Aspen finalizes loan to ACRA for marketing
December 8, 2009
ASPEN – The Aspen City Council voted unanimously Monday to give the chamber of commerce $100,000 in the form of a grant and a $400,000 loan to market the resort in 2010.
The council approved a one-year agreement with the Aspen Chamber Resort Association, which also includes its marketing plan for 2010.
The $500,000 allocation is designed to make up for lost revenue as a result of a proposed Local Marketing District that was pulled off the November ballot because of a technical error. Had it passed, the 1 percent bed tax would have generated about $1 million a year.
ACRA plans to put the question to voters next November, and if approved, the city loan will be paid back with that revenue. If not, the loan will be paid back at $50,000 a year over eight years from the existing 0.5 percent lodging tax, which is expected to generate $450,000 next year.
Next year’s budget for ACRA’s destination and marketing arm totals between $95,000 to $135,000 more than in 2009, which was $815,000.
The revenue from the 0.5 percent lodging tax this year brought in roughly $615,000, which was less than in previous years. To make up for that shortfall, the council gave ACRA $200,000 earlier this year.
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ACRA has leaned on the city in previous years when revenues have fallen short.
Mayor Mick Ireland said it’s not appropriate for the city to keep giving ACRA money. A dedicated revenue source must be established, he said.
“We shouldn’t keep hitting the general fund,” Ireland said, adding that Aspen should return to its roots of relying on a sustainable tourism model, and not on the real estate and construction industries.
“If we are [going to return to sustainable tourism] then the voters need to tell us that,” he said. “This is a decision that the community needs to make.”
In the November election, the LMD included about 700 voters in specific boundaries within the city. It was designed that way, supporters said, to decrease the chance that the 1 percent bed tax would fail.
Ireland said earlier Monday that an additional bed or lodging tax should be voted on by the entire city electorate, and that the community should be involved in helping shape what Aspen’s economy is based on.
Council members questioned some details of the marketing plan but in the end supported ACRA’s efforts.