Aspen could have to eat marketing money ‘loan’
November 25, 2009
ASPEN – If Aspen voters don’t approve a new lodging tax, presumably next November, the city of Aspen will likely have to eat $400,000 the City Council has agreed to advance to the Aspen Chamber Resort Association for marketing, Mayor Mick Ireland assured the ACRA board of directors Tuesday.
The City Council agreed last week to give ACRA $100,000 to bolster its marketing efforts, and to advance the chamber another $400,000, with the expectation that the latter sum would be repaid to city coffers from the proceeds of an additional lodging tax devoted to marketing.
“The big rub is, what if the Local Marketing District does not pass and there is no new tax?” said Warren Klug, ACRA board chairman, voicing the concern of many in the room.
“If the election loses, the city is out $400,000. We’re going to take a loss,” Ireland responded. “We’re at risk here, so we have something on the table.”
The Aspen Lodging Association and ACRA had hopes for passage of a Nov. 3 ballot question that proposed a Local Marketing District. Lodges within the district – essentially all the lodging in Aspen – would have collected an additional 1 percent sales tax on top of an existing 0.5 percent lodging tax devoted to marketing.
Snafus with the mail-in ballot, however, ultimately forced the county clerk to pull the ballot question altogether. The results of voting on the measure were not tallied. Only voters who resided within the district were supposed to vote on the proposed tax, but some voters within the district didn’t find the measure on their ballot, while others, living outside the district, did find the question – Referendum 5A – on their ballot.
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Whether the district will be proposed again next year, or some other marketing tax proposal will be pushed instead, remains to be seen. The ACRA wants to meet with the City Council in the early spring to discuss the options, said Debbie Braun, ACRA president.
Rather than a Local Marketing District, it could be that voters citywide are asked to approve another 1 percent lodging tax on top of the existing 0.5 percent lodging tax that funds marketing efforts, she said.
If the marketing district is proposed again, in its same form, with a 5-year sunset, the plan is to collect $100,000 a year for four years out of the proceeds to repay the city, said City Manager Steve Barwick. That repayment plan assumes the district wins voter approval.
“If a new tax doesn’t pass, the city’s got to make this up. It’s going to have to come out of the budget one way or another,” Barwick said.
With $450,000 that the 0.5 percent lodging tax is expected to generate next year, plus the $500,000 from the city, the ACRA will have $950,000 available to market the resort in the spring, summer and fall of 2010; the Aspen Skiing Co. takes the lead in wintertime marketing.
In addition, the city has put up $200,000 for events and is seeking suggestions from the community on how to spend it to bring in tourists.
Ireland said he will work to pass whatever marketing measure is put before voters next year, and said it’s critical to show the community that the ACRA’s marketing efforts are valuable to the resort’s economic health.
“You can win that election with hard work,” he said. “When I work very hard for an election, I rarely lose it.”
It’s key that the community see the ACRA as a conduit for spending marketing dollars effectively and not as a special interest group trying to garner more money for itself, agreed Stan Clauson, board member.
The marketing district was to generate $1 million a year for five years, which would still leave Aspen lagging behind other mountain resorts in spending for marketing, noted David Perry, ACRA board member and Aspen Skiing Co. vice president.
“I see that $5 million as essential to this community’s economic health,” he said.