Who’s subsidizing whom?
As I read Don Rogers’ Quick Takes on Saturday, March 18, I couldn’t help but wonder: Was this just some of the Old Blarney left over from Saint Patrick’s Day or does he really believe what he said? Because the Vail Daily hasn’t reported the facts and conditions of Avon’s agreement with the Confluence, I’d like to review them to prove the falsity to Don’s statement, “Once again Avon has been taken.” In reality, the Confluence is about the most careful and rigorous deal struck between a town and a developer that anyone could find. So complete and tight is the deal that the Avon Council unanimously approved it – a rare, if ever, outcome in this county or anywhere else.What’s in the deal and who are the benefactors? Both sides won on this public-private partnership between Avon and East West Partners. First, I’ll start with the benefits:n This is a $500 million project on 19 acres along the Eagle River and is made up of a Westin Hotel, condominium and vacation ownership residences, restaurants, meeting space, riverfront deck and all with underground parking;n The hotel will be a 285-key full service establishment and there will be 225 additional dwelling units in the project;n The Developer, East-West Partners, has one of the finest reputations for quality of work in mountain communities;n There will be a gondola, with construction starting this summer, connecting the public plaza to the Beaver Creek Landing which is the terminal of the Lower Beaver Creek lift.n A 5.5 acre public riverfront park is being deeded to the town and it includes a reconstructed recreation path, landscaping, riverbank rehabilitation and improved access points to the water. East-West is also a partner in the construction of our new whitewater park;n The plaza, which runs north-south and connects the town core to the river, is open to the public and can be used for town events, contains public restrooms, the gondola terminal and has a protected view corridor through it. There are also several secondary paths that connect the town core to the riverfront park and the main recreation path. No more sneaking across the railroad tracks.n In addition the developer has committed to special Design Standards that set requirements even more rigorous than our recently rewritten Town Core design Guidelines. The hotel will also be LEED certified. LEED standards are the most demanding requirements in existence for energy efficiency, materials conservation and total environmental impact.n East-West is providing the town with land for a possible future light rail station and is completely rebuilding, landscaping and widening Avon Road at the intersection with Hurd Lane.Now, let’s discuss the impacts. In total the cost for things that directly impact the public is $24 million. The town of Avon has identified a portion of these costs, $3.4 mil lion, or 15 percent, that are improvements consistent with usual public works. The developer is putting this money into the project up front. We will reimburse them as we collect real estate transfer taxes from the project buildout. Our reimbursement payments are limited in any time period to not more than 50 percent of the transfer tax collected on the Confluence. Based on the construction plan, we will have made our contribution by 2008. Avon has also agreed to assist in the operation of the gondola and the public plaza and restrooms on a limited and diminishing basis. We will contribute annually $280,000, which will be reduced, dollar for dollar, and eventually will go to zero as Confluence Metro District mill levy revenues increase. These increases will come from redevelopment and buildout in the west town core and from the “halo effect” that the gondola and the new real estate will have on surrounding property values.Avon also will receive from East West a cash payment of $846,000 to our employee housing fund and will be used to continue our efforts to provide affordable housing. An additional payment will be made to the town of $160,000 to compensate us for the contributions we have made in the past to help the Eagle River Fire Protection District.So how does this all settle out? We didn’t guess at anything. We hired Stan Bernstein & Associates to model the economic impact of every aspect of the project. Every cost to the town and every revenue stream are in our models and bottom line our net investments pay back at 10 to one over the next 10 years! If only we all could find this magnitude of return for our personal investments. What the town will receive financially is first a stream of real estate transfer taxes that can only by used, by town municipal code, for capital projects. This money will help build and rebuild a new Avon. Second, we will receive significant new amounts of property and sales taxes and these are used to pay for the operations of the town. They will cover the shared operating costs plus all new costs to Avon, plus a surplus of $600,000 annually for new town operations. The surplus revenue benefits all of the town’s residents. Unlike most development, that is a net cost to the rest of the community (proven by many academic studies, including one encompassing every county in Colorado), this project pays for itself and adds money to every other effort of the town. In fact, the value of the project increases Avon’s total assessed value by $34.5 million, which represents a 20 percent increase in our existing assessed value. But it gets better. The tax contribution from these new properties will actually decrease the taxes paid by every Avon taxpayer through a 0.75 mill or 20 percent reduction in our debt service tax levy.This is a project that is married physically and conceptually to our vision for a new town center. “Corporate welfare,” Mr. Rogers? I don’t think so! Now that you have the facts, I’ll ask just who is subsidizing whom? We are always ready to meet and give you the facts and answer your questions before you jump to incorrect conclusions.Ron Wolfe is the mayor of Avon.
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