Vail: Waiting for the retail boom | VailDaily.com
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Vail: Waiting for the retail boom

Cliff Thompson

VAIL – While Vail’s sales tax collections in 2004 were up a healthy 6 percent over the previous year, longer-term, they’re still barely keeping up with inflation.Sales tax collections, which make up approximately 45 percent of the town’s annual revenue, are generally viewed as a major indicator of the economic health of a community’s economy.At year-end, 2004’s collections were $15.36 million – up $184,605 over 2003. Despite the rebound, that’s still less than the $15.41 million collected in 2002. Collections in 2003 totaled $14.57 million.The average annual sales tax growth since 1993 has been 2 percent – a level at or below the rate of inflation. The town budget for 2005 kept pace and grew by just 1.5 percent.That disturbing trend was charted by former Vail town manager Bob McLaurin in 1993 – his first year on the job. Resolving it became part of Vail’s revitalization when Vail Resorts proposed redevelopment of Lionshead in 1997, said Suzanne Silverthorn, a town spokeswoman.”There was an underlying concern for Vail’s economy,” she said. “The forecasts for sales tax did not look very promising. The redevelopment plan was a call to action on that.”Increasing retail competition from Edwards and Avon began to erode Vail’s business, McLaurin had said.But this static economic situation may well be a calm before a sizable economic storm begins. A $1 billion revitalization of Lionshead and Vail Village town leaders expect to energize economy is about to begin. When complete in 2010, the revitalization will result in about a dozen new properties in the 43-year-old town.That lackluster retail growth is projected to end by 2009 when sales taxes generated by the new properties and businesses will increase the town’s take by $2 million a year. During the reconstruction, sales taxes will dip even more while existing buildings are razed and businesses displaced.An important component of that revitalization will be 561 new lodging units – a 15 percent increase – when the renovation is completed. Increasing beds is meant to increase the number of visitors in the tourism-dependent town and help Vail remain at the top of resort rankings in the media. Sales tax revenues in Aspen, by comparision, eclipsed the $400 million mark for the first time in history. Overall sales in 2004 were up 9.2 percent over 2003.Though Aspen set a record for sales tax collections, adjusted for inflation, the city’s buying power has lagged. Last year’s sales tax revenues have less purchasing power than the same sum a decade ago, said Paul Menter, the city’s finance director.”I don’t think it means all of our economy’s problems have miraculously been solved,” he said, noting high rents and a drop in hotel rooms. “I think the message is 2004 was a turn-around year. It was a return to prior trends.”Aspen correspondent Janet Urquhart contributed to this report. Vail, Colorado


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