When the lifts stopped spinning early last spring, we didn’t just lose out on pond skims and goggle tans. We also lost a mountain of revenue crucial to Park City’s feast and famine economy. The impacts were felt by both by private sector businesses which closed en masse and the municipal government which experienced a nearly $4 million shortfall. It was bad, and it was only going to get worse. Some halfwit writer for the very publication you’re reading prognosticated this was the big one that would uniformly decimate a fragile tourist-driven economy—it wasn’t my best take. Instead, the pandemic has made it abundantly clear ski town economies are anything but monolithic, and how the community fared has been anything but equitable.
For every bust, there’s been an equal and opposite boom. Unfortunately, the busts have been acutely felt by those most vulnerable to economic uncertainty and the booms are exacerbating long-standing issues of inequity most commonly associated with much larger population centers.
THE MISSING SALES TAX
Plummeting sales tax revenue is going to threaten the Park City Government, which leans heavily on collected revenue to fund day-to-day operations. Just how bad
is it going to be? These are the projected sales tax collection figures for 2020-21 as compared to the same time a year ago.
While unemployment numbers skyrocketed on the heels of ski season’s abrupt shutdown and a complete implosion of the tourism market, real estate prices and demand in the Park City area have risen dramatically. The fallout will only increase affordable housing shortages and the need for imported labor in the upcoming season as the funding for public services and infrastructure—which has tenuously made bearable the town’s traffic situation, among other things—dries up.
So, what happened when the pandemic struck? $153 million in spending that was expected over the final month of the ski season never came, and the shuttered resorts, hotels, restaurants, bars and shops led to an unemployment rate that spiked from 3.4 to 20.4 percent in Summit County, among the highest figures in the state. Private businesses and their employees faced the brunt of the immediate impact during the initial closure, which they’ve yet to fully recover from while operating at limited capacity. Even when Main Street seemed its most vibrant during lulls in the pandemic, Summit County Economic Development Director Jeff Jones estimated the county was operating at 70 percent of its economic capacity. As a result, the local government—which relies primarily on sales tax and property tax revenue for its fiscal solvency—is tightening its belt for tough times and predicting a $6.5 million shortfall in the town’s general fund.
The town is rebounding, but a complete recovery isn’t imminent until the corona virus is eradicated. The latest Department of Workforce Services figures available at the time of this writing showed the unemployment rate had fallen to 6.6 percent, still higher than Utah’s average but nowhere near peak levels. Arriving passengers at Salt Lake City International Airport, a key indicator for Summit County’s economic health, were down 58.3 percent. Restaurants, meanwhile, were seeing 35 percent fewer customers, though some were finding ways to adapt and remain profitable during a pandemic. If those numbers can hold as we move indoors and cases spike remains to be seen, but long-term economic prosperity will require the return of long-haul customers who fly to the area. Even the ski resorts that seem well-positioned to handle the upcoming winter—Vail Resorts, owner of Park City Mountain, has seen an 18 percent increase in season pass sales—are going to miss those $200 day ticket sales from the jet set.
But what of the housing? Would worldwide economic calamity alleviate the high-cost pressure of an inaccessible market? Quite the opposite. The boomtown to Zoom town transition hit Park City hard. People from out-of-state population centers, emboldened by the work-from-home revolution, flocked to the area to enjoy the lifestyle advantages of living in the mountains. They come bearing cash and have an appetite for the relative safety of the outdoors and single-occupancy vehicles.
The numbers are astonishing. In Snyderville Basin—where most growth is occurring and a majority of Parkites live—condo sales are up 36 percent from the same period in 2019 and the average sale price has increased 40 percent to $968,000. A Gallup Poll from the fall showed 60 percent of Americans are working from home, and two-thirds of them would like to continue doing so. Don’t expect this to slow down.
Eventually, the pandemic will pass, and tourism will return to peak levels. But by the time that happens, wealth will have further consolidated in the housing market, underscoring issues that already plagued the town. Creating a sustainable future in this new Zoom Town is a whole other discussion.
For more Park City life, click here.