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DRAFT Final Report Ever Vail Fiscal Impact Analysis Prepared for: Town of Vail Prepared by: Economic & Planning Systems, Inc. January 7, 2011 EPS #20812
Table of Contents 1. INTRODUCTION.................................................................................................... 1 Purpose .......................................................
............................................................1 Report Organization ..................................................................................................1
Methodology ............................................................................................................3 Fiscal Model Organization....................................................
.......................................6 2. PROJECT OVERVIEW AND KEY ASSUMPTIONS.................................................................. 8 Development Program...............................
................................................................8 Key Assumptions ....................................................................................................
12 3. FISCAL IMPACTS ................................................................................................ 14 Summary of Fiscal Impacts ....................................................
.................................. 14 Existing Site Fiscal Conditions................................................................................... 18 General Fund Impacts ......................
....................................................................... 19 Other Fund Impacts ................................................................................................
25 4. ECONOMIC IMPACTS ............................................................................................ 29 Summary of Retail Impacts ......................................................
................................ 29 Ever Vail Spending Flows ......................................................................................... 34 Retail Sales in Ever Vail Businesses
........................................................................... 38 5. KEY FINDINGS AND RECOMMENDATIONS.....................................................................
43
List of Tables Table 1 Ever Vail Proposed Development Program ...........................................................8 Table 2 Ever Vail Estimated Market Values...................................
...................................9 Table 3 Ever Vail Retail and Commercial Development Program ...................................... 10 Table 4 Comparison of Ever Vail Retail Programs.............
.............................................. 11 Table 5 Occupancy Assumptions.................................................................................. 12 Table 6 High Scenario
Fiscal Impacts ........................................................................... 15 Table 7 Low Scenario Fiscal Impacts .....................................................................
....... 16 Table 8 Current General Revenues from Ever Vail Site ................................................... 18 Table 9 High Scenario -General Fund Revenues and Expenses.......................
................. 20 Table 10 Low Scenario – General Fund Revenues and Expenses........................................ 21 Table 11 Summary of Ever Vail Sales Tax.....................................
.................................. 23 Table 12 General Fund One Time Revenues and Expenses................................................ 24 Table 13 Capital Fund Impacts – High Scenario............
................................................... 26 Table 14 Capital Fund Impacts – High Scenario............................................................... 27 Table 15 RETT,
Vail Marketing District, and URA Revenues ............................................... 28 Table 16 Summary of Town Retail Sales Flows with Ever Vail............................................
31 Table 17 Vail Retail Inventory ....................................................................................... 33 Table 18 Total Ever Vail Guest Spending Regardless of Location............
............................ 35 Table 19 Ever Vail Guest Spending Capture Rates ........................................................... 36 Table 20 Ever Vail Guest Spending by Location
............................................................... 37 Table 21 Potential Erosion from Existing Business Districts ............................................... 40 Table
22 Projected Sources of Sales in Ever Vail Retail..................................................... 41 Table 23 Projected Net Dollar Flows by Business District ....................................
.............. 42
List of Figures Figure 1 Ever Vail Guest Spending Patterns ................................................................... 30 Figure 2 Net Dollar Flows vs. Existing Retail Sales
.......................................................... 32
Economic & Planning Systems, Inc. 1 20812-R-01-07-2011.doc 1. INTRODUCTION Purpose Economic & Planning Systems (EPS) was hired by the Town of Vail to conduct a fiscal and economic impact
analysis of the proposed Ever Vail development. EPS’ scope of work included two major tasks: Fiscal Impact Analysis --The fiscal impact analysis addresses the costs of providing Town
services to the project compared to the revenues generated by the project. The fiscal analysis accounts for a range of funds including the General Fund, the Capital Fund, the RETT Fund,
the Marketing Fund, and the URA Fund. Economic Impact Analysis --The economic impact analysis addresses the ways in which the project is expected to impact other sectors of the Vail
economy and how these impacts can be mitigated. One of the key issues has been cannibalization (sales erosion). To address this issue, the Economic Impact Analysis quantifies retail
sales flows by base area, Vail Village, Lionshead, and West Vail. The Economic Impact analysis also addresses other economic and policy issues (more qualitatively) such as the provision
and filling of “hot beds,” the capability to attract group sales and ability of the project to fill shoulder seasons, and the economic goal of attracting and retaining jobs in more diverse
economic sectors. Repor t Organizat ion This report provides a comprehensive analysis of the Ever Vail projected impacts. It includes the following chapters: 1. Introduction – Identifies
the purpose for the analysis and lists key issues to be evaluated. 2. Project Overview and Key Assumptions – Provides summary of project, a summary of how the program has changed, and
lists the key assumptions used to determine the fiscal and economic impacts. 3. Fiscal Impacts – Identifies the full range of fiscal revenues and expenditure for five different Town
funds. 4. Economic Impacts – Provides basis for understanding sales flows into and within the Town of Vail. Estimates future sales flows and quantifies cannibalization impacts to existing
retail nodes. 5. Recommendations – Lists key findings from this study and isolates key issues that warrant follow up based on this analysis.
Ever Vail Fiscal Impact Analysis January 7, 2011 Economic & Planning Systems, Inc. 2 Draft Final Report Summary of Previous Material On December 7, 2010, Economic & Planning Systems
presented its analysis to the Vail Town Council regarding the fiscal and economic impacts of the proposed Ever Vail development. (Material used in the presentation was dated November
11, 2010.) During the presentation, Council members asked a series of questions. In response, EPS has provided this expanded report to address: Follow Up Questions – This report provides
a more detailed explanation of the methods and assumptions used in the analysis. The report describes the projections for each fund and links the narrative to detailed tables to provide
a more incremental approach and increase the level of understanding of the models used in the analysis. It also addresses specific issues such as the Lionshead retail sales levels, lift
ticket revenue projections, and revenue streams generated by the current improvements. Revisions – A number of small revisions have been made to address comments and to correct minor
errors. The changes show that the project will have a slightly better fiscal and economic impact on the Town than originally projected. None affect the overall conclusions. These revisions
are summarized below. 1. Fiscal Impact Model Overview. The methodology section was revised and expanded to describe the organization of the Fiscal Impact Model and the functions of the
various tables. 2. Lionshead food and beverage sales. Lionshead food and beverage sales are approximately $22.2 million, compared to the incorrect figure of $2.9 million shown previously.
EPS overlooked a category of sales in the previous version and the model has been corrected. A small change to the erosion and sales flows estimates was required after this change, resulting
in a minor difference in the sales flow figures (1.0 percent positive net sales flow versus 0.9 percent in this version). 3. RETT Fund. The figure reported in Tables 6 and 7 of the previous
memo reflected the total for RETT from initial developer sales and the recreation impact fee. These two figures are now reported separately. The on-going revenues stated previously have
not changed. 4. General Fund Expenses. The General Fund expenses under the cumulative scenario declined by $149,000. EPS mistakenly included this right-of-way maintenance cost twice
in the cumulative impact. Because costs are now lower, the fiscal benefit is higher. 5. General Fund Revenues. Revenues declined by $44,000 in Phase I and $18,000 in Phase II due to
the elimination of the Road and Bridge Property Tax. Since the project is largely within the Lionshead URA, this revenue stream would be part of the increment captured by the URA. 6.
A typographical error in Figure 1 (the dollar bill image) was corrected.
Ever Vail Fiscal Impact Analysis January 7, 2011 Economic & Planning Systems, Inc. 3 Draft Final Report Methodology This section provides an overview of the methodology used to perform
the detailed calculations in the Fiscal Impact Model. Fiscal impact analysis (FIA) is a municipal financial planning and community development tool used to evaluate the impacts of land
use decisions. It provides order-of-magnitude estimates of the impacts to a Town’s ongoing revenues, operations and maintenance costs, and capital expenditures. The FIA can, however,
identify specific project impacts to be addressed and mitigated such as extraordinary O&M costs, or one-time capital costs triggered by the project. The analysis focuses on the Town’s
General Fund revenues and expenditures to estimate the net fiscal impact of the project. The General Fund is the major operating fund for the Town. The analysis also estimates the building
and construction related revenues, the Real Estate Transfer Tax (RETT), construction use tax, lodging tax, the recreation impact fee, and property tax increment to the URA. The Town
has many other smaller revenue sources. Most of these were not analyzed because they do not have a strong nexus to growth and development. In other words, they are determined by contractual
agreements or formulas which are not directly linked to new growth and development. Expenditures are not estimated for the RETT, Vail Marketing District, or URA funds because expenditures
from these funds are made on a discretionary basis as funds are available, and these expenditures may not be directly related to impacts generated by Ever Vail. Cost and Revenue Methodology
The fiscal impact model uses the Town of Vail Budgets and Comprehensive Annual Financial Reports (CAFR) from 2006-2009 as the basis for estimating revenue and cost factors which are
applied to estimate project specific impacts. The analysis compares annual ongoing revenues to ongoing annual expenditures (O&M). One time capital costs are addressed separately. Two
methods are used to estimate costs and revenues: case studies and average cost or revenue multipliers as described below. Case Studies This refers to a specific calculation of the marginal
costs or revenues derived from the Project based on available data. Case studies were developed for revenue sources when refined calculation methods were available. For example, property
taxes are calculated from expected market values multiplied by the assessment ratio and then multiplied by the applicable mill rates. Sales tax revenues are calculated from estimated
visitor expenditures. Police and fire impacts (calls for service) were estimated by constructing a per-unit comparison of call volume in Lionshead Village. Average Cost or Revenue Multipliers
These are cost or revenue measures that are ratios of budget line items to known quantities such as population, housing units, or peak persons served. The variable “peak persons served”
is defined as population plus visitors plus one-half of non-resident employees. Half of non-resident employees reflect the impacts of employees who are only present for a portion of
a day. This estimating technique is used when more detailed data is not available. Revenues or
Ever Vail Fiscal Impact Analysis January 7, 2011 Economic & Planning Systems, Inc. 4 Draft Final Report expenditures can be expressed in terms of a cost/revenue per capita, or per housing
unit, or per peak person served, etc. Some costs and revenues do not increase at the same rate as the Town’s growth (i.e., the per capita or person served, etc., factors). For example,
general Town administration and government is a relatively fixed cost that does not increase by a one-to-one ratio with new development. The costs to provide other services such as police
and fire are more directly tied to the increase in population and persons served generated by new development. To account for cost variability, a percentage adjustment is applied to
gross average cost multipliers to reduce them to a net multiplier. One Time vs. Ongoing Revenues New development generates two types of revenue to the General Fund: annual revenue and
onetime revenue. Annual revenue includes property tax, sales tax, and lodging sales tax. One time revenue includes building permit and plan review fees. Note that other Town Funds, such
as Capital, RETT, Marketing, etc., are addressed following the General Fund discussion. Tax Revenues The tax revenues described below are ongoing annual revenues that will occur after
the project is constructed and occupied, and will continue for the life of the project. The major ongoing tax revenues analyzed are described below: Sales and Lodging Tax – The Town
allocates about 60 percent of sales tax to the General Fund and 40 percent to the Capital Fund. Within the General Fund, sales tax accounts for 37 percent of all General Fund revenues.
Sales tax includes the 4.0 percent general sales tax and the 1.4 percent lodging tax. The 4.0 sales tax applies to both retail sales and overnight lodging sales. The 1.4 percent lodging
tax is dedicated to the Vail Marketing District and is not used to fund Town operations. Property Tax – Property tax is normally a General Fund revenue. However, the Ever Vail project
lies within the Lionshead Urban Renewal Area (URA). The URA collects property tax increment revenues in this area. Any new property tax revenue in the URA, including revenues generated
by the Ever Vail project, flows to the URA rather than the General Fund. The URA can use these revenues to fund a variety of functions or capital projects within the URA. Ski Lift
Tax – This is a 4.0 percent sales tax on lift ticket sales. Lift tax revenue contributes to operating the Town’s free bus service. Lift tax is calculated from net new skier visits, rather
than the total number of skiers originating in the Ever Vail mountain portal. Real Estate Transfer Tax (RETT) –This is a 1.0 percent transaction tax on the sale of real property in
the Town of Vail. RETT revenues are restricted to the RETT Fund, which is used for parks, recreation, open space, and environmental sustainability.
Ever Vail Fiscal Impact Analysis January 7, 2011 Economic & Planning Systems, Inc. 5 Draft Final Report Construction Related Revenues Ever Vail will generate several revenue streams
during the course of project construction. These are “one time” revenues in that they will end when the project is built out. The primary concern in the FIA is to ensure that the ongoing
revenues will cover the costs of services, as construction related revenues cannot be relied on if construction stops. However, construction fees and permits are roughly 15 percent of
General Fund revenues, and are an important operating revenue source from year to year and should be accounted for in the analysis. Construction Use Tax – The Town’s 4.0 percent construction
use tax is applied to the cost of materials. The construction use tax is dedicated to the Capital Fund. Building Permit and Plan Review Fees – The Town charges a building permit fee
based on the construction valuation and a plan review fee that is 65 percent of the building permit fee. Permit fees go to the General Fund. Recreation Impact Fee – The Town charges
a $1.00 per square foot recreation impact fee which is allocated to the RETT fund for parks, recreation, open space, and environmental sustainability. Traffic Impact Fee – The Town
has traditionally collected a traffic impact fee that is $6,500 per peak hour trip. It has been included in the analysis, recognizing that in previous project approvals, the Town has
accepted public road improvements as a credit against the impact fee.
Ever Vail Fiscal Impact Analysis January 7, 2011 Economic & Planning Systems, Inc. 6 Draft Final Report Fiscal Model Organization The Table of Contents in the Fiscal Model shows the
general organization of the model, with table numbers and descriptions divided into major topic areas described below. Town staff has a copy of the full Fiscal Impact Model. The tables
referenced in this section refer to the Fiscal Impact Model, not this report. Project Assumptions The development program and basic market assumptions are identified in this section
of the Fiscal Model, in Tables 1 through 8. Many costs and revenues are based on visitor days generated by the project. The calculation of net new visitor days is shown in Table 5. The
project’s peak population and visitors are also calculated in Table 6. The monthly occupancies used for calculating skier visits are shown in Table 8. Town Demographics and Budget Analysis
This section of the model calculates the cost and revenue multiplier factors used for costs and revenues estimated with the average cost method. Table 9 estimates the total Town peak
population. Table 10 is an estimate of second homes (not in the rental pool) used in Table 9. Tables 11 through 14 identify the various cost and revenues in the general fund, the methods
used to estimate them (case studies or average cost method), and the resulting average cost and revenue multipliers. Table 15 describes the current sales tax structure in the Town. Revenue
Analysis Tables 16 through 22 provide detailed case study estimates of the property tax, lodging tax, RETT, and lift tax revenues. Table 22 estimates the lift tax from only net new skier
visits, calculated from net new visitor days. Table 22a provides a total estimate of skiers that would originate in the Ever Vail portal, not including day skiers from parking. Cost
Analysis Case studies for the major project costs are shown in Tables 23 through 28. These were developed with Town department heads and key staff. The transit impacts identified in
Table 28 come from LSC Transportation Consultants. One Time Fees and Revenues Tables 29 through 32 calculate one time building and development fees from the development program. Actual
fees will vary as more specific construction information becomes available. These revenues occur “one time” in that they only occur during construction.
Ever Vail Fiscal Impact Analysis January 7, 2011 Economic & Planning Systems, Inc. 7 Draft Final Report Results Tables Tables 33 through 38 combine the case study estimates and average
cost/revenue estimates to calculate the annual net fiscal impact to the General Fund, shown in detail in Table 35. Table 36 shows one-time General Fund revenues. Table 37 shows the impact
to the Capital Fund. Table 38 shows the impacts to the RETT, Vail Marketing District, and URA funds. Expenditures are not estimated for the RETT, Vail Marketing District, or URA funds
because expenditures from these funds are made on a discretionary basis, as funds are available, and these expenditures may not be related to impacts generated by Ever Vail.
Economic & Planning Systems, Inc. 8 20812-R-01-07-2011.doc 2. PROJECT OVERVIEW AND KEY ASSUMPTIONS The purpose of this chapter is to summarize the proposed development program, isolate
various elements within the program by use to evaluate fiscal impact, and provide assumptions about the functioning of the development that serve as the basis for the modeling. Development
Program Residential The development program as proposed is summarized in Table 1. It includes a total of 530 residential units and hotel rooms. The hotel is currently proposed to be
102 rooms. A 76 unit “branded residence” condominium component would be associated with the hotel brand, management, and guest services. An additional 307 market rate condominiums are
proposed, plus 26 deed restricted rental units and 19 deed restricted for-sale condominiums. The for-sale units would be deed restricted to Eagle County residents and full-time local
employees. Compared to the earlier submittal, the residential program is largely the same; the major difference is that the hotel has been reduced to 102 rooms from 120 rooms. The retail
program has also been scaled back significantly, as will be discussed below. The project was analyzed as a two phase project. The fiscal impact of each phase was modeled as if it were
a single standalone project; the fiscal impacts of Phase I and Phase II are reported separately. The cumulative impact of full buildout of both phases was also analyzed. EPS has modeled
the east phase as Phase I. Phase I includes the hotel and retail/commercial space. Phase II, the western phase, is almost entirely residential. Table 1 Ever Vail Proposed Development
Program Ever Vail Fiscal Impact Analysis Description Phase I Phase II Total East West Development Program Hotel 102 0 102 Branded Residences 76 0 76 Condominiums 158 149 307 Deed Restricted
Rental 8 18 26 Deed Restricted For-Sale 12 7 19 Total Units 356 174 530 GRFA 468,067 315,273 783,340 Source: Vail Resorts Development Company, Economic & Planning Systems H:\20812 Ever
Vail Fiscal Analysis\Models\[20812-fiscal model-12-29-2010.xls]1-Dev Program
Ever Vail Fiscal Impact Analysis January 7, 2011 Economic & Planning Systems, Inc. 9 Draft Final Report Market values for the fiscal impact analysis were determined by EPS from research
on several recently built and currently for-sale base area projects located throughout the Intermountain West. The market rate components are modeled at an average of $1,200 per square
foot, or $1.8 million per unit, as shown in Table 2. The hotel market value is estimated to be $426,000 per room, based on 60 percent occupancy, a $350 per night average daily rate,
50 percent operating expenses, and a 9.0 percent capitalization rate. Vail Resorts Development Company (VRDC) staff has indicated that the deed-restricted for-sale units would be priced
at approximately $400,000 per unit. Table 2 Ever Vail Estimated Market Values Ever Vail Fiscal Impact Analysis Description Phase I Phase II Avg. Sq. Ft. Hotel ------Branded Residences
1,500 1,500 Condominiums 1,500 1,500 Deed Restricted Rental 1,200 1,200 Deed Restricted For-Sale 1,250 1,250 Market Value/Sq. Ft. Hotel ------Branded Residences $1,200 $1,200 Condominiums
$1,200 $1,200 Deed Restricted Rental ------Deed Restricted For-Sale $325 $325 Market Value/Unit Hotel $426,000 $426,000 Branded Residences $1,800,000 $1,800,000 Condominiums $1,800,000
$1,800,000 Deed Restricted Rental $102,000 $102,000 Deed Restricted For-Sale $406,250 $406,250 Source: Vail Resorts Development Company, Economic & Planning Systems H:\20812 Ever Vail
Fiscal Analysis\Models\[20812-fiscal model-12-29-2010.xls]3-MktAssumptions
Ever Vail Fiscal Impact Analysis January 7, 2011 Economic & Planning Systems, Inc. 10 Draft Final Report Retail and Commercial The project is also proposed to contain approximately 123,000
square feet of mixed use retail and commercial space. However, less than half of the space or approximately 53,000 square feet is programmed as retail and food and beverage space. There
is an additional 69,500 square feet of conference, meeting, skier services, spa, and office space, as shown in Table 3. The program also proposes additional parking. A total of 1,464
parking spaces will be constructed, 1,025 in Phase I and 439 in Phase II. Approximately 400 of the total count will be public spaces and are anticipated to be used by day skiers during
the ski season. The balance fulfills requirements related to retail and residential uses. Table 3 Ever Vail Retail and Commercial Development Program Ever Vail Fiscal Impact Analysis
Description Phase I Phase II Total East West Retail and F&B Restaurant 16,090 0 16,090 Nightclub Nightclub 6,013 0 6,013 Sporting/Apparel 11,118 0 11,118 Spa and Other Leaseable Retail
5,881 0 5,881 Grocer 14,156 0 14,156 Subtotal 53,258 0 53,258 Other Commercial Space Skier Services-Ticketing 2,489 0 2,489 Children's Skier Services 0 12,114 12,114 Spa 9,870 0 9,870
Office 35,395 0 35,395 Meeting Spaces (incl. hotel) 9,663 0 9,663 Subtotal 57,417 12,114 69,531 Totals 110,675 12,114 122,789 Parking Public Spaces 200 200 400 General 825 239 1,064
Total Analyzed 1,025 439 1,464 Source: Vail Resorts & BBC Research, Economic & Planning Systems H:\20812 Ever Vail Fiscal Analysis\Models\[20812-fiscal model-12-29-2010.xls]4-Commercial
Dev Prog
Ever Vail Fiscal Impact Analysis January 7, 2011 Economic & Planning Systems, Inc. 11 Draft Final Report The applicant has reduced by approximately half the amount of retail proposed
in this submittal. The applicant is currently proposing 53,000 square feet of restaurant, spa, and leasable retail space. Earlier versions of the development program contained approximately
100,000 square feet of retail and restaurant space. The current proposal has been downsized, as shown in Table 4. Previously, EPS expressed concerns that the earlier proposal had too
much retail space for the location and the size of the bed base proposed. A number of potential impacts to the Town were identified such as vacant retail space and a lack of vitality
and potential impacts to the existing retail areas of the Town. The reduction in retail space was an outcome of several discussions and working meetings between Vail Resorts Development
Company (VRDC), EPS, BBC Research working as VRDC’s consultant, and Town of Vail Staff. A key factor used in these discussions was the amount of retail floor area that could be supported
by reasonable assumptions about the expenditure potential from Ever Vail guests and residents. (Based on the immediate adjacency, the “right sizing” also accounted for future expenditure
from Ritz Carlton guests.) There is now general agreement that the retail is appropriately sized, the supply reflects appropriate assumptions about demand, and that the resulting area
has sufficient ballast to provide a high quality guest experience expected by visitors at a ski area base portal. Table 4 Comparison of Ever Vail Retail Programs Ever Vail Fiscal Impact
Analysis Retail Development Current Proposal Previous Proposal Restaurant 16,090 24,000 Nightclub 6,013 6,000 Sporting/Apparel 11,118 36,000 Spa and Other Leaseable Retail 5,881 21,000
Grocer 14,156 13,000 Total 53,258 100,000 Source: Vail Resorts, Economic & Planning Systems H:\20812 Ever Vail Fiscal Analysis\Models\[20812-fiscal model-11-05-2010.xls]Sheet1
Ever Vail Fiscal Impact Analysis January 7, 2011 Economic & Planning Systems, Inc. 12 Draft Final Report Key Assumptions EPS analyzed the project under “High” and “Low” scenarios to
evaluate the project under different performance measures. The High Scenario reflects what EPS believes to be reasonable estimates of performance for a well located high quality base
portal development with direct
lift access. It was not designed to be an “optimistic” or “aggressive” scenario. It does, however, assume that VRDC will actively market the project, pursue off-season business (group
business, meetings, conferences, etc.) to fill hotel rooms and rental condominiums, and motivate owners to participate in a rental program. The “Low” scenario was designed to reflect
“average” or “business-as-usual” performance for Vail properties. Occupancy is a key economic and fiscal driver; the occupancy assumptions are shown below in Table 5. In the High Scenario,
the hotel is assumed to operate at 60 percent annual occupancy and 50 percent occupancy in the Low Scenario. Condominiums are modeled at 40 percent occupancy in the High Scenario and
at 30 percent in the Low Scenario. Table 5 Occupancy Assumptions Ever Vail Fiscal Impact Analysis Description "High" Scenario "Low" Scenario % In Rental Pool Hotel 100% 100% Branded
Residences 75% 65% Condominiums (Free Market) 50% 35% Deed Restricted Rental 0% 0% Deed Restricted For-Sale 0% 0% Annual Occupancy Hotel 60% 50% Branded Residences 45% 40% Condominiums
in Rental Pool 40% 30% Second Home Condominiums 20% 20% % of Guests Net New Hotel 70% 60% Branded Residences 70% 60% Condominiums in Rental Pool 50% 40% Second Homes 100% 100% Source:
Vail Resorts, Economic & Planning Systems H:\20812 Ever Vail Fiscal Analysis\Models\[20812-fiscal model-12-29-2010.xls]Sheet1
Ever Vail Fiscal Impact Analysis January 7, 2011 Economic & Planning Systems, Inc. 13 Draft Final Report The percent of guests that are “net new” to Vail are also estimated. The hotel
is assumed to draw 60 to 70 percent net new guests, based on interviews with hospitality consultants and hotel managers. Net new guests are lower for the condominiums, estimated at 40
to 50 percent. All second homeowners are assumed to be new; however, second homes have a fraction of the economic impact of hotel rooms and therefore do not have a large effect in the
fiscal impact model. Another key assumption is that costs related to infrastructure internal to the project will be borne by Vail Resorts, not the Town of Vail. It is anticipated that
Vail Resorts and the Town will establish a Title 32 Metropolitan District (metro district) for this purpose. At the time of service plan approval, it is recommended that a segregated
revenue stream be established to cover operations and maintenance costs (as distinct from debt service for capital improvements) and that it be sized to ensure a level of service commensurate
with Town of Vail standards. Finally, it is important to note that the fees included in the model are the best approximation available at this time. Actual fees and requirements applied
at time of project approval or at time of building permit may differ, based on a modified development program and/or modified Town standards.
Economic & Planning Systems, Inc. 14 20812-R-01-07-2011.doc 3. FISCAL IMPACTS Summary of Fiscal Impacts The following is a summary of the key costs and revenues generated by the project,
and the impacts by fund. Detailed results and supporting calculations can be viewed in the Fiscal Model that has been provided to Town Staff. A description of the methodology used and
an overview of the Fiscal Model is also provided at the end of this memorandum. 1. At full buildout, the Ever Vail project is estimated to generate a positive fiscal impact to the Town.
After accounting for high and low occupancy assumptions, the fiscal impact to the General Fund is estimated at $472,000 to $796,000 annually at full project buildout and stabilization.
The higher range of estimated fiscal impacts reflects what EPS believes are reasonable assumptions for the performance of a high quality well performing base area resort project with
direct lift access. It also presumes that VRDC will actively market the project to fill hotel beds, attract groups during the off-season, and encourage owners to participate in a rental
program. The lower fiscal impact estimate represents more “average” performance for Vail properties, with no special marketing or management strategies designed to maximize “hot beds.”
The project’s actual performance will likely lie somewhere between the low and high estimates. The results of the fiscal impact analysis are summarized in Tables 6 and 7 for the High
and Low Scenarios, respectively. 2. The fiscal impacts of both phases of the project are positive. Phase I (east) generates a larger benefit to the Town than Phase II (west) due to higher
guest expenditure levels generated by the 102 hotel rooms, 76 branded residences, and 158 condominium units. The hotel is a key economic driver estimated to generate about 25 percent
of the visitors and spending from the project under the High Scenario. The branded residences are modeled as performing similarly to the hotel and account for approximately 17 percent
of total visitors and expenditures. As noted previously, Phase II does not include hotel rooms or branded residences. Retail sales and sales tax are derived from visitor spending, and
Phase I generates more spending that Phase II. The annual net fiscal impact to the General Fund of Phase I by itself is estimated at $300,400 to $519,000. Phase II by itself has a fiscal
impact of $100,100 to $205,200 per year.
Ever Vail Fiscal Impact Analysis January 7, 2011 Economic & Planning Systems, Inc. 15 Draft Final Report Table 6 High Scenario Fiscal Impacts Ever Vail Fiscal Impact Analysis Fund Phase
I Phase II Phase I Phases I & II General Fund Revenues $971,500 $412,100 $971,500 $1,383,500 Expenses [1] -$452,800 -$206,900 -$452,800 -$587,850 Net Fiscal Impact $518,700 $205,200
$518,700 $795,650 Capital Fund One-Time Use Tax $9,291,760 $5,103,520 $9,291,760 $14,395,280 Annual Sales Tax $599,800 $258,464 $599,800 $858,232 RETT Fund One-Time Developer Sales $4,261,000
$2,710,000 $4,261,000 $6,971,000 Recreation Impact Fee $468,067 $315,273 $468,067 $783,340 Total One Time Revenue $4,729,067 $3,025,273 $4,729,067 $7,754,340 Annual Resales $192,000
$122,000 $192,000 $314,000 Vail Marketing District 1.4% Lodging Tax (Annual) $366,000 $168,000 $366,000 $534,000 Urban Renewal Authority General Fund Property Tax to URA [2] $258,000
$104,000 $258,000 $362,000 Other Taxing Entities Tax Increment $2,280,000 $919,000 $2,280,000 $3,199,000 Total Property Tax Increment $2,538,000 $1,023,000 $2,538,000 $3,561,000 [1]
Expenses by phase do not add to the cumulative impacts of the entire project. Police is not estimated to need additional staff to serve individual phases, but would need an estimated
1 officer to serve the project if both phases are built. Fire is estimated to need an additional staff person to serve Phase I, which will also cover Phase II. [2] The project is largely
within the Lionshead URA. This revenue reverts to General Fund after URA expires in 2030. Source: Economic & Planning Systems H:\20812 Ever Vail Fiscal Analysis\Models\[20812-fiscal
model-12-29-2010.xls]ES-1 By Phase -Standalone Cumulative Impact by Phase
Ever Vail Fiscal Impact Analysis January 7, 2011 Economic & Planning Systems, Inc. 16 Draft Final Report Table 7 Low Scenario Fiscal Impacts Ever Vail Fiscal Impact Analysis Fund Phase
I Phase II Phase I Phases I & II General Fund Revenues $736,000 $298,100 $736,000 $1,034,000 Expenses [1] -$435,600 -$198,000 -$435,600 -$561,750 Net Fiscal Impact $300,400 $100,100
$300,400 $472,250 Capital Fund One-Time Use Tax $9,157,200 $5,103,520 $9,157,200 $14,260,720 Annual Sales Tax $457,096 $188,264 $457,096 $645,344 RETT Fund One-Time Developer Sales $4,261,000
$2,710,000 $4,261,000 $6,971,000 Recreation Impact Fee $468,067 $315,273 $468,067 $783,340 Total One Time Revenue $4,729,067 $3,025,273 $4,729,067 $7,754,340 Annual Resales $192,000
$122,000 $192,000 $314,000 Vail Marketing District 1.4% Lodging Tax (Annual) $294,000 $126,000 $294,000 $420,000 Urban Renewal Authority General Fund Property Tax to URA [2] $248,000
$104,000 $248,000 $352,000 Other Taxing Entities Tax Increment $2,193,000 $919,000 $2,193,000 $3,112,000 Total Property Tax Increment $2,441,000 $1,023,000 $2,441,000 $3,464,000 [1]
Expenses by phase do not add to the cumulative impacts of the entire project. Police is not estimated to need additional staff to serve individual phases, but would need an estimated
1 officer to serve the project if both phases are built. Fire is estimated to need an additional staff person to serve Phase I, which will also cover Phase II. [2] The project is largely
within the Lionshead URA. This revenue reverts to General Fund after URA expires in 2030. Source: Economic & Planning Systems H:\20812 Ever Vail Fiscal Analysis\Models\12-29-Low\[20812-f
iscal model-12-29-2010_low.xls]ES-1 By Phase -Standalone Cumulative Impact by Phase
Ever Vail Fiscal Impact Analysis January 7, 2011 Economic & Planning Systems, Inc. 17 Draft Final Report 3. Ever Vail is estimated to require additional staff for Police and Fire under
the High and Low Scenarios. Police and Fire service demands were estimated by a comparative analysis of call volumes in Lionshead Village completed by EPS and Town staff. At full buildout
of both phases, Police is forecasted to need one additional patrol officer at an annual cost of $77,150 plus a one-time training cost of $65,000. By themselves, neither phase triggers
the need for an additional police officer. Cumulatively, however, demand for services will require a new position. Based on the forecasted call volume, the Fire Department will need
an additional staff person to serve Phase I at an annual cost of $76,600 plus a one-time training and equipment cost of $7,800. 4. The largest impacts on Town services are to the Town’s
transit system. LSC Transportation Consultants completed a study of the impacts of Ever Vail on the Town’s transit system. LSC estimated the need for three new buses at a cost of $600,000
each. The annual operations cost is estimated at $111,000. EPS has allocated the impacts to Phase I, as it generates the most visitor activity. 5. The project is largely within the Lionshead
URA. Therefore, the majority of the property tax generated by the project will flow to the URA rather than the General Fund until 2030. At full buildout, the General Fund portion of
the property tax increment generated by the project is approximately $360,000 per year. After the URA expires in 2030, this revenue will revert back to the General Fund, increasing the
net fiscal impact by the same amount. The total property tax increment at buildout is approximately $3.5 million per year, based on the structure of the URA which redirects non-Town
revenue streams to the URA. These funds can be used by the URA to fund eligible projects. 6. The Ever Vail development will generate substantial one-time revenues from construction use
tax and and permit fees. The construction use tax from Phase I is estimated at $9.3 million over the course of its construction, contributing to the Town’s Capital Fund. The construction
of Phase II would produce approximately $5.1 million in use tax. The total impact to the Real Estate Transfer Tax (RETT) fund for Phase I is $4.7 million, including $4.3 million in RETT
from initial developer sales and $468,000 from the Recreation Impact Fee. Phase II would generate $2.7 million in RETT from initial sales and approximately $315,000 from the impact fee
for a total of $3.0 million. The RETT fund is used for park, open space, and sustainability projects. Permit and plan check fees are estimated at $3.1 million for Phase I and $1.7 million
for Phase II. Permit and plan check fees are one-time revenues that contribute to the cost of development revue. Since they are one-time revenues during construction, they are not counted
in the annual fiscal impact to the General Fund which reflects the project at buildout and stabil
ization. Ever Vail Fiscal Impact Analysis January 7, 2011 Economic & Planning Systems, Inc. 18 Draft Final Report Existing Si te Fiscal Conditions How much revenue does the site generate
currently? The Ever Vail site has a variety of existing uses and structures on it, including the 20,000 square foot Vail Professional building (largely office), the 11,000 square foot
Cascade Crossing retail building, a former gas station, the 11,000 square foot Glen Lyon Office Building, and the Vail Resorts Maintenance Yards. The major existing revenues from the
site are $61,900 including $21,450 in retail sales tax to the General Fund, $14,360 in sales tax to the Capital Fund, and $26,000 in property tax. Table 8 Current General Revenues from
Ever Vail Site Ever Vail Fiscal Impact Analysis Revenue Existing 4.0% Retail Sales Tax – General Fund $21,540 4.0% Lodging Tax $0 Sales Tax – Capital Fund $14,360 Property Tax -General
Fund (4.69 mills) $26,000 Total $61,900 Source: Town of Vail Finance Department: Economic & Planning Systems H:\20812 Ever Vail Fiscal Analysis\Models\[20812-fiscal model-12-29-2010.xls]ES-2
B4Af
Ever Vail Fiscal Impact Analysis January 7, 2011 Economic & Planning Systems, Inc. 19 Draft Final Report General Fund Impacts What are the major revenue sources that will impact the
General Fund? What are the significant expenditures that will occur? Ongoing Revenues The largest sources of ongoing General Fund revenues are the 4.0 percent retail sales tax and the
4.0 percent lodging sales tax. The retail sales tax is generated through net new lodging visitor expenditures in Vail retail and food and beverage establishments. The 4.0 percent lodging
sales tax is generated through the sale of net new room nights (and is distinct from the 1.4 percent lodging tax dedicated to marketing). Under both scenarios, lodging sales tax is the
largest source of revenue from the project and is estimated to be $915,000 per year for the high scenario after buildout of Phase I and Phase II, as shown in Table 9. For the low scenario,
this figure is estimated to be $719,000 as shown in Table 10. The cumulative retail sales tax from buildout of both Phases ranges from $250,000 to $372,000. Note that the general fund
would not receive any property tax until after 2030 (when the URA will sunset) because the project is largely within the Lionshead Urban Renewal Area which collects the tax increment
from new development as will be discussed below. It should be noted that the revenue from lift tax is modest, at $47,000 annually in the High Scenario. Lift tax revenue shown is calculated
from the estimated new skiers (and net new revenue) generated by Ever Vail Lodging. If these skier estimates are included with day visitors using the Ever Vail parking structure as well
as Ever Vail guests that are not new to Vail, the total skier generation is approximately seven percent of total annual skiers. This estimate is consistent with internal Vail Resorts
estimates that the portal will accommodate approximately ten percent of total annual volume. Ongoing Expenses The largest expenses to be generated by the Ever Vail project are expected
to be in in the Public Works, Transportation, Facility Maintenance, Police, and Fire Departments. Public Works Under Public Works, the maintenance of new landscaped medians, a new roundabout,
and a wider road cross section is estimated to cost $149,000 per year. This includes snow removal, seasonal planting and maintenance, and seasonal holiday decorations consistent with
what the Town provides at other major entry ways and intersections. Transit and Transportation LSC Transportation Consultants completed a study of the impacts of Ever Vail on the Town’s
transit system. LSC estimated the need for three new buses at a cost of $600,000 each. The annual operations cost is estimated at $111,000. EPS has allocated the impacts to Phase I,
as it generates the most visitor activity.
Ever Vail Fiscal Impact Analysis January 7, 2011 Economic & Planning Systems, Inc. 20 Draft Final Report The new bus route is estimated to cost $111,300 per year to operate. Annual facility
maintenance (wear and tear on public spaces and public facilities) is estimated to increase by $73,800 from the new visitor population generated by Ever Vail. Police and Fire There are
also impacts to Police and Fire. The Police Department is projected to need an additional entry-level code enforcement officer after the construction of Phase I and Phase II, at a cost
of $77,150 per year. The Fire department would require a new crew member after the construction of Phase I at a cost of $76,600 per year. One time training and equipment costs for new
hires are not included in these figures but are included in capital expenditures below. Table 9 High Scenario -General Fund Revenues and Expenses Ever Vail Fiscal Impact Analysis Description
Phase I Phase II Phase I Phase II Revenue Local Taxes: 4.0% Retail Sales Tax [1] $273,000 $100,000 $273,000 $372,000 4.0% Lodging Sales Tax $627,000 $288,000 $627,000 $915,000 Ski Lift
Tax $37,100 $9,900 $37,100 $47,000 Intergovernmental Revenue County Sales Tax $18,000 $6,000 $18,000 $25,000 County Road and Bridge Prop. Tax $0 $0 $0 $0 Cigarette Tax $1,800 $900 $1,800
$2,600 Charges for Services Fines and Forfeitures $7,500 $3,700 $7,500 $11,200 Other Charges, Services, and Sales $7,100 $3,600 $7,100 $10,700 Total Revenue $971,500 $412,100 $971,500
$1,383,500 Expenses Municipal Services: Administrative $33,600 $16,800 $33,600 $50,300 Community Development $33,100 $16,500 $33,100 $49,700 Public Safety Police $0 $0 $0 $77,150 Fire
$76,600 $0 $76,600 $76,600 Public Works and Transportation Right-of-Way and Landscaping $149,000 $149,000 $149,000 $149,000 Transportation Operations [2] $111,300 $0 $111,300 $111,300
Facility Maintenance $49,200 $24,600 $49,200 $73,800 Total Expenses $452,800 $206,900 $452,800 $587,850 Net Fiscal Impact $518,700 $205,200 $518,700 $795,650 [1] See attached sales tax
and retail sales model. [2] LSC Transportation Consultants July 23, 2010 Memorandum. Source: Economic & Planning Systems H:\20812 Ever Vail Fiscal Analysis\Models\[20812-fiscal model.xls]3-General_Fu
nd_Expenses By Phase Cumulative
Ever Vail Fiscal Impact Analysis January 7, 2011 Economic & Planning Systems, Inc. 21 Draft Final Report Table 10 Low Scenario – General Fund Revenues and Expenses Ever Vail Fiscal Impact
Analysis Description Phase I Phase II Phase I Phase II Revenue Local Taxes: 4.0% Retail Sales Tax [1] $182,000 $68,000 $182,000 $250,000 4.0% Lodging Sales Tax $504,000 $215,000 $504,000
$719,000 Ski Lift Tax $23,000 $4,200 $23,000 $27,200 Intergovernmental Revenue County Sales Tax $13,000 $4,000 $13,000 $17,000 County Road and Bridge Prop. Tax $0 $0 $0 $0 Cigarette
Tax $1,500 $700 $1,500 $2,200 Charges for Services Fines and Forfeitures $6,400 $3,200 $6,400 $9,500 Other Charges, Services, and Sales $6,100 $3,000 $6,100 $9,100 Total Revenue $736,000
$298,100 $736,000 $1,034,000 Expenses Municipal Services: Administrative $28,600 $14,200 $28,600 $42,800 Community Development $28,200 $14,000 $28,200 $42,200 Public Safety Police $0
$0 $0 $77,150 Fire $76,600 $0 $76,600 $76,600 Public Works and Transportation Right-of-Way and Landscaping $149,000 $149,000 $149,000 $149,000 Transportation Operations [2] $111,300
$0 $111,300 $111,300 Facility Maintenance $41,900 $20,800 $41,900 $62,700 Total Expenses $435,600 $198,000 $435,600 $561,750 Net Fiscal Impact $300,400 $100,100 $300,400 $472,250 [1]
See attached sales tax and retail sales model. [2] LSC Transportation Consultants July 23, 2010 Memorandum. Source: Economic & Planning Systems H:\20812 Ever Vail Fiscal Analysis\Models\[20812-fiscal
model.xls]3-General_Fund_Expenses By Phase Cumulative
Ever Vail Fiscal Impact Analysis January 7, 2011 Economic & Planning Systems, Inc. 22 Draft Final Report Net Fiscal Impact to the General Fund What is the “bottom line” impact to the
General Fund? How does it change if the project is built in phases? At full buildout, the Ever Vail project is estimated to generate a positive fiscal impact to the Town. After accounting
for high and low occupancy assumptions, the fiscal impact to the General Fund is estimated at $472,000 to $796,000 annually at full project buildout and stabilization. The higher range
of estimated fiscal impacts reflects what EPS believes are reasonable assumptions for the performance of a high quality well performing base area resort project with direct lift access.
It also presumes that VRDC will actively market the project to fill hotel beds, attract groups during the off-season, and encourage owners to participate in a rental program. The lower
fiscal impact estimate represents more “average” performance for Vail properties, with no special marketing or management strategies designed to maximize “hot beds.” The project’s actual
performance will likely lie somewhere between the low and high estimates. The results of the fiscal impact analysis are summarized in Tables 6 and 7 and Tables 9 and 10 for the High
and Low Scenarios, respectively. Impacts by Phase The fiscal impacts of both phases of the project are positive. Phase I (east) generates a larger benefit to the Town than Phase II (west)
due to higher guest expenditure levels generated by the 102 hotel rooms, 76 branded residences, and 158 condominium units. The hotel is a key economic driver estimated to generate about
25 percent of the visitors and spending from the project under the High Scenario. The branded residences are modeled as performing similarly to the hotel and account for approximately
17 percent of total visitors and expenditures. As noted previously, Phase II does not include hotel rooms or branded residences. Retail sales and sales tax are derived from visitor spending,
and Phase I generates more spending that Phase II. The annual net fiscal impact to the General Fund of Phase I by itself is estimated at $300,400 to $519,000. Phase II by itself has
a fiscal impact of $100,100 to $205,200 per year. General Fund Sales Tax Calculations How is sales tax accounted for --is it generated from retail space or visitor expenditures? Sales
tax is calculated from the spending by guests staying in Ever Vail lodging, and residents and second home owners living in the project. Guests spending money in Vail businesses, generating
sales tax revenue to the Town. Guest spending is calculated from estimates of “net new” visitors discussed previously, rather than counting all guest expenditures as generating sales
tax. As will be discussed under the Retail Impacts chapter, 90% of guest spending is estimated to occur in Vail. This results in $16.4 million in new sales in the Town after the buildout
of both phases, as shown in Table 11. The remaining 10% of guest spending, or $1.7 million is estimated to be “leakage” to other Vail Valley communities. Total new guest spending including
Ever Vail Fiscal Impact Analysis January 7, 2011 Economic & Planning Systems, Inc. 23 Draft Final Report leakage is projected to be $18.1 million. The $16.4 million in new sales translates
to $372,000 in General Fund sales tax and $248,000 in Capital Fund sales tax. There is also a 15 percent County sales tax, of which 15 percent is remitted back to the Town, as shown.
Table 11 Summary of Ever Vail Sales Tax Ever Vail Fiscal Impact Analysis Store Type Phase I Phase II By Phase Net New Sales Restaurant $5,432,000 $1,195,000 Retail $4,678,000 $1,810,000
Grocer/Conv. $2,150,000 $1,149,000 Total $12,260,000 $4,154,000 4.0% Town Sales Tax Existing Sales Tax [1] General Fund (60%) -$21,540 $272,700 $99,696 Capital Fund (40%) -$14,360 $181,800
$66,464 1.0% County Sales Tax Sales Tax $123,000 $42,000 15% to Town $18,000 $6,000 Cumulative Phase I Phase I & II Net New Sales Restaurant $5,432,000 $6,627,000 Retail $4,678,000 $6,486,000
Grocer/Conv. $2,150,000 $3,299,000 Total $12,260,000 $16,412,000 4.0% Town Sales Tax Existing Sales Tax [1] General Fund (60%) -$21,540 $272,700 $372,348 Capital Fund (40%) -$14,360
$181,800 $248,232 1.0% County Sales Tax Sales Tax $123,000 $164,000 15% to Town $18,000 $25,000 Source: Economic & Planning Systems H:\20812 Ever Vail Fiscal Analysis\Models\[20812-EV
Sales Tax Model 12-29-2010.xls]8-Sales Tax
Ever Vail Fiscal Impact Analysis January 7, 2011 Economic & Planning Systems, Inc. 24 Draft Final Report General Fund One-Time Revenues and Costs What other General Fund Revenues will
the project generate? Permit and plan check fees are estimated at $3.1 million for Phase I and $1.7 million for Phase II. Permit and plan check fees are one-time revenues that contribute
to the cost of development revue. Since they are one-time revenues during construction, they are not counted in the annual fiscal impact to the General Fund which reflects the project
at buildout and stabilization. The one-time revenues and costs to the General Fund are summarized in Table 12. At buildout, the project will have generated a total of $4.8 million in
permit and plan review fees. These fees contribute to the cost of development review and other related administrative functions. It costs approximately $65,000 to train and equip a new
police officer. A new firefighter costs approximately $7,800 to train and equip. These one time revenues and expenses are the same in the high and low scenarios. Table 12 General Fund
One Time Revenues and Expenses Ever Vail Fiscal Impact Analysis Phase I Phase II Totals/Buildout General Fund One-Time Revenues Building Permit Fee $1,875,184 $1,047,944 $2,923,128 Plan
Review Fee $1,218,870 $681,164 $1,900,034 Total $3,094,054 $1,729,108 $4,823,162 General Fund One-Time Costs Police Training & Equip. $0 $65,000 $65,000 Fire Training & Equip. $7,800
$0 $7,800 Total $7,800 $65,000 $72,800 Source: Town of Vail; Economic & Planning Systems H:\20812 Ever Vail Fiscal Analysis\Models\[20812-fiscal model-12-29-2010.xls]36-One Time Impact
Ever Vail Fiscal Impact Analysis January 7, 2011 Economic & Planning Systems, Inc. 25 Draft Final Report Other Fund Impacts Besides the General Fund, what are the impacts to other funds?
Specifically, what are impacts to the RETT Fund? The other major funds analyzed include the: Capital Fund RETT fund Vail Marketing District Urban Renewal Authority (URA)
For the Capital Fund, both revenues and expenses were analyzed. Spending from the other funds, such as the URA was not analyzed because it is discretionary, is independent of conventional
Town funds, and is structured in compliance with state regulations pertaining to URAs. Capital Fund Ever Vail will contribute construction use tax (one time) and sales tax (annual) to
the Capital Fund. The Town regulations mandate that all use tax be dedicated to capital projects. Regarding sales tax, the Town has historically allocated 40 percent of total sales tax
revenue for capital projects, although this allocation has fluctuated moderately over time. Construction use tax is estimated at $14.4 million at project buildout, as shown in Table
13. Annual 4.0 percent sales and lodging sales tax to the Capital Fund is projected to be $600,000 under Phase I, $258,000 under Phase II, and $858,000 for the project at buildout. The
Town has historically collected a traffic mitigation fee on a case-by-case negotiated basis. The fee is $6,500 per peak hour trip and would be approximately $2.5 million for Ever Vail.
The transit analysis completed by LSC Transportation Consultants identified a need for three new transit buses at a cost of $1.8 million. The Low Scenario for the Capital Fund is shown
in Table 14. The one-time revenues are the same as the High Scenario. Annual sales tax is $213,000 less.
Ever Vail Fiscal Impact Analysis January 7, 2011 Economic & Planning Systems, Inc. 26 Draft Final Report Table 13 Capital Fund Impacts – High Scenario Ever Vail Fiscal Impact Analysis
Costs and Revenues Phase I Phase II Totals /Buildout One Time Revenues Construction Use Tax $9,291,760 $5,103,520 $14,395,280 Traffic Mitigation Fee [1] $1,251,250 $1,251,250 $2,502,500
Annual Sales Tax by Phase 4.0% Sales Tax (Annual) $181,800 $66,464 4.0% Lodging Sales Tax (Annual) $418,000 $192,000 Total Sales Taxes $599,800 $258,464 Cumulative Sales Tax 4.0% Sales
Tax (Annual) $181,800 $248,232 $248,232 4.0% Lodging Sales Tax (Annual) $418,000 $610,000 $610,000 Total Sales Taxes $599,800 $858,232 $858,232 Capital Fund Costs (3 Hybrid Buses @$600K
ea.) $1,800,000 $0 $1,800,000 [1] The Fee is based on a Study completed by Kimley Horn for the Town of Vail. Source: Economic & Planning Systems H:\20812 Ever Vail Fiscal Analysis\Models\[20812-fisca
l model-12-29-2010.xls]37-Capital Fund
Ever Vail Fiscal Impact Analysis January 7, 2011 Economic & Planning Systems, Inc. 27 Draft Final Report Table 14 Capital Fund Impacts – High Scenario Ever Vail Fiscal Impact Analysis
Costs and Revenues
Phase I Phase II Totals/Buildout One Time Revenues Construction Use Tax $9,157,200 $5,103,520 $14,260,720 Traffic Mitigation Fee [1] $1,251,250 $1,251,250 $2,502,500 Annual Sales Tax
by Phase 4.0% Sales Tax (Annual) $121,096 $45,264 4.0% Lodging Sales Tax (Annual) $336,000 $143,000 Total Sales Taxes $457,096 $188,264 Cumulative Sales Tax 4.0% Sales Tax (Annual) $121,096
$166,344 $166,344 4.0% Lodging Sales Tax (Annual) $336,000 $479,000 $479,000 Total Sales Taxes $457,096 $645,344 $645,344 Capital Fund Costs (3 Hybrid Buses @$600K ea.) $1,800,000 $0
$1,800,000 [1] The Fee is based on a Study completed by Kimley Horn for the Town of Vail. Source: Economic & Planning Systems H:\20812 Ever Vail Fiscal Analysis\Models\12-29-Low\[20812-f
iscal model-12-29-2010_low.xls]37-Capital Fund
Ever Vail Fiscal Impact Analysis January 7, 2011 Economic & Planning Systems, Inc. 28 Draft Final Report RETT, Marketing District, and URA Funds The one time and annual revenues for
the RETT, Vail Marketing District, and URA funds are shown below in Table 15. One-time RETT revenue comes from the initial developer sales of new units, estimated at $6.97 million for
both phases. The Recreation Impact Fee is estimated at $783,000, making the total for recreation and open space purposes total $7.75 million. The annual revenue from resales is projected
to be $314,000 for both phases, based on an estimate of 4.5 percent of all units turning over each year. The Vail Marketing District is funded by a 1.4 percent tax on lodging sales.
Ever Vail would generate an estimated $534,000 per year in lodging tax. The URA revenues include both the Town’s property tax as well as those of other taxing entities. In total, URA
revenues are expected to be $3.5 million. The URA will sunset in 2030 and the Town’s 4.69 mills will then flow back to the general fund. Table 15 RETT, Vail Marketing District, and URA
Revenues Ever Vail Fiscal Impact Analysis Fund Phase I Phase II Totals /Buildout RETT Fund One Time Revenue RETT -Developer Sales $4,261,000 $2,710,000 $6,971,000 Recreation Impact Fee
$468,067 $315,273 $783,340 Total One Time Revenue $4,729,067 $3,025,273 $7,754,340 RETT Fund Annual Revenue RETT on Resales $192,000 $122,000 $314,000 Vail Marketing District 1.4% Lodging
Tax (Annual) $366,000 $168,000 $534,000 Urban Renewal Authority Property Tax Town Mill Levy (4.69 Mills) (Annual) [1] $258,000 $104,000 $362,000 Other Taxing Entities (Annual) $2,280,000
$919,000 $3,199,000 Annual Property Tax Increment $2,538,000 $1,023,000 $3,561,000 [1] Reverts to General Fund after URA expires in 2030. Source: Economic & Planning Systems H:\20812
Ever Vail Fiscal Analysis\Models\[20812-fiscal model-12-29-2010.xls]38-Other Funds
Economic & Planning Systems, Inc. 29 20812-R-01-07-2011.doc 4. ECONOMIC IMPACTS When new retail is introduced into a community, the new competition can cannibalize or erode sales from
existing businesses. This Chapter provides a summary of the potential impacts to sales in existing business districts in Vail. The summary is followed by a more detailed presentation
of the methods and assumptions used to estimate these potential impacts. Summary of Retail Impacts 1. The spending from new guests in Ever Vail is forecast to be $18.1 million per year
with 90 percent of expenditures estimated to occur in the Town of Vail and 10 percent in the Vail Valley. The town derives most of its retail sales from visitor expenditures. Adding
to the bed base will introduce new dollars into the Vail economy, contributing to additional retail sales. Ever Vail visitors are estimated to make 35 to 40 percent of their expenditures
within Ever Vail, as shown in Figure 1. Approximately 50 to 55 percent of Ever Vail visitors’ dollars dollars are expected to occur within the Town of Vail in other retail locations
such as Lionshead, Vail Village, and West Vail. The remaining 10 percent of expenditures are estimated to occur elsewhere in the Vail Valley, such as Beaver Creek, Avon, or Edwards.
Similar to any guest in Vail, Ever Vail’s guests will spend money in multiple locations in the Town.
Ever Vail Fiscal Impact Analysis January 7, 2011 Economic & Planning Systems, Inc. 30 Draft Final Report Figure 1 Ever Vail Guest Spending Patterns Ever Vail Fiscal Impact Analysis Total
Spending $18.1 Million Down Valley $1.7M Ever Vail $6.8 Million Vail Village, Lionshead, West Vail $9.6 Million 38% 53% 9%
Ever Vail Fiscal Impact Analysis January 7, 2011 Economic & Planning Systems, Inc. 31 Draft Final Report 2. The project is not expected to cannibalize (erode) a significant amount of
sales from Vail Village or Lionshead. The West Vail area is estimated to see sales erosion of 1.1 percent. As new retail in Ever Vail is introduced, some sales from other Vail locations
will flow to Ever Vail. At the same time, Ever Vail guests will spend money in existing retail establishments in Vail. In most cases and in total, the net dollar flows to existing retail
areas are positive. In order for Ever Vail retailers to achieve a minimum level of viability, it is estimated that approximately $17 million in sales would be needed within Ever Vail
businesses. Based on Ever Vail’s location compared to other retail and lodging districts and the size and mix of retail proposed in Ever Vail, it is estimated that approximately 60 percent
of sales would come from guest in the immediate area consisting of Ever Vail and the Ritz Carlton. The balance of 40 percent would need to come from guests staying elsewhere in Vail
to support $17 million in sales in Ever Vail. Under these assumptions, Lionshead and Vail Village would “lose” respectively $2.5 and $2.9 million in sales to Ever Vail; however, this
is estimated to be replaced by $2.9 to $5.5 million in expenditures from new Ever Vail guests spending money in Lionshead and Vail. Thus, net sales flows are expected to be positive
for Lionshead and Vail Village. Due to the competition created by the proposed market, a one percent loss in sales is projected for West Vail. The sales flows are quantified below in
Table 16. Vail Village currently achieves $152.7 million in sales, while Lionshead achieves $51.9 million, and West Vail has $71.8 million in sales. The net dollar flows shown are less
than two percent of existing sales and are only projected to be negative for West Vail. EPS believes that the strength of Lionshead and Vail Village will be the main draw for all Vail
guests regardless of where their lodging is. Our opinion is that the removed location of Ever Vail is unlikely to draw significant amounts of sales away from existing retail areas. Table
16 Summary of Town Retail Sales Flows with Ever Vail Ever Vail Fiscal Impact Analysis Potential Dollar Flows Erosion to Ever Vail Spending From Ever Vail Net Dollar Flows Lionshead $2,510,000
$2,954,000 $444,000 Vail Village $2,994,000 $5,486,000 $2,492,000 West Vail $1,938,000 $1,166,000 -$772,000 Total $7,442,000 $9,606,000 $2,164,000 Potential Erosion vs. Existing Sales
Net Dollar Flows Existing Sales (2009) Erosion as % of Sales Lionshead $444,000 $51,953,000 0.9% Vail Village $2,492,000 $152,700,000 1.6% West Vail -$772,000 $71,807,000 -1.1% Total
$2,164,000 $276,460,000 0.8% Source: Economic & Planning Systems H:\20812 Ever Vail Fiscal Analysis\Models\[20812-EV Sales Tax Model 12-29-2010.xls]Table ES-1
Ever Vail Fiscal Impact Analysis January 7, 2011 Economic & Planning Systems, Inc. 32 Draft Final Report Figure 2 Net Dollar Flows vs. Existing Retail Sales Ever Vail Fiscal Impact Analysis
$444,000 $2,492,000 -$772,000 -$20,000,000 $0 $20,000,000 $40,000,000 $60,000,000 $80,000,000 $100,000,000 $120,000,000 $140,000,000 $160,000,000 Lionshead Vail Village West Vail Retail
& Food & Bev. Sales Net Dollar Flows Existing Sales (2009)
Ever Vail Fiscal Impact Analysis January 7, 2011 Economic & Planning Systems, Inc. 33 Draft Final Report 3. The amount of retail and restaurant space proposed in Ever Vail is small in
comparison to the Town’s retail inventory and is forecasted to have a relatively small impact on existing retailers. VRDC and their consultants have worked closely with EPS to “right
size” the amount of retail space in the project. This work has resulted in downsizing the retail from 100,000 to 120,000 square feet in earlier development plans to approximately 53,000
square feet as currently proposed. This has been based on an expenditure analysis, qualitative analyses and comparisons of other base areas, and from a determination of the minimum numbers
and types of services needed for a successful base area portal. The tenant mix is expected to cater largely to hotel and condominium guests rather than to create a new shopping destination
in Vail. The amount of retail proposed would result in an 8 percent increase in the amount of retail space in Vail, as shown in Table 17. Table 17 Vail Retail Inventory Ever Vail Fiscal
Impact Analysis Vail Ever Store Category # Retailers Sq. Ft. # Retailers Sq. Ft. # Retailers Sq. Ft. Total Vail Food & Beverage 54 205,000 21 58,500 11 27,000 290,500 22,103 Gallery/Art/Books
14 21,000 0 0 0 0 21,000 TBD Clothing/Fur 32 48,000 8 13,000 0 0 61,000 5,559 Jewelry 12 8,500 2 3,200 0 0 11700 TBD Ski Equipment 14 36,000 16 28,000 2 16,000 80,000 5,559 Grocery/Liquor
2 1,400 1 1,000 4 108,000 110,400 14,156 Gift Shop 6 6,000 3 2,400 0 0 8,400 TBD Eyewear 2 1,100 1 350 0 0 1,450 TBD Miscellaneous 14 10,000 6 10,000 11 25,000 45,000 5,881 Total 150
337,000 58 116,450 28 176,000 629,450 53,258 Source: Town of Vail; Economic & Planning Systems H:\20812 Ever Vail Fiscal Analysis\Data\[20812-inventories.xls]Vail_Retail Vail Village
Lionshead West Vail
Ever Vail Fiscal Impact Analysis January 7, 2011 Economic & Planning Systems, Inc. 34 Draft Final Report Ever Vai l Spending Flows This section provides a summary of the methodology
and calculations used to project guest spending and retail sales patterns after the Ever Vail project is constructed. The estimates of guest spending were made for two reasons: First,
to estimate sales tax revenue for the Fiscal Impact Analysis Second, to project the future flow of guest spending and retail sales to estimate the potential impacts of Ever Vail on
existing business districts. The complete set of calculations can be viewed in the Sales Tax Model. This is an abbreviated explanation. First, total expenditure potential is calculated.
This is the total spending made by Ever Vail guests regardless of location. Next, a capture rate is applied to allocate spending to the Town of Vail and locations outside of Vail. Only
expenditures made in Vail count towards Town sales tax and retail sales. Expenditure Potential Expenditure potential is estimated from net new visitor days. Net new visitor days are
calculated by multiplying the number of lodging and residential units by a person per unit factor, an annual occupancy factor, a net new adjustment discussed previously, and by 365 days.
Visitor days are converted to expenditure potential by multiplying by a dollar per day per person spending figure derived from hospitality professional interviews and visitor intercept
surveys in Colorado mountain resorts. The resulting expenditure potential, regardless of where expenditures are made, is estimated at $18.1 million at buildout, as shown in Table 18.
Spending by Location The capture rate estimates for guest and resident spending are shown in Table 19. Because Vail has one of the largest concentrations of resort retail in North America,
it is estimated to capture the vast majority of guest expenditures. In other words, Vail has a large selection and critical mass of retail space that creates a competitive shopping destination,
compared to other locations in the Vail Valley. As shown, guests (with the exception of parking guests) are estimated to make only 25 percent of their retail purchases in Ever Vail and
65 percent in other Vail locations. The retail “capture” in Ever Vail is estimated to be low because it will be much smaller than and have a more limited selection than Vail Village
and Lionshead Village. Ever Vail is proposed to contain a specialty foods market. It is estimated that it will capture 50 to 75 percent of guest spending on Convenience Goods. The remaining
spending would be made largely in West Vail grocers. In Food and Beverage (dining out), about half of guest spending would occur in Ever Vail, as shown.
Ever Vail Fiscal Impact Analysis January 7, 2011 Economic & Planning Systems, Inc. 35 Draft Final Report Table 18 Total Ever Vail Guest Spending Regardless of Location Ever Vail Fiscal
Impact Analysis Description Retail Conv. F&B Total Retail Conv. F&B Total Retail Conv. F&B Total Phase I Hotel 31,270 $60 $10 $100 $170 $1,876,000 $313,000 $3,127,000 $5,316,000 $1,876,000
$313,000 $3,127,000 $5,316,000 Branded Residences in Rental Pool 19,660 60 30 75 165 1,180,000 590,000 1,475,000 3,244,000 1,180,000 590,000 1,475,000 3,244,000 Condos in Rental Pool
20,180 60 30 40 130 1,211,000 605,000 807,000 2,623,000 1,211,000 605,000 807,000 2,623,000 Second Home Condos 15,000 30 30 20 80 450,000 450,000 300,000 1,200,000 450,000 450,000 300,000
1,200,000 Residents [1] ---------------289,000 189,000 85,000 563,000 289,000 189,000 85,000 563,000 Parking Day Visitors [1] ---------------243,500 74,875 224,625 543,000 243,500 74,875
224,625 543,000 Totals 86,110 $5,249,500 $2,221,875 $6,018,625 $13,489,000 $5,249,500 $2,221,875 $6,018,625 $13,489,000 Phase II Hotel 0 $60 $10 $100 $170 $0 $0 $0 $0 $1,876,000 $313,000
$3,127,000 $5,316,000 Branded Residences in Rental Pool 0 60 30 75 165 0 0 0 0 1,180,000 590,000 1,475,000 3,244,000 Condos in Rental Pool 19,030 60 30 40 130 1,142,000 571,000 761,000
2,474,000 2,353,000 1,176,000 1,568,000 5,097,000 Second Home Condos 10,880 30 30 20 80 326,000 326,000 218,000 870,000 776,000 776,000 518,000 2,070,000 Residents [1] ---------------377,000
247,000 111,000 735,000 666,000 436,000 196,000 1,298,000 Parking Day Visitors [1] ---------------243,500 74,875 224,625 543,000 487,000 149,750 449,250 1,086,000 Totals 29,910 $2,088,500
$1,218,875 $1,314,625 $4,622,000 $7,338,000 $3,440,750 $7,333,250 $18,111,000 Source: Economic & Planning Systems [1] See Appendix Tables A1 through A3 for further detail. H:\20812 Ever
Vail Fiscal Analysis\Models\[20812-EV Sales Tax Model 12-29-2010.xls]2-Expend Pot Expenditure Visitor $/Pers./Day Potential by Phase Days Cumulative Expenditure Potential
Ever Vail Fiscal Impact Analysis January 7, 2011 Economic & Planning Systems, Inc. 36 Draft Final Report Table 19 Ever Vail Guest Spending Capture Rates Ever Vail Fiscal Impact Analysis
Phase Retail Conv. F&B Retail Conv. F&B Retail Conv. F&B Retail Conv. F&B By Phase -Standalone Phase I Hotel 25% 75% 40% 65% 25% 50% 10% 0% 10% 100% 100% 100% Branded Residences in Rental
Pool 25% 75% 40% 65% 25% 50% 10% 0% 10% 100% 100% 100% Condos in Rental Pool 25% 65% 35% 65% 35% 55% 10% 0% 10% 100% 100% 100% Second Home Condos 25% 50% 35% 65% 40% 55% 10% 10% 10%
100% 100% 100% Residents 10% 35% 10% 55% 50% 70% 35% 15% 20% 100% 100% 100% Parking Day Visitors 50% 100% 50% 50% 0% 50% ---------100% 100% 100% Phase II Hotel ------------------------------------Bra
nded Residences in Rental Pool ------------------------------------Condos in Rental Pool 0% 0% 0% 90% 100% 90% 10% 0% 10% 100% 100% 100% Second Home Condos 0% 0% 0% 90% 90% 90% 10% 10%
10% 100% 100% 100% Residents 0% 0% 0% 65% 85% 80% 35% 15% 20% 100% 100% 100% Parking Day Visitors 0% 0% 0% 100% 100% 100% ---------100% 100% 100% Cumulative Phase I Hotel 25% 75% 40%
65% 25% 50% 10% 0% 10% 100% 100% 100% Branded Residences in Rental Pool 25% 75% 40% 65% 25% 50% 10% 0% 10% 100% 100% 100% Condos in Rental Pool 25% 65% 35% 65% 35% 55% 10% 0% 10% 100%
100% 100% Second Home Condos 25% 50% 35% 65% 40% 55% 10% 10% 10% 100% 100% 100% Residents 10% 35% 10% 55% 50% 70% 35% 15% 20% 100% 100% 100% Parking Day Visitors 50% 100% 50% 50% 0%
50% ---------100% 100% 100% Phase I & II Hotel 25% 75% 40% 65% 25% 50% 10% 0% 10% 100% 100% 100% Branded Residences in Rental Pool 25% 75% 40% 65% 25% 50% 10% 0% 10% 100% 100% 100% Condos
in Rental Pool 25% 65% 35% 65% 35% 55% 10% 0% 10% 100% 100% 100% Second Home Condos 25% 50% 35% 65% 40% 55% 10% 10% 10% 100% 100% 100% Residents 10% 35% 10% 55% 50% 70% 35% 15% 20% 100%
100% 100% Parking Day Visitors 50% 100% 50% 50% 0% 50% ---------100% 100% 100% Source: Economic & Planning Systems H:\20812 Ever Vail Fiscal Analysis\Models\[20812-EV Sales Tax Model
Model 12-29-2010.xls]3-Capture Rates % Spent in Ever Vail % Spent Elsewhere in Vail % Spent Outside Vail (Leakage) Total
Ever Vail Fiscal Impact Analysis January 7, 2011 Economic & Planning Systems, Inc. 37 Draft Final Report After applying spending capture rates to expenditure potential, dollars of spending
are calculated for Vail (sales tax) and locations within Vail, summarized in Table 20. Of the $18.1 million in total spending, $16.4 million is estimated to occur in Vail, or 90 percent
of total spending in all store categories. This $16.4 million of spending in Vail generates sales tax. Within Vail, 35 percent of spending in Vail is assumed to occur in Lionshead, or
$2.95 million. Sixty five percent of guest spending in Vail, or $5.5 is assumed to occur in Vail Village because of its larger concentration of retail and food and beverage options.
There is a small difference in total spending between Tables 17 and 19 due to spreadsheet rounding. Table 20 Ever Vail Guest Spending by Location Ever Vail Fiscal Impact Analysis Expenditures
and Sales Generated by Ever Vail Factors Total Spending by Ever Vail Guests/Residents In Ever Vail $6,806,000 38% In Vail, Not in Ever Vail A $9,606,000 53% Leakage /Down Valley Spending
$1,704,000 9% Total Spending $18,116,000 100% Estimated Spending by Location In Ever Vail $6,806,000 38% Lionshead A X 35% $2,954,000 16% Vail Village A X 65% $5,486,000 30% West Vail
$1,166,000 6% Down Valley /Leakage $1,704,000 9% Total Spending $18,116,000 100% Calculations
Ever Vail Fiscal Impact Analysis January 7, 2011 Economic & Planning Systems, Inc. 38 Draft Final Report Ret a i l S a l e s i n Ever Vail Businesses The level of retail sales within
the Ever Vail project can be estimated using the above estimates of guest spending by location. As shown above, guests are expected to spend only $6.8 million within the project, which
would translate to less than $150 per square foot in sales – well below industry benchmarks of $300 to $400 per square foot for average performing space. Many Vail businesses achieve
even higher sales, but this is exceptional in North America. More typically, new resort retail space is targeted to achieve sales in the $300 to $400 per square foot range. If Ever Vail
is to achieve higher sales, it will need to capture sales from other locations in Vail. If it is assumed that Ever Vail achieves sales of approximately $350, which is more consistent
with industry standards for new resort retail space, it would need to achieve $18.8 million in sales. If guests are only spending $6.8 million in the project, $12 million in sales would
need to come from other sources; either inflow from outside Vail, or by capturing sales from existing Vail businesses by offering a competitive and attractive shopping and dining experience.
The Ritz Carlton project will add 116 lodging units and generate additional guest expenditure potential immediately adjacent to Ever Vail. It is therefore highly likely that Ritz guests
will make some of their expenditures in Ever Vail. It is estimated at 40 percent of Ritz expenditures will be made in Ever Vail, or $4.6 million. The detailed calculations can be seen
in the Sales Tax Model. The remaining $7.4 million in sales would need to come either from inflow or through cannibalizing sales from existing businesses through competition. The market
in Ever Vail could generate a small amount of inflow, perhaps up to 10 percent. The remaining retailer and food and beverage establishments are expected to cater mainly to Ever Vail
and nearby nearby guests, rather than creating broader market appeal for Vail Valley residents who already have numerous shopping and dining options elsewhere in the Vail Valley. To
estimate the “worst case” in sales cannibalization, inflow is not counted towards Ever Vail sales. This means that more sales would need to come from Vail businesses. As shown below,
the impact is expected to be minor compared to the total sales levels of Vail Village, Lionshead, and West Vail.
Ever Vail Fiscal Impact Analysis January 7, 2011 Economic & Planning Systems, Inc. 39 Draft Final Report Potential Erosion The sales levels in Vail business districts are compared to
the $7.4 million in sales that would need to come from cannibalization in Table 21. Vail Village achieved $152.7 million in sales in 2009, compared to the $18.8 million needed in Ever
Vail. Lionshead achieved $51.9 million in sales. For confidentiality purposes, West Vail is combined with Cascade Village, East Vail, and Sandstone, referred to as “West Vail” for brevity.
West Vail had $71.8 million in sales. Approximations of erosion from each area are shown in total dollars and as a percentage of existing sales. However, as shown previously, Ever Vail
guests will also spending money in other Vail locations, offsetting any cannibalization that may occur. This net dollar flow will be estimated separately from potential cannibalization.
If $2.9 million in sales come from Vail Village it would be equivalent to 2.0 percent of its annual sales. If Lionshead “lost” $2.5 million in sales, it would be 5.0 percent of existing
sales. The impact to West Vail is also estimated at roughly five percent of grocery sales, or $1.9 million. As shown, total cannibalization to Ever Vail would need to be $7.4 million
in order to achieve $18.8 million in sales. The projected total sales in Ever Vail by source are summarized in Table 22. At the buildout of Phases I and II, $6.8 million in sales would
come from Ever Vail Guests. The Ritz Carlton would generate $4.6 million in sales in Ever Vail (and additional spending elsewhere). Cannibalization from Vail Village, Lionshead, and
West Vail could contribute $7.4 million if Ever Vail offers a competitive and attractive retail environment. Total sales from all sources are projected to be $18.8 million under these
assumptions.
Ever Vail Fiscal Impact Analysis January 7, 2011 Economic & Planning Systems, Inc. 40 Draft Final Report Table 21 Potential Erosion from Existing Business Districts Ever Vail Fiscal
Impact Analysis Description 2009 Sales % of Existing Sales $ Erosion 2009 Sales % of Existing Sales $ Erosion 2009 Sales % of Existing Sales $ Erosion Potential Erosion to Ever Vail
A By Phase Phase I Restaurant $60,218,000 2.0% $1,204,000 $22,158,000 5.0% $1,108,000 $16,243,000 0.0% $0 $2,312,000 Retail $89,484,000 2.0% $1,790,000 $28,037,000 5.0% $1,402,000 $16,798,000
0.0% $0 $3,192,000 Convenience Goods $2,998,000 0.0% $0 $1,758,000 0.0% $0 $38,766,000 5.0% $1,938,000 $1,938,000 Total $152,700,000 $2,994,000 $51,953,000 $2,510,000 $71,807,000 $1,938,000
$7,442,000 Phase II Restaurant $60,218,000 0.0% $0 $22,158,000 0.0% $0 $16,243,000 0.0% $0 $0 Retail $89,484,000 0.0% $0 $28,037,000 0.0% $0 $16,798,000 0.0% $0 $0 Convenience Goods
$2,998,000 0.0% $0 $1,758,000 0.0% $0 $38,766,000 0.0% $0 $0 Total $152,700,000 $0 $51,953,000 51,953,000 $0 $71,807,000 $0 $0 Cumulative Phase I Restaurant $60,218,000 2.0% $1,204,000
$22,158,000 5.0% $1,108,000 $16,243,000 0.0% $0 $2,312,000 Retail $89,484,000 2.0% $1,790,000 $28,037,000 5.0% $1,402,000 $16,798,000 0.0% $0 $3,192,000 Convenience Goods $2,998,000
0.0% $0 $1,758,000 0.0% $0 $38,766,000 5.0% $1,938,000 $1,938,000 Total $152,700,000 $2,994,000 $51,953,000 $2,510,000 $71,807,000 $1,938,000 $7,442,000 Phase II Restaurant $60,218,000
2.0% $1,204,000 $22,158,000 5.0% $1,108,000 $16,243,000 0.0% $0 $2,312,000 Retail $89,484,000 2.0% $1,790,000 $28,037,000 5.0% $1,402,000 $16,798,000 0.0% $0 $3,192,000 Convenience Goods
$2,998,000 0.0% $0 $1,758,000 0.0% $0 $38,766,000 5.0% $1,938,000 $1,938,000 Total $152,700,000 $2,994,000 $51,953,000 $2,510,000 $71,807,000 $1,938,000 $7,442,000 Source: Economic &
Planning Systems H:\20812 Ever Vail Fiscal Analysis\Models\[20812-EV Sales Tax Model 12-29-2010.xls]12-ErosionVail Village Lionshead Village West Vail
Ever Vail Fiscal Impact Analysis January 7, 2011 Economic & Planning Systems, Inc. 41 Draft Final Report Table 22 Projected Sources of Sales in Ever Vail Retail Ever Vail Fiscal Impact
Analysis Project Visitors/Total Sales Residents, and Ritz Carlton Vail Village Lionshead West Vail In Ever Vail Description Parking Spending Spending [1] Erosion [2] Erosion [2] Erosion
[2] Businesses By Phase Phase I Restaurant $2,349,000 $1,586,250 $1,204,000 $1,108,000 $0 $6,247,250 Retail $1,331,000 $1,395,900 $1,790,000 $1,402,000 $0 $5,918,900 Convenience Goods/Market
$1,437,000 $1,586,250 $0 $0 $1,938,000 $4,961,250 Total $5,117,000 $4,568,400 $2,994,000 $2,510,000 $1,938,000 $17,127,400 Cumulative Phase I Restaurant $2,349,000 $1,586,250 $1,204,000
$1,108,000 $0 $6,247,250 Retail $1,331,000 $1,395,900 $1,790,000 $1,402,000 $0 $5,918,900 Convenience Goods/Market $1,437,000 $1,586,250 $0 $0 $1,938,000 $4,961,250 Total $5,117,000
$4,568,400 $2,994,000 $2,510,000 $1,938,000 $17,127,400 Phase I & II Restaurant $2,816,000 $1,586,250 $1,204,000 $1,108,000 $0 $6,714,250 Retail $1,857,000 $1,395,900 $1,790,000 $1,402,000
$0 $6,444,900 Convenience Goods/Market $2,133,000 $1,586,250 $0 $0 $1,938,000 $5,657,250 Total $6,806,000 $4,568,400 $2,994,000 $2,510,000 $1,938,000 $18,816,400 Percent of Ever Vail
Sales Restaurant 42% 24% 18% 17% 0% 100% Retail 29% 22% 28% 22% 0% 100% Convenience Goods/Market 38% 28% 0% 0% 34% 100% Total 36% 24% 16% 13% 10% 100% Source: Economic & Planning Systems
Ever Vail Fiscal Impact Analysis January 7, 2011 Economic & Planning Systems, Inc. 42 Draft Final Report Net Dollar Flows As discussed earlier in this Chapter, Ever Vail guests will
make expenditures within Ever Vail and in other business districts in Vail. By comparing guest expenditures in other locations to the potential sales cannibalization to Ever Vail from
other business districts, the net dollar flows are estimated in Table 23. The total spending from Ever Vail Guests in other areas is estimated at $9.6 million, including $2.9 million
in Lionshead, $5.5 million in Vail Village, and $1.2 million in West Vail. Potential erosion has been estimated at $7.4 million, resulting in a positive $2.2 million net dollar flow
to existing business districts, or $2.2 million in new sales, or a 0.8 percent increase in total sales. Lionshead and Vail Village are likely to experience a modest increase in sales
of one to two percent with the Ever Vail project. West Vail could lose a small amount of sales, estimated at at -1.1 percent. This is due to competition from the proposed Market, which
is a store type that does not currently exist in Vail today. It would compete with the prepared and specialty foods sections of the grocery stores. Table 23 Projected Net Dollar Flows
by Business District Ever Vail Fiscal Impact Analysis Potential Dollar Flows Erosion to Ever Vail Spending From Ever Vail Net Dollar Flows Lionshead $2,510,000 $2,954,000 $444,000 Vail
Village $2,994,000 $5,486,000 $2,492,000 West Vail $1,938,000 $1,166,000 -$772,000 Total $7,442,000 $9,606,000 $2,164,000 Potential Erosion vs. Existing Sales Net Dollar Flows Existing
Sales (2009) Erosion as % of Sales Lionshead $444,000 $51,953,000 0.9% Vail Village $2,492,000 $152,700,000 1.6% West Vail -$772,000 $71,807,000 -1.1% Total $2,164,000 $276,460,000 0.8%
Source: Economic & Planning Systems H:\20812 Ever Vail Fiscal Analysis\Models\[20812-EV Sales Tax Model 12-29-2010.xls]Table ES-1
Economic & Planning Systems, Inc. 43 20812-R-01-07-2011.doc 5. KEY FINDINGS AND RECOMMENDATIONS 1. Ever Vail development would expand the Town’s economic base by expanding visitation.
The visitor and resort economy forms a substantial portion of the Town of Vail’s economic base. If successful, the hotel and overnight rental condominiums in Ever Vail project will bring
additional visitors to the Town, expanding the resort and visitor based economy year round. Because a significant percentage of the users projected to occupy or visit the Ever Vail project
are estimated to be net new, (approximately half to two-thirds based on the occupancy rates of the various buildings within the project), there will be an overall expansion of visitation
to Vail. From a fiscal perspective, the Town is expected to experience a positive impact from the Ever Vail project coming from new guests
(new room night sales and new expenditures). Retail sales are projected to be net positive in two of the three existing retail centers in Vail, with West Vail seeing a modest contraction.
Regarding lodging, the development will introduce new lodging competition in the Vail market and some existing hotels and condo-hotels will be impacted. Consideration: The hotel is an
important piece of the project and thus would be most beneficial if constructed in Phase I. 2. The hotel provides the most fiscal and economic benefit to the Town. Hotels have a larger
fiscal impact to the Town than a condominium project with a rental program due to higher annual occupancies. The Ever Vail hotel is projected to operate at 60 percent annual occupancy
compared to 40 percent annual occupancy for condominiums. The hotel is also expected to bring a larger share of net new guests. From the Fiscal Model, EPS estimates that one hotel room
has a fiscal impact of 1.3 times that of one condominium unit in a rental program. The economic benefit to the Town in terms of spending is also larger for hotels compared to condominiums.
EPS estimates that one hotel room generates 2.3 times more retail and food and beverage expenditures than a condo. Consideration: The hotel is an important piece of the project and thus
would be most beneficial if constructed in Phase I. 3. The Ever Vail Hotel could bring additional summer and shoulder season business by marketing to groups and events. The 102 room
Ever Vail hotel is proposed to include 6,291 square feet of meeting space with a seating area of 4,951 square feet. At 20 square feet per guest, this space could accommodate groups of
at least 250 people. There is an additional 3,372 square feet of meeting space proposed in the mixed use portion of the project. Groups of this size (250 or more) need a block of at
least 200 rooms that can be sold together. The off seasons present an opportunity to expand group business, as occupancies are low and it is easier to assemble a large block of rooms.
Because the hotel room count falls below this threshold, the
Ever Vail Fiscal Impact Analysis January 7, 2011 Economic & Planning Systems, Inc. 44 Draft Final Report developer and property managers will need to encourage that condominium owners
participate in a rental program to leverage the economic impact of the meeting space. Consideration: Pursue an effective incentive program that motivates an adequate number of condominium
owners to join a rental program. Request that VRDC demonstrate a business model for attracting groups and off season business. 4. The Town and Vail Resorts should strive to provide a
consistently high quality visitor experience. Part of Vail’s success is the consistently high quality guest experience on the mountain and in the Town. Guests should see no difference
in the quality of maintenance and services on property maintained by Vail Resorts or the Town. The Ever Vail project should continue the high quality of service and experience by ensuring
that public spaces are maintained to the same, or higher, standards as areas maintained by the Town. The operations and maintenance budget for the metropolitan district(s) needs to be
adequately funded the segregated from debt service to ensure consistently high standards of upkeep. Consideration: Ensure that Ever Vail will maintain the property and public areas to
the same standard as the Town by ensuring the service plan for any future metropolitan districts include a distinct mill levy dedicated to Operations & Maintenance. 5. The 35,000 square
feet of office space will make a modest contribution to the Town’s economic diversity. The Ever Vail project will replace the existing 31,000 square feet of office space on the site
with 35,000 square feet of new space. Currently, it is anticipated that half of the space will be occupied by Vail Resorts Development Company by moving their current operations from
Avon to Vail. The remaining space would be available for lease to local professionals and businesses. The employees in this space will add vitality to Ever Vail year round. Consideration:
Encourage office development in Phase I. 6. The fiscal and economic analysis indicates that cannibalization of existing retail and restaurant sales by Ever Vail businesses will be minimal.
The development team has reduced the amount of retail as a result of discussions with EPS, Town Staff, and other stakeholders to address concerns about right-sizing the retail hub. When
EPS first became involved in the project, the retail program was proposed to include approximately 100,000 square feet of retail and food and beverage space. Through a collaborative
process, EPS, and VRDC and its consultants agreed that the project was overretailed for this location and the size of the surrounding bed base. The retail program was reduced to approximately
53,000 square feet. The impact of new retail space in Ever Vail will have a minimal impact on existing retailers in Vail for two reasons. First, the amount of space is small in comparison
to the current retail inventory. Ever Vail would add 53,000 square feet of retail and food and beverage space to an existing inventory of 629,000 square feet, an increase of 8.5 percent.
Ever Vail retail would be one half the size of Lionshead Village and one seventh the size of Vail Village, requiring proportionally less in sales to be successful. Second, Ever Vail
is also expected to generate new visitation and new expenditures, adding to the overall level of guest spending
Ever Vail Fiscal Impact Analysis January 7, 2011 Economic & Planning Systems, Inc. 45 Draft Final Report in Vail. The Fiscal and Economic Impact Analysis determined that any sales erosion
that occurred from Lionshead or Vail Village would be “cancelled out” by new expenditures. Erosion from West Vail grocers to the proposed Market was estimated at 1.1 percent. 7. The
responsibility for the cost of three transit buses should be part of the development agreement negotiations. The transit analysis completed by LSC Transportation Consultants identified
a need for three new transit buses at a cost of $1.8 million. The responsibility for this cost will be part of future discussions and negotiations between VRDC and the Town.