Trading a lift tax for Howelsen Hill: City, Steamboat Resort consider partnering in running the historic ski area
Editor’s note: This story was corrected at 5 p.m. Monday, July 1. A quote from Council President Jason Lacy was incorrectly attributed.
STEAMBOAT SPRINGS — The city has released a skeleton of a developing agreement that could see Steamboat Ski and Resort Corp. operating Howelsen Hill.
“It’s an idea at this point,” Steamboat Springs City Council Member Sonja Macys said. “It’s a concept paper to some degree.”
Among these initial details is a clause that states the resort can terminate the agreement immediately if the city imposes a tax on lift tickets.
City Council will discuss the preliminary elements of the agreement at its Tuesday meeting.
Macys and Council President Jason Lacy have been representing the city in negotiating with Ski Corp. Both solicited feedback from the community on the idea.
“We really just need to see if council and the community are ready for us to keep talking, and what areas we might need to change a little bit, or if it’s just time to scrap the discussion altogether,” Lacy said. “It’s really still pretty preliminary but we feel like at the same time we need to get some input from everyone to see if this is the right line that we’re going down.”
“Ski Corp. understands that Howelsen is an important community asset, and we’re exploring ways to support that,” said Loryn Kasten, senior communications manager for Steamboat Resort.
“There are ongoing conversations between the resort and the city to see how we can continue to have Howelsen thrive as a community asset,” she continued.
Ski Corp. had not responded to further questions about the proposal as of press time.
Instead of a lift ticket tax, a compromise
Macys said the discussion about Ski Corp. operating the historic ski hill came about after the city again started considering a tax on lift tickets.
The idea was shelved as the two entities explore a partnership centered around Howelsen Hill.
“The question has always been, ‘Does the visiting public who is motivated by the ski area to get here have a bigger share of the burden of infrastructure to pay?’” Macys said. “Just looking at the ridership that happens up to the ski area — obviously the transit services are free to the rider — so essentially the city is subsidizing getting people up to the area. That’s just one example of the kind of pressure on services that the tourism brought by the ski area creates.”
Macys said these services benefit other businesses, too, though much of this tourism is driven by the ski area.
“We talked a little bit about the lift ticket tax and whether or not that was the best option and the best way to have Ski Corp. get involved with this fiscal sustainability goal that the council has,” she said. “We ended up putting that on a shelf until we could explore whether a partnership around Howelsen Hill would make more sense.”
While the current City Council can’t prevent a future council from exploring and implementing a lift ticket tax, Macys said the council hopes to express its intention that this takes the place of a lift ticket tax.
The document proposes a three-year agreement, with the intent of negotiating a long-term concessionaire agreement. Lacy said this initial three years would allow the Resort to analyze operations of the hill and “have a better idea of what they can see as a long-term agreement.”
The city, resort and Steamboat Springs Winter Sports Club would pursue another agreement, also with a three-year term, addressing operations of the Alpine Slide.
Lift tax, Howelsen agreement have been considered before
This is not the first time City Council has discussed a lift tax or a partnership with the resort on Howelsen Hill.
In 2016, City Council discussed the idea of a tax on lift tickets, but nothing concrete came of it.
In 2017, in response to a request for proposals from the city in operating Howelsen, Ski Corp. proposed an agreement that would’ve seen the resort take over operations on Howelsen. This ultimately resulted in an offer of Ski Corp. placing a general manager and assistant general manager at the hill for a year to serve as consultants initially, with a hint that the resort might be interested in taking on a bigger role at Howelsen.
Council members rejected the 2017 proposal due to the $250,000 price tag and a desire to pass management of the ski hill on to another organization entirely.
“In this case, they’re bringing personnel to the table. They’re bringing assistance with capital costs to the table, and the city pays nothing more than we’re already paying already, essentially,” Macys said.
Initial points of agreement
The city would retain ownership of Howelsen Hill and receive revenue from sales of lift tickets and most other fees collected at the hill. Ski Free Sundays and summer camps would continue at the ski hill, which doubles as a city park.
“Everything would still be running through the city,” Lacy said. “It’s still our ski hill. It’s still our operation. They would essentially just be managing it over the next three years.”
City staff that currently work at the hill would continue in their current capacity and would still be employed by and reporting to the city’s Parks and Recreation Department. City employees will continue to receive a free Howelsen season pass as they do now.
The resort would consider offering a locals’ ski pass to Howelsen Hill, according to the document.
The Winter Sports Club would be allowed to continue its existing summer operations.
Macys said the agreement aims to build on the community interest ignited by programs such as Ski Free Sundays.
“Our goal in looking at this partnership is to build on that success — to continue on the path that we started — which is retaining the historic designation and all of the character and feel around that,” she said. “We continue to be a locals’ hill that hasn’t turned into this amusement park. To that end, we included a lot of provisions that were important to us to make sure that locals are still served by Howelsen.”
The resort would take over year-round operations of Howelsen Hill with a general manager supported by the resort’s senior management team. The resort would takeover everything from marketing, events and business development to retail, rental and food service operations.
The resort would operate food and beverage services out of Howelsen Lodge and Tenth Inning, the concession stand situated between the jump complex and Howelsen’s largest parking lot. The resort would also manage rentals of Olympian Hall and receive revenue from these rentals.
The city and the resort would work together to “create operational improvements, anticipate losses and identify business opportunities” in the following areas:
- Slope stabilization
- Snowmaking and on-mountain operations
- Winter tubing and summer recreational activities
- Food and beverage
- Other opportunities to generate revenue
The agreement, if it takes effect, will not impact the Steamboat Springs Pro Rodeo Series or concessions at the rodeo grounds, Lacy said.
A new lift and negotiating losses
The city would continue to pursue a replacement for the shifting Barrows Chairlift, installing a new lift in summer 2020 or 2021. The resort would provide consulting support for the project. The resort would also help fund and fundraise for the lift, working with the city and the Winter Sports Club.
A clause within the document would essentially cap the city’s loss in operating costs at $913,080. Losses greater than that would be absorbed by the resort. If losses are reduced to an amount smaller than $913,080, the city and the resort would split the savings.
Resort investments in items such as winter tubing or food operations would count as capital investments, not the loss involved in operating costs.
Macys said the agreement aims to take Howelsen from an operation that loses “more or less a million dollars a year” to one that produces revenue.
“We’re not naive that that’s necessarily going to happen in the three-year period, but that’s the direction we want to move in,” she said.
Macys said the topic of operating costs and funding the installation of a new lift would likely be the biggest issues for the council to work through in its discussion Tuesday.
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