There’s No Bidness like TBIDness
Mammoth Lakes Tourism Business Improvement District (TBID) was established in 2013. At the time, MMSA (now Alterra) CEO Rusty Gregory had a grandiose plan to generate more air travel to our area.
Gregory came up with his solution as the Town was dusting off its wounds from a lawsuit with Terry Ballas, a developer who had an airport development agreement with the Town. A Sheet editorial recounting the events reads, “When the Town (at the urging of Gregory) tried to dump Ballas in order to land millions in Federal Aviation Administration (FAA) airport improvement dollars … Ballas cried foul.”
The Town lost in court, and had to pay $29 million (or $47 million over 23 years, with interest).
Then came Gregory, TBID, and a new way to subsidize the infamous Mammoth-Yosemite Airport.
Gregory supported the TBID proposal, in part, because at the time Mammoth Mountain was the only entity subsidizing air travel to the area, and in the drought year of 2011, MMSA got burned when it tried to greatly expand routes (to San Jose, Reno, Seattle) and spent $4 million alone in subsidy that fatefuil winter.
So a proposed TBID where the Mountain would pay the winter subsidy and the Town the summer subsidy was the agreed-upon plan, which caps MMSA’s airline subsidy at $1.5 million/year.
John Urdi, Executive Director of Mammoth Lakes Tourism, told the Sheet that as a sign of good faith, Mammoth Mountain offered to contribute 2% for lift tickets and ski school.
That stands as the highest tax rate of TBID. For reference: TBID taxes lodging at 1%, retail and restaurants at 1.5%, and then the 2% for lift tickets.
A Sheet article from 2013 reads, “Speaking in support of the TBID was MMSA CEO Rusty Gregory, who promised that in addition to MMSA’s participation in the TBID, that the company will significantly increase its own marketing efforts over the next three years.”
Mammoth Mountain’s motives were clear. It wanted help with the airport subsidy and claimed it would help market the Town with MLT – which was more than happy to accommodate a larger budget.
And while numbers rose all the way around overall between 2013-2019, the MLT marketing budget as a percentage of room revenue has gone from 20% in 1998-99 to 22% to 2010-2011 (pre-TBID) and had reached 44% by 2017-18.
The Alterra drain
Little has been said about Mammoth Mountain’s acquisition by Alterra and how that has affected TBID.
As Alterra is based in Denver, Ikon pass sales are considered to be sold out-of-state and not subject to paying TBID.
The effect on TBID revenue was calculated by Hite.
The first fiscal year (2013-14) of TBID generated a total revenue of $3.15 million. $1.15 million (or 36.5% of TBID) was paid for by skiing. TBID numbers are not broken down by individual payer but rather by industry. Mammoth Mountain is likely the only business that paid into this portion of TBID so it is safe to say it represents the “ski” category.
The year before the sale to Alterra, in FY 2016-17, TBID generated $5.7 million. Mammoth Mountain paid $1.97 million (or 34.5% of TBID).
The next year, FY 2017-18, TBID dropped to $5.13 million and Mammoth Mountain contributed $1.44 million (or 28% of TBID). During FY 2018-19 TBID generated $5.63 million and the ski industry paid $1.49 million (or 26% of TBID).
So from Mammoth Mountain’s perspective, its TBID bill dropped approximately 25% after the sale to Alterra ($1.97 million to $1.44 million.)
What’s the upshot?
The interesting part of the TBID creation is that it’s a taxation district in which the business community taxes itself, and each entity’s vote is weighted based upon the percentage of its overall contribution.
When the TBID was first contemplated, Mammoth Mountain had 40% of the vote – which always made TBID renewal seem like a virtual fait d’accompli – if that’s what Mammoth Mountain desired.
With Mammoth Mountain’s share at just 25%, and the future of air service as we know it in doubt generally (never mind that many local business owners were irate to learn of plans to transfer air service – with their dollars – down to Bishop), it seems the purpose of TBID itself is ripe for revisitation. Particularly since Mammoth Mountain has been the driving force behind moving air service southward.
Urdi told the Sheet this week, “Air service will come back for winter (December) but it is still up in the air what will be at MMH and what will be in Bishop.”
However, Bishop Fire Chief Joe Dell said at Bishop’s Council meeting on Tuesday that there would be no commercial air service coming to Bishop this year. But will they even come to Mammoth?
The U.S. Transportation Dept. recently announced it would allow airlines to cancel routes to secondary markets
The Yahoo! Finance story which appeared Monday stated that American Airlines will be permitted to stop flying to Aspen and Vail.
CARES Act bailout funding had committed airlines to retaining flights to locations it had served prior to Covid.
The next meeting of Eastern Sierra regional partners with the Federal Aviation Administration (FAA) is scheduled for June 24.