Vail Daily column: Events alter political landscape
Editor’s note: The following is an excerpt from the Vail Homeowners Association monthly report. We publish weekly excerpts from the association, which keeps a close eye on economic and political trends in and outside of the town. The newsletter electronic version with links to supporting documents is available at http://www.vailhomeowners.com.
The dominance of special events as a driver of Vail’s economy is reflected in the changes to the balance of political power within the local government. Prior to the 2007 recession, residential real estate sales, development and construction were much more dominant factors in the town of Vail’s governing policies as they were a major source of revenue generation through real estate related taxes and development fees. During that time, there was a more balanced governing agenda between commercial and residential interests.
The economic slowdown affecting real estate and development parallels the decline of the industry’s influence in the town’s political affairs. This, according to some analysts, has resulted in a greater number of costly land use legal disputes between the town and residential property owners. This is the source of a call by the Homeowners Association to rebalance the town’s political participation and agenda to formulate a more collaborative relationship among voters, businesses and non-resident property owners.
Critics question the degree to which the entire community benefits from public expenditures that lead to overcrowding and the resulting underfunding of quality-of-life priorities, such as cleaning up Gore Creek pollution. VHA advocates that it is the funding of quality-of-life projects that will underpin property values and ensure that sufficient real estate sales occur. The importance of ongoing real estate sales and renewal cannot be ignored as a critical driver of the local economy.
Actions that threaten property values such as covenant conflicts, excessive fees or regulation become an economic hindrance to the community-at-large. Many non-resident residential property owners and Realtors, developers and contractors who deal with residential property are waking up to the fact that they have to participate in the local political process or lose more of their influence.
The continued post-recession effect on real estate and construction is reflected in 2013 third quarter real estate sales figures that saw a year on year decline of 11 percent in the number of real estate transactions and negative 28 percent in dollar volume. The town of Vail for the same period reported a year-on-year decline of 16.9 percent in Real Estate Transfer Tax revenues. Building permit valuations for the town of Vail are on a par with the past year, but well below pre-recession levels. Both Eagle County and Pitkin County were down 2 percent in dollar volume. Some see the reason for the decline is the lack of available inventory.
Expenditures for the town of Vail were once held to a 50/50 ratio of operational costs versus capital investment. Since the town of Vail began dwelling on its special events and health and wellness agendas in recent years, it has skewed the allocation of its budget expenditures to a ratio of 70/30. Seventy percent is now allocated to operational costs, leaving 30 percent for capital investment. The funding of operational, i.e., special events, and non-voter approved capital cost for major projects are increasingly being taken from capital reserve funds, which have been depleted during the past few years.
Troublingly, some business interests are saying the town should expand from marketing and hosting summer events to winter as well. Winter marketing and events have for the most part traditionally been the responsibility of Vail Resorts. In addition, a new municipal building and additional investment in affordable housing may once again be considered for approval and financing from the reserve fund in the coming months, potentially drawing down reserves to minimum levels.
Overcrowding and congestion is causing protest from residential property owners in neighborhoods affected by excessive commercial events and urban uses, like on-street truck deliveries. Some local business interests dismiss residential owners’ protests saying they should have expected inconvenience when they bought in a commercial area. Since the inception of the community in the 1960s, most commercial districts were developed to be mixed use, most having more residential than commercial. Therefore businesses, in the view of residential owners, have no intrinsic right to dominate and diminish the character of their neighborhoods.