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Gazette Premium Content Only time will tell how retail marijuana sales affect Manitou's bottom line

By Ned Hunter Published: January 22, 2014

Some business owners are worried.

Some are cautiously optimistic.

But many are simply waiting to see how Tuesday's vote legalizing the sale of recreational marijuana in Manitou Springs will affect the town known for its charming historic downtown, tourist trade and family-friendly attractions, such as the arcade and Pikes Peak Cog Railway.

Will the impact on tourism cause some businesses to cut employees or fail, as some critics of marijuana sales fear? Or will Manitou Springs become an even more popular destination spot? Will the town be overrun by transients who strain public services and hamper the local police department? Or will the city reap a windfall in tax revenues that could help lift it from the destruction of two years of fires and floods?

"Nobody has a crystal ball, and nobody really knows anything as to what the impact will be," said Manitou Mayor Marc Snyder, who voted for the ordinance on Tuesday,

The outcome likely will remain unknown for at least 12 to 24 months after sales of the drug begin, Manitou officials say, but already, some business owners believe pot sales will damage the city's commerce and employment.

"Even if sales tax revenues net ahead from these sales, but you have business damaged or closed and fewer people working, (was) this really a smart move?" said Tim Haas, owner of four businesses within the city's historic district. "I think it is a dire mistake."

Mark Malec, however, hopes retail marijuana sales will entice tourists to his town during winter months. Malec, assistant manager and son of the owner of the Comfort Inn Manitou Springs, said the hotel had only one guest on Tuesday night - typical for this time of year because of the lack of winter sports in the surrounding area.

"It will probably help us out in the off season," he said.

While Malec, 25, said not all Manitou Springs hotel owners agree with him, he believes it is often better to embrace change than fight it.

"Usually it pays off to be at the front of change," he said, "and not in the back of it."

One thing is certain: Manitou will reap sales taxes from marijuana sales, though how much remains to be seen. The city likely will tax the sales of marijuana at the high end at 10.4 percent, Snyder said. The city's finance department estimates the city could see about $1.7 million in marijuana sales its first year, reaping about $170,000 in tax revenues. Others have estimated about $30 million in sales, Snyder said. The city has not added any revenues from future sales of marijuana into this fiscal-year's budget, he said, "because there are still too many unknowns."

Revenue also depends on how many customers the town attracts. For now, Manitou Springs is the only city in El Paso County to allow recreational pot sales. But Palmer Lake voters might OK recreational sales of the drug this year. And Snyder said there is chatter that Colorado Springs leaders could eventually allow sales within the city limits.

"But we just don't know," Snyder said, "There are a lot of "ifs" there."

One of those "ifs" is whether tourists will stop coming to Manitou if they no longer view it as family-friendly.

Paul Jakubczyk, owner of PJ's Bistro, said he is concerned about a change in the city's image. Still, he remained hopeful Wednesday that tourists won't shun Manitou, or that a different group of people will at least arrive in the same numbers.

"I just read an article on pot tourism in the Wall Street Journal about two days ago," he said, "so maybe this could have a positive effect."

But news of marijuana's sales within the city already is hurting businesses, said Ryan Cole, executive director of the Pikes Peak Country Attractions Association. He said he has received several calls from people unhappy with the news, including a Texas couple who said they would no longer visit Manitou Springs after nearly 33 years of vacationing in the city.

Cole said it doesn't matter that recreational pot sales won't be allowed in downtown Manitou. It's not where the drug is sold within the city that will hurt tourist traffic, he said; it's that the drug is being sold in Manitou, period.

"Where they put the shops does not matter," Cole said. "Someone in another state does not know the size of the city, or where the shops are. All they hear is Manitou Springs, and we are done."

While others await the final outcome, Haas is taking action. Haas, who owns the Manitou Outpost, Mountain High Sportwear, Mountain High Gallery and Gifts and Five, has organized a group that will begin collecting signatures to add an item to the November ballot to stop the sale of marijuana within the city.

"I think a lot of damage has already been done," he said.

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Contact Ned Hunter: 636-0275

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