Taxing debate: City Council prepares to decide fate of lodging tax as 2 finalists jockey for slice of the pie
June 23, 2013
In the lengthy and taxing debate about how the city of Steamboat Springs should spend millions of dollars of its lodging tax revenue in the coming years, Chris Johns certainly is in a unique position.
As a bike store owner on Yampa Street, Johns is poised to benefit greatly from either of the two final proposals that emerged after a year-plus vetting process.
The Steamboat Springs Trails Alliance's proposed hiking and biking trails indeed would satisfy — and potentially grow — Johns' customer base.
A new promenade on Yampa Street, on the other hand, would add a 16- to 24-foot-wide sidewalk to the front door of his Wheels Bike Shop and possibly bring more customers and action to the business nestled along the Yampa River.
The benefits are sweet for Johns to think about, but when he's asked to choose between the two finalists, the headaches start.
"It would be hard for me to say which one I prefer," Johns said last week, adding that he is excited by the vision of the trails and its tourism potential, but he also is supportive of neighboring business owners' efforts to promote the promenade. "But I'm in a good position because I'm going to benefit either way."
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For many in Steamboat who have been following the tax debate with a vested interest in one of the proposals, the luxury of a win-win scenario like the one Johns describes is elusive.
Money on bike trails will do nothing to lure older, more affluent visitors downtown for shows, proponents of the Chief Theater's request for capital improvement funding have argued.
But Johns easily could be any member of the Steamboat Springs City Council, which currently is grappling with the decision of how to spend the money after it frees up this year from retiring the debt on Haymaker Golf Course.
The council is charged with deciding the best use of the tax that was created in the late '80s to build new amenities that promote tourism in Steamboat.
And before they sign off on spending any money, council members are taking their time and hoping to address a number of concerns about the final proposals.
Is it wise for the city to potentially invest hundreds of thousands of dollars in trail projects that will be done outside of city limits and without the guarantee of long-term access?
Will the Yampa River promenade be more of a boon for the downtown stakeholders and residents than a tourist draw?
With council set to revisit the recommendation July 2, the stakes are high, and emotions are running strong.
It's a good problem to have, council member Kevin Kaminski recently said to a crowd of people who held varying but strong opinions about how the tax should be spent.
But not everyone can come out of this process a true winner.
A passionate debate
The lodging tax's rare availability has evoked much passion in the community.
Even the advocates of proposals that were nixed from contention months ago still are lobbying their elected officials for a piece of the tax pie.
A committee made up of three leaders of the lodging community, two City Council members and a community volunteer just spent a year vetting dozens of proposals for the tax as objectively as they could.
The applications ranged from the entertaining (How about we give a videographer some cash to make an intriguing documentary about the history of Howelsen Hill?) to the quickly disqualified (Who thinks new portable toilets across town really will spur any tourist to click "buy" on an Expedia booking to Steamboat?).
In the end, the committee recommended the trails projects proposed by the Trails Alliance should receive 90 percent, or an estimated $600,000, of the tax revenue each year for the next decade.
But the City Council recently indicated it might not follow that recommendation, with some members expressing a desire to see the revenue split among more than one proposal.
Moments after the council voted last month to have the lodging tax committee reconvene and look more into the possibility of the promenade and the trails projects, proponents of the two final proposals spilled into the lobby of Centennial Hall to digest the news.
Members of the Trails Alliance, which today still has the full endorsement of the lodging tax committee, said they weren't disappointed in the council's extension of the process and its refusal to go full speed ahead with the trails projects.
Instead, they said they would continue explaining why their proposal best meets the ballot language that created the tax and has the most potential to bring more visitors to town.
Proponents of the Yampa Street promenade, on the other hand, were excited that some on the council were open to sharing the revenue despite a majority of the lodging tax committee thinking it wouldn't be in the city's best interest to split the tax and potentially dilute the tax revenue's impact.
Today, the two groups still are hoping for different outcomes.
Asked about the potential of sharing, the Trails Alliance says doing so could prevent the city from building the more popular and expensive extensions of the Yampa River Core Trail.
The downtown stakeholders insist that they never have sought the full pot of the tax revenue and that they could build much of the promenade with $300,000 per year from the tax that in recent years has netted no less than $600,000 annually.
In the days and weeks after that meeting and that reflection, both groups have been working behind the scenes to better position their plans to receive the funding.
Sifting through a stack of architectural drawings a few weeks after the council meeting, Chris Paoli, Jarret Duty and Ryan Spaustat said they and other downtown stakeholders are working hard to ensure a promenade on Yampa Street soon can be "shovel-ready."
That means refining cost estimates and making sure there will be signed maintenance agreements in place with property owners who stand to benefit from the project.
The planners are all too aware of the recent struggles the city and business owners at the base of Steamboat Ski Area have been working through in regards to maintenance agreements put in place after the city created an urban renewal authority to fund new infrastructure through tax-incremental financing.
The city specifically has faced some unanticipated maintenance costs as a result of the projects.
"What's great about our group is we have a lawyer, we have engineers, we have a really experienced team of getting everything done," Paoli said. "That's probably the biggest question the city has is, 'Are you ready?' and our answer is, 'yes.'"
If the promenade is selected to receive a portion of the accommodations tax dollars, planners say the project could be completed as early as fall 2015.
It would entail adding four new riverside parks, each with a different purpose, on Sixth, Seventh, Ninth and 10th streets.
And according to a new website the group launched Tuesday, planners estimate that with $163,000 annually from property owners to maintain the improvements, 51.6 percent of the total project will be privately funded and 48.4 percent will be publicly funded.
The group estimates a lodging tax commitment of $300,000 per year for 20 years could be bonded to produce $3.75 million for the promenade.
Planning around the wheel
When founders of the Steamboat Springs Trails Alliance ride their bikes to community meetings and talk about their vision for the city as a world-class biking destination, it's hard to imagine how they find the time to do other things that don't involve trail workdays, cycling research and bike park planning.
The lodging tax has consumed many of their days in the past year, and they sense their trail plans, which also will accommodate hikers and walkers, are close to a major breakthrough.
To ensure the city will be able to measure the impact of the projects, groups like Routt County Riders and Bike Town USA have ordered 16 new trail counters that will survey how many people are using popular trails.
With a baseline of ridership established, the groups will be able to see the impact of new trails and also help a steering committee prioritize projects and determine when to fund them.
"We keep hearing, 'There's no data. There's no data. How can you back this up?'" Doug Davis, executive director of the Steamboat Springs Bike Town USA Initiative, said earlier this month. "To go with the counters, we're working on finding additional money for independent studies for the next three years to see how we're doing with trail usage."
After a meeting to further describe their trails projects, Davis, along with Trails Alliance co-founder Eric Meyer and trail designer Aryeh Copa, headed to the Bear River Bike Park.
They stood on a tall mound of dirt at the park and worked with designers from Bell helmets to determine how they best could use a new grant from Bell to complete an expert jump line at the park this summer.
The cycling groups also described how an upcoming project will widen the access of the recently completed Rotary Trail to allow adaptive cyclists to enjoy the route.
While proponents of the trails projects and the promenade can spend hours promoting the benefits of their projects, each holds its own set of questions and concerns that could complicate how they are funded.
Businesses with benefits
If architectural drawings become reality, Steamboat could have an attractive new amenity to market in the Yampa Street promenade.
But for much of the deliberations about whether the plan should receive any of the lodging tax, the vetting committee spent a lot of time wrestling with whether the project would be more of a benefit to locals and downtown business owners than tourists.
Scott Marr, owner of the Holiday Inn, also expressed a concern about infusing so much of the lodging tax into downtown when much of the revenue is generated by guests staying off the main street.
It is easy to see that the plan, which would convert vacant lots on Yampa into city-owned parks and not new businesses and potential competition, would indeed benefit the planners of the promenade and their property values.
Paoli and the other leaders of the proposal acknowledge that fact, but they point to the simultaneous public benefit, the significant private investment and the potential for transfers of development rights away from the Yampa properties as reasons the promenade isn't just a public improvement for private benefit.
Some concerns about the Yampa Street plans also were raised recently at a meeting hosted by the city and Mainstreet Steamboat Springs about how to revitalize the downtown area.
Some merchants on Lincoln Avenue and Oak Street questioned what benefit they would see from a project like the promenade.
Mainstreet Manager Tracy Barnett countered that "a rising tide lifts all boats."
After months of being integrated with planning for greater downtown improvements, the Yampa Street revitalization project appears to now have branched off and become its own group of stakeholders.
On their new website and in meetings, the Yampa Street redevelopment group draws a Venn diagram showing "town" and the promenade in the center of two overlapping circles representing biking and skiing in Steamboat.
On the biking front, questions remain.
Patience and planning
Community members could spend hours delving into the detailed topographic maps and proposed elevation gains of the trails that could become a reality with help from the lodging tax.
It's easy to close one's eyes and imagine a new trail and the sweeping views it could offer.
But it isn't clear when the projects could go from plan to pavement, or dirt.
Kent Foster, the U.S. Forest Service's recreation manager for the Hahn's Peak/Bears Ears Ranger District, said this week that the concerns multiple City Council members have about using city tax dollars on trails outside of city limits are valid.
He added that the Forest Service, which is facing budget cuts from Congress, would need to hammer out agreements on the maintenance of new trails to ensure users have constant access.
"It seems like there are some people in the community who feel like all the planning is done, and we're ready to go (on building the trails), and that's not the case at all," Foster said.
As an example, he said the Trails Alliance's proposed signature Walton Rim Trail, which is among the top three identified priorities of the group, is likely to take years to become a reality.
That's assuming environmental studies come back OK, the route is acceptable to the public and building a trail through a roadless wilderness area is in the public's best interest.
The Forest Service also must balance requests from different user groups, including those who want to use motorized vehicles on trails.
"Anytime we're going to identify trails to put into the system, we need to look at the bigger need for trails because it's a long-term decision," Foster said. "Once we determine there is a need, we get into environmental analysis, and that can take a year or two."
The Forest Service has proven to be a valuable partner in trail building in Steamboat and at Steamboat Ski Area, and Foster said relationships with groups like Routt County Riders and the Trails Alliance offer benefits for both sides.
But as the trails projects inch closer to securing lodging tax dollars, Foster is making it clear that patience is a necessary trait for a trail builder.
He said a priority of the Trails Alliance and the Forest Service is the development of four to five unauthorized trails cut on Buffalo Pass and near Mad Creek.
He imagined those types of projects could be some of the first to be realized on the Trails Alliance's list.
Foster also wasn't afraid to step into the debate about the lodging tax dollars.
"We're all winning," he said. "I think no matter how this plays out with the accommodations tax, whether it goes to (the trails) or the downtown group or the Howelsen Hill group, it's going to be a win-win."
The City Council will revive the debate about the lodging tax dollars July 2.
What is clear is that after the council settles on a recommended use, the proposal is likely to head to the ballot box so voters here can approve bonding for a project or OK a multiyear commitment to spend the funds.
At its next meeting, the council also will weigh new information on potential bonding for the projects and what a scenario in which they both receive money could look like.
There also is a chance some of the proposed improvements to amenities at Howelsen Hill could reenter the lodging tax conversation after they recently were praised by two council members.
Back at the Wheels Bike Shop on Yampa Street, Chris Johns said he'll be tuning in.
"It's really hard thinking about it right now," Johns said. "It's a tough decision. But whatever they decide to go with, they should make sure they do it right."
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