Mountain towns forecast the future

ASPEN – Two theories prevail about how the current economic travails will ultimately affect mountain destination resorts.

One school holds that if the balloon has burst, it will begin inflating once again – perhaps late this year, but perhaps not even for three, four or five years. This viewpoint sees drama, but no fundamental restructuring. Real estate, after emerging as the top-drawer economic player during the last 10 to 20 years, will revive to regain some of its former glory, although probably not to the same proportions of 2004-08.

A second theory sees the lights being permanently dimmed. In this view, the real estate bubble that caused the profusion of big vacation homes will never again regain the vigor of the last several years, and perhaps not even of the last couple of decades. As such, the economies of mountain valleys will again be driven more purely by tourism.

Deep-thinkers gathered at a recent meeting in Aspen tended toward the latter view. “I don’t see how anybody can say we’re going to return to lost levels of prosperity,” said Ford Frick, managing director of BBC Research and Consulting, a Denver-based firm. Frick, an economist, has analyzed mountain and other economies since the late 1970s.

Many people in the wealthy mountain towns had come to believe that their economies were recession proof. After all, even in the depths of the Great Depression, there were wealthy people in these places. The downturn of 2001-02 was certainly felt in places like Vail and Aspen, but after a year of self-introspection and plenty of affordable housing, they roared back beginning in late 2003.

Another downturn, in the early 1990s, was barely noticed.

But this one is different, Frick argues. “We haven’t seen this one before. The resorts are more vulnerable.” He went on to explain that the wealthy travelers who visit or live part-time at high-end resorts were at ground zero of the recession. This, he predicted, will cause not just a temporary lull in real estate sales, but will bludgeon the market. Prices will start dropping. “We’re hardly there yet,” he said.

Many people had been buying real estate in resorts speculatively, because it kept going up and up. The same thing was happening across the country, of course. But the resorts may have reflected this more so, because the appreciation rivaled that found in places like Phoenix, Las Vegas and along the West Coast.

But what will happen now if there’s no prospect of making money by flipping properties. Some believe that tourism will enjoy a second golden era. Instead of having to share the front page with real estate developers, they can be considered the elite of the class.

Jim Westkott, a demographer with Colorado’s Department of Local Affairs, adheres to this view. He suggests the dynamics of aging will result in more people wanting to be tourists, even if they can’t afford to speculate in high-end vacation homes.

“The beauty of the area has not been lost,” Westkott told the crowd in Aspen. But reading the same tea leaves, Frick saw a darker future. Mountain resorts may appeal to retirees in their late 50s and 60s, but as they continue to age, the snow and thin air lose their appeal.

Both speakers mused on the future with caveats, explainsThe Aspen Times, the source of much of this reporting. This is new ground, and so little can be predicted with any great confidence, they noted.

Much clearer is the past. A Montana-based consultant, Headwater Economics, has studied recessions going back more than 30 years to see how various counties of the West responded economically during and immediately after the downturns.

Strictly by the numbers, Eagle County – home to Vail and several of Aspen’s suburbs –  bounced back quicker than the rest of the country after every recession, reports the group’s Ben Alexander, an economist. Pitkin County also did far better after the recessions of 1975, 1980, 1982, 1991 and 2001.

But Alexander warns against drawing too many conclusions. “Looking at statistics from the past alone can be risky,” he said. “However, we know that more diverse economies are more resilient and more likely to recover faster,” he told the group.

Construction races ahead in Vail

VAIL – Real estate may be softer than a marshmallow, but don’t tell that to Vail. Hundreds of finish carpenters, tile-layers and other construction hands remain at work on five significant construction projects in the town’s core. Included are a Four Seasons Hotel and Ritz-Carlton Residences. These and other projects represent roughly $1 billion of base-area redevelopment on top of another $1 billion completed earlier in the decade.

Next in the lineup is replacement of the town’s 1,100-space LionsHead Parking Structure. At the very least, remedial work will be needed to prevent decay of the garage, and town officials believe they can achieve that while also gaining a long-coveted community conference center by partnering with a developer. The developer would gain the rights to build a couple of hotels – a W and St. Regis are the prime candidates – plus the usual assortment of restaurants and stores.

Several years ago, the town selected a Dallas-based developer, Open Hospitality Group-Hillwood Capital. The consortium includes Ross Perot Jr.The Vail Daily reports that the town and the Texas development group continue to negotiate. But the development planning has been difficult enough that some members of the Town Council have suggested launching maintenance of the parking garage for now.

Ski area cited in ski patroller’s death

JACKSON, Wyo. – Kathryn Miller, a ski patroller at Jackson Hole Mountain Resort, died in March from injuries suffered while inspecting a steep, rock-sided chute. The Wyoming state government is now issuing the resort operator a citation, charging that the ski area should have required its ski patrollers to wear helmets.

Jackson Hole will appeal the citation, arguing that none of the 400-plus ski areas in the United States required helmets as of March, when the accident occurred, reports theJackson Hole News&Guide.

However, Vail Resorts in April announced that it would make helmets mandatory for all employees skiing or riding on the job beginning next ski season. The company has four ski areas in Colorado and one in California. Vail will also mandate helmets for children ages 12 and under who participate in group lessons.

David Byrd, director of education and risk for the National Ski Areas Association, told the newspaper he wouldn’t be surprised to see other ski areas follow Vail’s lead.

Would a helmet have prevented the death of Miller? That presumably remains a point of conjecture. But a 2008 study by J. Shealy, R. Johnson and C. Ettlinger concluded that the “salutary effect (of helmet usage) was limited to the less serious head injuries, such as scalp lacerations and mild concussions.”

The study, says theJackson Hole News&Guide, found “no significant effect” for the more severe concussions, closed-head injuries and skull fractures.

Still, use of helmets continues to increase. A study by the National Ski Areas Association found 48 percent of skiers and boarders used helmets this past winter, up from 43 percent the year before.

Couple calls in rescue for their dog

BANFF, Alberta – Pretend you have an 11-year-old German shepherd. You take him on your outing, but the sharp rocks have hurt his feet so much that when you reach the base of the mountain you intend to climb, he’s already limping. What to do?

In Banff National Park, a couple decided to rope Rover around a tree. That maybe wasn’t the best idea to begin with, but it deteriorated when they found the going on the mountain much more difficult than expected. Forced to overnight on high, they called rescue officials by cell phone asking assistance –  their dog.

Rescue officials similarly saw danger to the dog, fearing the dog might be attacked and eaten by a predator, reports theRocky Mountain Outlook. At first light, the rescue officials dispatched a helicopter to retrieve Rover. Parks Canada, which administers Banff, was reportedly thinking of assessing the couple $600, the cost of flying the helicopter.

Aspen starts smart-grid installation

ASPEN – Aspen has taken the first steps to installing a so-called smart-grid. More than 200 meters have been installed in buildings, mostly in an affordable housing complex called Burlingame Ranch.

The meters communicate information about how much energy a person is using and when, helping the consumer figure out how to most efficiently use the electricity. A smart-grid infrastructure also improves efficiencies in countless other ways that do not necessarily require human decision-making.

– Allen Best