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Mountain News: Aspen economy still slowing

ASPEN, Colo. - The conventional wisdom has been that the most affluent high-end resorts are the last to enter a recession and the first to emerge. If so, this one has a ways to go.

ASPEN, Colo. - The conventional wisdom has been that the most affluent high-end resorts are the last to enter a recession and the first to emerge. If so, this one has a ways to go.

The Aspen Times reports of continued declines in sales tax collections and further layoffs among local governments up and down the Roaring Fork Valley.

Aspen has laid off six employees, all of them with jobs relating to the dormant development and real estate sectors. These layoffs come after the city shaved $25 million from the municipal budget in early February. Further budget cuts are expected yet in March.

Pitkin County, where Aspen is located, is also finding a more severe economic decline than was expected. Sales tax revenues had been projected to drop 3 per cent overall in 2009, with a far sharper decline in fees collected from developers. Instead, the January sales tax revenues were down 14 per cent. No cuts are expected - for now - as the county has a good cushion in surplus funds.

Snowmass Village also discovered a 17 per cent decline in revenues in January. This follows a 10 per cent decline in December.

Services are being cut here and there. The valley-wide bus system, called Roaring Fork Transportation Authority, is looking to reduce service in early morning hours and after 9 at night once ski season is over. Ironically, it has money to push forward with a capital-intensive project called bus rapid transit, or BRT. The project was approved by voters, who committed to a sales tax increase and authorized the issuance of $45 million in bonds.

Meanwhile, in Carbondale, an opening for a building inspector that pays $45,000 to $48,000 a year drew 85 applicants. Ironically, the town has issued not even one permit this year for a new housing start, compared to 17 last year at the same time. There have been but a few handfuls of permits for remodels.

Jobs evaporating

JACKSON, Wyo. - Although the situation surely can't be as grim as in Cleveland, for example, layoffs are mounting in Jackson and the surrounding area, Jackson Hole.

Total numbers were unavailable, but the Jackson Hole News & Guide found anecdotal evidence. The Center for the Arts, a community non-profit, laid off four people, a quarter of its work force. Jackson Hole Mountain Resort has not laid off anyone, but year-round employees will be given mandatory one-week unpaid vacations.

The newspaper itself noted that it has become thinner, but there have been no layoffs. Kevin Olson, the paper's associate publisher, said that the newspaper and its sister publication, the Jackson Hole Daily, do not have the large overheads common at metro papers. "The community newspaper market is alive and well and healthy (across the country)," Olson said. "We're in that market."

Still, Olson admitted to concern. "Revenue outlooks make me very anxious about what the future holds."

A glimpse of the economy is offered by sales tax collections for the City of Jackson and Teton County, which slipped 18 per cent in January compared to the same month last year. Bob McLaurin, the town administrator, is now expecting sales tax revenues to drop 12 per cent on average for the next year. Layoffs are possible, he said.

Squaw Valley slashes prices

TRUCKEE, Calif. - Squaw Valley has announced major reductions in the prices of its season passes. The reason, according to the resort, is to commemorate the 60 th anniversary of the ski area's founding and the 50 th anniversary of it hosting the Winter Olympics. That was in 1960.

A more skeptical view suggests that Squaw is competing with Heavenly, the resort a few miles away, which is part of the Vail Resorts chain. Vail hit a home run this season with its Epic Pass, only $579.

Squaw's passes aren't that good, but they're aggressively discounted, up to $1,000 less. The lowest priced pass will be $379, which does not allow Saturday skiing from Christmas until March, nor during the holiday periods. A tiered level of access and perks is offered in three other increments of passes ranging in price to $1,500.

In a sense, this represents an extension of the discounted season pass ski pricing introduced at Idaho's Bogus Basin in the 1990s and then expanded by Colorado's Winter Park. But now, the same principles are being applied to the destination skier market.

Illegal bookings on the rise

MAMMOTH LAKES, Calif. - The town council in Mammoth Lakes has decided to begin "sting" operations on illegal condo and home rentals. Telluride is also struggling with the same issue.

In Mammoth Lakes, several members of the lodging community spoke at a recent meeting about the proliferation of owner-guest rentals, which they say has tripled. In the past, at least in theory, the owners actually knew the guests, and because they were friends, wouldn't charge - except, notes the Sheet, perhaps a case a case of beer. As such, this was legal.

But the Internet, far more than newspapers of the past, is allowing this concept to proliferate. And no longer do the home- or condo-owners know the visitors. In the process, taxes are not being paid on the transaction. Those taxes are the most important funding mechanism for town government in Mammoth Lakes.

The Sheet reports estimates that such owner-guest nights used to comprise 10 to 15 per cent of all booked room nights, but now may be 50 per cent or higher.

Judy Farnett, of a reservations agency, pointed to a trend. "All this is happening with the ease of online booking engines," she said. Private homeowners can undercut legitimate rentals by up to 50 per cent, she said.

Romney jewelry lifted

PARK CITY, Utah - It wasn't a big heist by the standards of Park City, only $5,000 to $6,000 of jewelry. But the house from which the jewelry disappeared is owned by Mitt Romney, a candidate for the Republican nomination for president last year. The Park Record notes that the 7-bedroom, 10-bathroom mansion is on the market for $5.25 million.

Butch Cassidy to ride again

TELLURIDE, COLO. - Do you suppose that Robert Redford would be willing to duck out of his hideaway in Utah and put in a show at Telluride this summer? In mid-June, 120 years nearly to the day, Telluride will have a re-enactment of the robbing of a local bank by Butch Cassidy and his gang. At least in the movie version, Redford was the Sundance Kid, a name reflected in his Utah resort.

The Telluride Watch explains that the re-enactment is part of a new Heritage Festival. Also a major part of the weekend will be appearances by representatives of the Ute bands that once made their homes in the San Miguel Valley. The festival will wrap up with a performance by R. Carlos Nakai, the Grammy Award-nominated flutist whose heritage is of the Navajo and Ute tribes.

Yellowstone a legal mess

BIG SKY, Mont. - The battle to control the genteel Yellowstone Club is turning nasty, reports the Wall Street Journal. The newspaper says a variety of billionaires and investors are likely during coming weeks to place bids to acquire the 13,500-acre private ski and golf club located between Bozeman, Mont., and Yellowstone National Club.

The latest news is that a group of founding members who hold equity in the club have filed a lawsuit against the founders, Tim and Edra Blixseth, accusing them of breaching their fiduciary duty in how they used the loan proceeds.

The $375 million loan "enriched the Blixseths (who took most of the proceeds) and Credit Suisse (which earned a seven-figure fee, plus interest)," the lawsuit alleges.

Yellowstone filed for bankruptcy court protection in November. "Once a refuge of privacy and exclusivity for the ultrawealthy, Yellowstone now is a battle zone of disputes," the paper says. Partly precipitating the sale was the divorce of the Blixseths.

CB enters into formal process

CRESTED BUTTE, Colo. - The arguments haven't changed in Crested Butte during the last six years about the proposed ski area called Snodgrass, which is across the way from the existing ski area. But the circumstances have. In January, the Forest Service agreed to accept the proposal for the expansion.

That acceptance doesn't make Snodgrass a reality, but it dramatically improves its odds of happening.

The plan calls for a gondola to connect the existing ski area, crossing over the town of Mt. Crested Butte, and reaching 275 total acres of new terrain. About half of the new terrain would be of intermediate difficulty. Ski area officials for years have said that the existing ski area's experts-heavy runs dampen interest from the vast majority of destination skiers, who usually find Crested Butte so intimidating that they don't return for a second visit.

The resort hopes to have 600,000 skier days annually within a few years. That compares with 415,000 last year - but about two-thirds were pass holders or people who skied for free during a promotion called Test Ride.

The Crested Butte News reports that 300 people turned out for a meeting explaining all this. Many remain unconvinced that the ski area needs to expand.

"People say at one time we had 290,000 paid skier visits, and why can't we do that again without expanding," said Ken Stone, the president of the resort company. He said that the resort breaks even at 360,000 skiers - but that does not include summer expenses. Not many people will go to Crested Butte specifically because it's small and has a lot of extreme terrain.

Also part of the plan for economic sustainability is major expansion of the base-area real estate, more than 2,000 housing units, to be built over a period of decades.

The Forest Service accepted the proposal after Crested Butte agreed to modify its layout of lifts to avoid areas identified last year as geologically unstable.

Park City gets one and loses one

PARK CITY, Utah - The big news out of Utah last week was that legislators had agreed to change what many people saw as quaint, even kooky, laws governing the dispensing of liquor at bars. To drink at a bar, somebody had to become a member, which involved filling out a form and paying a membership fee.

Places like Park City had objected to the requirement for years, but the New York Times says it took the recession - and an extremely popular governor, Jon Huntsman Jr. - to move the ball across the line.

Huntsman is a Mormon in a state heavily dominated by Mormons, a religion that officially has no use for alcohol. However, he argued the business case for accommodating a less esoteric approach to dispensing alcohol.

Now, Park City hopes that Huntsman will come to its rescue in another way. For several years, the U.S. Air Force has wanted to build a recreational hotel for personnel from a base located elsewhere in Utah. Park City objects, because of traffic impacts it fears at the site that is being proposed. It suggests an alternate site, but the Air Force doesn't want that site. Utah's legislature passed a law that would bypass the local governments in the planning process. Park City sees this as a directly intended snub - but hopes that Huntsman will veto the bill.

Haste makes waste

TRUCKEE, Calif. - Northstar Mountain Properties will pay $500,000 in fines and has agreed to finance $2.25 million in environmental improvements in and around the Northstar-at-Tahoe resort, located between Truckee and Lake Tahoe.

The settlement was reported to be the largest of its kind in California. The violations occurred in 2006 when storm-water runoff from the construction site at Northstar sullied Martis Creek, a tributary to the Truckee River.

Blake Riva, managing partner for East West Partners Tahoe, the principal partner of Northstar Mountain Properties, said the violations occurred when the company tried to "undertake too much construction too fast."

"We would prefer not to be in a position of paying any fines, but we believe it's a positive that the funds are being used for local environmental programs," Riva said.

Local newspapers reported the money will be used for restoration at an open space area called Waddle Ranch, as well as wildfire reduction work at Northstar itself.

In a separate announcement, East West Partners announced it has signed on to advise the Sun Valley Co. about real estate development of two projects in the adjoining towns of Ketchum and Sun Valley.

Carpenters' union protests

BRECKENRIDGE, Colo. - Unions have become so rare at construction sites in ski towns that they seem almost as outdated as miners. But organizers are trying to change that. The Summit Daily News reports that the union of carpenters has unfurled a banner at a construction site at the base area in Breckenridge.

"Shame on Vail Resorts, Inc.," says the sign, although the dispute most specifically is with a construction company, Spacecon Specialty Contractors.

A spokesman for the United Brotherhood of Carpenters and Joiners of America said the company is paying wages of $16.50 to $18 per hour for hanging drywall and placing metal studs. The company believes the standard wage - and the one the workers should be paid - is $26.15 per hour, including family health care.

A similar dispute between the union and a contractor in Aspen is also reported.