Aspen chamber pushes for new lodging tax
The Aspen Times
Aspen, CO Colorado
ASPEN ” Officials from the chamber of commerce are hoping within weeks to convince a majority of Aspen commercial property owners to sign off on a proposal to generate an estimated $1 million annually for marketing through a new bed tax.
Aspen Chamber Resort Association board chairman Warren Klug on Tuesday explained the details of a proposed Local Marketing District that would appear on the November ballot. It would ask to tack a 1 percent fee onto daily room rates.
ACRA officials hope that by mid-June, at least 50 percent of the commercial properties within the proposed boundaries as determined by property valuations will sign a petition asking the City Council to put the district on the ballot. Two public hearings would be held before the council officially puts the district to a vote.
Only registered voters who live within the defined boundary or own property there would vote on the establishment of the district. It’s unknown how many people would be able to vote since the boundary has not yet been established.
Rental properties that are included in the proposed boundary but don’t want to be can either decline to sign the petition or cast a “no” vote at the polls. The boundary doesn’t have to be contiguous but will mostly contain the commercial core.
Klug said he and other ACRA officials will spend the next few weeks finalizing the boundaries and rallying support from property owners. He added that he’s concerned about involvement from some large properties owned by outside interests, like the Hotel Jerome and the St. Regis. But Klug said he hopes he can convince those properties to be part of the district.
“We’ll be talking to a lot of people,” he said. “Absolutely everybody I’ve talked to is supportive.”
Aspen currently has a 0.5 percent lodging tax dedicated to summer marketing. It raises about $600,000 annually. Unlike winter marketing that is funded primarily by the Aspen Skiing Co., there is no significant resource established to market the summer other than the existing lodging tax, chamber officials said.
That’s not enough in this economic climate, they added.
“It’s clear $500,000 or $600,000 in marketing is pretty small,” Klug said. “Here we are with a premier resort with a little amount for marketing and sales.”
Julia Theisen, vice president of marketing and sales at ACRA, said Aspen falls below other resorts in terms of marketing budgets. Snowmass and Vail, for example, have budgets upwards of $2 million.
ACRA President and CEO Debbie Braun said in addition to the $600,000 budget, she and other chamber representatives have found themselves in recent years asking the council for more money, which comes out of the city’s general fund.
“We need a permanent revenue stream instead of going back to the general fund every time,” she said.
The Local Marketing District concept was borne out of the Aspen Lodging Association, and ACRA officials chose that route after learning that the resorts of Steamboat Springs and Estes Park have similar set-ups that work successfully. And establishing a district here doesn’t require a vote of the entire electorate, which makes its success rate more probable, ACRA officials say.
“This is a more narrow voter count,” Klug said. “So the likelihood of passage is greater.”
The 0.5 percent lodging tax only won by a margin of 80 votes when it was passed in 2000, and other bed taxes have failed at the polls over the years, said ACRA board member Bill Tomcich, who also is the president and CEO of Stay Aspen Snowmass, a central reservations booking agency.
He added that now is an opportune time to ask for the approval of the district because economic conditions may motivate lodge and commercial property owners into increasing marketing efforts, and room rates will likely remain relatively low through the next year.
“The opportunity to pursue this has never been better,” Tomcich said.
By state law, there would be a district board to oversee the use of the funds generated by the district. It’s anticipated that the money will be used by ACRA Destination Marketing to augment its current efforts and budget.
“Proponents see this as the only way to generate economic health of this community,” Klug said.
The Aspen City Council directed staff to move forward with the Burlingame early childhood education center, but decided it needs more information on the affordable housing units that are part of the schematic design at a work session Monday.