Community Skis contests TBID assessment.
Community Skis might pull up stakes after receiving a letter from the Town informing the ski manufacturer that it must pay a Tier 1 Retail Tourism Business Improvement District (TBID) assessment. Co-owners Michael Lish and Kristin Broumas argued that their business, a non-tourism based manufacturer, should be exempt from TBID. They believe Mammoth Lakes Tourism’s (MLT) insistence that they pay TBID has become a personal vendetta.
Lish and Broumas have struggled to appeal the TBID assessment with both MLT’s Executive Director John Urdi, who determines businesses’ TBID classifications, and the Town Finance Department, which determines business classifications.
The difference between the two is the first of several confusing factors in Community Skis’ case.
As Town Manager Dan Holler explained it, the Town determines business classifications, which solely affect taxes and fees associated with the Town’s Business License Ordinance. Initially, the Town classified Community Skis as a retailer; Lish and Broumas fought hard to change that designation to manufacturer.
They have now convinced not one but three different Finance Department employees—Maureen McClain, who left the Town about a year and a half ago, Dan Izzo, who left last March, and most recently Eric Bertovich—that Community Skis is a manufacturer and not retail.
Lish said the Town initially classified Community Skis as retail because “we submitted our initial business license as a manufacturer/retailer. At the time our thought was we would be selling bindings, soft goods and other items. That never materialized. As of day one we have only sold what we manufacture.”
When Lish took the matter to McClain and Izzo, the Town classified Community Skis as a manufacturer “and exempted us from all taxes and fines associated with TBID we had incurred to date.”
But Lish claimed that “Shortly thereafter John Urdi went to the Town Finance office and, apparently in a great deal of anger, admonished Town Finance and forced them to put us back into the TBID collection process. This is when we were informed by Town Finance that business classification has nothing to do with who pays TBID; John Urdi determines that.”
Lish said Urdi has repeatedly denied Community Skis a manufacturer classification.
“When TBID was enacted as a law, we had been discussing with Clayton Mendel [owner of Eastern Sierra Armory, which specializes in biathlon-related goods and services] how he had approached the town proactively as a manufacturer and was exempted from the TBID,” Lish said. “When the TBID was enacted we followed Clayton’s advice, and John Urdi throughout the appeal process consistently denied us the path that Clayton had taken.”
MLT Board of Directors Chairman John Morris spoke on behalf of Urdi, who is on vacation, regarding Community Skis’ TBID classification. “Community Skis is similar to Mammoth Brewing Company and, say, Mimi’s Cookies,” he said. “They do manufacture and sell wholesale to outside distributors but they also sell directly to the consumer, which is a retail transaction. The retail transactions are subject to the TBID.”
What’s more, and perhaps more important, according to Dan Holler, Urdi continues to classify Community Skis as a tourism-based business in spite of Lish and Broumas’ protests to the contrary. According to John Morris, a business is tourism-based if it derives more than 50 percent of its revenue from customers outside of Mammoth Lakes.
But Lish argued that Community Skis sees little to no tourist walk-in business. He said the majority of business is drummed up through his and Broumas’ own marketing campaign and conducted online. Because of this, he maintained that Community Skis should not have to contribute to an MLT marketing campaign that does the shop no good.
Lish also said that while he had attempted to determine Urdi’s rationale for classifying Community Skis as a tourism-based business, he never received a straight answer.
“To determine whether we are tourism based or not would have to take due diligence on the part of MLT, following a specified protocol in-line with the law as written,” Lish said. “Our company, or any other company, seems in fact to be randomly selected to fit into MLT’s classification as tourist-based. But if we receive tourists, then the gas stations receive tourists, the real estate broker receives tourists, and so on and so forth. Without tourism, any of these businesses, including the newspaper, would not exist … John Urdi has created an environment where his personal prejudices dictate who will be forced to pay and who will not.”
Lish argued that Urdi must have initially taken business information and classifications from the Town, or “how did John Urdi know what businesses existed and what they might be doing? Did he use the Town Finance designations or did he talk to the fairy godmother?”
In other words, why use the Town’s data and determinations only to draw a different conclusion about the business in question?
Community Skis’ experience also begs the question why MLT, which stands to gain the most from classifying a business as retail and tourism-related, could do so with so little oversight or understanding on the part of the Town or the businesses in question.
Although Dan Holler pointed out that Community Skis can resort to a TBID appeal process, Lish said this hadn’t done his business much good.
“We did go through the appeal process, but at no time during the process was it ever made clear what John Urdi and the MLT Board were basing their decision on in regards to who pays TBID,” he said. “We’ve never seen a concise reading of the law, and throughout the process we felt decisions were being made in an arbitrary manner.”
Lish said the entire process, which has been ongoing since the TBID passed into law in 2013, has taken about 70 hours, or an equivalent $3,500 in Lish and Broumas’ time. “It’s left us exhausted and nervous about the future of our business,” he said. Paying the TBID assessment of $1,500, which was due on August 10, would cost Community Skis an employee and is forcing Lish and Broumas to consider moving. If they do not pay the TBID, Community Skis will not be able to renew its business license.
“We will never pay the TBID assessment,” Lish said. “The problem we are facing in regards to TBID and its administration, fines and penalties, is indicative of a town that is not in the process of self correction, but a town bent on continuing dysfunctional practices, bad management, and a weak Town Council. The Town has had ample opportunity to correct the actions of John Urdi and the other people who perpetuate this level of mediocrity … the level of harassment and then the denial of our business license based on what we consider the prejudices of one man, the Tourism Executive Director, is much too poisonous to our persons and vision.”
Morris said he believed Community Skis had voted on TBID, and that “to the best of my knowledge all of the business that were going to be assessed the TBID were able to cast votes.” But Lish said that Community Skis didn’t vote. While proponents of TBID continue to insist the TBID is a fee and not a tax, what this amounts to in Lish’s eyes is taxation without representation, and all for a marketing campaign that he argued still does nothing to benefit his business.
“We wanted to flourish as a business and flourish in this community,” Lish said. “The Town is clearly telling us that John Urdi can do what he wants to do, and if Community Skis has to go, who cares?”