Aspen will loan $400K to ACRA for marketing
November 17, 2009
ASPEN – The Aspen City Council agreed Monday to loan the chamber of commerce $400,000 and issue $100,000 as a grant toward a beefed-up marketing plan for 2010.
The council supported the pitch made by representatives from the Aspen Chamber Resort Association that increased marketing is crucial in a down economy and is necessary to remain competitive with other mountain resorts.
The additional $500,000 will be part of the ACRA’s overall marketing plan, which totals a proposed $1.15 million. Another $450,000 is estimated to come from a 0.5 percent lodging tax that’s earmarked for ACRA marketing.
The ACRA also requested to absorb $200,000 the council set aside earlier this year as economic stimulus funds for marketing ideas generated by the community at large. A committee is currently considering dozens of ideas that were submitted by individuals and organizations.
The majority of council members decided to defer that request until all ideas have been vetted, as well as have more discussion about who should control that money and where it should be applied.
Mayor Mick Ireland said he envisioned the $200,000 to be a tool for involving the community in discussing how Aspen should be marketed in the future, and not necessarily for the ACRA to create new special events as it was suggested.
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“It’s about getting the community talking about how we promote ourselves,” he said, adding the community has to come to a consensus that Aspen should be marketed as an accessible and affordable resort, as well as return to its roots of a sustainable tourism economy not fueled predominately by speculative real estate and construction. “It’s a broader concept.”
Julia Theisen, ACRA’s vice president of sales and marketing, said there’s more benefit to have the chamber control the money because it’s part of an overall plan that would be backed by cross promotions and coordinated, ongoing marketing efforts.
Since the council earmarked the economic stimulus funds, individuals and organizations have come out in droves trying to get a piece of the pie, including the city’s special events department.
As a result, some people feel the process has been politicized.
Andrew Kole, who serves on the Commercial Core and Lodging Commission, said the $200,000 should stay out the ACRA’s control and be overseen independently.
“Everybody’s politically grabbing for the money, and it’s a shame,” he said.
The ACRA in recent years received about $600,000 annually from the lodging tax. But those revenues have fallen off as a result of the recession, and it’s predicted that there will $150,000 less next year.
That’s coupled with the fact that ACRA’s Local Marketing District proposal was pulled from the ballot this past election due to a technical error. If passed, that district would have generated about $1 million a year with a new 1 percent bed tax.
ACRA plans to place the marketing district question on the November 2010 ballot and expects it to pass. The loan from the city would be repaid by that revenue, if the ballot question passes. If it fails, revenue from the existing 0.5 lodging tax would repay the loan over a period of years.
Councilman Torre said it’s questionable asking voters to approve a new bed tax knowing that the revenue will be used to repay a loan that was funded with taxpayer dollars. He added it’s not fair to ask voters to approve paying themselves back.
Councilman Steve Skadron said it’s imperative that the loan is backed with existing collateral.
“This is nothing more than a $500,000 giveaway,” he said.
Ireland said he supports the marketing district and will campaign for it next year, just as he had prior to the ballot question being pulled.
The loan will come from the city’s “rainy day” fund, which totals about $1 million. That money is set aside as cash reserves in case of emergencies.
Councilman Derek Johnson said the city’s 2010 budget is solid and appropriate given the current economic climate.
“I think we should spend those rainy days funds … it’s raining,” he said, suggesting that the council should consider giving more to the ACRA than what was requested. “I like the idea of doing more, not less.”
The ACRA received an additional $200,000 from the city earlier this year to promote Aspen this past summer in response to a downward spiral in tourism and the failing national economy.
Chamber officials said that money helped keep Aspen competitive with other mountain resorts, which have significantly higher marketing budgets.
“Although occupancy was down significantly this year across destinations, our competitive report shows that Aspen had higher occupancy than most of our competitors, especially so in our primary months of our marketing efforts,” Theisen wrote to the council.
The council will formally approve the ACRA’s marketing plan and the loan at a future meeting.