Grays On Trays

Here in the flatlands, the season for snowboarding and skiing is coming to an end. It’s hard for the areas to stay open until St. Patrick’s Day, let alone later.

This morning my driveway was more than half uncovered.

People at ski areas have a hard time convincing the public that even if there’s no snow at home, it is on the slopes. They’re right, of course, at the beginning of the season, when cold nights and snowmaking equipment combine to make sliding possible.

But towards the end of the season, their job may be even more difficult, as thoughts turn to golf, tennis, cycling, gardening and other outside activities.

For those of us who live in the flatlands, mountain towns can be a bit unusual. Consider Aspen, Colorado.

According to the January 23, edition of the Wall Street Journal, Aspen now faces “a glut of luxury stores downtown.”

Walk through the mall and you’ll find high-priced merchandise, to be sure. It’s a tail-end-of-the-bell-curve kind of place, as far as the prices that people pay. (Then again, you can buy ordinary stuff at Carl’s pharmacy or the grocery stores a few blocks away.)

Is this a problem?

The Journal says that the city is considering a law that would require “new commercial building projects set aside a percentage of space at affordable leasing rates.”

(Main Street, Aspen)

Now that’s an interesting situation for economists to ponder. Presumably luxury goods stores can pay higher rents than those that sell mass merchandise–though whether luxury goods sell at a higher margin is an empirical question, not one that can be answered ahead of time.

In any case, what would such an ordinance mean for visitors? It all depends on one’s chosen activities. For non-shoppers, not much.

There would be a logic of bifurcation that would reinforce itself, though. Here’s what I mean: assume that you own some land suitable for retail. The city council says you must rent one-third of it at below-market rates. So what do you do with the rest of our land? You rent it out (market conditions permitting) at an even higher rate, in hopes of offsetting the lost opportunities imposed by the mandate.

Wonder what those expensive lift tickets are for? As a business, ski resort operators hope to make a profit. But don’t forget the expenses, including snowmaking and lifts.

For this last season, Wolf Creek, Colorado, spent $3.4 million on a high-speed quad, which replaces a two-seat lift.

Image isn’t everything, but it can help sell the goods.

I thought of that as I read through this profile of Danny Kass, a 24-year old snowboarding phenom turned businessman.

Kass started competing in skateboarding and then snowboarding events at a young age. By 17, he had a sponsor to pay some of his bills.

He started his own snowboard-themed company, and being a bother to adults was part of the plan:

Kass turned his love of a sport that annoys the grown-ups into two Olympic silver medals, a bunch of X-Games medals and his own company, Grenade Gloves, whose products, from outerwear to goggles to gloves, are sold in 25 countries, 600 retail outlets in the United States and online at www.grenadegloves.com.

Kass’ elder brother, Matt, is the company’s CEO, and Kass is the vice president. They do their own designs, with the object, he laughed, being to scare the adults.

This year, he said, it’s “loud, vibrant colors all mixed together like a paint spill.”

Actually, I’m not sure whether “annoying the grown-ups” is part of Kass’s plan, or if it’s simply the words of a reporter going back to a cliche.

To be truthful, I couldn’t pick Kass’s clothing from out of a pile of stuff at a sports shop if I had to. But if it is designed to annoy or scare the adults, I have this to say: so what?

I respect the enterprise of business, and everyone in business has to find some comparative advantage. If annoying the adults is the advantage that some business owners seek, well, that’s the way it is. Just don’t expect me to go along. The sport is too great, the mountains are too big, the rides are too sweet, to let anyone else’s attitude, or business plan, get in my way of enjoying a ride.

(Source: “Mike Celizic,” Danny Kass is living the good life, Straus Newspapers, February 22, 2007)

Mountain resorts, much like beachfront property, becomes more expensive as the population and the economy grow. Why? “They don’t make them anymore.” A rising national income affords more people the option of buying resort property. Increased demand and a fairly static supply sends prices in one direction: up.

Generally, people who go skiing and snowboarding at destination resorts have above-average incomes. And people who work at destination resorts–lift operators, retail clerks, hotel employeess–don’t have above-average incomes.

So where do they live? Sometimes elsewhere. To take one extreme example, the Aspen Ski Company released a marketing video this year that has profiles of a dozen or so people who live and work in the region.

One fellow, who works in a restaurant, rides a bus from somewhere “downvalley,” for about an hour each way. I believe that he is from Mexico, which means that even at $8 an hour (or whatever he makes), putting up with that commute, on a bus, is a winning proposition.

In the case of Crested Butte, I suspect that the problem is not so severe. The base of the resort is actually in the relatively new of Mt. Crested Butte. It’s got lots of condos. Crested Butte, the longstanding down, is a few miles away. I don’t know if it’s any cheaper there, though some non-spectacular houses could be seen.

Perhaps some people commute from Gunnison. As I’ve said before, it looks like a low-rent district.

How can resorts fill low-wage jobs in a high-cost area? There are several possibilities. One, they subsidize housing. Two, they offer an entry to opportunities to immigrants, who are willing to put up with more deprivation than the average American. And finally, they offer non-monetary compensation in the form of recreational opportunities.

Meet the ski bum.