Sept. 11 just one factor in jumbled economic year
SUMMIT COUNTY – While local business people say they don’t discount the weight of Sept. 11, they also say it was but one of many factors that played into a difficult last 12 months.
Post Sept. 11, the economic news across the county hasn’t been much to brag about.
While Breckenridge Ski Resort recorded its best year ever, just miles away, Keystone Resort’s skier numbers dropped by 12 percent. Overall, Colorado skier visits were down 4 percent during the 2001/2002 season.
Sales tax revenues fell countywide. In March, Summit County government was forced to cut nearly $1 million from its budget due to decreases in sales tax and building inspection fees, and plans to cut another $2 million to $3 million from the 2003 budget.
This summer, the county’s unemployment rate clocked in at just over 4 percent – higher than it had been in several years.
The construction and real estate industries, which for years had moved at a frenetic pace, flattened.
A multifaceted picture
But no one is pointing a finger at Sept. 11 alone.
“September 11 came with a lot of other things, and it’s really hard to determine what caused some of the impacts we’ve seen this year,” said Lynn Skall, director of the Summit County Chamber of Commerce. “Was it the drought? Was it the fires? People’s fear of airline travel? I can’t put my finger on a specific dynamic.”
Breckenridge real estate broker Turk Montepare agreed.
“Sept. 11 certainly didn’t help the economy in general, but what percentage was the stock market, the effects of layoffs in the dot-com business and the economy in general?” he asked. “It’s all such a stew, it’s hard to delineate.”
“I think Sept. 11, combined with a bad snow year, is what impacted everybody,” said Marty Ferris, Summit County’s assistant finance director. “We’ve definitely seen a dropoff in our sales tax figures. There aren’t as many people coming here.
“But look at what the stock market is doing – if all your investments are going down, I would guess one of the first things to go is your vacations.”
The economic decline, many say, began before the attacks.
“I would have to say things were on the downslide before, and Sept. 11 just accelerated it,” said Donna Braun, finance director for Silverthorne. “All indicators are showing this is going to continue for a while.”
The impacts that can be directly attributed to the terrorist attacks came immediately after the incidents and then quickly eased, said several local business managers.
“In September 2001, we had to refund over a half-million dollars in room revenue and food and beverage revenue due to people not being able to travel,” said Joe Shackleton, general manager of Breckenridge’s Beaver Run Resort. “But by October, things started rebounding.
“State business was one of our largest markets (last ski season). Typically, Florida and Texas are, but we saw Colorado jump right to the top. We presume it was because Coloradans didn’t want to take their annual trip to Cancun and travel outside the state. I think our winter was like everybody else’s in Breckenridge – it was a good year, not the best.”
The situation was similar on the other side of the county.
“We saw an immediate effect,” said Keystone Resort Chief Operating Officer John Rutter. “People either couldn’t get here and had to cancel, or wouldn’t fly. The majority of that business rebooked at a later date, which was encouraging.
“Then we got into winter. We were 50 percent of our normal snowfall for Keystone, and that was the real dominant factor in our winter.”
All things considered …
Like most of the business people who spoke, Breckenridge Ski Resort Chief Operating Officer Roger McCarthy looks back on the past year with relief.
“A year later, we had what turned out to be a good year,” he said. “Ski school business wasn’t as good as it was. There was a downturn in the economy before Sept. 11, but I think there’s no doubt the spending is down 9 to 11 percent.
“I’ve been in this business 30 years. What’s a normal winter? I don’t know, but people still came. My sense was a lot of people said, “Life goes by too quick. We’re going to do this.'”
Montepare said he, too, sees people thinking harder before they let go of their money.
“People are more cautious about what they consider disposable income,” he said. “Maybe they’re not buying the new mountain bike. They’re using the old canoe. The higher-end (real estate) market is slower. It’s more of a take-your-time, selective market. But we’re not dead in the water. We’ve just got some flatness.”
The local real estate situation is far from dire, Montepare said.
“I’ve lived through a lot of slowdowns,” he said. “In 1989 in Boston, we saw a 40-to-50 percent drop in real estate values. That was panic selling. I think the lowest I’ve seen here is maybe 8 percent. I’ve had a couple sales where people did lose some money, but it was people who bought 18 to 24 months ago. Some stuff has appreciated. And some people who are second-home owners, even if they broke even, were happy because they had their money here instead of in the stock market.
“Historically, everything goes back up. I think our demographics here are much, much stronger than they were in our last big crunch in the ’80s when we were really a very fledgling, adolescent community. That’s why I’m fairly comfortable in the long-term future of Breckenridge.”
Ferris, too, said the county’s recent history had made people comfortable. Now, she said, it’s time to adjust to a changing picture.
“We all just kind of got into this mode of there were always increases,” she said. “I’ve been here 18 years. I think we’ve always had an increase in our sales tax revenue every year. That’s not going to happen this year.”
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