Estes Valley Plan

Chapter 3 - Economic Overview

A. Economic Overview

INTRODUCTION

We cannot know where we are going unless we first understand where we are and where we came from. This economic market analysis of the Town of Estes Park and the Estes Valley is an attempt to provide a baseline scenario of where the community will be in the year 2000 if no special action is taken to shape the direction of economic growth.

It is difficult to obtain consistent data series for an economic unit below the county level. Because Larimer County is so dominated by the City of Fort Collins, it does not provide a dependable guide to economic activity in Estes Park, which comprises only 2% of the County's population base. We have attempted to overcome this problem by combining what little data are available for the Town (primarily construction and retail sales data) with data from the decennial census, conversations with people who live and work in the community and the judgment acquired over almost 20 years of studying the Colorado economy.

This analysis is designed to provide the basis for exploring various options to strengthen and diversify the Estes Park economy over the next ten years. It provides a snapshot of where the community is in late 1994, as well as a measure of the momentum in place as a result of the trends of the last ten years.

Estes Park Area Economic Profile

POPULATION

Population data are available only once every ten years, when the decennial census is conducted by the Department of Commerce. In the intervening years, all population data are estimates.
There are two problems with the 1990 Census data. The first is that Census Tract 28 that comprises the Estes Valley was redefined, making data not strictly comparable. The second is that the Town of Estes Park believes there was a substantial undercount of the resident population, due to the way the Census questionnaires were distributed.

The population of the Town of Estes Park and the Estes Park Valley has grown steadily since 1960 (See Figure A1.1 - 3 on Appendix One). The most rapid growth occurred during the 1970s, when the Town added 1,087 residents at an annual growth rate of 5.3%. The Valley grew even faster, adding 3,179 residents at an annual growth rate of 6.6%.

During the decade of the 1980s, population growth slowed. According to the Census, the Town added 481 people at an annual growth rate of 1.7%. According to estimates prepared by the Town of Estes Park, the Town added 969 residents at an annual growth rate of 3.1%. The Valley added 2,406 residents at an annual growth rate of 3.1%.

Note: All tables supporting the Estes Park area economic profile will be found in Appendix One.

In 1996, there were 5,038 residents in the Town of Estes Park and 9,861 residents in the Estes Valley, according to estimates by the Town of Estes Park.

School enrollment data support continued rapid growth in the Estes Park area, with young families as well as retirees coming into the community. During the 1993/94 school year, the Park School District had 1,273 students. In September of 1994, 1,388 students were enrolled, a 9% increase. In September of 1996, 1,349 students were enrolled.

During the 1980s, the Town of Estes Park added 462 households (See Figure A1.4 Households on Appendix One), based on the Town of Estes Park population estimates (214 households based on Census data). The decline reported for the Estes Valley is probably due to the change in the boundaries of Census Tract 28. The Economic Market Analysis prepared by Browne, Bortz & Coddington (BBC) in April 1983 said the Valley had 5,400 residents and 2,300 households. The average household size in the Town remained fairly stable at 2.17 in 1990, after declining from 2.59 in 1970 to 2.2 in 1980. This was below the state average of 2.51 per household, reflecting the Town's older population.

During the last three decades, the population of the Estes Valley and the Town of Estes Park grew faster than the state. During the last two decades, the most rapid growth was in the Valley. Census data indicate that the Town grew more slowly than the Valley or the county during the 1980s, but the Town of Estes Park estimates indicate the Town grew at the same rate as the Valley.
Socioeconomic Characteristics

DEMOGRAPHICS

Estes Park residents were considerably older than those of Larimer County or the State of Colorado. In 1990, the average Estes Park resident was 42.6 years old, 10.1 years older than the average Coloradan. This confirms the perception that the Town has a high number of retirees.

PROPERTY

A relatively smaller percentage of Estes Park homes were owner occupied, 56.9% versus 62.3% for the state. The Town's vacancy rate was 6.3% for rentals, versus 5.0% for Larimer County and 11.4% for the state of Colorado. The vacancy rate for owner occupied housing was 2.5% for the Town versus 2.2% for the county and 3.3% for the state.

In 1990, the median housing value in the Town of $103,300 was 125% of the state median. The median rent was $353, only 84% of the state and Valley median and below the median for the County.

Since all of the socioeconomic data are based on the 1990 Census, they must be used with some caution. If the population count was distorted by the survey methodology, the socioeconomic characteristics may also be unreliable.

EMPLOYMENT

The only employment data available below the county level are those from the 1990 Census (See Figure A1.6 Employment Base on Appendix One). They are subject to distortions if the undercount was significant, but are all that are available.

The 1990 Census reported that there were 1,612 people at work or looking for work in Estes Park, for a labor force participation rate* of 63.3%. In the Valley, there were 3,129 in the labor force for a labor force participation rate of 62.3%. These labor force participation rates were significantly below Larimer County's 69.3% and Colorado's 70.3%. Either local residents between the ages of 16 and 65 could afford not to work or became so discouraged at their inability to find a job that they stopped looking.

In Estes Park, 50.6% of the population was either working or looking for work, according to Census data (43.9% using Town population estimates), while in the Valley, 34.2% of the population was either working or looking for work. This indicates that there was a much higher proportion of people outside the Town limits who were either under 16, over 65 or between 16 and 65 who chose not to be in the labor force. In Larimer County, 53.5% of the population was working or looking for work.
The average commuting time of 11.1 minutes indicates that local residents worked close to home. For Larimer County as a whole, the average commuting time was 70% higher at 18.8 minutes.
An examination of where Estes Park residents work (See Figure A1.8 Distribution of Employment Base on Appendix One) shows the skewed distribution of jobs relative to Larimer County as a whole. Manufacturing provides 19.2% of the county's employment, versus 1.4% for the Town and 3.5% for the Valley. Manufacturing is one of the highest paid sectors of the Larimer County economy, with an average annual wage of $35,816 in 1993.

Retail trade is a low-wage sector of the economy, with an average annual wage of only $12,678. It provides 23.6% of the jobs in Estes Park and 21.8% of the jobs in the Valley, but only 17.6% of the jobs in the county.

The service sector pays an average wage of $19,107, but this average spans a wide range. At the low end is amusement and recreational services, paying $8,534, and at the high end is health services, paying $27,898. Estes Park service employment is heavily concentrated in recreation services (7.1%) and personal services (11.8%), which pay very low wages. Together these sectors comprise 18.9% of the Town's jobs, 16.4% of the Valley's jobs and only 4.6% of the county's jobs.
On the positive side, Estes Park holds its own in medical service jobs, with an average wage of $27,898, and construction, with an average wage of $28,129. It is only slightly underrepresented in communications and public utilities, with an average wage of $31,983, and the federal government, with an average wage of $36,750.

* The labor force is defined as people working or actively looking for work. The labor force participation rate is the percentage of people 16-65 either working or actively seeking employment.

Wholesale trade is a small but high paying sector, with an average wage of $26,527. It provides 1.3% of the Town's employment base versus 2.6% of the county's. The Town has about twice the proportion of jobs in finance, insurance and real estate as the county, at 9.5%. The average wage of $23,291 is equivalent to the average wage for all sectors.

INCOME

Personal income data are available annually at the county level with a two year lag. Unfortunately, Larimer County data are so dominated by the City of Fort Collins that they provide little useful information about the Town of Estes Park.

The only income data available at the Town of Estes Park level are from the decennial census (See Figure A1.10 Per Capita Income on Appendix One). During the decade of the 1980s, household income rose at an annual rate of 7.1% to $29,387, while family income rose at a 7.5% annual rate to $37,565.

This ten-year period encompasses several years of rapid inflation, which reached double-digit levels in 1979-81. Using the consumer price index for the Denver-Boulder metropolitan area (the only inflation index calculated for the state of Colorado), we find that after adjustment for inflation, household income in Estes Park rose at a 1.9% annual rate during the 1980s, while family income rose at a 2.2% annual rate. This was well above the County growth rates of 0.4% and 0.7% respectively, confirming that the in-migrants to Estes Park were relatively wealthy.
Per capita income (Figure A1.10 on Appendix One) experienced a similar pattern of growth. Over the ten year period ending in 1989, per capita income in the Town of Estes Park grew at an annual rate of 7.3% to $17,010 in 1989. Per capita income in Larimer County grew at an annual rate of 6.5% to $13,821. Per capita income in the Town was 115% of the state average. Income in the Valley was slightly higher.
After adjustment for inflation, per capita income in the Town still showed solid gain, up at a 2.1% annual rate. This was well above the county growth rate of 1.3%. Both the per capita income level and the rate of growth confirm the relatively high income level of the people who moved to Estes Park during the 1980s.

RETAIL SALES

Retail sales in Estes Park grew at an annual rate of 7.9% during the 1980s (See Figure A1.12 Estes Park Retail Sales on Appendix One). After adjustment for inflation, sales growth averaged 3.3% annually. During the 1990s, retail sales growth unadjusted for inflation averaged 7.3%, while inflation adjusted retail sales growth averaged 2.4%. Growth rates usually decline as the base from which they are calculated increases.

The highly seasonal nature of retail sales can be seen from the monthly sales tax data (See Figure A1.13 Sales Tax Revenues on Appendix One). In 1993, 57.3% of sales came during the summer tourist months of June, July, August and September. Over the last eight years, this proportion has fluctuated between 57% and 60%.

Two things stand out in these data. First, sales tax revenues have grown steadily. Second, tourism has declined only slightly in its relative importance to the economic base of Estes Park, despite rapid population growth and an increasing number of retirees.

In interviews conducted during July of 1993, a recurring theme was the leakage of business out of the Town of Estes Park into surrounding towns (e.g., Loveland, Longmont, Boulder, Fort Collins) that offer a wider selection of merchandise. Merchants believe that residents go to other communities to obtain goods and services that cannot be purchased in Estes Park and while there buy a number of items they could have purchased in Estes Park (e.g., groceries, lunch or dinner, household staples).

The business owners interviewed were almost unanimous in their belief that the Town needs a Wal-Mart or similar retailer. They recognized that the big box retailer would take some of their business, but believed it would be less than they are currently losing to surrounding communities.
The sales leakage hypothesis is difficult to test without conducting extensive, expensive surveys of Estes Park residents shopping outside the Town. Retail sales data for the first quarter of the year, when tourist visits to Estes Park are at a minimum, show that per capita retail sales are high relative to the state as a whole (See Figure A1.14 Per Capita Retail Sales on Appendix One). They have also increased about twice as fast as they have statewide over the last three years. This could be because winter tourism has grown in importance or because local residents are spending a higher percentage of their incomes in Estes Park.

An examination of October retail sales over the last decade shows a similar pattern (See Figure A1.15 October Retail Sales on Appendix One). Real per capita retail sales more than doubled between 1982 and 1993, supporting the local perception that more tourists are visiting Estes Park during the shoulder season. There was a 106% increase in retail sales, which swamped the 25.4% increase in real per capita income over the same period.

The tax revenues generated by retail sales are extremely important to the Town of Estes Park. In 1994, 62% of the General Fund Budget was derived from sales tax receipts. The General Fund Budget provided 43% of the Town's total revenue stream.

THE RETIRED POPULATION

Estes Park has a growing retired population, as shown by the 19% increase in the median age of the population between the 1980 and 1990 censuses. National consumer surveys show that older consumers exhibit significantly different spending patterns from younger consumers.

It is no surprise to find that retirees devote a higher proportion of their expenditures to health care: 10.3% for young retirees (65-74) and 14% for older retirees (75 and older) versus only 4.1% for those under 65. The mix of health care expenditures is also different. Insurance premiums consume 39% of the health care dollars of those under 65, but 46.9% of retirees' health care spending.
Older residents are also more generous in their charitable giving than younger residents. Philanthropy accounts for 4.6% of young retirees expenditures and older retirees donate 7.6%, versus 2.6% for those under 65.

Retirees designate a larger proportion of their expenditures to food: 17.9% versus 15.7%. However, both retirees and those under 65 spend about 4.4% of expenditures on food away from home. Shelter consumes a smaller percentage of retirees' expenditures, especially the non-utilities segment, as do apparel and transportation.

These statistics are based on national surveys and must be applied to the Estes Park population with some caution. However, they are suggestive of changing spending patterns in the community that are likely to accompany a growing retired population.

One question that comes to mind is whether lack of availability of medical services causes retirees to go to communities outside of Estes Park to obtain medical care. This leakage of health care dollars might be compounded by people purchasing goods and services that could be obtained in Estes Park while they are in other communities obtaining health care.

The sketchy data that are available on health care in the 1990 Census (See Figure A1.17 Health Care Workers on Appendix One) suggest there is a higher than average number of health care workers in Estes Park. In 1990, 12.9% of the labor force worked in the health services industry, providing one health care worker for each 14.8 Estes Park residents. For Larimer County, there was one health care worker for each 28.7 residents and health services employed 6.5% of the labor force.

These data are merely suggestive. Some of the health care workers living in Estes Park may have commuted to work outside of the Town. There is no information about the type of health care services provided. Estes Park required more health care workers per capita than Larimer County, since a much higher percentage of the Estes Park population was age 65 and over - 23% - than in Larimer County - 9.6%. When the ratio of health care workers per resident age 65 or over is calculated, there was one worker for each 3.5 elderly residents in Estes Park versus one for each 2.8 in Larimer County. This supports the hypothesis that people are leaving the Town for health care, taking service and retail sales dollars out of the community.

CONSTRUCTION ACTIVITY

Housing construction declined in Estes Park during the 1980s (See Figure A1.18 Residential Construction Building Permits on Appendix One), as it did throughout the state. Single family construction peaked in 1984, a year later than statewide, was down by 50% or more through 1989, then began to climb in 1990 as it did statewide. 1993 was the second best year in the 23 years of available data, only three units below 1983. In 1994, a new residential construction record of 117 dwelling units was set.

Multi-family construction is very erratic. It has ranged from a low of four units in 1977 to a high of 77 units in 1983.

In 1994, the median selling price for an Estes Park home was $141,183. There were 155 home sales, with a median time on the market of 148 days. (Note: These data are multilist data for 1994, while the data in Figure A1.5 Socioeconomic Characteristics-See Appendix One are for 1990 and are from the 1990 Census.) In 1993, apartment rental rates averaged $600 per month for a three bedroom unit and $500 per month for a two bedroom unit. There were 72 units of senior housing and 44 units of rent adjusted housing.

The value of commercial construction is available beginning with 1983 (See Figure A1.19 Commercial Construction on Appendix One). It is very volatile, peaking at $3.6 million in 1985 and dropping to as low as $253,000 in 1988. The data in later years appear stronger than they actually are relative to the early part of the decade, because of the inflation factor. In 1993, the value of commercial construction contracts increased after a two year decline.

UTILITY SERVICE

The Town of Estes Park provides electrical (See Figure A1.20 Electric Utility Service on Appendix One) and water (See Figure A1.21 Water Meters on Appendix One) service to a larger area than the Town itself. The number of residential and commercial customers has grown steadily over the last decade, in line with the expanding population base.

BANK DEPOSITS

The number of commercial banks in the Town of Estes Park increased from three to four in 1986. Bank deposits (See Figure A1.22 Bank Deposits on Appendix One) have grown steadily over the last 15 years. It is clear that the growing population base prefers the convenience of local services, when they are available.

PARK VISITATION

The number of visitors to Rocky Mountain National Park has fluctuated between 2.5 million and 3 million for the last 20 years (See Figure A1.23 RMNP Visitation on Appendix One). However, these figures are somewhat distorted by a change in 1984 in the estimated number of visitors per automobile. Since the change, the number of visitors has grown fairly steadily from 2.2 million to 3.2 million.

The increased importance of the non-summer tourist season can be seen from the declining percentage of visitors coming during the June through September period. In 1982 and 1983 it was over 78%, but fell fairly steadily to 73.7% in 1992. In 1993, it rose to 75.8%.

The capacity of Rocky Mountain National Park to accommodate 3.7 million visitors annually in 2000 is open to debate. During the month of August 1994, the Park had over 730,000 visitors. If this pace were sustained over a 12-month period, the Park would accommodate almost 9 million visitors. If an additional 700,000 visitors come outside the peak months of July and August, they can be handled without too much strain. If they attempt to crowd into the Park in mid-summer, serious congestion problems will result. If measured against a yardstick of the crowds that throng to Yosemite, many more visitors can spend part of their summer vacation in Rocky Mountain. But increasing crowds will dampen some of the Park's unique attraction and at some point the congestion will discourage people from coming.

Visits to Rocky Mountain National Park rose 6.8% in 1994, after increasing only 0.2% in 1993. Across the United States, national parks, monuments and recreation areas reported a 0.3% decline in recreational visits in 1993 and a 1.6% decline in of 1994.

Efforts to reduce automobile traffic in the Park (as Pitkin County has done in the Maroon Bells area) and to encourage people to visit during off-peak seasons will improve the quality of the Park experience. It will also pay dividends to Estes Park in terms of lengthening the tourist season and encouraging people to spend more time (and dollars) in the Town.

Campgrounds have declined in attendance while, resorts and motels have remained fairly stable and the number of restaurants has grown. A 22,000 square foot conference center capable of handling up to 1,000 delegates opened in August of 1991. Usage has grown steadily (See Figure A1.25 Conferences on Appendix One). The Town estimates that in 1994 each delegate spent about $220.21 (double occupancy) or $295.50 (single occupancy) in Estes Park on items such as food, shopping and lodging.

B. Trend Projections Through 2000

The trend projections look at past rates of growth in Estes Park and projected growth rates prepared by the Bureau of Economic Analysis for Larimer County. They provide a baseline forecast of what the Town can expect under a "business as usual" scenario.

Population growth will average just under 3%. Employment growth will average 2.4% through 1995, then 2.7% thereafter. The employed population will continue to decline as a proportion of the total population, as Estes Park continues to attract a growing number of retirees. Personal income after adjustment for inflation will grow more rapidly than population, indicating a modest increase in the standard of living. This is consistent with the increase in relatively affluent retirees.
Over the ten years spanning the 1990s, Estes Park will add about 754 housing units. For the last 20 years, the Town of Estes Park has built about the same number of multifamily as single family units.

During the 1970s, Estes Park gained 605 households and 419 housing units, for an average of 0.7 units per household. The Town was absorbing vacant space.

During the 1980s, the Town gained 462 households and 516 housing units or 1.1 units per new household. New housing was being built to absorb the immigrants and replace substandard housing, as well as provide vacation homes for nonresidents.

From 1990-1993, Estes Park added 155 households and 237 housing units. This equates to 1.5 housing units per new household. This ratio is probably unsustainable for an entire decade.
During the 1990s, the Town will add 1,217 residents or 580 new households. Substandard housing stock will be replaced, vacation homes will be added and the low inventory of available homes will require a high proportion of new construction for new residents, keeping the ratio at a relatively high 1.3.

Park visitation will increase by about 100,000 visitors per year, in line with the trend since 1984 (when the estimated number of visitors per automobile was adjusted). By the year 2000, the Park will average 3.7 million visitors annually, if current trends continue. Under the baseline scenario, this growth in the tourist industry will provide the source of most of the new jobs, with the attendant problems of low wages, lack of affordable housing and high employee turnover.

ANALYSIS AND PROPOSED ECONOMIC DEVELOPMENT STRATEGIES

In order to identify the correct economic development strategies for the Estes Park Valley; a fairly straight forward process should be followed:

  1. Identify where you are.
  2. Decide where you want to go.
  3. Identify strategies for/obstacles to getting there.
  4. Consider constraints and costs to implementing strategies.
  5. Check desired state for internal inconsistencies
  6. Modify vision.
  7. Develop action plan (economic development strategies).
  8. Monitor and modify plan as it is implemented.
  9. Make mid-course corrections, if needed.
There are no right or wrong answers to the question, "How should Estes Park plan for future growth and development?" The only requirements for a good plan are that it be internally consistent and meet the objectives of the planners, in this case the citizens of the Estes Park community.

Internal consistency can be an elusive goal. For example, a community that wants to attract young families but refuses to provide funding for schools has an internally inconsistent plan. The same is true for a community that wants to attract retirees but is unwilling to provide good medical services.
Implicit in any plan are the consequences that flow from it. In order to meet these objectives, consequences must be made explicit and accepted by the community either as desirable or as the price that must be paid to achieve other goals.

In the most global sense, there are two possible economic development strategies for the Town of Estes Park. Either it can strive to become a self-contained economic unit -- a balanced community where people live, work and play -- or it can choose to be a sub-unit of a larger economic entity.
Growth trends in a community are not equivalent to destiny. Certainly, the easiest economic development strategy is to encourage the trends already underway. The residents of Estes Park are generally positive about the current trends. It is unrealistic for a community to think it can make a 180 degree turn and go off in a new direction. But it is possible to nudge the economy in new directions, to make incremental changes that will have a large impact several years into the future.
It is also important for the community to plan for a sustainable economy. The Future Land Use Plan that the residents have developed provides for substantial growth, from about 9,000 residents in the Estes Valley today to a maximum of 19,000-20,000 in the 21st century.

IMPLICATIONS OF PROPOSED LAND USE PLAN

Over the past 2.5 years, the Estes Park Comprehensive Plan has been broadened and modified. It now presents a more balanced plan for growth in the Estes Park Valley.

The current plan continues to recognize that the Town of Estes Park is not a stand alone economic unit. It will continue to be a part of a larger economic entity encompassing southeastern Larimer County and parts of metropolitan Denver. Some residents will shop and work outside the Estes Valley and the sales tax base will be important tot he provision of services and amenities for a growing and relatively affluent citizenry.

The current plan wisely calls for joint planning that includes a combined Planning Commission with representatives from the Town and from the Estes Park Valley. Planning also involves the Urban Renewal District and Rocky Mountain National Park.

While the Town of Estes Park will never be a stand alone economic unit, the current plan takes several steps to provide jobs and housing for people of various ages and income levels. Steps taken to broaden the economic base of the Town include expanding the job base, revenue base and housing base.

Economic activity in the Town of Estes Park is centered on two basic industries (industries that bring new dollars into the community). These industries are tourism and retirees. Any attempt to broaden the job base must be sensitive to the impact on these industries.

The current plan increases the area zoned industrial from 15 acres to 48 acres. An I-1 Light Industrial District, with performance standards, will be developed. The performance standards are an important component, since environmental and scenic quality are critical to both the tourism and retiree base. Broadening the job base to include more industrial jobs, which usually pay more than the retail and service jobs supporting the tourist and retirement communities, will offer families more job opportunities and the potential for higher household income. It will also provide balance to the seasonality of tourism-related jobs.

Broadening the revenue base to keep pace with population growth and its accompanying demand for services is one of the major challenges facing the Town of Estes Park. The Town is heavily reliant on sales tax revenues, which in 1994 (most current data available) provided 62% of the General Fund budget. The General Fund budget provided 43% of the Town's total revenue stream.

A study by Zax and Hester (August 1996) confirmed that sales tax revenues over the past decade have grown less quickly than the effective residential population. They concluded that residents are meeting increasing proportions of their consumption needs outside of the Town. Local business people interviewed two years ago expressed similar concerns.

Attractive, interesting shopping opportunties are also important to Estes Park's tourist visitors. An intercept study by Blackhurst, Zax and Hart (November 1996) indicated that shoppins is an important vacation component. Ninety-one percent of study participants had shopped or planned to shop (sightseeing was in secodn place, at 87%). It was the favorite activiity of day visitors (29%) and ranked sixth for overnight visitors. The fact that the survey was conducted on Elkhorn Avenue, in the heart of the shopping district, skewed the data in favor of shopping. However, it is clearly an activiity that attracts people into the Town.

The current plan addresses the need for increased sales tax revenues by classifying 360 acres for commerical activity, including retail and banks. Acreage formerly classified as commercial that is actually used for activities other than retail (e.g., accomodations, golf courses, multifamily residential, office) was reclassified. A new land use policy will require that lands zoned commercial or industrial be developed with this as the principal use, rather than being converted to residential, as currently happens. Infill development as well as space for a mall anchored by a big box retailer will potentially increase the sales tax base.

Within the current downtown district, there are 615,706 feet of developed commercial space, with the potential for development of an additional 558,000 square feet, with potential expansion of 386,000 square feet. The combined space, which encompasses the Estes Park Urban Renewal District, totals 763,972 square feet of total space (office, bank and retail), which generated $2,621,787 in sales tax receipts in 1995. The Town estimates that 77% of this space, or 588,258 square feet is retail. Of this, about 92% or 541,197 square feet, is gross leasable area (GLA). This equates to sales of $121.14 per square foot of GLA and sales tax revenues of $4.85 per square foot. With the potential to develop an additional 944,000 square feet of space, including 726,880 of retail (668,703 GLA), sales tax revenues could more than double, adding an additional $3.24 million in sales tax revenues (in 1995 dollars), if existing ratios are maintained.

A community shopping area center composed of in-line retail in a small town/ nonmetropolitan area generates median sales per square foot of GLA in the following range:

Discount department store (62,200 square feet) - $140.51
Smaller general merchandise - $81.18 - $95.82
Restaurants - $152.66 - $234.11
Clothing and accessories - $131.15 - $190.00
Gifts and cards - $106.25
Jewelry - $377.06

The Estes Park sales per square foot of $121.14 is in line with this and is an appropriate estimate to use for future developement.

If the Stanley Park area is developed for a 20,000 S. F.strip mall, additional retail sales could reach $2.4 annually, generating $97,000 annually in additional sales tax revenues. If the mall were anchored by a big box retailer such as WalMart or Kmart, with average annual sales of $140,51 per square foot, a 62,200 square foot store could generate $8.7 million in sales annually, with sales tax revenues of $348,000.

[Note: Currently, sales tax revenues average approximately 4% of total retail sales, which is the figure used for these calculations.]

A best case scenario under the current plan has annual sales tax receipts increasing to $6.3 million in 1995 dollars. This will support a population of 22,500 in the Estes Park Valley, based on the 1995 ratio of approximately $280 of sales tax reventues per capita. Of course, zoning land for retail does not ensure that development will occur or that sales will reach the natioal average. However, the zoning in conjunction with policies and incentives to encourage such development increase the probability that the sales tax base will support the projected population growth.

The Town of Estes Park faces a problem common to all resort communities, the lack of affordable housing forlow-paid retail and service industry employees. With a finite amount of land available for housing and an increasing population, rising land costs will continue to preclude a large amount of affordable housing.

The current plan takes several steps to mitigate this problem. Provision is made for higher density residential zoning including the creation of a small lot (1.4 acre) single family category. The town will grant enhanced residential density bonuses for the provision of affordable housing. Fifty-seven units of affordable housing are currently under construction. Infill development, such as accessory structures and second floor housing over retail establishments, will provide opportuntieis for less expensive lodging for lower paid workers. Caution should be exercised in mandating that businesses provide employee housing, since it may drive needed jobs out of the community rather than providing new jobs accompanied by affordable housing.

The Town must constantly analyze its strategies to be sure that is does not inadvertently have unintended results. For example, suggestions to relieve traffic congestion by providing a by-pass to route people around Estes Park rather than through it might have serious implications for consumer spending in the Town itself. When the Town of Frisco realized in the early 1980's that the highway to Breckenridge was being rerouted to avoid Main Street, it spent millions of dollars to attract tourists back into the downtown area. A better solution to the congestion problem might be to relocate basic services for the residents of Estes Park away from the downtown area and the main tourist routes.

The current plan is realistic in its approach to the future. The problems and challenges identified two years ago will not disappear even if the best policies are put on apper and then adopted. The plan recognizes that tourism and retirees will be the Town's primary economic base for the foreseeable future. It recognizes the importance of environemntal qualtiy, convenient parking, residential zoning and a reasonable tax base to ensure a viable community. It is realistic about the competition from surrounding communities for its residents' sales tax dollars, recognizing that it will not become a stand alone economic unit. However, it provides for a broader economic base with jobs and housing for various ages and income levels. It also focuses on the need to enlarge the sales tax base to provide services for a growing population. It proposes reasonable policies to mitigate the problems that accompany economic growth, while achnowledging that they will not be completely eliminated.

C. Potential Economic Development Strategies

The Town of Estes Park has completed the first two steps of the nine step economic development strategy described above. It has identified where the Town is and decided where it wants to go. It is now ready to develop the strategies and action plans to accomplish the goals of the Comprehensive Plan.

As the Town of Estes Park develops an economic development strategy to support its Comprehensive Plan, there are a number of things it should take into consideration. First and foremost, it needs to make a fundamental change in the way it thinks about its two major industries, tourism and retirees.

The debate over which is more important is nonproductive at best and destructive at worst. The two industries complement each other and in aggregate add more to the economy than each would individually. It is truly a case where the whole is greater than the sum of the parts. As American Demographics (November 1994, p. 30) noted:

"It is no coincidence that the most popular retirement concentrations are overwhelmingly in or near places that attract tourists and vacationers. Retirees often "check out" potential new home sites while on vacation trips. Fond memories of childhood summer camps and family vacations can also have a powerful influence on choices in retirement living."

Retirees are attracted to Estes Park because they came here first on vacation, some 50 or more years ago. The amenities that support the tourist industry - excellent restaurants and shops, for example - make the Town more attractive than a similar Town with no summer visitors. The natural beauty that attracts tourists also appeals to retirees. Thanks to sales taxes paid by tourists, the tax burden on retirees is lessened.

Just as the tourist industry benefits retirees, so retirees benefit the tourist industry. Retirees keep Estes Park from being a one or two season economy. Restaurants and shops are able to remain open year round, thanks to retiree spending during the off season. Retirees broaden the tax base, adding to the revenue stream.

1. The Town must work within the realm of the possible.

What are the strengths of Estes Park?

  • Physical environment
  • Clean industry base (tourism and retirees)
  • Community spirit
  • Lack of crime
  • Good health care
  • Good schools
  • Arts community
What are the weaknesses of Estes Park?
  • Lack of affordable housing
  • Congestion
  • Conflicting needs of young, less affluent renters versus older, wealthier homeowners
  • Possible conflict between creating jobs and preserving environment
  • Lack of year round economy
2. What are the trends in the US and in Colorado that will affect Estes Park?
  • Shortage of cheap labor (baby bust in entry-level market)
  • Aging of the population (baby boom approaching 50)
  • Communications technology increases choice in workplace location
  • People may have more leisure time in the future
  • Growing importance of international marketplace
  • Increasing pressure on open space and environment
  • Opening of Denver International Airport
3. How important a role should tourism play in future growth in Estes Park?
  • Role of the Park and implications of overcrowding there.
  • How can the needs of a growing tourist base be balanced with the needs
  • of the local, resident population?
4. How can the Town work in partnership with the Valley and the County to provide new job opportunities without harming the tourist and retirement industries?

It is critical to focus on attracting basic industry, industry that brings new dollars into the community. This doesn't mean industries that produce goods - agriculture, manufacturing and mining. In fact, the Town's current basic industries, tourism and retirees, are both in the service sector. The secondary jobs, those that recirculate the new dollars, will follow. However, there are certain infrastructure jobs that do not qualify as basic industry but are critical to attracting basic industry - business services, for example - that are an appropriate focus of economic development activities. Schools and health care are other examples.

Expanded job opportunities fall into two categories: Those that build on the important tourism/retiree base and those that are in very different areas, but don't negatively impact tourism or retirees.

Tourism

1. Eco-tourism: This is the current buzzword in the travel industry. The Audubon Society defines eco-tourism as "purposeful travel to natural areas to understand the cultural and natural history of the environment while maintaining the integrity of the ecosystem, making the conservation of natural resources financially beneficial to the inhabitants of the host region." The adventure traveler, or ecotourist, has traditionally been young and poor, but the demographics have changed. Nature-based tourism is enjoyed by older, more affluent travelers who want a good, outdoor nature experience but want a comfortable bed and a flush toilet at night. What are the possible niches for Estes Park in this, the most rapidly growing segment of the tourist industry?

  • Possible niche: Nature-based tourism for people who can't afford, don't chose to "ecotour" in the Peruvian rainforest, Antarctica, New Zealand, etc.
  • The largest segment of the Estes Park tourist market is between the ages of 35 and 44, family- oriented with children living at home, relatively affluent and highly educated. These are likely two income families who feel guilty about the amount of time their children spend in day care.
  • - family inclusive outdoor activities
  • - drop in day care with a strong environmental education component for the
  • days when parents and children need time apart
  • Programs for older travelers who want to enjoy the out-of-doors but may be bothered by the altitude.
  • Appeal to the mountain bike-roller blade market, as well as be on the lookout for similar popular, growing outdoor activities.
  • What are the pros and cons?
  • Builds on existing strengths.
  • Increases the sales tax base to support future population growth.
  • Continues to introduce people to the Town, attracting some to relocate/ move businesses there.
  • More low paying jobs. Exacerbates current problems.
2. Expand existing tourism industry.
  • Alternative winter vacation site for people who don't want glitz/expense of Vail and Aspen, prefer a lower key escape.
  • Destination site for people waiting to visit Park and for small conventions.
    • offer vacation packages
    • central reservation service (such as Winter Park's)
    • what kind of activities will these people want?
BUILDING ON EXISTING STRENGTHS

Retirees

Between 1985 and 1990, 4.5% of Americans 65 and older moved to a new state. Retirement migration is important in most states and in a community like Estes Park, it is a major industry. Retirees provide a rich monthly infusion of money from pensions, investments and Social Security checks, no different from dollars flowing in from the sale of agricultural or manufactured goods or tourism services.

Although 24% of all retirees moving to a new state go to Florida and 56% move to only ten states (Colorado is not one of these), migration patterns are changing. This is good news for areas that want to attract retirees. There is growing evidence that age segregated retirement developments may carry the seeds of their own destruction and that communities like Estes Park that maintain a balance of young and old people are the retirement communities of the future.

There are several questions Estes Park needs to consider as it develops strategies to build on its existing retirement base. What does Estes Park offer retirees? What will happen when today's younger, physically active retirees become older and frailer? Will they leave? What can Estes Park offer baby boomers when they begin to retire ten years from now that will set it apart from other retirement communities? What can Estes Park do to prevent becoming too crowded or too old, thus making it less desirable as a retirement destination?

According to a 1992 survey by the American Association of Retired Persons, what retirees want most is access to basic services. Living near a grocery store was listed as important by 62% of older adults. About the same number wanted to be near a pharmacy or hospital. Getting away from crime and congestion was a priority, with 37% indicating a preference for small Town life.

Studies of retirees in resort communities show that over 50% knew someone in the area before they moved there. This is referred to as network recruitment. Selective recruitment or marketing is also important. Studies find that about 20% of retiree migrants were first approached by a developer or Realtor.

Potential strategies to attract retirees might include:

1. Target marketing to states with the largest share of older migrants.
2. Official relocation and retirement guide, such as is produced by the State of South Carolina. This could include a survey asking readers for their demographics and lifestyle preferences.
3. Center providing healthy living; spa, health care.
4. Congregate care facilities.

Pros and cons?

* Compatible with preserving environment
* Potential clashes with needs of tourist population
* Will retirees be willing to help pay for schools, recreation services for younger residents?

OTHER NEW DIRECTIONS

1. Education center

  • Some experience with the Eagle Rock School.
  • There is a lot of interest among universities in developing residential training programs for business and government officials from developing nations. Estes Park could provide an ideal site for CU, CSU.
  • Training programs for people entering lodging/recreation industry
Pros and cons
  • Compatible with/builds on tourist industry.
  • Provide higher paying jobs.
  • Might not add much to the tax base.
2. Encourage lone eagle/telecommuters. With the advent of computers, fax machines, overnight mail and other communications technology, many people can work virtually anywhere. The Center for the New West describes telecommuting as the most significant thing that has happened in the work force since the two-wage-earner family. They report that the average telecommuter brings work orders into the community ranging from $50,000 to $150,000.

Pros and cons:

  • Quality of life in Estes Park meets requirements of these people.
  • Does/when will the Town have the fiber optic and digital switching capabilities this requires?
  • Proximity to Denver International Airport. Near enough?
  • Are the requisite business services available?
  • How about building a video conferencing center to support these people?
  • Would there be enough potential business to cover the start-up costs? Have a chicken/egg situation? Should it be in conjunction with the convention center?

Next chapter - Chapter 4 - Land Use