Local information about Breckenridge and Summit county real estate and information about what's going on in the County.
Saturday, April 25, 2015
Summit County retail sales edging back to pre-Recession levels
#Summit County, Colorado.
The tax revenue figures for 2015 are slowly rolling in and Summit County is well on the road to economic recovery — and nearly back on par with the banner year of 2007.
Across Summit, towns have reported sales increases for nearly every industry, led by traditional high performers like lodging and dining, along with the brand-new marijuana sector and a noticeable uptick in construction activity.
“We certainly had one of our strongest winters ever, if not the strongest ever in terms of sales and lodging tax revenue,” said Chad Most, revenue specialist for the Town of Frisco. “That’s great for the town, but we try to keep it in perspective. It’s a credit to our business community and how they’ve taken advantage of the opportunities they have.”
Healthy tax revenues in Frisco and neighboring towns come despite a strange winter. Of 17 tax categories in Frisco, Most says only arts and crafts retailers showed a decline over the past year. The remaining categories enjoyed impressive gains, including tourism indicators like restaurants (up 20.6 percent) and vacation rentals (up nearly 16.8 percent).
“Tourism in particular was incredibly strong this winter,” Most said. “We occasionally tend to overestimate tourism and the impact it can have, but we had more people in town, staying for multiple days, and that tends to trickle down across town.”
The picture isn’t quite complete. With the exception of Breckenridge marijuana sales, towns have only collected tax data through the end of February this year. March data will be available by mid-May.
Yet for some industries — think general retail like clothing and sporting goods — booming returns were actually bolstered by meager snowfall and balmy temperatures in January and February. The Outlets at Silverthorne saw revenue increase by 6.3 percent from 2014 to 2015 — not jaw dropping, but enough to generate roughly 25 percent of the town’s overall tax revenue.
“If the ski season is really good, people are skiing, not shopping,” said Donna Braun, finance director for the town of Silverthorne. “Last year’s ski season was really good and this year wasn’t quite on the same level, so the Outlets saw a year-to-date increase. It can be a major draw for tourists when they go on vacation.”
GROCERIES AND HEATING BILLS
Across Summit, general retail this winter managed to outpace every industry except the big dogs of lodging and dining. Frisco and Breckenridge both benefitted from a lack of inventory, with nearly every available space taken along Main Street in both towns. Frisco saw a modest increase of 2 percent, while Breck jumped by 7 percent.
Beyond the Frisco town core, a handful of industries saw wildly impressive gains, even without the blanket influence of a recovering national economy. The 1-year-old Whole Foods skewed numbers slightly in the grocery category: It generated nearly $164,000 in tax revenue last July alone, with revenues dipping below the $100,000 mark only twice since then. Still, a low of $79,000 in October 2014 is double the town’s grocery revenue from 2013 — an impressive all-time high in a traditionally lean month.
Down the interstate from Whole Foods, consumer retail in Silverthorne also saw a dramatic increase, with standalone stores like Target boosting revenues 14 percent from 2014 to 2015. Only lodging fared better at 21 percent.
And then there was construction. Nearly across the board, the construction and building retail industries are finally returning to normal, due in part to major projects like the Hampton Inn in Silverthorne and renewed interest in residential plots throughout the county.
“The construction activity you have around real estate always impacts other industries, your restaurants and everything else,” Most said. “When you combine that with a strong economy, we’ve been able to tap into a strong construction market in a strong year.”
While Frisco has very little room remaining for development, the booming vacation rental market (up 16.8 percent) led to year-over-year increases in the home improvement category (up 11.7 percent) and the furnishings category (up 45 percent).
In Silverthorne, building retail was right in line with consumer retail, jumping about 13 percent since 2014. Despite the gains, the town saw noticeable dips in the automotive and service industries, with auto sales dropping by about 1 percent, while service revenues from utilities fees dropped 10 percent.
Braun believes the auto decrease is the side effect of an industry still leveling out after a recession. As for the utilities, funky weather again played a role.
“That one is kind of an oddball category because it includes a lot of things, but the biggest one is Xcel, paying a sales tax on gas and electricity,” Braun said. “But we had a warm winter, and utilities tend to trend with the weather, just like shopping.”
And then there was weed. With a full year under its belt, the Summit marijuana industry is looking healthy, although officials are quick to note that under two years of data is hardly enough to gauge long-term impacts.
“We didn’t really have expectations of the marijuana industry because it just hasn’t happened elsewhere in the United States,” said Brian Waldes, finance services manager for the town of Breckenridge. “Our estimates were honestly a little high for 2014, but not off by much. Those real numbers helped us look ahead to 2015 and the council has been very conservative in the way they budgeted the marijuana revenue.”
In Breck, total marijuana sales — dubbed “weedtail” by town staff — continue to trend upwards, jumping 8 percent from 2014 to 2015. It’s a blip compared to the 77 percent increase from 2013 to 2014, but like Whole Foods, the numbers are slightly skewed by the fact retail weed didn’t exist until last year. And marijuana still only accounts for a modest 1.65 percent of total sales activity in the town, the lowest of eight tax categories.
In Frisco, home to three of the county’s nine dispensaries — Silverthorne and Dillon can’t release data since each town has just one dispensary — weedtail tax revenues (not total sales) were up a whopping 135 percent this February over last February. The town saw nearly $20,000 in revenue, compared to about $8,500 the previous year.