Town of CB grappling with formula businesses

Proposed ban on Elk Ave and Sixth Street; allowed in two zones in town 

By Cayla Vidmar

The town of Crested Butte held a community discussion last week to consider the potential of formula businesses, commonly  referred to as chain stores. While there was some debate about how best to address the issue, no one spoke in favor of not restricting them.

Formula businesses are defined as businesses that “maintain a standardized array of merchandise, menu and beverage items and/or…systematized features: façade treatments, décor, color schemes…,” according to the handout provided at the meeting. The town has imposed a six-month moratorium on approving new formula business licenses to get ahead of potential formula business applications. Staff is proposing regulations that would ban all formula businesses on Elk Avenue and Sixth Street, and to allow them in only two specific zones, the commercial and tourist zones.

Of the dozen people in attendance, those who spoke noted their opposition to allowing formula businesses in Crested Butte at all, but town employees were grappling with the potential legal issues of banning the stores altogether.

“This is something we’ve heard for years, about keeping formula businesses out of Crested Butte, but we do already have several formula businesses here,” said mayor Jim Schmidt, referring to shops like The Rocky Mountain Chocolate Factory and True Value.

The moratorium and the proactive discussion of formula businesses was kicked off following conversations with other resort towns whose home mountains were purchased by Vail Resorts. Schmidt and Town Council member Kent Cowherd said they have heard from other similar towns that Vail buys up real estate on the “main drag” for formula stores, and that “feeder” formula stores tend to follow Vail Resorts into towns in which the company purchases a ski resort business.

Town planner Bob Nevins said, “You have a lot of tag-along when a major new business moves in. These businesses sort of follow one another, and it’s usually not one, it’s several.” Nevins explained that these businesses range from restaurants to hotel and motel chains and retail chains.

Schmidt noted that Crested Butte does not allow drive-through businesses of any kind, formula or not. Nevins explained that many times formula accommodation businesses are not typically regulated, “but would have a huge impact. You can see a Motel 6 from miles away.”

The proposed amendment to the town code drafted by the town staff states “The zoning amendments, if approved, would effectively prohibit all ‘formula businesses’ on Elk Avenue and Sixth Street; certain businesses such as gas stations, banks, hardware stores and real estate offices would be exempt … These amendments would allow ‘formula businesses’ within two zone districts as conditional uses if certain criteria are met.”

The amendment also defines a “formula business” as being “substantially identical to seven or more other businesses worldwide regardless of ownership.”

The amendment would allow formula businesses in two zones, which are located in three separate areas, including the commercial district on Belleview; the tourist zone encompassing the Majestic Plaza spanning to the empty lot used for parking across from True Value on Whiterock Avenue; and the tourist zone behind the Gas Café along Seventh Street. Formula restaurants and hotels/motels would be permitted in the “T” zone, and formula retail businesses would be allowed in the commercial district.

“If you ban formula businesses entirely, you’re more likely to be challenged in court,” Nevins explained. He stated that there’s no case law in Colorado to predict which way the courts would decide in a case in which a formula business challenges a town ban on a certain kind of business.

The risk, according to community development director Michael Yerman, is, “If you lose in court, you lose entirely. By allowing formula businesses in certain zones, you have a lot more legal standing.”

Community member Wendi Birchler said she was a land planner and worked with developers. “I know some of these retailers would never come here because there’s not enough people to ever make it worth it,” she explained.

Yerman also chimed in, saying the numbers matter. “I worked in Salida and that has Highway 50 running through it, and [formula businesses] never had the walk-through traffic to make their businesses work there.”

Birchler asked for comparison of population numbers on Park City Mountain Resort in Utah, which Vail Resorts acquired in 2014. Nevins said Park City had a population of more than 5,000, compared to Crested Butte’s population of 1,549.

Cowherd interjected, saying, “What we heard is that formula businesses are actually able to displace local stores because they have bigger stores elsewhere that pay the rent, and can safeguard themselves against failing here.”

Nevins noted that The Alpineer is owned by Christy Sports. “It’s not to say Vail can’t open a business here, it’s just that, that business does it under the community’s terms, not necessarily their terms. It’s a subtle nuance, but it’s a big difference.”

Yerman then asked the crowd if anyone was interested in having formula businesses in Crested Butte, to which the group responded with laughter. The town has heard from one franchise business on how this will impact their business here, but Nevins said the proposed amendments will not impact existing licensed businesses on Elk Ave.

Nevins mentioned that while the amendment would keep formula businesses off Elk Avenue and Sixth Street, a “Domino’s could open up in Majestic Plaza.” To which Birchler replied, “It still has to meet your architectural standards, and your signage standards, which are really pretty good, and restrictive in a way that keeps this place looking the way that it does and very authentic.”

Community member Sue Navy stated she is not an advocate for having any formula businesses anywhere in town, noting that town is comprised of more than just Elk Avenue.

“What we’ve found is that formula businesses like to be proximate to where the action is,” responded Nevins. “Given these locations, that commercial district does not get a lot of foot traffic or drive-by.” Birchler jumped in, saying the districts being proposed for formula businesses “are not ideal locations for retailers because they’re not highly visible, and that’s what they’re looking for, they want people to see them … I understand what you’re saying in wanting to protect all of town, but the truth of the matter is that retailers are going to want to be on Elk or Sixth because of the traffic.”

Local business owner and community member Allison Drucker interjected, saying, “But the exception is the Majestic Plaza, which could basically be a mall.”

Birchler countered, observing that parking in the Majestic Plaza is very limited, and retailers love parking. “I think there are a lot of challenges for formula businesses coming into this community already, and then limiting where they can be is also going to discourage them,” Birchler concluded.

Drucker later addressed the room, saying, “I’m the sole business owner in attendance in these proposed districts. I really appreciate the consideration you’re giving this. In a bizarre twist, I literally moved here because of an article I read about this town not allowing chain businesses … I moved here because I wanted to own a coffee shop in a ski town and I knew there couldn’t be a Starbucks here.

“I’m not a lawyer, and I understand the legality, but it is the Majestic that’s being offered up as a sacrifice … I might be collateral damage in this,” said Drucker.

Nevins responded that the idea was not for the Majestic to be the sacrificial lamb. “It was to sort of allow formula businesses, but based on man-made constraints, those businesses would be limited. We weren’t sure if you would come in and say, ‘How dare you, we want to go to Subway.’ We’re trying to go with community values and capitalize on what’s special here.”

Based on feedback from the meeting, town staff will send the proposed amendment to BOZAR for review, at which point BOZAR will make its recommendation and forward the proposal on to the Crested Butte Town Council. There will be two readings of the ordinance at the Town Council, and the second will be a public hearing where members of the public can weigh in on the proposed ordinance.