The Telluride Town Council deserves a lot of credit for forging ahead with a consideration of “horizontal zoning” even in the face of strong opposition from main street property owners and even skepticism from their own Planning and Zoning Commission.
The problems of main street are real. If you doubt that, try a couple of thought experiments. First, imagine you were visiting Telluride on vacation and did the stroll up and down main street. Would you be impressed? Second, do a mental survey of main street businesses. How many can you think of that are doing well? Of those that seem stable, ask yourself whether they have a very low basis in real estate, either because they purchased it a long time ago or have a favorable long-term lease.
The increasingly conspicuous weakness on main street is important for a number of reasons. Sales tax revenues generated by retail and restaurant activity are vital to the town’s financial well-being, especially following the Valley Floor condemnation, which will require the town to devote 30 percent of unencumbered revenues for open space for at least the next 30 years. We can’t afford to watch sales tax revenues shrink and maintain the level of services the town now provides, at least not without an increase in property taxes.
More importantly, Telluride’s historic main street is one of our major assets, both a draw for tourists and an amenity for locals. Vacant historic buildings do not a historic attraction make. We were told during the War for the Floor that the Valley Floor needed to be preserved as an essential setting for the historic district. No less critical to the historic district is an economically functioning main street. So it is no exaggeration to say that protecting main street is every bit as important to protecting our identity as was preserving the Valley Floor
Even if it were not historic, nurturing a healthy main street would be smart. More than ever in the Internet era, distinctive shopping (and dining and nightlife) are crucial distinctions of successful resorts. Yes, people come to Telluride primarily for the scenic beauty and to recreate, but people on vacation like to shop and dine out, too.
Although main street is every bit as threatened as the Valley Floor was, it’s not as easy to create the same passion for protecting it. For one thing, there is no single opponent, like Neal Blue, to mobilize against. And although the cancer is well-advanced, it’s not obvious to the casual observer. But perhaps the most difficult problem is that we have sentimentalized our historic district. We seem to think that because it has been preserved to closely resemble a 19th-century commercial district, it should be able to operate like one, governed solely by Adam Smith’s Invisible Hand, an idealized free market.
In fact, if we want to see it succeed, we need to start applying some 21st-century thinking to our commercial district. We need not reinvent the wheel here. Communities across the country, and not just resorts but also small towns, aging suburbs and even urban downtowns have been grappling with the problem. Retail districts everywhere have to be smart to survive, and places that imagine – as Telluride has insisted up to now – that they can leave it to the “free market” to sort out the problems are doomed to fail.
So what’s the malady, apart from increasingly fierce competition from the Internet and regional shopping malls, as if that weren’t enough?
In Telluride, add the prohibitive cost of real estate, the high cost of doing business even beyond real estate costs, a small year-round population, and low visitation numbers.
It sounds daunting, but there are ways to fight back. Smart retail districts, even if they look old-fashioned, do it by operating like a mall. While malls are hardly socialist endeavors, they are master planned. Malls have a single management that calculates what sort of retail mix is necessary for success, sets hours of operation and other policies that tenants have to adhere to, and undertakes marketing activities, including special events, which individual retail businesses could never afford.
In considering horizontal zoning, the Telluride Town Council is tentatively embarking down this path, in effect by tinkering ever-so-gingerly with the tenant mix. The proposal to restrict office uses in the retail district is a way of trying to boost retail businesses.
That’s not a bad idea, but it’s far too little. Aging suburbs near Denver and elsewhere have tackled the problem far more aggressively by entering into public-private partnerships to redevelop large portions of their downtowns. Telluride probably need not go that far (although it is an approach that is probably appropriate for the Coonskin Base area), but Telluride does need a far more comprehensive plan than the proposed new zoning if we are to compete successfully with other mountain resorts, some of which are far ahead of us on the learning curve in coming to grips with this problem.
We need to increase visitation by continuing to invest in marketing (a disclosure: I am on the board of the Telluride Tourism Board) and, more importantly, by protecting our existing bedbase, which is shrinking, and by creating more bedbase. We need to help our retail and restaurant businesses establish a downtown improvement organization that can try to impose consistent hours of operation and undertake other group initiatives, such as marketing. We need to continue to create more affordable housing so that businesses can find reliable employees who can afford to live here.
But all of this will come to naught if we don’t tackle the single biggest problem: the exorbitant cost of commercial real estate. Horizontal zoning is a start, but the town must also consider some bolder measures. A commercial building deed restriction is one idea that could help. The establishment of a commercial building trust, which would own commercial real estate just as a land trust owns open space and would manage it in the community interest, is another. There may be other possibilities, but one way or another, the town is going to have to step in and find a way for businesses to reduce their occupancy costs. That is, of course, a suggestion that inspires great opposition from devotees of the free market. They understand that horizontal zoning is a step in this direction, and that’s why they oppose it.
Government intervention in the economy is anathema to many of us. And yet, in this time and place, our only alternative is to stand by and watch our retail district continue to wither away. That’s no alternative at all.