Downtown sales growth lags behind rest of city

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— Sales in Steamboat Springs' downtown commercial district are growing, but not as fast as in the rest of the city.

The city's 2005 sales tax collections are up about 7 percent during 2004, but the year-to-date increase in the downtown area is 2.6 percent through September.

Members of Main Street Steamboat Spring's Financial Restructuring Committee said this week that some downtown businesses haven't recovered from the post-Sept. 11 economic downturn, and others are just beginning to recover. The downturn in downtown sales came even as leases were increasing, Main Street Steamboat Springs Executive Director Tracy Barnett said.

Sporting goods sales in Steamboat's downtown are up 7.6 percent this year and saw an increase of 23.3 percent in September. This year marked the first time September's sales tax receipts from sporting goods in downtown surpassed the levels of September 2000. September sporting goods sales were off by 17 percent in 2002.

Barnett said it was difficult to extract true sales trends from sales tax figures without taking into account changes in the downtown landscape. For example, the major expansion of Steamboat Ski & Bike Kare two years ago likely contributed to the growth in sales in the sporting goods industry, she said.

Financial Restructuring Committee Chairwoman Ruth Dombrowski of Alpine Bank said one of her group's goals for 2006 is to keep a just-completed inventory of downtown commercial real estate inventory current. That would allow the trends to be tracked more thoroughly, she said.

Barnett noted that the inventory shows just six empty spaces in the downtown, including second-story locations. That's one sign of a healthy commercial district, but it doesn't tell the entire story.

The committee has worked with the city of Steamboat Springs finance department to break out downtown sales-tax figures to answer the concerns of business owners who previously were concerned with citywide statistics that portrayed a rosier picture than they were seeing.

"A lot of business owners were calling and saying, 'We don't understand these statistics,'" Barnett said. The breakout of downtown statistics helps them understand whether they are underperforming among their peers, she added.

In other sectors of the downtown commercial district, lodging taxes are down 4.5 percent this year. A significant portion of that decline can be pinned on the closing of the Nite's Rest motel in October 2004, Barnett said.

Restaurant tax receipts were down 3.3 percent in September after being up 6.3 percent in July and 5.3 percent in August. Braun's Grill closed in September, accounting for much of the dip.

The biggest category of all, miscellaneous retail, is up 5 percent year to date and was up 4.7 percent in September and 9 percent in August.

A portion of the increase is probably because of inflation, Barnett said. And behind the scenes, there has been churn, with some retail stores closing and others taking their place.

Commercial landlord Bill Mosher, also a member of the committee, said the downtown needs to find the right balance between achieving the critical mass needed for an attractive shopping setting and being overbuilt.

"You have to offer variety and choice," he said, "and we're creating new spaces, which can help with critical mass. On the other hand, if it's overdone, it doesn't help."

Georgia Taylor said the line between more-successful and less-successful downtown businesses might be drawn by those who own their space and therefore control their destiny.

-- To reach Tom Ross, call 871-4205 or e-mail tross@steamboatpilot.com

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