Why to think twice about center | VailDaily.com

Why to think twice about center

Jim Lamont

This is the second and final part of the Vail Village Homeowners Association’s position on the Vail conference center.There is Exposure to Higher Taxes: Vail taxpayers appear to be exposed to tax increases resulting from unprojected increases in costs. Underlying any tax increase, all commercial and non-improved residential property taxpayers will pay a disproportional higher tax levy than residential property owners. These increases will place an even heavier load upon an already burdened business community. In all likelihood, revenues generated from convention business will not be distributed widely throughout the business community. A few large, nationally connected hotels with food and beverage operations will most likely be the prime beneficiaries. Conferees will be a captive market, spending most of their time in the center, eating their meals there and staying in hotels that can provide the largest block of rooms at the lowest price. Residential interests have little or no incentive to support a property tax increase, as there is no evidence they will receive a tangible benefit from the center. Should a tax increase be required to increase tax revenues, as a yardstick to raise $1 million from each type of town of Vail tax that could be used to pay for the un-projected expenses of the conference center, the increase in tax rate would be: property tax 1.9 mills, sales tax 0.46 percent, lodging tax 0.28 percent. Currently the level of town of Vail tax rates are as follows: property tax 4.69 mills, sales tax 4.5 percent, lodging tax 1.5 percent. The tax rate for property tax rate for commercial and non-improved residential property is assessed at nearly three and a half times the rate paid by residential property owners. Commercial and non-improved residential property account for 34 percent of all property tax revenues collected with residential property accounting for 66 percent. Any increase in taxes would require a vote of the electorate.Is There a Bailout Strategy?: There is now ample evidence nationwide that there is a commonly used bailout strategy being applied throughout the industry, whereby the construction of a conference or convention center is only a precursor to other speculative development, i.e. flagship hotel, often requiring further public subsidies. The master plan for the proposed Vail Center already contemplates such an investment. Public land would be converted to private ownership, thereby underwriting the profitability of a hotel development that would provide a dedicated bed base to support the conference facility. The success of these types of bailouts has received less than unanimous endorsements. The obligation of the taxpayer is only deepened if the bailout proves unsuccessful. By several accounts, many centers nationwide are in this no-other-way-out predicament.A Better Use For Funds – Emerging Skiing and Tourism Markets: Vail’s winter and summer marketing efforts have yet to tap into the emerging global market potential in Europe and elsewhere. The strength of the European currency (euro) over the dollar is already positively influencing other Colorado ski resorts and Vail’s economy this ski season. Financial experts believe that the buying power of the euro in America will be sustained over the long term. The depth of the European skiing and tourism market that would come to Vail, based upon outward appearances, could be considerable. Redirecting a portion of the community’s marketing effort to Europe could bring immediate response by next ski season and can build every year thereafter. It will be three years, at a minimum, before any revenues begin to flow from the conference center, and then it is still a losing proposition for taxpayers. One of the most essential (and expensive) components of the marketing equation is already in place, direct international airline service from Europe to Denver/Eagle. Limited Group Marketing Options: The proposed Vail conference center falls into the “premium niche market” category because of Vail’s stature as a premier destination resort. The Vail center must expect to compete in the highly competitive and demanding market of corporate and professional associations. Many of these groups can be accommodated in existing and planned hotel facilities. Vail’s stature is considered by some industry authorities to be a deterrent to attracting one of the largest segments of the conference market, SMERF (Social, Military, Educators, Religious, Fraternal). It is reported that SMERFs are spendthrifts and shy away from potential political criticism that results from hosting their meeting in a premiere resort, which is perceived as an extravagant expenditure. Nationally, SMERFs dominate the summer non-prime conference season, which if promoted locally could stifle the growth of Vail’s summer cultural tourism efforts. Should the center have to rely on the SMERF market, there is the potential it will downgrade the quality of the Vail product and experience. It is reported that the national conference and convention industry remains in disarray due to national and international political circumstances. As these circumstances appear to be long lived, stability in the industry should not be expected in the near term, even though conditions are improving in some segments of the market. Troublesome Competitive Experience: It is noted that a new center similar in size to Vail’s proposal has recently been opened at the Broadmoor Resort in Colorado Springs. Conference facilities in some metropolitan regions similar to that proposed for Vail are reported to be doing well in the corporate and professional association markets. However, Vail is not located in a major metropolitan region and the nearby Keystone conference center has its own challenges. According to town of Vail consultant studies that have been presented to the public, the Keystone conference center had an annual net loss of $3,637 million last year. The Vail taxpayer cannot afford the potential for losses at this scale. Site Planning Questions: The relationship of the proposed structure to the surrounding neighborhood and streets raises questions. The sheer size of the structure dominates its adjacent residential neighbors. There could perhaps be a more sympathetic relationship that accounts for the potential expansion and redevelopment of the adjacent sites. The center’s exterior floor overreaches onto an adjacent street right-of-way, presuming a right that would be denied to private property owners. Link to Vail conference center architectural concept plan by Fentress Bradburn Architects’ on the homeowners association’s Web site. Stress on Traffic Circulation: The complex and competing demands upon traffic circulation surrounding the combined Lionshead parking structure and conference center site are extreme to a fault. The interests of the mountain operator, the town of Vail, and the Colorado Department of Highways (CDOT) are at cross-purposes. The design and budget for traffic circulation and aesthetics of the South Frontage Road is limited. It could be more imaginative and efficient, if the accommodation for on-street parking were removed and redundant through or turn lanes reduced, making provision for high capacity rotary circulation (roundabouts) feasible where space permits. Other, less onerous traffic circulation issues exist and remain unresolved for East Lionshead Circle. CDOT has yet to approve the master plan for the South Frontage Road. It is not likely that CDOT will concede any right-of-way to the town for its circulation, because it will want to ensure ample space to add additional lanes to the Interstate in the future. Limited Ease of Community Access: The committee’s consultants report that meeting planners believe that the logistical challenge of getting to and from Vail is a potential detriment to the success of the conference center. Congestion by ground or air transportation from Denver and elsewhere is a growing challenge both on Interstate 70 and at the Eagle County airport. Long-term construction projects associated with the contemplated expansion of I-70 will only exacerbate the frustration of accessing Vail during those seasons that the center is to be in peak operation. There has been no analysis presented of the impacts of this to the viability of the Vail center. Likewise, no information has been presented that analyzes the capacity of the Eagle County airport to provide regularly scheduled flights that would be able to serve the needs of the conference center. No analysis has been made of the demand or methods to finance collateral improvements at the airport. There have been no publicly known negotiations between Vail, the Eagle County Airport Authority and county officials as to expectation of improved air service and systems necessary to support the Center. Corporate executives, a target market for the center, require dependable and efficient access. An informed source reports that these requirements are sometimes not attained at the Eagle County airport. Currently, summer service to the Eagle Airport is very limited. Vail is now experiencing investment, growth and in many ways true renewal. The Town Council has an opportunity to allow the voter to relieve the town of a risky and perhaps very costly legacy. It should do so. Jim Lamont is the executive director of the Vail Village Homeowners Association.Vail, Colorado

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