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Growing Concerns, Part Three |
Glenn Walsh | 3/27/08
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Read Part One
As local businessmen and women lined the back wall of the south conference room, and then the hallways outside that room, Mayor Ross Aragon excused a small procedural error with a half-joke. “So many people have come in that I was looking for an escape route.”
Of course, there are few reasons Aragon should need to escape from the local business community. It is not an editorial but a fair reading of some basic numbers – property taxes one-quarter that of comparable towns and retail sales 400% higher – to say that the Town of Pagosa Springs over Aragon’s tenure has been pro-business and measurably successful.
The larger-than-expected crowd listens to the larger-than-expected problems of local retail, real estate and construction firms |
Almost all local businessmen would have conceded this – before 2006, when impact fees were passed by the Town, water resource fees were established by PAWSD and the San Juan Water Conservancy, and “smart growth” regulation of commercial and residential development was enacted in Pagosa Springs, including restrictions on Big Box retailers and a moratorium on demolition of older downtown buildings.
These initiatives have become less than evidently smart to many in the Pagosa business community as retail sales have flattened and the real estate and construction industries have collapsed over the past year. It is estimated that real estate brokers and agents earned $5 million less in 2007 than in 2006. Calculating how often those dollars were not passed around within the local economy would be dismal science.
The fees most opposed by local businessmen are the capital investment fees assessed against new development by PAWSD and the San Juan Water Conservancy to fund the proposed Dry Gulch Reservoir. These fees can run over $11,000 for a single family home in the Town (almost all proposed development is either in, or will soon be annexed to, the Town) or $50,000 for a modest restaurant.
Fred Schmidt, the president of the SJWCD, seemed reluctant to address criticism of the water districts’ fees. He spoke first in favor of reconsidering Big Box stores, citing figures which have the average family of four in Archuleta County spending $12,000 per year at the Durango Walmart. Schmidt added, “How many small businesses are next to Walmart? Are there twenty, something like that?”
Schmidt estimated the sales tax windfall and asked, “What could the County do with $700,000 per year?” (That amount would cover this year’s airport subsidy.) Schmidt then cast out the red herring of a Southern Ute casino and Walmart at Lake Capote, where the present population fluctuates wildly as traffic changes at the intersection of highways 151 and 160.
SJWCD President Fred Schmidt promising to think outside the box about impact fees for Dry Gulch |
Later in the meeting, Schmidt addressed the Dry Gulch fees more directly. “These are very difficult issues and there is a lot of misconception about Dry Gulch and what we are doing there. It is too easy to have strong opinions on half facts and not be involved. ... I hear what the real estate brokers and developers are saying about the impact fees and there is a lot of validity to it. And I think there are some solutions, but on the Water Conservancy Board we have nine people. We need more input. … No one has come to our board meetings and yet we are making significant decisions. .... We need your input. And it has to be open. We have to listen to you and you have to listen to us.”
“… I will make a pledge to you. We have to think out of the box to defer or stretch the impact fees and the water resource fees. ... I agree it is a big issue for the development community and the real estate brokers.”
Carrie Weiss, the Manager of PAWSD, is a confident and efficient speaker. Before this crowd, her speech was softer and full of unusually lengthy “y’alls.” But Weiss offered no promises to lessen or defer any fees. She offered to “clarify some things and encourage y’all.” Weiss added, “I wish we had this kind of a turn out, even a fraction at our board meetings.” She then reiterated, “The district has a complex fee structure, but we can explain it to you.” Weiss, while very pleasant, seemed to be suffering from the same tone-deafness that had other speakers recommending that everyone read hundreds of pages of economic data and analysis. These businessmen and women were asking for fee reductions and regulatory relaxation to help them survive 2008, and not for a primer on financing a reservoir for 2050.
While both Schmidt and Weiss highlighted the difficulties of making decisions without public participation, neither mentioned that thousands of citizens had entered those small meeting rooms called election booths in 2004 and vote 60% against a $6 million bond issue for land purchases for what would become Dry Gulch. The water districts listened to this turn-down and then instituted capital investment fees and sought a loan of $22 million for land purchases.
The response of Town and County leaders was far more direct and positive.
Indeed, when it seemed that no further complaints were going to be aired soon after the move to a larger room, Councilor Darrel Cotton challenged the audience, “Come on, we didn’t move down here to just sit here.”
Councilor Stan Holt asked, “How many of you remember 1988-1990 when the real estate market went bust? … We cannot rely solely on tourism with second home owners being the economic driver.” Holt was emphatic, “We need jobs 8-5, Monday through Friday, with people working, that is what we need.” Those with an ear for Holt’s old-school values will note that jobs for Holt start at 8, and you are expected to work. Holt then introduced Archuleta Economic Development Association executive director Bart Mitchell.
Mitchell gave a pep talk peppered with some constructive criticism. He seconded Holt, “A driving economy requires diversification not merely tourism, construction and real estate.” Mitchell is targeting his recruiting efforts on small growth companies with 10-20 employees. He didn’t pull any punches about what he labeled “the attitude issue” that can turn off firms that are considering a relocation. Mitchell warned against “the defeatist attitude that some of you guys have. Be aware of the major part that you play in driving the economy.”
Mitchell was very diplomatic about the issue of impact fees, though it is no secret that he believes the cumulative effect of all the fees currently assessed against start-ups places Archuleta County at a competitive disadvantage. Mitchell was frank that his approach was not a quick fix, “It is a mid- to long-term solution.” While Mitchell receives widespread compliments for his work, he is now seeking complements: reliable funding, staffing and a joint Town and County commitment to diversify the local economy.
Bob Moomaw describing impact fees as "a necessary evil" that should be spread out over 5 or 10 years |
County Commissioner Bob Moomaw again showed his ability to both sympathize with a large crowd while not entirely agreeing with them. He rejected the calls to eliminate impact fees, characterizing them as “a necessary evil to make development pay for itself, but I certainly think they should be spread out over a five- to ten-year period so that you don’t have this hit right up front.” Moomaw continued in a very straightforward manner, “But from a governmental standpoint, development unfortunately does not pay for itself. It is absolutely necessary for businesses to survive, ... but you end up with the options of impact fees or paying more taxes. Personally, I like to see whoever is causing the impacts to pay for it, but it does need to be spread out so impact fees don’t prevent development. Right now it is hitting the limit of what the market will bear and having a very serious effect on it.”
Moomaw came across, very simply, as a very responsible public official.
Newly appointed Councilor Mark Weiler closed the session with a set of proposals to jump start the local economy. It had been noted that almost all the questions had been directed to Weiler. Weiler explained, “I am the brand new guy here.” It is likely more than that. Weiler is also the most prominent and successful businessman on the Town Board. He communicates a broad sympathy for the problems of businessmen, so long as they are seeking solutions. And, of course, that sympathy would be far narrower if you were in direct competition with him.
Weiler advertised in last week’s Pagosa Springs Sun for people to come to Town Hall and share their difficulties and solutions. Weiler reported, “I have learned more in those three days about this community than in the seven years I have been here.”
Weiler called for a waiver of all building fees and all impact fees for the rest of this year. He added that the Town should place a moratorium on its sign and banner ordinance for the rest of the year. “If you want to do it, you put your signs out.”
Weiler insisted that the next transformation of the local economy would occur only when the natural resources and recreation opportunities of the area were marketed to twenty- and thirty-something knowledge-based workers. Weiler put the problem succinctly, “These workers don’t know here is here.”
Knowledge-based workers, according to Weiler, “bring their own jobs, and are not defined by the where but the what. … Market the natural resources of our community to those people who are not defined by the where in their careers, only the what.”
Weiler closed the session with a personal promise. “You have my commitment that I will be a leader... We are no longer going to be limited by ‘our glass is half full.’ … The reason we are here is because you have real problems. We’ve heard them and we are going to respond. And we are going to do this a lot. This is going to be a rich, vibrant, broad-based financial community.”
Look for the beginnings of this response at the next meeting of the Pagosa Springs Town Council, which convenes next Tuesday, April 1, at 5pm.
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