Business Improvement District to fund air service still being mulled
The concept of creating a Business Improvement District to help sustain air service subsidies isn’t a new one. This paper reported on the idea when Mammoth’s Airport Commission previously batted it around in December 2011. “ESAA [Eastern Sierra Air Alliance] hopes to bring the local business and homeowner community into the air subsidy mix. It will ask the community to support air service along with Mammoth Mountain [Ski Area], [Town of Mammoth Lakes] and Mono County. The idea has been thrown around in the past but has never been organized,” we wrote.
Given the Town’s rock-and-a-hard place financial situation, Mammoth Lakes Tourism Director John Urdi has revived the idea, though it’s still just an idea at this point. If a BID is ever formed, it would encompass a defined section of the town’s lodging and businesses community, adding a surcharge (i.e. 0.5% or some other amount) on a variety of transactions, including food and retail, that would be put toward air service, and ideally end Urdi’s need to scrounge for subsidy funding from a cash-strapped Town and a tight-fisted Mono County.
After weeks of lobbying for commitments, he was happy to get $85,000 of a $100,000 ask from the county’s Board of Supervisors, but is admittedly exhausted at the energy and time poured into the effort. “After it was over, I thought, ‘I really hope I never have to go through that again,” he recollected.
Don’t look for a charge of that kind appearing on receipts anytime soon, though. At the moment, Urdi said MLT’s legal representation has sent a draft proposal to the MLT Board of Directors for input and comments. One topic is whether a BID should have a steering committee formed to help organize it, one that would include representation from MMSA, and the lodging and business communities, which would be directly affected by implementation of a BID.
A clear BID benefit is what could be a sustained commitment to air service, derived from the roughly $1.2 million the BID might be capable of generating annually. Any remainder would likely be applied to marketing, though it might also be put aside for “rainy day” applications in the case of low snow years or other economic slow times. “We need sustainability, but also consistency in the funding structure, which we’ve never really had when it comes to air service,” Urdi pointed out.
On the other hand, what if any impact it would have on businesses is also a consideration. Creating a BID takes a simple majority of businesses that collectively generate at least 50 plus one percent of the community’s revenue. Obnviously, the bigger the businesses on board, the faster one gets to that figure. Once enough support has been mustered to create one, however, typically BIDs do not afford dissenting businesses a way to opt out. Any surcharge adopted would be mandatory across the board within the BID’s borders.
Currently, Urdi said there is no fixed surcharge rate and no particular delineation of boundaries, or even what types of businesses would be involved. “Our take on it right now is, ‘Don’t speculate on what it’s going to look like until we know what it’s going to look like,’” he advised the public. “It’s still in discovery mode, and there are lots of questions, lots of ideas to go through, including many we haven’t even though of yet.” He stressed that the business community and related stakeholder also haven’t yet had their say.
Mammoth Lakes Chamber of Commerce President Brent Truax said he thinks the business community would be “cautions when it comes to looking at any type of BID proposal.” Truax added that a lot depends on the mediation [and MLLA settlement agreement] and how the result will play into a BID and impact the business community.
“Parts of the business community already contribute a lot of tax revenue, and if we are to consider a BID, we would want to make sure it’s equitable for everyone,” he said, pointing out that Mammoth is already one of the heaviest taxed municipalties in the state. Truax also expressed concerns as to how BID surcharges might affect visitors, and whether it would be the best idea to use a BID to make up for revenue that could be found elsewhere.
Urdi is expected to mention the BID during a presentation to the Airport Commission on Sept. 25, though he’s uncertain whether or not he’ll have new or updated information.
Rudder won’t bid
In response to the story on page six regarding a proposed Business Improvement District (BID) to help subsidize commercial air service, I called Mall magnate Paul Rudder and asked him what he thought about the idea.
“That’s a terrific idea, Ted,” he said. “I’m sure the entire local business community will be very supportive.”
There was a pause on the line. I know Paul well enough so as to listen for the other shoe.
I paraphrase the following, because Paul got a little amped up and started speaking more quickly. It went something like this. Ted, who in their right mind in this town would vote to tax themselves again, knowing that there is absolutely no guarantee, and in fact ample case history to suggest the money won’t be spent on what the Town promises it’s supposed to be used for. Any further tax increase proposed by this town is D.O.A.
A business owner along Old Mammoth Road who wished not to be identified said, and again I paraphrase: Why would I be in favor of taxing myself to support air service when 90% of that business will go to the Mountain and the Village? I’d rather spend my money trying to animate Old Mammoth Road … the ski and snowboard industry has been contracting for the past decade. One of the biggest ski and snowboard markets around is Southern California. Let’s allocate our resources marketing to/shoring up our base rather than wasting money chasing the elusive customers every other resort is chasing.