First month of detour shows 7% Glenwood sales drop
Glenwood Springs’ first sales tax report since the start of the Grand Avenue bridge closure and detour confirms what most local economic observers have been saying about a significant drop in business.
The August sales report, which captures only the first 18 days of the projected three-month bridge detour, shows that retail sales were down 7 percent for the month in the year-over-year comparison to last year.
And, the worst from a city finance perspective is likely yet to come when reports are filed for September and October, when businesses have said the brunt of “bridgemageddon,” as some have called it, really began to hit.
“August came in about where we thought it would be,” City Finance Director Steve Boyd said. “Our best guess is that sales will be off about 15 percent during the months that the bridge is completely down.”
City officials, merchants and consumers did get a bit of good news on Tuesday when bridge project officials announced that construction is ahead of schedule, and the new bridge is likely to open to traffic several days ahead of schedule.
Retail sales figures for the first part of the bridge closure, which resulted in long detour traffic backups and general frustration getting around Glenwood, were telling.
General merchandise sales for August, down 13.5 percent; miscellaneous retail, down 16.3 percent; automotive sales and servicing, down 12.5 percent; restaurants and bars, down 7.7 percent; grocery store food sales, down 3.2 percent; furniture sales, down 10.2 percent; building materials and supplies, down 5.7 percent; even marijuana sales, down 11 percent.
Businesses at Glenwood Springs’ largest retail center, Glenwood Meadows, have reported sales being off at a consistent level into the fall, said Scott Goldammer, director of property management for Meadows leasing agent, Miller Real Estate.
“I would say the trend had been pretty consistent from what we initially saw,” Goldammer said. “We thought things might settle into more of a pattern, but we have seen a pretty consistent decline, and it really hasn’t rebounded from that initial impact.”
Changes made by bridge project officials to adjust the signal timing in and out of the Meadows did help some, Goldammer said. But sales activity has still suffered, he said.
The only significant city sales categories to conclude August on the plus side were taxable transportation services and utilities, up 10.3 percent; business services, up nearly 25 percent; and motels/hotels, up 0.72 percent.
The city’s special lodging tax even saw a rare monthly downturn, falling 0.12 percent compared to August 2016, though taxes on overnight stays remain up 4.2 percent for the year.
Overall, year-to-date sales tax figures are now down 0.22 percent compared to 2016, putting the city well behind the typical 2 percent increase that was projected for budgeting purposes.
“We were looking to do about $18 million in sales taxes for the year,” Boyd said. “At this point, we think we will probably miss that overall target by about a million dollars.”
To adjust, the city has begun cutting as many non-essential items out of this year’s budget and reining in operating expenses where possible, he said.
On the positive side, the city is projecting about $4.25 million in general fund reserves by the end of the year, Boyd added.
When and if sales will rebound in 2018 is a hard guess, he said.
“We do know that Glenwood’s economy runs at a certain level, so by the end of next year we do hope to be back at a natural level of sales tax revenue,” he said.
“In the meantime, we would like to remind everybody to shop local when they can, because we don’t get sales taxes on those remote online sales,” Boyd added.