Vail eyes tax on construction
Aspen, CO Colorado
VAIL ” A stream of builders shuffled out of the town of Vail offices Monday, just after a noon deadline for submitting plans to the town.
It was nothing special ” the town has gotten lots of building plans this year.
As of Monday, Vail had issued $567.8 million worth of building permits in 2007 ” almost four times the amount issued through this time last year.
Across Vail, those plans are becoming reality as concrete and steel rise from the ground. Big projects ” such as the Arrabelle at Vail Square, the Four Seasons and the Ritz-Carlton Residences ” will each take more than two years to complete.
Town leaders have long envisioned a “renaissance” that will spruce up Vail and keep it the No. 1 ski resort in North America.
But they also see the construction creating extra costs ” both now and when it’s completed.
Town Council members are considering more taxes and fees for builders. They could decide by next month to ask voters to put a 4 percent construction tax on building materials on November’s ballot.
The town is having trouble funding projects, such as putting cobblestones on pedestrian streets, that are supposed to rival the private projects in quality, officials say.
In fact, the town’s capital projects budget ” which includes things like road repairs and building repairs ” won’t have enough money to pay for next year’s planned improvements.
Also, construction has forced the town to hire more employees, such as code-enforcement officers and construction coordinators, said Judy Camp, the town’s finance director.
And once there are more condos, stores, hotel rooms and timeshares in Vail, there will be more demand for town services such as buses, parking, police and parks, officials say.
“We’ve got to do something to get some revenues off all the construction that’s taking place,” said Vail Mayor Rod Slifer.
Slifer said the town should ask voters to approve the tax.
“I think we’re just falling behind more and more, and we need to cover our costs,” Slifer said.
But Ron Byrne, a local developer who is building the Vail Mountainview Residences on Gore Creek, said a construction tax might end up hurting the town.
“My gut instinct is that adding a tax like that could be detrimental to the growth of Vail,” he said.
Project such as his ” with condos and timeshares ” bring people to town who spend money in stores and restaurants, and that generates sales tax for the town, he said.
“It is part of the general economy when new development occurs,” he said.
The town is also considering “impact fees” to pay for things like staff members’ time to deal with construction, newsletters and things like climbing walls that seek to bring people to Vail during construction.
Under the current proposal, a project worth $100 million would have to pay $558,000 in fees.
Construction taxes or fees could allow the town to rely less on sales tax, said Councilman Mark Gordon. Now, 39 percent of the town’s revenue comes that type of tax.
And, a bad snow year could mean little sales tax, Gordon pointed out.
“I’m definitely interested in finding alternative means of revenue for the town,” he said.