in Economy
Summit County Unemployment Rate Stays Steady in August
The Utah Department of Workforce has released unemployment numbers for August 2015. Our seasonally adjusted non-farm unemployment rate is holding steady at about 3.2% (same as August). We continue to have the second lowest unemployment rate in the state, with only Cache county having a lower rate at 3.0%.
Non seasonally adjusted data from jobs.utah.gov provides a similar view. Compared to August 2014, approximately 630 more people are working in non-farm jobs in Summit County in August 2015 (23,294 in 2014 vs 23,926 in 2015).
in Film Studio
How Did Park City Film Studios’ “Blood and Oil” Do in Its Debut?
Blood and Oil is a new TV series starring Don Johnson, that also is renting out the entire Park City Film Studios. A recent report says the show”is taking over the entire production facility including three 15,000 square foot production spaces and offices.” Given that only 20% of new network primetime series make it to season two and the controversy surrounding the studio (from its inception through recent litigation), the Park Rag is going to follow the show to see how its ratings are trending each week.
For the first week, it was one of the worst ranked shows in the 18-49 demographic (only Bob’s Burgers did worse) and the worst in its time slot. The 18-49 demographic is the most coveted age group for advertisers and ratings in this demographic tend to indicate whether a show will be cancelled. That said, it did have 6.3 million viewers and was up against the series finale of CSI. So, future results could be different.
However, if the show doesn’t improve its ratings quickly, it may be replaced by ABC sooner rather than later. At that point, Greg Ericksen Gary Crandall whoever owns the studio will likely be pounding the pavement looking for their own replacement.
Here are the Nielsen ratings from Sunday night:
in Economy
Would a Brewery Start the Boyer Tech Park on the Road to Success?
Headphones, skiing, and a developer. What do they have in common? A brewery.
As you may know, the Boyer Technology Park (across from Redstone on 224) is a controversial topic. It started out as a pretty good idea; bring high paying technology jobs to Park City. Yet, it has failed to deliver on that promise. It seems few technology companies (in one of the biggest booms ever) find the tech park compelling.
What we have now is one building in a tech Park that houses a visitor’s center, a vacation rental business, a coffee shop, a physical therapy location, and a few assorted other businesses. It’s hardly Google.
Last year, Skull Candy (who makes headphones) was granted the right to build an office in the tech park. This was under the auspices of outdoor recreation research, which appears to be permissable under the development agreement Summit County signed with Boyer (the developer). Skull Candy appears to be ready to begin the planning process for a development in the Tech Center.
Contrast that with the ski company, Armada, made famous by local celebrity Tanner Hall. They moved here from Southern California and are in the process of renovating a space on Rasmussen Road by Burt Brothers. I’ve heard that one of the things they really like about their current space is that it sits about 100 feet away from Park City Brewing Company. It’s just not the beer but the creativity and energy that often accompanies a brewery. In some ways it seems brewing beer and skiing are somewhat kindred spirits.
Now, consider the what-if. What if there was a brewery in the tech park? Instead of wide open space that appears devoid of everything, what if there was a kindred spirit sitting there? Would Armada have made the choice to move there instead? If Armada and Skullcandy both had offices there, along with a brewery, would other outdoor research companies follow?
I heard through the grapevine that a brewery had attempted to receive permission to build in the tech park within the last couple of years and were denied. In hindsight, perhaps that was a mistake. The agreement governing the land says that permitted uses include “Incidental commercial uses principally located within the Research Park to support other permitted and approved conditional uses, such as restaurants, private clubs …” You might argue that this language really means “a small deli shop in a building.” However, it doesn’t say that. You may argue that there isn’t anyone to “serve” yet so building a brewery isn’t INCIDENTAL since there is hardly anyone there. Yet, the language of the agreement says that a restaurant has to support “permitted uses” and not “permitted uses that have been constructed.” There is a million square feet of permitted “Armadas” and “Skull Candy’s” to be built. Do you think they’d like a beer?
More importantly, do you think more of those type of companies would come if there was a brewery only a few feet away? I do.
Of course, you could argue that the agreement’s designation of INCIDENTAL uses doesn’t apply here, because a brewery could service people outside of the tech park. Of course you could argue that Skullcandy isn’t an “outdoor research company” too. It’s all semantics.
If we truly want “outdoor technology” companies to choose Park City over Ogden we have to make an effort. Allowing a brewery in the tech park isn’t a bad start. Imagine a world where you have a few “Skull Candy’s” and a couple breweries in a campus environment. It becomes a much easier sell.
Now, of course, we could argue whether we as citizens would have preferred to keep the entire area as open space (that ship has sailed). Or we could say that we want to keep requirements as stiff as possible to keep the area as defacto-open space. I suppose that’s fair too.
Yet, if we really want to bring research and technical jobs to Park City… and we want a million square feet of them … a brewery isn’t a bad place to start.
in Schools
A Reader Provides a Reason to Vote for the Park City School Bond
Yesterday I wrote an article titled Do You Want to Pay for New Park City Schools for 3 Years, 5 Years, or for 20 Years? It attempted to lay out the case for why citizens may opt to vote down a school bond and pay for rebuilding schools in installments of 3 or 5 years.
Reader, Dave, commented back “I think what you are missing is that most people will not be living in Park City for 20 years. For a homeowner living here in the 5-10 year range the $123 a year option is cheaper for them.” He makes a great point. For an individual who is planning on living here for a “short” period, a bond option, where you pay $123 a year makes sense. It appears that about 12 years is the breakeven point where a bond will cost you more money.
Now, I’m not sure that Dave’s characterization that “most” people, who live here now, won’t be living here in 20 years is accurate. That said, I’m not sure it’s entirely inaccurate. But Anecdotally I don’t see that and the latest US census data shows us that between 2009 and 2013 (5 years) 627 people left Summit County. So, if you extrapolate that, it would be about 2500 people leaving Summit County in the next 20 years. That would be about 6.5% of the current population.
Yet, those macro numbers don’t really matter to an individual or a family. If you are planning on moving out of Park City in the next 11 years, the school bond option may make financial sense for you.
Dave, thanks for pointing that out.
in Schools
If We Vote Down the Park City School Bond, Do We Essentially Get Two Schools for Free?
You may have heard the school district wants to float a bond for rebuilding our schools. The bond is for $56 million and would be paid over 20 years. This bond is up for vote on November 3rd.
One of the reasons touted for doing the bond is an affordable interest rate. When a municipality issues a bond, the tax payers are responsible for paying back both the principle and the interest on the bond. So, in the case of this proposed bond, the Park City tax payers would be on the hook for 4% of the bond price each year (or likely a little less due to a good credit rating). Historically, 4% is a pretty good interest rate; therefore, I see why the school board is touting it.
Yet, we shouldn’t lose sight of the fact that 4% of $56 million, each year, is a lot of money. I know a few local financial folks are readers, so please correct me if I’m wrong… but the annual interest on a $56 million bond seems like it would be about $2.25 million each year. Over 20 years, that would be about $45 million in interest that the taxpayers would have to pay under this initiative (again, please correct me if I don’t generally understand this). In today’s dollars, that interest amount ($45 million) could fund the construction of two new schools.
The school board has said that we have a choice. We, the citizens of the school district, can either float a bond and pay $123 per year for 20 years or we can pay outright over the next few years ($335 per year for 5 years, or $550 for 3 years) to pay for these new schools.
It seems to me that if we look at this community wide and choose to pay as we go over the next 5 years, and avoid the interest charges associated with a bond, we could have two new schools for “free.” It almost seems like a no brainer. Am I missing something?
in Schools
Do You Want to Pay for New Park City Schools for 3 Years, 5 Years, or for 20 Years?
Let’s say you were a TV dad from the 1980’s or 1990’s — let’s say you were Bill Cosby that guy from Growing Pains (Alan Thicke). Your college aged daughter wanted to buy a TV for her dorm room and she came to you asking for your advice on how to buy it.
What would you say?
A) Put it on your credit card
B) Pay for it in installments with no interest
C) Wait until you had enough money to buy it outright
If you were TV Dad, you would probably recommend C then B and then as a last resort A. Why? You should generally be able to pay for something upfront. If that’s not possible, you would want to pay for something in installments, if you could avoid interest payments. The last thing you would want to do is go into debt for it.
Now that the School Board has drawn the line in the sand around rebuilding our schools, and said the question isn’t what we are going to do but how we are going to pay for it, it’s time to consider how we want to pay for our School District $65 million plan. So, let’s examine the options provided by the School Board (for primary home owners):
A) Pay $123 per year for the next 20 years
B) Pay $550 per year for the next 3 years
C) Pay $335 per year for the next 5 years
Which do you prefer?
At first blush you’d probably pick A, just like the college student would choose to put the TV on a credit card. The payments are smaller but the problem is that they are much longer and you are paying interest. With the School District plan, if you choose option A, you’ll be paying $2500 over 20 years. If you choose options B or C, you’ll pay about $1675 in total. So, you’d save $825 by choosing to vote down the bond and pay for our schools over the next few years.
That said, I received an email from a reader that said “a hit of $500 would be felt pretty hard by my household; especially with two kids in college.” Fair enough. That may be reason to choose options C or A. However, if you choose to option C, that will save you $800. The reader may say, “but I can’t afford option C, either.” Again, fair enough. So, I would recommend that you choose option A. The reader may then say, “I can’t afford that either.” That’s where the School District’s argument of the bond vote being purely a vote on how to pay for rebuilding schools breaks down. What if you can’t or don’t want to pay for it? I really do believe the bond vote is a referendum on many things related to the school plan, and not just how to pay for it, but that argument is for another day.
So the question is how do you want to pay for it? I believe the School Board thinks most people will take what appears to be the cheapest way out but is really the more expensive path. When I look at it, 20 years is a long time to pay for anything you won’t eventually own.
Yet, I keep coming back to the TV question. If the bond issue was a TV, would you put it on your credit card? Would you pay in installments? Would you wait until you had the money in the bank? We see the School Board is opting for the credit card option… I’m not sure that is really in the best interests of our community. That said, if we absolutely must have these school updates, and we can’t afford to pay for them, then I guess we might as well charge…charge…charge it!
in Vail
Vail Reports Earnings and What it Says About Park City
On Monday, Vail Resorts reported a loss of $70 million in the last quarter of its 2015 Fiscal year. The loss was more than stock analysts expected and the stock dropped 4% in Monday trading. However, its revenues surged 20% to over $162 million during the quarter. In looking historically at the financials, a 4th quarter loss isn’t out of the ordinary, and in fact it was less than the 2014 loss. Vail still says they are on target to meet analyst estimates for the fiscal 2016 year, with earnings in excess of $400 million.
On a conference call, Vail CEO Robert Katz answered a number of questions about the company’s financials. As always it provides a little insight into our local Park City market. Here are a few select questions and answers:
Q: Consumer softening in spending seems to be occurring in lodging. Is Vail seeing this?
A: They are not seeing any softening in the consumer. They had a strong summer. Other parts of the industry struggle with supply side (i.e. too many competitors adding too many hotels), but they say not much supply has been added to mountain resorts in the places they operate.
Q: What sort of mix of local versus destination guests does Vail expect?
A: Last year Utah and Colorado was strong for Vail destination visitors.International customers represent 12%-15% of total destination visitors to resorts. Vail expects much of upcoming Utah market growth based on destination visitors.
Q: What sort of season pass penetration is Vail seeing in Utah?
A: Vail does not provide market specific information. That said, Utah season pass penetration is much less than Colorado, due to maturity of Colorado market. Vail sees potential opportunity to sell more passes in Utah but that potential is not as great as the potential to increase passes in other parts of the world.
Q: What does Vail real estate look like moving forward?
A: Still have a handful of units to sell. Inventory is starting to move. Development land parcels are starting to be sold. Great thing about real estate is that as developers develop land around resorts that enables the resort to add restaurants, retail space, and ticketing options near these new developments.
Q: Will Vail expand the Epic Discovery program to other areas (Epic Discovery is a summer focused program where they use their own land and when applicable rent forest service land in the summer to provide a summer experience for guests. It is not currently in Utah.)?
A: In Utah they are focused on combining the resorts. Once that is completed they will look at other opportunities, that could include Epic Discovery, to bolster revenues.
It’s always interesting to listen the question and answer portion of investor conference calls. While, it is very rah-rah, you do learn little tidbits of information. Here are some of the more interesting things I found:
- I was interested to see that they haven’t seen consumer softening. That bodes well for the winter season.
- There was lots of talk of currency rates and the impact of a strong dollar on international visitors to the U.S. Since the dollar is strong, it costs people more to come to the US and therefore they tend to vacation at home instead of come here. Vail acknowledged that this was going to be a challenge. It could also mean that Park City’s international visitors could be down a bit.
- The talk of plans to expand summer offerings are interesting. I’d guess it will be a couple of years until they feel they have integrated PCMR and Canyons… but then I would expect a huge push for summer here from Vail (not that summer isn’t already trending up in Park city).
- Their talk of supply in mountain resorts is interesting. Effectively they said that new resorts aren’t being built, so that isn’t putting price pressure on Vail. Yet, I wonder what happens i our market when (if) that Deer Valley Jordanelle expansion starts.
- Every time I hear Vail’s CEO I’m impressed. It’s like the US Army… they don’t seem to do anything without a plan. It made me think of our transportation issues. I wonder if they consider transportation problems an issue in Park City, and more importantly to them, a threat to their earnings . If so, what is their plan?
If you’d like to listen to the investor conference call, it is available here.
in Schools
Is the School District Educating or Bullying? People Likely See It Differently.
This weekend’s Park Record had a guest editorial calling out resident Bill Humbert for remarks made to the Park City Council. According to a previous Park Record article, during Public Comment Mr Humbert said he overheard a conversation between a city council person and a school board member regarding the upcoming $56 million bond. Mr Humbert said he overheard, “You just have to tell the voters that either you pass the bond or we will simply levy taxes on your property and it will cost you more.”
The editorial said Mr Humbert “took a conversation so out of context…that it is appalling.” It went on to say that the grandstanding that has gone on by many (not all) of those against this bond is so disingenuous that we must call it out. It ends by “shaming” the Park Record.
I don’t know what conversations were had by who at a parade. I don’t know if the accusations Mr Humbert were making were valid. I don’t know if the guest editorialist, Kathy Meyer, is the same Kathryn Meyer that received money from the school district in 2014. And frankly I don’t care about any of that.
Think back to 6th grade. Did you ever have a big kid in your class that would “kick your *ss” if you didn’t give him your lunch money? From personal experience, I know that he wasn’t lying. Just because it was true, it doesn’t mean it wasn’t bullying. Daren would beat the crap out of you if he had to, but he’d rather just take your money.
So, it’s accurate to say that members (and former members) of the school district have stated that their is no debate about whether the school district is moving forward with their $65 million plans. They have also said that if voters don’t vote for the bond, they will just raise taxes, which will cost a voter about 5 times more per year.
Do I believe them? Yes. I don’t think they are lying or bluffing.
In my mind the hard part is understanding intent, as this is a little different than school bullying. Is the mention of raising taxes purely educational in nature — something like “you should really save 10% for retirement because it’s more fiscally sound”? Or is it said with the intent of influencing the populace through a threat of raising taxes to a point that some people cannot afford?
The definition of bullying is to “use superior strength or influence to intimidate (someone), typically to force him or her to do what one wants.”
So, if those statements are said in a purely benevolent way in an attempt to educate the populace (imagine sitting down to a wedding dinner and being told you can either have the steak or fish … or in this case a bond or tax) then it’s hard to level a bullying claim.
However, if there is even an inkling of intimidation in any of these statements or tone by the district, it’s hard to come to any other conclusion than this is a case of bullying.
Is the school district just making sure we know we have a choice between bond and tax, or is it a no-so-veiled attempt to influence the voter through coercion?
I guess that slight distinction appears to be in the eye of the beholder.
What Exactly Is the Role of Mountain Accord?
I received an email over the weekend, touting Mountain Accord’s involvement in funding a trails project at the mouth of Little Cottonwood Canyon. When I first read the email, I thought, “Well, at least some good is coming out of the Mountain Accord.” Yet a question kept nagging at me. Is this what we expect the Mountain Accord to be doing?
In this case they provided $20,000 to the effort to clean up the Grit Mill area at the base of Little Cottonwood Canyon. It’s an area frequented by climbers, has a graffiti problem and lots of unofficial “trails” that lead to erosion. The recipient of the funding, the Salt Lake Climbers Alliance says, “years of unplanned usage has been a “spiderwebbed” collection of access trails that cause erosion and degradation of the water shed.” The article references Mountain Accord Director Laynee Jones and says “the project is emblematic of the sensible planning Accord signers want to see throughout the Central Wasatch.”
That all sounds good.
Yet, Summit County is putting about $50,000 into the Mountain Accord this year. So about two-fifths of that amount is going toward this trail project. More importantly, is building trails how we envisioned a portion of our money being used? In my mind, I thought it was looking at grand solutions like massive land swaps, protecting forestry land, changing the face of transportation, and providing studies. In fact, I, incorrectly I guess, thought we were still in the research phase of making plans. I didn’t realize projects were being funded.
Perhaps, this is a good use of Mountain Accord funds. As stated, maybe it is emblematic of the type of project and organization the Mountain Accord members (i.e. you and me) want to support. Maybe the idea of Mountain Accord is to focus on both the macro and micro level over the next few years, and while working on the grand solution, they’ll be using their funding on local projects.
If it is, and projects like these are where Mountain Accord is going to be spending their money, I hope Rena Jordan at Basin Rec and Charlie Sturgis at Mountain Trails are trying to get on that gravy train. I’m sure the Park City area has many trails that could benefit from this funding. If Mountain Accord truly is a regional solution, and is now into funding trail rehab, it should also support trail efforts on this side of the Wasatch.
The Super Market Scam That You Should Be Aware of
I was in Walmart on Sunday morning and saw something that may happen often but I’d never been aware of it. There was a man standing by the strawberries opening a number of tubs. I thought may be he was just inspecting them, trying to find the best batch. Then I thought maybe he was a worker… but no it turned out that he was just a thief shopper.
After he had left, I had to go see what was going on. As I walked over, it became evident. He had taken a whole bunch of strawberries from other packs and smashed them into his container. Since strawberries are sold by the pack and not by weight) this guy appears to have gotten about 2 for 1.
Some people may give the “Robin Hood Excuse” of “It’s OK to steal because I am stealing from Walmart and they are rich.” The problem is that other people, who may not notice the missing strawberries, are going to get shorted too. So, in this case, Walmart got ripped off and at least 5 other people probably did too.
In hindsight, I should have found a Walmart employee and told him/her about it. Although I’ve tried that before at other stores and just received the “shrugged” shoulders of indifference.
So, the best I can offer is a warning to take a look at everything you buy and make sure you are getting what you are paying for. It’s a problem I never knew existed.
If you happen to work at Walmart and care, the alleged thief will be easy to spot on video. He had long white hair and was standing by the fruit case (where all the berries are) at about 9:20 AM on Sunday morning. I’d guess this wasn’t the first time (or the last) that he’s pulled that “trick.”
Parkrag
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