Mountain Town News: One-percenters and our widening wealth gap
The widening gap between the economic elite that constitute the bread-and-butter for high-end ski towns was in the news frequently last week.
In Park City, economist Anirban Basu, chief executive of Sage Policy Group, said he expects the U.S. economy to grow 3.6 percent this year, the largest growth since 2004. People will be spending more money, driving the economic growth, he said.
That should be good for mountain resorts, including Park City, where 44 percent of visitors make $200,000 or more.
But Basu also pointed out that not all pockets are jingling with spare change equally. The wealthy are seeing the big gains, while income for the majority of Americans remains stagnant.
While Aspen elected officials considered a proposed hotel, current Aspen Mayor Steve Skadron expressed reservations, because the plan contains no guarantees that the hotel rooms will remaining in the $150 to $200 per night range. Aspen remains concerned about keeping the door cracked open for middle-class skiers.
Former New York City Mayor Michael Bloomberg was in Aspen to speak about income inequality, drawing national attention to his proposal to help elevate the poor in cities. Education isn’t enough, he said, and he said that removing guns from young men in poor, usually minority, communities would reduce the murder rate.
Responding to the comments by Bloomberg, who is now worth $36.6 billion, according to Forbes, Patrick Hunter called for greater redistribution of wealth as a way of helping poor people, something that the tax rates used to do.
“That redistribution worked a lot better when the top marginal rates were 90 percent,” he wrote in the Aspen Daily News. “We now live in a world where a handful of people control half the world’s wealth. Are we supposed to be grateful?”
Former Aspen Mayor Mick Ireland also commented on the polarity of wealth. “Even the Republicans are starting to talk about wage inequality,” he said in a column.
Raising the minimum wage will, if it occurs, have little impact in Aspen, where the minimum wage is already a de facto $10.50 an hour, he said.
Slashing tax rates for the wealthy, as has been proposed, also would have little effect. “The haves seem to be in a spending mood that probably won’t get much crazier even if their effective tax rate falls further below my own,” added Ireland, a lawyer, who lives in deed-restricted employee housing.
Ireland does see a direct impact on wages in Aspen if President Barack Obama’s proposal to defer deportation of 5 million undocumented workers happens.
As undocumented workers, they have to take the most menial of jobs, no matter how smart or educated they are. If they gain legal status, they will be free to “take jobs that match their skills and pay better: driving a bus, managing a company, perhaps teaching, starting a company or practicing medicine.”
That means Aspen’s remaining “worker bees” will have more bargaining power. Wages will rise, Ireland predicts, because high-end resorts are, above all, labor intensive.
HOW SOON FOR THE NEXT REAL ESTATE CORRECTION?
ASPEN — Has the resort real estate market really been climbing now for five years? Seems just like yesterday that the sky was falling.
And so it will soon enough again. That was the message in a presentation to real estate professionals recently covered by The Aspen Times.
Randy Gold, of the Aspen Appraisal Group, and Andrew Ernemann, of Sotheby’s, painted a picture of great strength in the Aspen real estate market unseen since pre-recession days. For example, this might be the first year in more than a decade when prospective buyers outnumber listings, they told real estate professionals at a large gathering covered by The Aspen Times.
Gold predicted three to five sales in excess of $20 million. Already this year, three closings on properties of more than $10 million have occurred, with three more under contract.
Last year, eight condominiums in Aspen sold for more than $2,000 per square foot, and one exceeded $3,000 per square foot. This, said Ernemann, compares with Manhattan, London, and European ski resorts where $3,000, $4,000, and even $5,000 per square-foot price tags are common for condos. He said Aspen should start seeing more $3,000-per-square-foot sales.
Gold also pointed out that five real estate investors collectively own roughly 40 to 45 percent of commercial real estate in Aspen’s core downtown area.
But Gold and Ernemann also indicated that in the last 40 years, the average “up” cycle in Aspen lasted six years. In this case, because the recession was so deep, the bounce of this market might last longer.
“Andrew and I are both expecting that as 2016 comes to a close and we move into 2017, we’re probably going to see another start of our next down cycle,” Gold said.
“Real estate’s cyclical, it’s always been cyclical, it’s always gonna be cyclical. And it’s certainly important not to lose sight of that as we got caught up in all the enthusiasm in this market strength we see in 2014 and in what we expect to see in 2015.”
This might be problematic for Snowmass, which tends to lag behind Aspen by two to three years in its up-cycle. Development of Base Village, Aspen’s answer to Beaver Creek, Deer Valley, and other sparkly resorts studded with new hotels, was stopped by the last recession, and the pieces still haven’t been put together again.
NO EVIDENCE CANNABIS
HAS REPULSED FAMILIES
STEAMBOAT SPRINGS — Has Colorado’s legalization of cannabis for recreational use drawn or repulsed tourists?
Predictions both ways were made in the early days. But after 13-plus months of legalization, the Steamboat ski area tells the Steamboat Pilot & Today that there is no evidence cannabis has driven away families.
“Once the dust settled along with public education, outreach programs and enforcement, guests have a much better understanding of the issue,” says Rob Perlman, who is responsible for all aspects of marketing for the ski area. “Nothing indicates the resort’s family demographic is changing.”
The newspaper reports sales of $6.8 million worth of recreational and medical marijuana last year in Steamboat, producing $271,901 in sales tax revenue for city coffers. That compares with $745,721 in tax revenues for the city from liquor.
OPHIR WOULD PREFER A
LITTLE LESS DETACHMENT
OPHIR, Colo. — Can you have your cake and eat it, too? That seems to be the essential question in Ophir, a town at 9,600 feet in elevation that, of the last census, had 159 people. In good weather, it’s about a 17-minute drive into Telluride.
It’s remote, and most people seem to like that. But residents would prefer to be more connected to the information highway. Town manager Randy Barnes cannot participate in video conferences. Children, of course, can’t watch movies over the Internet.
The problem is the cost of installing broadband cable to so few residents.
“There aren’t enough people per mile; the profit margin isn’t there for them,” Barnes told San Miguel County commissioners at a recent meeting covered by the Telluride Daily Planet.
Ophir has applied for a $10,000 federal grant, and the county commissioners have agreed to match it, provided Ophir succeeds.
PAYING DEFERRED COSTS
FOR HARD-ROCK MINING
SILVERTON, Colo. — Yellowed mining tailings can be found around every valley corner in the mountains above Silverton. Citing government scientists, the Durango Herald reports that it’s the largest untreated mine drainage in Colorado.
Most of the mining ended many decades ago, but the effects of water coming from mines have actually accelerated. Between 2005 and 2010, three of the four trout species living in the upper Animas River have disappeared.
“Yet for two decades, vocal residents have torpedoed the Environmental Protection Agency’s many attempts to designate Silverton’s worst mines as Superfund sites, which would allow the agency to clean up the pollution and making any parties it deems responsible pay for it,” says the Herald.
“Though the environmental catastrophe has, if anything, worsened, Silverton residents long have argued against Superfund, saying federal intervention could sully the town’s reputation, deter mining companies and repel tourists,” reports the Herald’s Chase Olivarius-Mcallister.
Talking extensively with locals, Olivarius-Mcallister discovered that many locals — including the San Juan County commissioners — determined to stay the course by working with a volunteer collaborative group that has included the last big mining operator, Sunnyside Gold Corp.
Some locals fear Superfund designation will discourage resumption of mining. “We’re not going to get any companies to invest or pursue mining in our area with a Superfund designation hanging over our heads,” said Commissioner Ernest Kuhlman.
But the Herald found some locals exasperated with the failure of the volunteer collaborative process to achieve meaningful results. John Poole, for example, said that the Superfund cleanup in Leadville “certainly didn’t hurt tourism.”
SOME LODGING PRICES
DROP AS THE SUN SHINES
PARK CITY, Utah — A big storm swept over the West during Presidents’ Day weekend — and just in time. While the skiing remained tolerably good in many places, the steady progression of blue skies and shirt-sleeves weather was disconcerting.
In Park City, one rental firm had started dropping booking prices by 15 to 40 percent. “We’re actually up in nightly rentals this year over last year, though we’re definitely not up in revenue,” explained Jim Bizily, owner of Park City Rental Properties.
The Park Record observed that the sole bright spot from this string of unseasonably warm and dry weather was that most other resorts in the West were in the same boat.
But Chris Eggleton, president of the Park City Area Lodging Association, said something had to change to avoid drastic measures, such as laying off seasonal staff.
MORE BAD WEATHER FOR
LAKE TAHOE, Calif. — It was impossible not to wonder about what caused the abnormally warm weather of late January and early February and to wonder about the amazing patch of dryness.
California is ground zero. The Associated Press last week reported that even some of the big resorts with millions of dollars in modern snowmaking equipment don’t have all their lifts running. That would include Heavenly, the Vail Resorts ski area that sits on the California-Nevada border. A little more than half the ski runs were open.
At China Peak Mountain Resort, owner Tim Cohee had only the beginning skiing hill and a slope for sleds and inner-tubes open for Presidents’ Day weekend.
“I’ve seen a couple wimpy years before, but nothing like this — nothing even close.”
There were hopes of a big storm, but it produced mostly rain. “When it’s raining at the top of the mountain, it’s awful hard to build a snowpack,” said Michael Anderson, the official state climatologist in California.
He told the AP that it was the second warmest January in recorded history but also the driest. The Sierra Nevada in January received 2 percent of its normal precipitation, with an average high temperature of 53 degrees.
In Wyoming, several century-old marks as high temperatures hovered around 50 degrees Fahrenheit. That warmth played havoc on cross-country ski trails and ice-skating rinks. “Mid last week we really had to shut down,” parks manager Tim Selka told the Jackson Hole News&Guide. “Overnight temperatures are not even below freezing.”
Concurrent with the warming, Yellowstone National Park officials announced that grizzly bears had been observed out of hibernation, eating bison carcasses. It was, said the News&Guide, the earliest ever for such an announcement in Yellowstone.
Vail and Beaver Creek had fog in early February, interrupting training of skiers at the World Alpine Ski Championships. People in Vail since the early 1970s could never remember having mid-winter fog before.
In Aspen, The Times noted the fifth consecutive day of 50 degree temperatures, plus the second driest January since records began in 1935. While not linking the recent warm spell, the Aspen Skiing Co.’s Auden Schendler talked about preventing “runaway climate change.”
The Aspen Global Change Institute has issued a report saying that skiing could end by 2100, but the Aspen Times got a sharp response to that prediction from local meteorologist Cory Gates, who called it was the “most ridiculous statement on Earth.”
He said that the unusual weather of this winter is just that. “It just wasn’t our year in the West. Whoop-de-doo,” Gates said.
Gates added that human activities are changing the climate, but this isn’t evidence of that.
WHISTLER TALKING OF
WHISTLER, B.C. — A recent storm produced so much rain in Whistler that there were fears of flooding. Nordic ski trails had to be closed. Higher on the mountain, the rain turned to snow.
Still, the storm spurred a new conversation about “weather-proofing” the local economy by providing more diversity of activities. The question, of course, is whether this will become much more common, as climate models show.
Mayor Nancy Wilhelm-Morden struck a middle ground in an interview with Pique Newsmagazine. “I’ve been here for 41 years, and you know, it has been the case where you’ve had a couple of bad seasons in a row to be followed by two or three mammoth seasons, so it is part of the weather pattern,” she said.
“That said, I’m not a climate change denier, not by any stretch, and we have to be cognizant of climate change and what we can do here in Whistler to give our best efforts to pay attention to that.”
In an editorial, Pique noted that Whistler Blackcomb has doubled its snowmaking capacity in the last four years to 270 snow guns. But there is renewed talk about expanding weather-independent activities in the community.
‘GREAT KID’ ACCUSED OF
CANMORE, Alberta — Could it really be true? That was the reaction of some in Canmore to learn that a former local student had been accused of conspiring to participate in terrorist acts.
Suliman Mohamed was described by his former basketball coach as an “awesome kid” who presented “zero issues” and was “just a great kid.”
But this great kid, who is now 21 and was living in Ottawa, was arrested along with two others, reports the Rocky Mountain Outlook.
For more mountain town news, visit mountaintownnews.net.
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