Give and take
This is the third in a five-part series on how the presence of ski giant Vail Resorts affects life in Summit County.
SUMMIT COUNTY – The bill was staggering – $900,000 in overpaid taxes that various Summit County services, from schools to fire departments, would have to cough up and return to Vail Resorts.
“Like a kick in the stomach,” is how Summit School Board president Bill Pelham bluntly put it.
And a dip in the pocket of every Summit County taxpayer, for that is where the burden will inevitably fall.
But what has been lost in the shuffle of news surrounding VR’s recent tax abatement for property that was incorrectly assessed in 1998 and 1999 is that the company contributes more than $3 million in property taxes alone to Summit County every year, more than 3 times the amount of its two-year refund.
As illustrated by the publicity surrounding the abatement, this amount flows into the coffers of various county service providers. According to Summit County Treasurer Larry Gilliland, roughly 26 percent of the property tax roll goes to the county, 3.5 percent to towns, 43.5 percent to schools, 8 percent to Colorado Mountain College and 19 percent to special water, fire, river and metro districts.
VR therefore contributes a substantial amount to budgets countywide.
The company bears only partial responsibility for the overvaluation and has been working closely with the affected districts to ameliorate the effects of such a large financial hit, but the dilemma has underscored the importance of VR as a financial and political force in the region.
VR is the county’s principal taxpayer, constituting 4.64 percent of the total assessed valuation of land in the county, more than double its closest rival, Copper Mountain. This amount does not include the Keystone-Intrawest partnership, which accounts for slightly more than an additional percent.
“They’re a major factor,” Gilliland said. He added, however, that the rough numbers are misleading, and that the indirect effects of the company’s presence far outweigh the direct contributions it makes.
“They’re creating additional tax revenue for all of us through their contribution to the community, and that is immeasurable,” Gilliland said. “They’ve left this legacy over time.”
Yet financial arrangements are hardly the sole impact of the company on the governmental level. While the company itself is generally recognized as keeping its distance from the local political scene – with a few notable exceptions – its business has helped precipitate a host of hot political issues, from affordable housing to environmental concerns to parking.
“They’re like seeing Wal-Mart come,” said County Commissioner Tom Long. “The only thing worse than seeing a ski company coming to you is seeing them leave.”
Long says the economic and social impacts of VR’s presence are diverse and that the company’s response to such impacts has been mixed. He claimed its stature in the community made it a significant player in local politics.
“They obviously make us a company town and obviously pull that kind of political clout,” he said.
Others in the community disagree.
“We are not a company town,” Breckenridge Mayor Sam Mamula said. “I think a company town implies that you are totally dependent on a single industry, and I don’t think that we are in the sense that that industry calls the shots in the community.”
Marty Lessow, owner of Marty’s for Kids on Main Street in Breckenridge and a town resident since 1973, compromised.
“Whether we like it or not, it’s a company town,” he said. “But it’s a company town with a very strong town that speaks its mind and doesn’t just sit back and allow that corporation to do whatever it wants to do”
Breckenridge is the Summit County location most noticeably forced to deal with the balance. While Keystone exists solely as a resort without the unincorporated town, in Breckenridge, a ski area and historic former mining community sit intertwined, one virtually indistinguishable from the other.
“If someone comes to vacation in the area, they don’t look at the ski area and town as being separate,” said Lessow.
Yet the two coexist in a sort of mutually beneficial arrangement, and Mamula characterizes overall relations between VR and the community as good.
“We see their guest and our guest as the same guest,” he said.
Still, he said the two entities are staunchly independent and that the town fought to assert final control over issues that affected the fabric of the community. VR, he says, has been amenable to the town’s wishes, especially under the leadership of Roger McCarthy, the company’s vice president and chief operating officer for Breckenridge and Keystone.
“The town of Breckenridge is pretty particular about what goes on in the town,” Mamula said. “We’ve held fast to certain quality-of-life issues that, quite frankly, Roger has bought into.”
According to Mamula, the two view their personal relationship more as that of business partners.
“I think we both understand what the other’s responsibilities, objectives, goals and, probably, limitations are,” Mamula said.
Nevertheless, he noted that the two have not always avoided conflict.
“That’s part of our understanding – we agree that in certain areas we will agree to disagree,” Mamula said. “Their objective is to maximize investment, and our objective is to help them maximize their investment without significantly impacting the quality of life of our community.”
Commissioner Long, who also characterizes the overall relationship between the reservations department, VR itself reaped the rewards first and foremost as it geared customers to specific vendors as part of its package vacations. Such vertical integration of the different ski vacation services under the umbrella of a single company, she believes, is detrimental to many in the community – and in the case of lodging, it is particularly keen.
“If you stand alone (in lodging) – unless you have a huge reputation – you can’t possibly hope to fill to capacity,” she said.
Some local hotel operators, however, indicated that wasn’t always the case, especially during peak season.
“We get their overflow,” said one hotel owner, who asked not to be named, who says his business benefits from VR advertising efforts. “Their marketing is much more broad-based than ours. They have to charge people for that marketing. We don’t.”
“Sure we benefit from it,” said Leon Joseph Littlebird, a manager at Hotel Frisco. “How can you argue with the fact that Vail brings a lot of people and lots of business to the community?”
Nevertheless, Lester Warpecha, owner of the Alpine Inn in Frisco, maintains that direct competition does occur and that his business might stand to encounter more customers if VR did not control such a large portion of the lodging market.
“They are working really hard to bring some people out here,” he said. “(But) they are also my competitors because they have so many rooms in their lodges.”
“Sometimes we’re bumping heads,” Warpecha said. “Sometimes they’re giving such a good deal that it affects small businesses.”
Direct and indirect effects
The immediate consequences of the VR presence typically are most apparent in Breckenridge and Keystone. But other Summit County towns such as Dillon and Frisco are still deeply affected, both directly and indirectly, by the company and its resorts.
In Silverthorne, for example, VR has a direct retail interest through Mountain Sports Outlet, a Specialty Sports Ventures-managed store.
Indirectly, the outdoor shops, supermarkets and dining venues that lace these gateway towns cater more to Front Range skiers, second-homeowners and locals who have been drawn in larger numbers by discounted season passes.
While failing to capture a significant share of destination skiers, who generally end up at or near the base of a particular mountain, these towns are able to corner the more flexible visitors with cars who are looking for something a little cheaper and a little more removed from the resort itself.
“We get people who are more attracted to the Frisco experience,” Littlebird said. “It’s a real town. It has its own character.”
He said the hotel sees many second-time visitors to the county who had previously stayed at the base of a resort, generally in a VR-owned hotel, but who are now seeking something more affordable and different.
Therefore, while many local merchants have difficulty gauging exactly the level to which the VR corporate influence affects them directly, they almost universally acknowledged the importance of well-run ski resorts in drawing their own potential customers.
Across the board, the county and its local businesses remain tied to the industry for a huge portion of their success. Thus, they also remain tied in large part to VR.
“I see it working both ways,” said Jack Taylor, executive director of the Summit County Chamber of Commerce. “I see them drawing folks into the county and into the marketplace. At the same time, they’re currently offering some retail services that are offered in other parts of the county and that will increase competition.”
Because of this, the relationship local businesses maintain with VR, both as beneficiaries and as rivals, will continue to be give and take.
Aidan Leonard is a free-lancer for the Summit Daily News. He can be reached at
email@example.com, subject: Aidan Leonard.
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