Our View: Time to stop depending on luck in the economy

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Editorial Board, August through January 2012

  • Scott Stanford, general manager
  • Brent Boyer, editor
  • Tom Ross, reporter
  • Shannon Lukens, community representative
  • Scott Ford, community representative

Contact the editorial board at 970-871-4221 or editor@SteamboatToday.com. Would you like to be a member of the board? Fill out a letter of interest now.

Thursday marks the start of the 2012 Steamboat Springs Economic Summit, the annual gathering that is the signature event of the Steamboat Springs Economic Development Council. This year marks the 18th summit, and it includes an ambitious visioning process to define our community’s economic goals.

But before we turn the Economic Development Council loose on a task list, we must define and agree upon our ultimate destination, what it will look like and how we will know when we have arrived.

A lot has occurred in the local economy since that first economic summit was held in 1994. Even using the simplest of economic performance measurements — per capita income adjusted for inflation — the Yampa Valley’s economy, and specifically that of Steamboat, has improved. During this time period, Routt County’s per capita income adjusted for inflation grew by 35 percent. By comparison, the entire state of Colorado’s per capita income grew by slightly less than 25 percent. Nationally, the number is 21 percent. Clearly, something positive is happening locally. 

To what degree this positive trend occurred by accident or as a result of carefully focused planning is unclear. Most likely, more can be attributed to the luck of being at the right place at the right time.

The theme of this year’s Economic Summit is “Developing Your Economic Roadmap: Looking Forward, Planning Smart.” The summit will provide a mix of speakers and workshops that will allow attendees to define what this theme means for their businesses as well as what it means for us as a community. Defining what economic development means for the greater community likely will be the more significant challenge.

This is not the first time we have wrestled with this question as a community. Unfortunately, economic development is a catch-all term that often is used but just as often poorly understood. Typically, when asked to define what economic development means, we use terms like “diversity” and “vibrancy.” As evidence, both of these are referenced in the mission statements of the Steamboat Springs Economic Development Council, the Routt County Economic Development Cooperative and the Steamboat Springs City Council.

Although diversity and vibrancy often are mentioned as the primary goal of any economic development effort, they are not well understood. Way too often, we have been comfortable in allowing each organization associated with economic development — from the City Council to the Steamboat Springs Chamber Resort Association to Routt County government — to use whatever definition they are comfortable with in the hope our good luck continues. The bottom line is that if economic development can mean anything to anyone, it likely means nothing beyond being a much-overused term that is poorly understood.

As part of this year’s Economic Summit, we ask those who participate in the afternoon’s “visioning” session to ask themselves first, “What is economic diversification, and how will we know if progress is being made?” The same question can be asked in regard to economic vibrancy. We encourage the participants to avoid the temptation to quickly create a to-do list before doing the very hard work of clearly defining what the desired outcome is as it relates to economic diversification and vibrancy. Equally important is defining how progress toward the desired outcome in these two areas is going to be routinely and objectively measured. 

As the Cheshire Cat told Alice in Lewis Carroll’s novel “Alice’s Adventures in Wonderland,” “If you do not know where you are going, any road will get you there.”

Comments

Dan Hill 2 years, 3 months ago

"Routt County’s per capita income adjusted for inflation grew by 35 percent...To what degree this positive trend occurred by accident or as a result of carefully focused planning is unclear."

Here's my explanation. The internet happened. Professionals could now move to the valley full time bringing their above average salaries with them. Pure luck, completely independent of any planning.

What are we doing to build on this trend? Nothing. Talk to any location neutral worker and they will tell you the big issue is year round air service (internet service is a red herring - it's the least of our problems). Our current (increasingly unsustainable) air program does nothing for us but instead just brings in (at the margin) people who don't really have that much money to spend anyway.

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Richard Levy 2 years, 3 months ago

I agree that the our planning has nothing to do with the expansion of the internet and "location-neutral" business. What attracts those people to Steamboat is dependent on planning.

Efforts to protect community character, bike and pedestrian friendly policies, MTB trails on Emerald Mountain, community parks and protecting river corridors are huge assets that continue to be attractive to many people.

Let's continue to protect and promote these assets.

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Scott Wedel 2 years, 2 months ago

As a resort town, Steamboat's relative remoteness has the advantage of not being overwhelmed by tourists and traffic on the weekends which makes SB a nicer place to live than most other resort towns. SB is also surrounded by more private property and so we have a greater variety of options for those looking to move to a resort town. That has nothing to do with planning.

The amenities are nice, but are not better than other places. Other resort towns tend to overspend on a rec or performing arts complex. SB City ends up overspending on an airport terminal that services no flights or buying a motel that is so mismanaged that they are now considering demolishing it. And now instead of focusing the spending to benefit the community, they are figuring out how to spending millions to move police and fire services out of downtown. Things like Strings, Haymaker, ice rink and Tennis Center were well done.

I have to laugh that bike friendly policies are claimed to have the slightest impact. SB may have the worst bike trails and bike lanes of any resort town. SB doesn't even have credible bike lanes to get across downtown. And now they allowed a Yampa St property to build a sidewalk further into the street so with street parking the bicyclists are forced into the traffic. Lincoln Ave reconstruction is pretty, but is very unfriendly for bicyclists that are now forced into the path of traffic at every intersection.

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Robin Craigen 2 years, 2 months ago

Scott you have to be making uninformed silly comments like this about our biking infrastructure just to get a reaction.

Steamboat is Nationally Recognized as a Gold Level Bicycle Friendly Community. There are still things to improve but the quality of existing trails, bike lanes and bike routes, and range of cycling experiences are worthy of recognition and not to be dismissed by casual scorn.

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John Weibel 2 years, 2 months ago

Steamboat will probably always rely on luck in its economy as the focus is tourism. If there is good snow people will come, if it is hot in the summer people will come and both conditions are dependent upon a strong national/world economy.

Not depending upon luck would entail building an economy that has more local focus. Trying to rebuild some of the infrastructure of a local food economy would be the least likely to depend upon luck. Though the challenges of doing so in this climate could use some help from local officials, when stumbling blocks are encountered - when there is no risk of public safety.

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Scott Wedel 2 years, 2 months ago

So if someone lives in West Acres and wants to bike home from working on the mountain what is supposed to be the route?

This area is nice for biking because of dirt trails and roads have less traffic than other places. But SB city as a nice place to bike? A joke. That SB got recognition for putting arrows on streets too narrow for bike paths? What a joke. Silicon Valley with all that traffic is still an easier place to bike commute that SB.

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Daniel Kolb 2 years, 2 months ago

The best thing that SB can do to promote economic growth and development which it tried and true and does not benefit one business over another through the use of tax incentives/abatements/cuts which hardly embraces the free enterprise system, is investment in new and improvements to existing infrastructure whether it be roads, bridges, schools, etc. Make it easier for people and business to get around, improve the quality of their lives and their children through better education and the rest will fall into place, it may take time, but it will happen.

A new study from the Congressional Research Service, "Taxes and the Economy: An Economic Analysis of the Top Tax Rates Since 1945." was recently released and their analysis of six decades of data found that top tax rates "have had little association with saving, investment, or productivity growth." However, the study found that reductions of capital gains taxes and top marginal rate taxes have led to greater income inequality. Past studies cited in the report have suggested that a broad-based tax rate reduction can have "a small to modest, positive effect on economic growth" or "no effect on economic growth."

While this study was at the Federal level, the same lessons apply at the state and local level. You want growth, infrastructure improvement/expansion is the road to success.

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Steve Lewis 2 years, 2 months ago

Daniel, Thank you for writing that. Basic infrastructure is very important in my opinion as well. I attended the ULI presentation on Yampa Street's revitalization. I support the revitalization, but have concerns that seem mirrored in your first sentence.

The presentation suggested, and the steering group echoed, that the BID property tax district of Lincoln, Oak, and Yampa streets (and also a URA) should be activated. The ULI report and its presenter both said there should be a comprehensive reinvigoration of all three streets. I spoke as an Oak Street owner asking for parity of benefit from any taxes taken. We have the same need of sidewalks and attention as Yampa St. and we matter to the district's vitality too. The ULI committee chair stood up behind me to say he supported my comments completely.

But the ULI and their report were directed to address just Yampa St. The local steering group seems focused on Yampa St., but I will join in that discussion to better understand their intention for the tax. I would like to see a comprehensive, and fair, revitalization of the whole of downtown's infrastructure.

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Scott Wedel 2 years, 2 months ago

The best incentive that SB has for business is no city property tax. In Colorado, the commercial property tax rate is substantial and commercial property taxes for properties along Lincoln Ave are already $1,000 a month and more.

The next best incentive for SB businesses is YVEA which has among the lowest electric rates in the state.

This Yampa St revitalization project is exactly what creates a bad environment for businesses. First, the project is only going to promote retail. Second, whatever additional retail occurs on Yampa St is most likely taken for retail in other parts of SB. No one is suggesting there will be retail options on Yampa St that cannot otherwise be located in SB. Third, city is looking to spend a whole lot of money to make the street prettier that could otherwise be used for more tangible benefits. The properties along Yampa St are already worth significant money and anyone redeveloping those lots are going to put in nice sidewalks and so on. So the money the city spends making the street pretty is simply subsidizing those developers and so the property owners ask more for their properties.

It is when cities think they are smarter than the free market that starts scaring off businesses and investors. That sort of government arrogance always ends poorly and then creates a demand for tax increases to cover the government's losses.

I grew up in Silicon Valley which is a whole collection of cities, largest being San Jose, that have grow city limit to city limit so the area is one continuous metropolitan area. Anyone that wants to learn about economic development and attracting business should study that area because it is a lesson on how less by government is more for business. The reason it is known as Silicon Valley and San Jose Tech is because of all the big local companies not located in San Jose. Intel is in City of Santa Clara, Apple is in Cupertino. HP in Palo Alto. Google in Mountain View. And so on. And the more that San Jose worked to attract companies the more that new companies located elsewhere. Companies do not want to form and face established competition subsidized by their city taxes.

The San Jose Redevelopment district subsidized a movie theater that nearly drove the private market art house movie theater out of business. Fortunately for Camera One, the operator of the subsidized theater went under first and infamously left over a weekend and stripping the theater of all equipment. So after it sat empty for a while, the city finally offered it to Camera One at a favorable rent. Tens of millions wasted trying to ruin a nearby local business.

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Scott Wedel 2 years, 2 months ago

City of SB should study the revitalization efforts of Mountain View, Cupertino, Los Altos, Sunnyvale, City of Santa Clara, and learn that less is more. City should then look at redevelopment efforts of San Jose to learn how more is less.

Instead, City of SB is still convinced that city staff is so much smarter than the free enterprise system and will spend money trying to make things happen regardless of the economic reasons why it has not previously happened.

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Scott Wedel 2 years, 2 months ago

And redevelopment districts only make sense when the underlying property value is so low that buildings sit empty and vacant lots persists because rents are so low that rent will never pay for the costs of remodeling or new construction.

Hayden and Oak Creek should have redevelopment districts. Those downtown districts are at risk of being so empty that even local shoppers ignore local stores. If vacant lots were offered for $1 on the condition that the buyer had to immediately construct a commercial building then they would find no takers. So maybe a redevelopment district with subsidies could create an environment where there are good buildings for rent so there is a local retail district.

SB with commercial lots worth high six figures and up does not need redevelopment districts. The value of the vacant lots is based upon how much money the developer of the lot is likely to make. Thus, if the redevelopment projects is believed to add value then the owners of the vacant lots simply increase their asking price.

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Scott Wedel 2 years, 2 months ago

The reason it is known as Silicon Valley and NOT "San Jose Tech" is because of all the big local companies not located in San Jose

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