Mammoth Real Estate Q&A Hard Questions, Questionable Answers?

This Mammoth Real Estate Q&A appears in the President’s Weekend/Ski Week 2018 issue of The Sheet.

“Quality questions lead to a quality life.”

— famous self help guru

Q: In a recent Jack Lunch editorial in The Sheet it was expressed that the Ice Rink/MUF should be made an election issue for the upcoming three Town Council seats in June. We like the idea. Let the candidates and local voters debate and decide. But we want to know what other issues should the candidates be questioned about?

A: Now is good time to be asking questions. There are important issues facing Mammoth. Town government and real estate have many intersections in this resort community. In fact, real estate’s symbiotic relationship with tourism makes this town tick, and this is a real estate column.

Almost all of the dollars the government entities have to spend is derived from real estate property taxes, and TOT (bed taxes) which are generated when our guests stay in some form of local real estate (predominately condos). And many of the local residents are employed in building, remodeling, repairing, maintaining or renting this real estate. The tourism wonks may think they are almighty, but the real estate and the multitude of various service providers make it all happen.

Unlike most communities, the majority of Mammoth real estate owners are “absentee” owners and they rely on us to perform in a responsible and reliable manner. Including the Town Council and local government. And ultimately these second/absentee homeowners don’t have a vote in these matters simply because they aren’t registered here in Mammoth. That gives us greater responsibility, or at least that is the way it should be. The Town Council and local government controls how most of the money is spent. The money needs to be spent in a dutiful manner.

So a big questions is; Should the TOML’s financial strategy be more conservative, or more risk-and-debt prone? That is a familiar theme in both real estate investment and government. Today, most governments like to borrow and spend to their heart’s content. But does anyone want to recognize that we live in a boom/bust economy, both locally and state? Busts historically crush the risk-and-debt prone until they can borrow again (like the Town right now). Conservative operators are typically in a position to take advantage of the busts. It is a proven strategy to get ahead.

Do the present local residents (and voters) in Mammoth know how many Town Council People, Town Managers, Planning Directors, Marketing Directors, Parks & Rec. Directors, etc. have flowed through this town since incorporation? I’ve known and dealt with plenty of them. The majority have moved on and have no concern for any of the messes they may have left behind (does the name Paul Marangella mean anything to you?).

The current group is no different. Just because someone’s words makes them sound endeared to the Mammoth area doesn’t mean they have any real investment here, or long term intentions. It is the Council’s responsibility to make sure poor decisions aren’t being made just to make someone’s resume look great. And are our memories so short that we can’t remember we filed for bankruptcy just a few years ago? Those bankruptcy headlines hurt this community and may have suppressed local real estate values as much as the drought.

So I’d like to know the candidate’s position on local economics and spending, because sooner or later the chickens come home to roost, again.

Which leads to this question for Council candidates; At what point does the Town’s massive marketing budget meet the law of diminishing returns? This is an economic law that few people understand. Its half-cousin is the concept of opportunity cost. Can any of our TC candidates process these two concepts and question what we are spending on marketing, and are we spending it efficiently and effectively? And is there a better place to spend some of the allocation that would be more beneficial to the big picture of the community? Do the TC candidates desire more quality, or more quantity from our tourism? Do we really understand the return on the marketing investment? I’d like to hear the debate. And then let the voters decide.

I support the Town’s purchase of the Shady Rest parcel. I’d like to think I could have negotiated a better deal. As I have pointed out in the past, when you control the land use (zoning) of a parcel you control the value. And land value is compromised here in Mammoth because of the high cost of construction. But what do I know? The future Council will drive what is ultimately  developed on this land. So how do the candidates see deriving “the highest and best use” from this land that is critical to the community’s future? Is it more middle-income housing, low income housing, or both? And is there an opportunity to utilize some of the land for something else (an opportunity cost question again)?

Which brings me to the Main St. re-development plans. Now that the powers-that-be have become less delusional about the process; How do we promote and incentivize a more economically vibrant downtown and commercial district? And without bankrupting everybody? And doesn’t it need to apply to all of the commercial areas including out Old Mammoth Road and around the Village? The current planning mentality seems to only think in terms of “new” when the old is what we need to re-vitalize. A famous planning commissioner used to remind us that we don’t have “a giant eraser.” That would be nice. But it isn’t reality. So what are the candidates vision to revitalize the commercial areas of Mammoth? What will they support? And not support? Hopefully they are grounded in the real world.

And here is one of my long contentions (and this is never talked about); Should the Town Council be a truly paid position like County Supervisor (not that anybody is getting rich off of that)? Paying the Council members a decent salary would be a relatively small line item in the Town’s greater budget and it would help ensure competition, quality, stability, focus, etc. The Town probably pisses away more money than this would cost. It is very difficult to be a Council member and own a business or hold down a full time job; there are soo many meetings (beyond regular Council meetings) and tons of reading to do. And there are endless people who want your “ear.” Are we shortchanging the community by making this such a compromised position? I pose the question. I’d like to hear some thoughts on this.

And as office space becomes increasingly less necessary (and less valuable) does the Town really need to be considering a massive expenditure for government offices? In the real estate world, owning is great, but sometimes leasing is better. Real estate investors are bailing out of office space across the globe. And for good reason. Does building new space make sense?? Again, is this the highest-and-best way to spend the dollars? Candidates?

And I agree with Jack Lunch, the Ice Rink/MUF should really be left up to the voters at this point. Is it really the highest-and-best use of $15 million in this town? (It really is a $15 million project — we’ve already spent $1 million and we haven’t made a decision to build it, or how to build it, and the ultimate cost is increasing all the time). It is a fair question for anyone running for a Town Council position. And has anyone completed a real cost/benefit analysis on this project?

But the current Council majority is too emotionally invested at this point and their majority may not even be on the Council in the near future. They really owe it to be left to a vote of the community. Whatever happened to the old public planning axiom; What is going to benefit the greatest amount of people?

So candidates; Is an Ice Rink (the MUF is just a bureaucratic red herring so the facility doesn’t look like a special interest project) the highest-and-best usage of the expenditure? And not only the high cost of development but also the ongoing line item expenditures of personnel, maintenance, insurance, utilities, etc.? Marketing budgets and police budgets can be trimmed in tough economic times but large facilities have ongoing debt and operating expenses. Of course, if it doesn’t work out we can make it a homeless shelter.

Which then leads to the School District bond proposal and questions for the candidates. The District wants the local residents to pass a $63 million property tax based bond initiative. But they didn’t want to give the community a favorable lease on the existing ice rink. That doesn’t seem equitable. Who made them king? Forget that a substantial portion of the last bond initiative was extravagantly spent on administrative offices and a sparsely used football field. The trade-off for our votes for the bond initiative should be a lease that makes sense so we can put a roof on the ice rink and stop planning a potential $15 million boondoggle. Candidates?

Are there any candidates that can see a win-win opportunity here? The skaters just wanted a roof on the rink from the beginning so they could get a little more skating time through the season. They weren’t looking for the Taj Mahal. The whole thing got out-of-hand. But do we now have a bargaining chip? Can’t the District share a little pain with the local property owners?

The really regrettable part of it this bond proposal goes back to our “absentee” property owners; the vast majority of the people who pay for the schools in this community via property tax will never have any children attending these schools. And they’re not likely to go ice skating either. (Okay, I know the “social contract” rhetoric.) But for now the School District’s intransigence on the ice rink negotiation has, and may, cost this community dearly. The District thinks they live on a one-way street. So much for being responsible. Will any of the candidates think that is a good reason to vote NO on the bond?

I hope the candidates have some thoughtful answers.

Happy President’s Weekend!!

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