Vail Valley Voices: Vail braced early for its downturn
Vail, CO, Colorado
The first full year of the economic recession was finally felt in Vail during 2009 following earlier indicators of a weakened local economy during the close of 2008. That was nearly a year later than experienced nationally.
In anticipation of the downturn, town leaders looked to an arsenal of strategies and actions that have been used to manage costs and attract visitors.
In the end, Vail finds itself well positioned to retain its competitive edge due to the extraordinary timing of the major redevelopment surge, expanded marketing alliances with Vail Resorts and other business partners, and an emphasis by the municipality on economic development and fiscal responsibility.
Looking ahead, Vail is not only in a position to sustain a continued downturn but is also poised for the next upswing.
However, Vail’s town council, staff and members of the community must continue to take action to ensure Vail’s economic vitality and future prosperity.
Nearly $2 billion has been invested both publicly and privately into Vail’s infrastructure and real estate offerings since 2004, a renewal of well over half of all the land in Vail Village and Lionshead. This has resulted in 154 net new lodging units and 54,000 square feet of net new commercial space.
The renewal has spurred unprecedented growth in town municipal revenues, with gains of as much as 70 percent in real estate transfer tax collections from prior years.
Sales tax collections were also at a record high during 2007 and 2008, an indication of economic prosperity throughout the community as further evidenced by increased skier numbers, favorable lodging occupancy and increased attendance at events.
Vail’s renewal helped the town increase revenues and build strong reserves just as the rest of the country went into recession in November 2007.
Almost a full year later, in the fall of 2008, Vail headed into its own economic downturn. But just as Vail has handled difficult challenges in its past, these new circumstances have proven to strengthen community alliances in working together toward the common goal of restoring Vail’s economic health.
By the time Vail began to experience the initial impact of the national recession, the municipality was ready with a plan — due in part to perceptive insights offered by community and business leaders who voiced their support for the proactive approach initiated by the Vail Town Council and staff.
A three-part strategic focus was used to prepare for the anticipated downturn:
n Work with resort community partners to retain a leadership position in lodging and tourism activity in comparison with resort competitors.
n Maintain municipal service levels while operating within the constraints of approved budgets.
n Monitor the budget throughout the year and amend as needed if actual revenue is not equal to projections.
There was acknowledgement that a consistent re-evaluation of economic objectives, strategies and tactics would be needed to sustain Vail’s economic health.
Resulting actions in 2009 focused on:
n Increased marketing efforts of $550,000 to bring guests to Vail with an unprecedented winter partnership campaign, plus an emphasis on special events.
n $2.9 million reduction in 2009 operating expenditures to include 12 fewer full-time equivalent positions.
n $5.6 million in deferred capital projects, postponing reconstruction of Vail Valley Drive, frontage road bike lanes and new public restrooms until conditions improve.
n Commitment to priority capital projects such as the West Vail Fire Station, redevelopment of Timber Ridge and construction of employee housing at Arosa Drive.
n Maintaining service levels for guests and citizens.
As 2009 came to an end, the town exceeded revised revenue forecasts of $42 million and outpaced its resort competitors in sales tax collections and lodging occupancy.
Part 2 of Vail’s state of the town report will continue the discussion of Vail’s 2009 financial results and projections for 2010.
Public meetings of the Vail Town Council are held the first and third Tuesdays of the month. Work sessions are scheduled in the afternoon, followed by an evening business meeting beginning at 6 p.m.
Agendas, memos and supporting documents are posted to the town’s Web site at http://www.vailgov.com four days in advance of the sessions. The meetings are recorded by Public Access TV 5. Call 949-5657 for programming information or visit http://www.publicaccess5.org to view the meetings online. Also, follow the Town Council on Twitter at http://www.twitter.com/VailTownCouncil.
Kathleen Halloran is the town of Vail manager of budgets and financial reporting.