Letters to the Editor
April 21, 2005
Why a revote?
Matt Zalaznick recently wrote a commentary, for the April 15 edition, stating that the Vail conference center revote petition was initiated because a small group of concerned Vail citizens did not like the results of the first vote.
Unfortunately, he could not be further from the truth. If Vail’s conference center today was developing in accordance to what was represented to the voters, there would be no petition for a revote.
However, the reality today is that the Vail conference center is not what was represented to the voters.
At the time of the vote, the conference center was sold to the Vail voters on the basis that it would have absolutely no financial repercussions on the finances of the town. There was to be a firewall between the operations of the conference center and the town’s funds.
It was based on this premise that Vail voters approved the tax for building this center. For the first time in over 20 years, after many previous attempts, the Vail voters agreed to a convention center because the business community was willing to assume all the liability of the project. It turns out that is simply not true.
Recently, partly as a result of our petition efforts, Vail’s bond legal counsel ruled that Vail’s operational charter made the town and its taxpayers ultimately directly responsible and liable for any and all losses not covered by the lodging tax regarding the conference center. This liability exists even though the bonds used are revenue bonds.
The town of Vail and its taxpayers are assuming $94 million, original bonds and interest, of legal financial liability. On top of that, the Vail taxpayer is also responsible for any construction cost overruns not budgeted, which on the first go-around looks to be today at 10 percent, and any and all annual operational cost deficits which exceed the collected escrow. Understand that this conference center, at its best, is projected to operate at a loss.
Even more alarming: In a recent Forbes magazine article, the Feb. 28 issue titled “The Answer is Always Yes,” the massive building campaign of convention centers across the country in the face of a rapidly deteriorating convention business model is detailed for all to read.
I quote: “Where do politicians get the crazy idea that the world needs yet another convention center? From the experts, of course. Sound familiar? ‘We haven’t set our sights on being profitable,’ says Oregon Convention Center’s executive director, Jeffery Blosser. ‘These are challenging times in our industry.’ Challenging? The business is a mess, plagued by taxpayer-funded burst of expansion and a continuing dearth of customers.” So says Forbes magazine. Not a great prospect for taking on so much debt. None of this information was available to the voter at the time of the election.
And finally, at the time of the vote the Vail conference center was to be located on a land parcel donated by Vail Resorts referred to as the “Holy Cross” site to the west of Lionshead. Today the center has been relocated to a town-owned site at the east end of the Lionshead parking structure. This is a very prime, expensive, piece of real estate. Using this site hardly fits the original promise of no financial exposure or risk to the town of Vail. Is it not fair to ask the taxpayers of Vail if their land can be used for this?
In our minds, the Vail convention center today is a very high-risk business venture with significant financial exposure for the Vail taxpayer. This is not what was represented to the voter in 2002. The financial exposure to the Vail taxpayer is even more enormous if the “experts” are incorrect, as they have been with every new center built in the last few years — all 34 of them to be exact.
The town’s finances and its ability to maintain its high-service levels could be hurt drastically. Our revote petition initiative is serving to highlight these risks to the Vail taxpayer and voter. For this reason, and not because we did not like the results of the first vote, we feel the Vail taxpayer should get another opportunity to vote.
Thank you for your interest.