The Pagosa Springs Town Council has a regular meeting scheduled for this evening at 5pm at Town Hall, and much of the meeting will, as usual, involve perfunctory items. Approval of previous meeting minutes. Approval of liquor licenses. Brief reports from staff, and from related boards and commissions. An update on Lodgers Tax collections, and on recent sales tax income.
Three items might be of wider interest, however.
The Mountain Pact
The Council will hear about ‘The Mountain Pact”, for example. Mountain Pact is an environmental/tourism organization that’s promoting a certain political agenda at the federal level, on behalf of communities in the American West. From the presentation we will hear tonight:
Founded in 2014, The Mountain Pact is an effort to educate, mobilize, and empower mountain towns with outdoor recreation-based economies in the American West around federal policy. We work with local elected officials in over 50 mountain communities from all 11 western states to build resilience in the face of environmental stresses and their economic impacts through a shared voice on policies related to climate, public lands, and outdoor recreation…
Some of the Colorado towns who have joined the organization? Aspen, Vail, Telluride, Durango, Dillon, Breckenridge. In other words, Colorado ski towns that, generally speaking, have tax revenues to burn — and that may be especially worried about global warming. And towns especially challenged by the lack of affordable housing.
Workforce Housing Incentives Package Discussion
The Town has been working on workforce housing strategies for for several years, without producing any significant effects on the downtown housing market. Except for a proposal for a LIHTC (Low Income Housing Tax Credit) project, the only proposed large-scale developments within the Town limits are anything but affordable. But we keep trying?
From the Council packet:
Staff has drafted a preliminary incentive package for discussion purposes and we will be working with PAWSD for their consideration of adopting similar housing income ranges and an incentive package consistent with the Town’s adopted definitions, income ranges and regulations. The biggest challenge for an incentive package is developing an incentive large enough to help offset the developers loss of profit versus market rate developments, while negotiating a long term (preferably decades to in-perpetuity) deed restriction for an affordability category…
We note that subsidies provided to developers of affordable housing — waivers of fees, and such — do not cost the taxpayers anything directly. The cost to the non-subsidized taxpayers is a possible reduction of services, due to reduced revenues flowing into the Town bank account. (You can download the proposed Housing Incentives here.)
And then we have the proverbial ‘economic development’ question…
Adoption of Economic Development Incentives Policy
As I mentioned yesterday in Part Six, the Town of Pagosa Springs and the Archuleta County government have, between the two of them, invested around $8.4 million into various attempts to boost the local economy. No one has made a comprehensive study of these various investments to see whether they’ve been a royal waste of money, or worse, if the investments have actually be detrimental to our lives here in Pagosa Springs. The people spending the money have simply assumed that there’s been a benefit, because… well… the intention is to have a benefit.
At least $6.9 million of this amount has been spent promoting tourism. That is to say, over the past couple of decades, our local governments have been promoting one particular industry with taxpayer subsidies — at a level far above every other industry sector. We note, however, that the tourism industry generally pays the lowest possible wages. To put it another way, our local governments have been working really hard, for many years, to help create low-paying jobs.
During the approval of the Economic Development Incentives Policy at the Board of County Commissioners’ meeting on Tuesday, County administrator Scott Wall reminded the commissioners that the policy is completely flexible, and really guarantees nothing at all to any particular business. He also noted that the policy, as written, discourages subsidies to new incoming businesses that would directly compete with existing Archuleta County businesses.
Mr. Wall:
“One thing I want the public to know is, we don’t want to give incentives to duplicate an existing business — somebody who has already been paying their taxes, and is a known entity and has provided wages and paid taxes — and then we bring in a competitor. But if it’s something very unique and different — for example, a hotel with a big conference center — you may want to subsidize that…”
Commissioner Steve Wadley:
“We’ve tried other things, like the geothermal, and this is something else, in partnership with the Town government. We would like the opportunity to bring in other businesses that might be looking to come in. And this community desperately needs a big hotel, and a conference center. I’d love to be at the table with them.”
We note here, that the only business type mentioned during Tuesday’s BOCC discussion of the Economic Development Incentives Policy was a new hotel, with a big conference center.
What a happy coincidence. We just happen to have a future development currently being discussed at Town Hall: a new hotel with a big new conference center, proposed for somewhere on the the 27 vacant acres owned by developer Jack Searle. A rough sketch of this proposed hotel (and conference center) was shared this past May at a lightly-attended community presentation by David Dronet, managing partner of the Springs Resort. (The Springs Resort declined to allow the local media to share the image, however.) Additionally, Mr. Searle and Mr. Dronet have been meeting with Town staff and elected leaders to promote an ‘Urban Renewal Authority’ to funnel even more taxpayer subsidies towards the new hotel. The developers claim that the new hotel and surrounding commercial structures are simply not financially feasible unless tax subsidies are created.
No net loss of taxes would take place, however, because without the tax subsidies, there will be no development and thus no taxes collected. So we are told.
As far as I can tell, we’ve had a long standing policy, here in Colorado, where we expect homeowners and business owners — everyone, really — to help support our government operations through the payment of sales and property taxes. When our local governments pick one particular project, and offer to reimburse its development costs with tax subsidies… just because the developers claim they won’t move ahead without tax subsidies? … Well, that’s just plain unfair to the rest of the community’s businesses, and to the rest of the community’s taxpayers.
We do, in fact, have a full-blown economic crisis unfolding in Archuleta County in 2019. But the crisis is not a ‘lack of big hotels.’ The crisis is a lack of employees. Nearly every day, I hear someone from a local business or agency, complaining that they cannot find qualified workers. And even when a suitable employee can be found, that employee often cannot find an affordable place to live in Archuleta County.
Another hotel, subsidized by the taxpayers, and paying Pagosa tourism industry wages, will only make the problem worse.
So… will the Town Council vote, tonight, to make the problem worse?