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Tourism, Taxes, and Growth in the Heart of the Adirondacks

October 11th, 2007 · 5 Comments · Destination Marketing, News

Fall Colors in the AdirondacksThis really is my favorite time of year in the Adirondacks. We’re just past Columbus Day so the bulk of the crowds are gone for the season. Don’t get me wrong, I love tourists! I had the entire Blue Ridge Road to myself with colors which can only be described as sublime. Not another car the whole way until I hit Newcomb.

I’m sure glad I made the drive to attend the event I mentioned in a previous postSmart Actions for Real Growth. It’s been a too long since I last visited the Adirondack Museum who co-sponsored today’s symposium with Hamilton County Tourism. I always recommend the Museum as a “must-do” Adirondack activity, just go and see for yourselves.

Private Sector Panel - Left to Right: J. Lane, T. O’Brien, J. Oestriecher, R. Pohl, G. Swift, S. Swift, C. Young-Inserra, R. Whaley.The goal for the day was the generation of “an action plan to increase tourism in Hamilton County and the surrounding area and to grow tourist-related businesses.” Two panels were assembled to explore how this could be done. I’ll endeavor to be brief in my attempt to distill yesterday’s findings.

Public Sector Panel - Left to Right: C. Leo, J.R. Risley, A. Melious, B. Farber, B. Towers, B. Osborne, C. Welsh (ADK Museum), C. Stevens, R. Whaley, G. Pearsall.The meeting was started with a brief introduction to the topic by Bill Osborne, Director of Hamilton County Tourism and Economic Development. He noted the incomparable outdoor resource we have – both accessible and suitable for a wide-variety of 4-season activities. Question – Why don’t we get more tourists? In particular, he pointed to the imminent Baby-Boomer travel bubble on which we are on the verge of. And quite accurately, described the difficulty of reaching and converting that market in today’s technological and marketing environment. I think we’ll simply agree that these folks can’t be pigeon-holed or reached through traditional “old” marketing means. (Egads, we might even have to use travel2.0 techniques!)

Bill has been around the block a few times (Ha !). He’s a 5th generation Adirondacker, born in Lake Pleasant. Left, came back, and now works to better this most archetypal of Adirondack counties. Here’s his list of issues:

  • Property Taxes / Property Values / Affordable Housing
  • Government Regulation / State Ownership of Lands
  • “Preservationism” with no concern for sustainable economic growth
  • Too many tax-eating jobs (Govt) Vs. Not enough tax-creating Jobs (Private sector)
  • Need to provide a market-driven value to customers

OK, can we go home now? Just kidding. That pretty much sums things up here and set the tone for the rest of the day.

The Panels

All of the discussions were moderated by Dr. Ross Whaley, Chairman Adirondack Park Agency.

Private Sector
Jonathan Lane – Charlie John’s Store and Speculator Department Store
Carol Young-Inserra – Adirondack Hotel
Julius Oestreicher – Prospect Point
Rachel Pohl – Raquette Lake Navigation
Tom O’Brien – Wakely Lodge and Golf Course
George and Susan Swift – Melody Lodge, Adirondack Mountain Grill, et al

Public Sector
Bill Farber – Chairman, Hamilton County Board of Supervisors
J.R. Risley – President, Adirondack Association of Towns and Villages
Brian Towers – Chairman, Hamilton County IDA
Paul Beyer – Governor’s Office, Smart Growth NY
Chris Leo – Senior Community Developer, NYS Office for Small Communities
Ann Melious – Exec. Director, Adirondack Regional Tourism Council
Craig Stevens – VP Community Bank

What they said

Carol Young-Inserra – Adirondack transplant from Buffalo who purchased the historic Adirondack Hotel in 1990.

  • Age of Property – balance between cost-effective maintenance and historic stewardship
  • High cost of operation
  • Seasonality – Only the summer is an operationally profitable
  • Staffing and labor issues
  • “1st time in 18 year, half the winter in the bank at the end of summer” – now that’s optimism
  • Now planning for retirement (Hey Carol, I bet your URL is worth a few bucks)

George and Susan Swift – Connecticut restaurateurs, purchased the then-closed Melody Lodge in 1976.

  • Affordable housing or provided housing needed to retain quality labor
  • “If it wasn’t for help, it would be fun”
  • Affordable housing or provided housing needed to retain quality labor
  • Investments have improved their product’s competitiveness
  • “We need 1st-time visitors”
  • Credits “I Love NY” program for quality efforts in the 1980’s
  • Agrees that today’s “sophisticated” traveler is being underserved in the Adirondacks
  • IDA Funding – “Best thing we ever did”
  • Website is now a critical part of their marketing
  • Greatest need is mid-week and shoulder-season traffic

Rachel Pohl – Raquette Lake Navigation, daughter of Dean and Donna (what a refreshing perspective on the Pohl “Empire” – these guys are creating Adirondack history everyday!).

  • Success is a result of “diverse” income streams and a united family effort
  • Shift from traditional weekly rentals to seasonal has changed the type of visitors and the concurrent level of demand for certain attractions.
  • Average about 75 Motorcoach tours per season – Wow! All the credit goes to Donna for relentless marketing enthusiasm.

Julius Oestreicher – Prospect Point on Blue Mountain Lake. Former site of the famous Prospect Hotel. Mr. Oestreicher purchased the property to save it from development. The existing cottages were renovated over time to retain their waterfront location (current rules would require a setback). Very interesting story and I’m really glad I heard it.

  • Sat – Sat rentals, 10 week/year max. profitability
  • Extending the season is key to their success
  • A unique product, excellent location, and loyal clientele
  • Website has been key to expanding their audience to a worldwide market
  • Main challenge is lack of ancillary services and businesses in the area – no restaurant in Blue Mountain Lake
  • Challenges – declining infrastructure and blight, high taxation, labor and availability of affordable housing
  • Future offerings may include themed weekends, educational and recreational packages

Tom O’Brien – Wakely Lodge and Golf Course

  • “Seasonal home ownership creates a different set of activity needs”
  • Main challenge is labor and affordable housing
  • Would like to see local education system tailor programs to train local youths in skills and trades suitable for our region

Jonathan Lane – Family purchased Charlie John’s Store in 1972 and the Speculator Department Store in 2003. These two establishments are historical centerpieces of the Speculator region economy.

  • A broad product line and serving the needs of both the local community and visitors had been their commitment
  • Franchising with Big M and Tru Value are critical to their business
  • Major investments – POS, security system, and generator
  • Seasonal challenge – only 4 months of profitability – 50% of annual sale occur June – Aug
  • “Winter operational losses are an investment for the summer” – again, that’s the attitude of a North Country survivor

After lunch, the public sector panelists spoke briefly about their organizations and reacted to some of the concerns from the morning.

Chris Leo – NYS Office of Small Communities. His office is responsible for the administration of development grants and he described the many ways that tourism businesses and local governmental entities might qualify for their use.

  • $40-45 million a year in available funding
  • Fairly competitive application process
  • Possible uses include: housing, public facilities, infrastucture, job creation/retention

Bill Farber – Chairman of the Hamilton County Board of Supervisors

  • “Adirondack economy is a complicated animal, there is no silver bullet”
  • Local funding needs are being addressed primarily through the IDA program
  • Hamilton County is getting an Empire Zone – What do we do with it?
  • The county is working on workforce development, affordable housing, and home ownership programs
  • Would like to see some grants or funds available to subsidize certain “needed” jobs i.e. small motor repair
  • “Cellphone coverage and availability of broadband throughout the Adirondacks is a necessity for future growth”
  • “New York State has become too dependent on real property taxes – need holistic fix”

Ann Melious – Exec. Director of the Adirondack Regional Tourism Council – 25 year old consortium of Adirondack counties committed to economic development through tourism. She described what the ARTC is doing currently to promote the Adirondack region.

  • Comprehensive travel website for the Adirondack Vacation region – representing all tourism businesses at no charge
  • Advertising campaigns supported by marketing collateral fulfillment
  • This year – TV campaign, Canadian E-campaign
  • Marketing niches include: snowmobile, fishing, hiking, paddling, heritage, birding, and hunting (next year)
  • “We are taxing the Adirondack experience to death”
  • “Besides the “OC” and (possibly) Buck County PA, name one other county which has been successfully marketed?”
  • “Adirondacks” is brand which we should be promoting – that’s where the investment and equity is
  • Q: Is ARTC marketing in Europe? A: I Love NY is, ARTC is not.
  • “Economic development people don’t think that tourism is economic development”

J.R. Risley – President of the Adirondack Association of Towns and Villages. Started in the mid-90’s, this organization’s membership includes 92 towns and 11 villages. It’s aim is to improve communication between communities and to present a unified voice for local governments in the Adirondacks.

Craig Stevens – VP Community Bank (formerly Tupper Lake National Bank). Mr. Stevens has had much experience in providing capital for local businesses.

  • Restaurants are the riskiest venture – 50/50 success rate
  • Potential borrowers should prepare for a fairly lengthy process
  • “We just want to make sure we have our loan repaid”
  • Most important thing is a solid business plan which convinces us of Cashflow – existing and/or future
  • “For those businesses that deal with cash, please adequately report your income to the government” – Ha!

Brian Towers – Chairman, Hamilton County IDA. Another important source of funding for small businesses.

  • “I am not a banker and the IDA is not a bank” – opening line. Huh?
  • Funding available through the IDA typically has lower barriers than commercial lenders
  • Low application rate for available fund

Paul Beyer – Governor’s Office, Smart Growth NY. I don’t know too much about the grants which they are administering with DEC, but it sounds like local governments should take another look. Showed up 30 seconds after his panel started – I both admire and resent that.

  • Claimed he didn’t like the word “Smart”, and did not want to define it
  • Due to apparent lack of professional grant writers in the Adirondacks, the application deadline has been extended by 6 weeks
  • Major investments – POS, security system, and generator
  • Seasonal challenge – only 4 months of profitability – 50% of annual sale occur June – Aug
  • “Winter operational losses are an investment for the summer” – again, that’s the attitude of a North Country survivor

My conclusions

We do have a labor problem, mainly in the service industry. This includes both a general shortage of qualified employees and specialized trades. The problem is exacerbated by the dilemma of high property values, high property taxes, and associated lack of affordable housing. Traditional outward migration of local youths is cited as a problem, but anecdotal success stories of imported (foreign) labor seem to point to a possible solution. Fact is, people go where they can make money. If the cost of living outweighs potential income, then obviously it will be both hard to attract and retain a qualified labor force. Thus, many of the business owners in the Adirondacks have had to provide seasonal housing in order to feasibly have and retain employees. This is a supply and demand issue. I think a supply solution exists without market intervention.

Having the heaviest tax burden in the United States, New Yorkers shouldn’t be complaining about deteriorating infrastructure. But they are. Nobody at the meeting denied that there are generally pretty crappy conditions all around in terms of infrastructure and blight. At the same time they are also complaining about ever increasing tax burdens. The incentive for those businesses to improve is almost immediately taken away by a concurrent increase in their taxes. I think Bill Farber said it best when he noted our state’s (we are not alone) heavy dependence on real property taxes as a primary generator of revenue. The more I heard about grants, fund, abatements, subsidies, Empire Zones, rebates, etc, the more reinforced is my belief that these are all Bandaids for a completely dysfunctional tax system both at the state and federal level. To me, this is the core problem which we must address. Market forces will sort our everything else.

The other issue that is related to both of the above is the rising value of Adirondack properties. This is both a result and a generator of an increasing number of seasonal home owners. It was mentioned that this has changed the nature of the visitors to our area and have impacted the type and frequency of tourism consumption. These pressures have also lead to attrition in the supply of existing tourism related businesses as they are either sold for residential development, or no longer can be feasibly operated as a business. There is no easy answer for any of these issues and they are all interrelated. Add the unique environment of existing within the highly regulated Adirondack Forest Preserve.

I’m not sure if I should be hopeful, but I am. We do have an unparalleled resource here and if we can properly balance the need for sustainable development with thoughtful concern for preservation, then success seems inevitable. This conversation is not new, and I’m sure will be continued into the future.

Crazy things I saw and heard

The biggest three piles of donuts I’ve ever seen at a meeting. After lunch, a similar amount of cookies.

“Why can’t we change the date the clock change so people don’t have to eat dinner in the dark in November?” – it would be easier to call lunch dinner.

“Why can’t we have some kind of property tax abatement?” – that’s simply insane, this is New York.

“How do we get a Holiday Inn Express in Hamilton County?”

“It’s really important that everyone has a website. It’s not enough just to list information, you have to use hyperlinks. This way the user doesn’t have to write down the web address and type it in.”

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5 Comments so far ↓

  • Mrs. Mecomber

    This time of year is my favorite, too. I don’t love the tourists , though, ha! They get in my way. 😉

    I am hankering to get to that Adirondack Museum, but admission fees are outta this world. NY travel admission prices are very unfriendly to larger families, it seems. Therefore we often drive “off the beaten path” to smaller, quirkier areas. It is nice, but once in a while I’d like to see a big place without spending $150-200!

    Maybe your influence can change a few thing, eh? ;);)

  • TourPro

    You’re so right, a family trip to any “major” attraction these days is always a costly proposition. I love the Museum and it is really an Adirondack must-see, if you know what you’re looking for or have the right expectation.

    It’s awesome for getting a quick snapshot of Adirondack history if one is not familiar with it. Plus, you can look and touch. I’ll have to admit, once you have actually lived in the area for awhile, some of the stuff doesn’t seem as “rustic”. Aside from their collection, a good portion of an ADK Museum visit is the trip there itself.

  • Kevin The Camping Info Guy

    I wonder if there is any central place that helps promote regions like this? I live in the west and we know almost nothing about the Adirondack’s, but we should.

    Folks should become region centric and only visit nearby areas. Yes the west is great but the East has great places to visit and camp as well.


  • Julie

    “Due to apparent lack of professional grant writers in the Adirondacks, the application deadline has been extended by 6 weeks ”

    There are several professional grant writers in the ADK’s. We even have a little club/secret society.( It’s just coffee talk..Ha!) The problem is…. we can make $65 an hour telecommuting with non-prof’s and small towns outside the region. The best anyone inside the Park has offered me is $22 an hour. We can’t live and survive in the Park at those prices– just like everyone else.

  • TourPro

    Ha, don’t you know that working in the Adirondacks is charity!?