Lots of questions about center

Diana Donovan
January 4, 2005

The genesis of this version of a Vail convention-conference center was different from prior efforts. Several times in the past large groups of community representatives have worked to design a facility to serve the resort and community of Vail. For various reasons, all of those efforts failed. Some of the reasons for failure are shared with this project.

This proposal came in the form of a presentation by the lodging community to the Vail Town Council to put a Conference Center on the ballot. Clearly, some council members had been included in discussions prior to the presentation and it was quickly placed on the ballot with minimal discussion. There were no public meetings to inform voters of the issues.

In a very close election, Vail citizens voted to collect additional sales and lodging taxes to "plan, build and operate" a conference center. It then became the Vail Town Council's responsibility to make sure that the proposal works and most of all, is a financially responsible venture for the town of Vail.

A specially appointed committee has been studying the finances for many months and there is not yet a clear answer as to its financial viability. In fact, there are more questions than ever. And although the meetings of this committee have been noticed as public meetings, there has not been a meeting for public input and discussion of the entire proposal. The council has been presented various bits and pieces, but has not reviewed the entire project.

During all of these events, things have really changed in the town of Vail and the need for a conference center to bring additional business to Vail must be questioned further.

Proposals have been approved for the redevelopment of the Vail Village Inn and the Holiday Inn sites. The redevelopment of the Vail Resorts property in the center of Lionshead (known as the Core Site) has been approved and is expected to proceed this summer. All of these projects have their own conference center spaces.

Donovan Pavilion has been built and has met with incredible acceptance and success, including a positive cash flow. A face lift for the village in the form of new streetscape and snowmelt is being completed ahead of schedule. The Pirate Ship is being rebuilt and will be completed the spring of 2005. Several lodges are making major additions or being totally rebuilt, like the Tivoli. Various special events are growing and others are being recruited. These are just a few of the positive things happening in Vail which will generate more business and increase sales tax collections. From all appearances, the town has a bright future even without a convention/conference center.

The town probably has fewer true hotel beds now than we did 10 years ago. Although some of the new condos are expected to operate like hotel rooms, they will still be controlled by their owners and may not be reliably available for convention reservation use. Successful convention/conference centers are adjacent to major hotels.

"Value engineering" is already being discussed. Usually that means a reduction in quality, which would certainly compromise the quality of the facility just as it did the first version of the pavilion. In fact, value engineering put an end to the first pavilion because it destroyed the unique design and interior.

This proposal includes a full kitchen and is largely dependent on serving meals and banquets to improve the financial picture. Prior proposals have not included this competition with existing restaurants and hotels for the food business of conventions.

This center originally was proposed to be built on a Vail Resorts parcel. Immediately following the election, the proposal was moved to a town-owned parcel that had been reserved for a multiple-use facility to complete Vail's Civic Center that now includes the library and Dobson Ice Arena. This proposal is a flat floor convention/conference center with all other uses being compromised.

My understanding is that a significant portion of the use of this proposed center will compete directly with existing conference space, restaurants and banquet spaces. It is questionable whether business will increase to replace the existing business lost to the convention center.

History has shown that we are not able to sell even new conference spaces to fill the off-season even when marketing dollars are focused on that effort. Hotels want full price for their rooms in high season, so those rooms are not available in the numbers essential to guarantee the success of a pure convention/conference center. Most of the studies include downvalley hotel rooms, but then Vail does not receive the tax dollars essential to build and operate the center, thus increasing the financial risk to Vail's citizens.

I have been asking many additional questions during the current review period. I have not received answers. Perhaps others have questions similar to some of mine that follow.

-- Is it possible to have a guaranteed maximum construction price before the design is complete?

-- Identify how cost overruns will be paid.

-- Will an increase in property taxes be essential if projections are not reached?

-- How many actual hotel beds exist IN Vail? Is this an adequate number?

-- How much new, approved and existing conference space does Vail have?

-- How many of the projected conferences can fit into these spaces?

-- To assure that the conference center attracts incremental new business, please define the types of conferences and events that the conference center will accommodate that cannot be accommodated by the many new, approved, and existing conference hosting capabilities that Vail will have on line in the next two-three years.

-- What are the impacts on restaurants?

-- Is there a detailed "P&L" statement which shows the estimated truly incremental new sales tax vs. net operating costs? The amount of business taken from existing Vail facilities must be clearly identified.

-- What is the planned marketing expenditure? Where are these marketing dollars coming from? Do these funds come from other marketing efforts?

-- Will this building be vacant during prime seasons?

-- How will we compete with other resort or non-resort conference facilities?

-- How will we compete with facilities with year-round air service?

-- How do we compete without adequate evening activities (a need identified in all surveys) particularly during the off-season?

-- Given that every convention center in the United States operates at a deficit, how will Vail fund this deficit for the life of the building if a very large deficit exists even after increased sales tax collection?

-- The parking need seems to be grossly underestimated to lower building costs.

-- Are there better uses for this vital site?

-- Are there less risky but more successful ways to increase guest visits and sales tax revenue? Have alternatives been researched?

-- Can we afford this proposal or is it simply too great a financial risk?

The successful election does not compel the Vail Town Council to move forward with the project if it is shown that the project is not in the best interests of the Vail community. It must be financially viable. It cannot be a financial risk.

The council can hold an election to redirect the monies from the collection of the new taxes or can end the collection of the new taxes and direct how the remainder would be spent. Just as direction was given in an election, it can be undone or modified by another election.

There is also another option that I have been encouraging the committee to look at: building a multi-use "auditorium" instead of a flat-floor convention space.

It would not be a Vilar Center but would have some raked or theater seating for lectures, movies, plays, music, community theater, and a multitude of other uses and events that guests and residents would benefit from.

It would be a truly multiple use building, which is essential in a town with such limited land for public facilities. And it would help to satisfy the identified need for evening activities. Using it in conjunction with Dobson Arena would create a real asset to the town.

From past studies we know this type of facility will fit on this site. And most importantly, it would complement existing conference spaces. Being a real multiple-use building will also reduce the financial risk.

Expenditures of this magnitude must be questioned no matter how worthy the intention. Many things have changed and become realities since the election. We must make sure this project is good for Vail with little to no financial risk.

There must be answers to all questions and there must be a broader public conversation. Assumptions made in reports must be validated and "facts" provided by special interests and "experts" must be double checked. Unbiased quantitative fiscal data is mostly lacking in the existing reports.

We cannot afford to not get this right, whatever that is! I don't believe we are very close at this point.

But most of all, Vail's citizens should not be exposed to a significant financial risk.



Diana Donovan is a Vail town councilwoman.