Will MMSA “bankrupt TBID” to ensure air service to Bishop?
“Commercial Air Service, we believe, belongs in Bishop,” said Mammoth Mountain Ski Area COO Eric Clark at a meeting of Mammoth Lakes Tourism’s (MLT) Board of Directors on Wednesday, February 7.
During a discussion about the renewal of the Tourism Business Improvement District (TBID), the Board’s conversation focused on air service, with Clark saying “I think what is important to understand is [Mammoth Mountain] wants to move the air service to Bishop. And we want to create infrastructure that could help us do that.”
Mammoth’s TBID expires on August 31, 2018. However, the details of a possible renewal have not been finalized.
Mammoth Mountain is the largest single contributor to the TBID—it commits 2 percent of lift ticket and ski school sales (as well as 1 percent of lodging gross revenue and 1.5 percent of restaurant and retail gross sales) to the tax, which funds marketing under the umbrella of MLT. Mammoth also commits up to $1.5 million per winter to an air service subsidy for flights out of Mammoth-Yosemite Airport.
Enplanements at MMH rose steadily from 2008, when Mammoth first began offering commercial air service, until 2013, when Mammoth began reducing seat capacity.
On January 25, representatives of the Federal Aviation Administration visited both MMH and Bishop Airports, and indicated that they would be supportive of a regional solution to Mammoth’s notoriously unreliable commercial air service (see “Better Together?” January 27).
Clark said that Mammoth Mountain (now a part of parent company Alterra) initially voted to contribute to the TBID in 2013 because “we wanted to create infrastructure that would help us deliver air service to Mammoth.” Now, Clark said, “we want to move our resources in a different direction to create air service in Bishop.”
A “Statement of Intent” to work together was signed by both Mammoth Mayor John Wentworth (on January 17) and the Inyo County Board of Supervisors (on January 16) ahead of the FAA’s visit. That statement mentioned the possibility that Mammoth Lakes could engage in “cost sharing” with Bishop Airport.
Board member Sean Turner said at Wednesday’s meeting that “I’ve heard we cannot legally contribute TBID to the Bishop Airport” in order to help it attain Part 139 (commercial) certification, but MLT Executive Director John Urdi responded that was not the case.
California Tourism Improvement Districts (TIDs) were formed under the Property and Business Improvement District Law of 1994. Per State law, passage of a TID tax requires a 2/3 supermajority of district business owners (under California proposition 26).
The vote is on a proportional basis, but no one entity can have more than 40% of the vote. Mammoth Resorts has 40%.
In effect, if Mammoth Resorts votes against a renewal, the TBID is dead.
It was initially passed in 2013 for a five-year term.
The law requires that the TBID must provide a specific benefit to people who pay into it. However, Urdi said, there are ways to quantify that benefit to Mammoth if TBID money goes towards improvements or subsidies at the Bishop Airport.
For instance, he said, if passengers flying into Bishop were bused to Mammoth and “dropped off at the Westin, we’d know the specific benefit.”
However, Urdi said, a “blanket subsidy is where [an] attorney feels we could get into a potential issue.”
Clark said that the future of Mammoth Mountain is in “destination air service coming from Chicago, Atlanta, Houston …long haul flights.” Clark announced at the January 25 FAA meeting that Alterra Mountain Company had just introduced its Ikon Pass, which aims to compete with Vail Resorts’ Epic Pass. According to Clark, “they have over 750,000 Epic Passes out there … if you look at our access strategy and how we can bring more people to Mammoth Lakes, we think air service is one of the areas we can do that.”
Clark said that the reason the TBID renewal language has “been held up is because we want to understand what the air service strategy is going forward…we don’t think we can take [Mammoth-Yosemite] air service any further than what it is now.”
“Is the Mountain comfortable with holding up TBID and potentially bankrupting TBID in absence of that strategy?” asked Board member Scott McGuire.
“Can you rewrite the TBID in terms of moving towards that two to three year strategy of air service in Bishop?” replied Clark.
It was decided that three MLT Board members (Michael Ledesma, Brent Truax and Paul Rudder) would be appointed to represent the organization moving forward at meetings of the Mono-Inyo Air Working Group