountain resorts. Vail Resorts Inc. reported a 29.4 percent drop in its third quarter net income of fiscal 2009 ending April 30. (VRI Q3 Report)
The town reports April lift tax was up 61.8 percent for the same month in 2008 but for the ski season down 3.3 percent.
The town has begun preparing its 2010 budget and estimates for 2011 and 2012. The Town Council authorized using a $3.2 million revenue surplus from 2008 to cover budget shortfalls. Concerns have been raised that planned capital expenditures could reduce the town’s nearly $40 million in cash reserves to $6 million within a few years.
Eagle County unemployment continued its unprecedented rise through May, doubling (4.5 percent to 9.6 percent) over the same month a year ago. All major construction projects in Vail remain in progress, with small projects keeping contractors active through the summer.
In recent weeks, the Four Seasons project in Vail Village has changed its project manager and replaced the prime contractor. The developer remains confident that the scheduled December opening date will be met. Dollar volume of real estate sales for April was nearly 42 percent less for the same month in 2008 and down 50 percent in total transactions. Vail Village remains the leading area in Eagle County for property sales.
Vail Resorts will continue its Epic Pass incentives into the 2009-10 ski season. The customer base reversed over the past ski season in the ratio between the destination guest (40 percent) to the day skier (60 percent). Some see this shift, along with increased urbanization and other factors, as a harbinger of Vail’s waning preeminence. Others anxiously await the economic surge anticipated to follow the completion of new retail shopping, dining and visitor accommodations due to come online over the next 18 months. Residential owners’ quality-of-life and property values are dependent upon vibrant and well-maintained resort commercial centers.
The 2008 beginning-of-the-year opening of the Arrabelle commercial-residential project appears to have helped lessen the decline of sales tax revenues for the Lionshead area. There are those who worry that once VRI’s proposed Ever Vail project is completed in west Lionshead, Vail Village could well be eclipsed as the prime commercial center of the community. Some believe the company’s patronage, because of the magnitude of their Lionshead business interests, is migrating away from Vail Village.
Many local retail merchants have never needed to promote themselves on a national or international level. To bring customers to their front doors, they have relied on Vail Resorts and, more so in recent years, on the town of Vail, through their respective winter- and summer-marketing programs. Vail’s businesses have had difficulty at times formulating cohesive action. Factionalism poses a particular challenge.
The town of Vail, some observe, is spawning increased fractionalization through its control over a major share of the community’s business promotion funds and by franchising public property for development that will directly compete with the private sector. Some retailers complain that the town’s special-events programs tend to benefit restaurants, bars and lodges more than their shops. Others say care should be taken to avoid image-dampening events, promotions and amenities, while continuing to nurture well-performing venues, such as Vail’s established cultural and recreational programs.
There are Vail Village business people who are beginning to take note that the community’s traditional business support system may require that village businesses become more self-reliant and less dependent upon town-Vail Resorts largess. Redevelopment has opened the potential to restructure neighborhood business alliances that could bring a fresh approach to how commerce might be expanded beyond their front door to the broader world. According to one influential Meadow Drive businessman having made a major new investment on the street, Vail Village businesses soon need to begin “packaging and promoting” the neighborhood’s upgraded image and destination accommodations to the larger world.
Business owners along East Meadow Drive have shown how self-determination and mutual cooperation can accomplish political success. Their influence now stretches from Dobson Arena on the west to Ford Park on the east. Once fully engaged and operational, new and established businesses along Meadow Drive stand a good chance of drawing greater numbers of highly valued destination guests into Vail Village. If effective, they could help counter what many perceive as a drift toward flooding and devaluing the community’s resources through misdirected mass marketing.
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