A Better Way To Build On The Resort’s Success

January 13, 2017

Killington, VT 

I am not on board with designating $100,000 for support of Killington Resort’s efforts to bring back the World Cup. 

First of all, there are no guarantees that Killington will even be considered by the FIS (International Ski Federation, the World Cup governing body). The reason the World Cup came to Killington this year is Aspen was awarded the World Cup Finals this year. That event happens at the end of the season. Aspen typically hosts the Women’s World Cup event that came to Killington this year. Killington was awarded the event because the FIS does not want any resort to get two World Cup events in a given season.

While Killington Resort and Powdr (the Resort) did a great job in staging the event and received great coverage and penultimate praise from all media, none of this is a guarantee we’ll get a World Cup event in the future. 

On top of that Mother Nature may not cooperate with snow or temperatures. I give kudos to Jeff Temple, Killington Operations Manager, and his crew, who came through with flying colors in less than ideal conditions to produce the snow cover for this year’s event. Can you imagine if they went through making eight feet of snow and then temperatures soaring like they are this week with inches of rain washing it all away?

Secondly, the Select Board is currently struggling with preparing the 2018 budget; cutting costs, delaying road and bridge projects such as East Mountain Road and reconstruction of the River Street Bridge (and threatening possible loss of already approved grants in the process) as well as kicking the can down the road with its planned capital funding. All the while making the $100,000 set aside for “Strategic Investments” sacrosanct. Even with all the cuts and delays the Board is currently faced with a four cent increase in the property tax. The $100k is 1.25 cents of that.

Following Mike Solimano’s presentation before the Killington Select Board January 10th,  it was asked if this $100k would be used even if the event did not come to Killington or was canceled. There was some waffling and then stated if that was the case the town would retain the money. I’m skeptical - what I witnessed was uncertainty about the disposition as no negotiations or agreements had yet occurred in this regard. My contention was and is - mucho dinero is spent in anticipation of the event. Staging and tents need to be erected, concessions need to stocked, snow made, etc.. 

Mike Solimano’s Letter to the Editor in the January 11, 2017 Mountain Times states,  “we have asked the Killington Select Board to include $100,000 from the 2018 budget….which will help provide hospitality services”.

I’m not sure what that means exactly but it doesn’t seem to rule out that some of that $100k will be sunken costs in anticipation of the event which may not be recoverable.

Having said all that, I’m in favor of helping the Resort. During the aforementioned Select Board meeting, Jim Haff, former Selectman and owner of the Butternut Inn, suggested we revisit rescinding the Sales Tax portion of the 1% options tax (Sales 1%). I support that idea.

When the Resort floated this idea a couple of years ago I was dead set against it. The Resort presented a plan with substantial investments for summer amenities to increase summer business for the mountain and community. In my skepticism I asked if the town voted out the Sales 1% what guarantees would there be that the Resort would do what they planned. The answer was “there are no guarantees” and if the Resort didn’t follow through we could reinstate the Sales 1% (easier said than done). The proposal was shelved. 

However, with the passage of time we have witnessed that the Resort has followed through with their investments and has substantially increased summer business. By all accounts I’ve heard, “best summer ever” in feedback from local businesses. Howard Smith even decided to keep Sushi Yoshi open.

I contend that the Resort’s investments have increased business in the town by a far greater margin than any efforts by the town’s Economic Development and Tourism Department (EDT). The Resort is planning further investment and SP Land is moving forward on the Ski Village now that the millstone of constant local legal suits has been lifted off their necks. Once the construction of the Village begins it will dwarf the town’s EDT efforts: initially with the construction, then with real estate sales, and finally with service jobs. This is not to mention the increase in the Grand List which would increase property tax receipts for the town.

Taking Haff’s proposal further, the town would hand over all EDT related functions to the KPAA and eliminate Marketing and Events from the town budget. After querying the Select Board for a comparison of the Sales 1% receipts vs. the town budget for Economic Development and Tourism (EDT), the quick analysis by Selectman Chris Bianchi showed receipts were roughly $400k and expenses were around $360k. That’s pretty close to a wash. When one considers during Seth Webb’s tenure much of the EDT spending was interspersed among other departments the rest of the $40k difference could easily be found.

Since there are three parts to the 1% Options tax and the proposal is to repeal only the sales tax portion, the town would retain the rooms and , meals and liquor, portions. Going forward economic development spending would be limited to improving and maintaining the town’s infrastructure.

If we do this as a town, the Resort will not need our direct subsidy and will be able to comfortably invest in its infrastructure, summer activities and World Cup efforts. I would think it would also consider some sort of quid quo pro to the citizens and increased financial support to the KPAA since elimination of the Sales 1% would increase their cash flow beyond what the town currently receives from the tax as the 30% that goes to the state will be retained. The increased cash flow to the Resort would be around a half million dollars annually.

In this way we would not need to gamble the town’s money on something that may or may not occur and make a proper budget addressing the town’s current and future needs as well as helping the Resort “build on its success”.

Vito Rasenas