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TAXES SKYROCKET - BUSINESSES CLOSE
learn how the Media, the Olympics and BIG business
work in partnership towards a common goal I'll walk you through a series
of seemingly disparate, but connected issues and events ...
I had another opportunity to hear Brian Krieger speak
(he's the GM of the 2010 Commerce Centre & pictured at the left).
This time around he addressed members and guests of the Environmental
Managers Association of BC at the Fairmont Hotel May 26, 2005. It
was low-key and thankfully without the Olympic boosterism video to kick
off his talk.
At the end of his session Krieger invited questions from the floor so
I asked him what Olympic organizations were doing to ensure we would not
experience the same environmental debacles as Salt Lake City. (i.e. 11th
hour clear-cutting of forest to create temporary parking lots in order
to compensate for a failure to provide busses to transport sport fans
from Salt Lake City over the Wasatch Mountains to Olympic venues.) In
case you haven't heard, instead of bussing spectators as first planned,
thousands of fans at the last minute and in the middle of winter drove
personal and rental cars on less-than-adequate twisting turning highways
that soon became riddled with pot holes. It's difficult to get exact numbers,
but it's been reported that environmental budgets in Utah were chopped
from 5 million to 1.5 million in order to channel money to Olympic venues
Krieger started his response to my question with the old, "That's a good
question" stall, and in a laboured cordial tone went on to say he didn't
know what the specific plans were regarding the Sea to Sky and private
vehicles. I'm surprised he doesn't know because it's described in detail
in the 2010 Bid. He ended with a disclaimer that it wasn't his job to
know, and that VANOC directors would have more information in this regard.
You might think it was a fair enough answer, but when you consider that
environmental management is an integral part of planning for the Olympics
and that many of the companies involved are small and midsize, Krieger's
answer was inadequate. He should at least offer a viable comment before
tossing out a disclaimer. If I wanted a political tap dance I could have
asked Paul Martin, or Stephen what's-his-name.
I learned later from EMA members who hold executive and engineering positions
in waste management that they are not being engaged in the manner they
expected by Olympic organizations to do preliminary environmental impact
studies of Olympic venues. Two executives from competing companies concurred
that they were not aware of independent RFPs regarding environmental studies
for Olympic venues that are about to start construction. Something is
wrong here. Either, a) these guys are mistaken or out of the loop (which
I doubt), b) the work is being channeled through unconventional methods,
or c) the work isn't being managed properly from square one. I'll try
to have more regarding this issue later. Stay tuned. Maybe my big cousins
with big budgets in mainstream media can scope this out for us and offer
a d) ?!?
Past Krieger presentations, and this one was no exception, allude to how
the 2010 Commerce Centre will illuminate opportunities for a variety of
businesses in the region, so I followed up with a second question regarding
whether or not the Sea to Sky would be closed during the Games, and he
"very reluctantly, half-agreed that it probably was the plan", but again
stated it was a question better answered by VANOC. However, he did say
the opportunities for companies in cities like Squamish were more related
to products and services needed in the "ramp up to the Games" and smiled
as he finally admitted that merchants in the area would be disappointed
if they mistakenly believed tens of thousands of tourists would be stopping
in to browse. Wow, I wonder where they got that idea Mr. Krieger? He must
have read my newsletter last month because he explained almost word for
word my description of what the real opportunities are for businesses
on the Sea to Sky corridor, which by-the-way was quite a bit different
than what he spoke of at the Squamish Chamber in April.
Something else I find very interesting is Krieger's anecdotally styled
request for everyone in BC to become more MEDIA SAVVY and that business
owners and their employees should be prepared to offer positive stories
to "unaccredited media" who will soon be in our midst -- and to use his
intonation, preying on us for deep dark secrets that will make us look
less-than-Olympic caliber. It struck me that Krieger and Olympic organizations
should not simply be warning SMBs (small and midsize businesses) to get
up to media speed, instead they should be OFFERING FREE TRAINING, and
in fact go a step further to ENTICE business operators to make sure they
learn how to deal with media. They should teach by example, not lecture,
and they should do it today. It's not easy to learn how to deal professionally
with the media.
Krieger is absolutely right to warn SMBs that they had better learn basic
media skills and become more globally attuned, and that the Olympic microscope
is upon us which means international journalists are already pricking
their antennae looking for stories that will embarrass BC and Canada.
For proof all you have to do is recall what happened in Utah when the
bribery scandal broke a few years before their Games. Contrary to what
the uninformed might think, SLC never recovered. To make matters worse,
once media latched on to a wounded animal they started to uncover all
kinds of stories from the street including reports from business owners
who were going bankrupt and that the Olympics was the worst thing that
ever happened to their small and midsize companies. Once these stories
started to surface media had a field day.
There were even reports from out-of-town bus, taxi and limo drivers hired
by the Olympics who refused to ferry around media because they were scared
to be ridiculed on the front-page of newspapers or on worldwide TV broadcasts
because they got lost in a strange town. Getting lost seems unimportant
until you realize that drivers are transporting not only hundreds of thousands
of fans, but also thousands of Olympic officials and athletes who really
cannot afford to be late. You probably also don't realize that Vancouver
/ Whistler will have to hire drivers from all over the country and even
the world during the Games - same goes for catering, cleaning, security
workers, etc. -- we don't have enough here. And if you think that international
unaccredited media are tough on drivers, just wait until they glom on
to Vancouver's East Side nightmare or our penchant for smoking pot or
that a sizable proportion of our population is growing increasingly more
house and tax-poor every day. Once these stories start to circulate attracting
capital investment to our province will slide over a cliff into the Burrard
If you cringe when someone refers to you as a Lotus Eater, Granola Muncher
or Wild West Space Cowboy, you ain't heard nothin' yet. If instead you
want to be regarded as business-sophisticated and worldly, my advice is
to take Krieger's advice. Regardless of his delivery -- he is right.
It takes time and professional training to become media savvy. But if
Krieger and Olympic organizations are really worried about what inexperienced
business operators will say to media they should take responsibility for
educating the business community. You can't force businesses to do it.
They need incentive. Krieger's anemic scare tactics won't light a fire
because most businesses simply don't get it. How could they, especially
when Olympic organizations and "sponsor-newspapers-in-waiting"
sugarcoat the spectacle?
If you don't understand the "sugarcoat" reference take a look at the Vancouver
Sun's Saturday June 11 edition. It's a good example of media working in
partnership with Olympic organizations to lead residents to believe that
everything is OK in Lotus Land. On the front page, headlines scream "Homeowners
are B.C.'s new millionaires." The article explains that house prices have
shot up so dramatically since 2003 that the number of million dollar homes
has jumped by a whopping 111.3%. They boastfully report that in 2003 there
were 5,776 single-family homes worth $1 million, and now there are more
than 12,205 homes worth $1 million. BTW, all-time real estate sales volume
records were broken the month after the Olympic bid was won.
The headline leads readers to believe that artificially inflated house
prices are a good thing, but what they don't say is that this spike in
real estate is driven by Olympic frenzy and is totally predictable. It
may not be the only reason for rising prices, but it is exactly what happens
in most Olympic regions. I've been cautioning SMBs about this since 2003
-- Sydney Australia is a perfect, well-documented case and so is Salt
Lake City. When you put Olympic frenzy in proper perspective, the overall
impact of artificially inflated property values is easier to appreciate.
The resulting tax-hike is a financial nightmare for businesses, homeowners
and renters. (Look soon too for rental prices to skyrocket -- more on
this in future issues.) The Sun fails to adequately alert readers that
once the frenzy dies down house prices level off and in some cases drop
-- while taxes remain high and landlords hold everyone hostage. The only
people maintaining millionaire status are the few who sell today, plus
of course real estate companies, developers, and bankers. They are making
a killing -- all of them by the way invest heavily in newspaper advertising.
Somehow those salient points slipped by the Sun's reportage.
On the front page of the same edition in the "C" section the Sun once
again screams in HUGE bold headlines, "THESE HOUSES ARE WORTH MORE THAN
$1,000,000 AND THERE ARE 12,200 MORE LIKE THEM IN B.C. (their upper case
type face, not mine). This second two and a half full pages article goes
on to describe once again how fortunate B.C. residents are to be experiencing
such a windfall. It is equated to winning the lottery and coincidentally
is very similar in tone to how the same style of "windfall" was reported
in the Olympic sponsored Sydney Herald in the years preceding the 2000
Summer Games. It's not new or surprising news to anyone who has done a
bit of research regarding real estate trends in pre-Olympic regions. Would
it kill the Sun to tell us upfront that this happens in other Olympic
regions and that it is not necessarily a good thing for the community
Interestingly, buried on page 3 of the Sun in section "C" at the bottom
of the page is a short story of homeowners who are fearful because their
new "windfall" will raise taxes so high that they have no choice but to
sell homes they have lived in for dozens of years. Even more interesting,
the Sun chose to use as examples homeowners from swank Point Grey. The
average house-poor person in the GVRD could care less about what the wellheeled
are experiencing, and this slick maneuver by the Sun dances around the
fact that all property taxes will eventually match new assessments. If
the Sun wanted to report a fair and balanced story they should have included
the following headline on the front page along with the misleading spin
they foisted upon unsuspecting readers. OLYMPIC FRENZY WINDFALL DRIVES
UP TAXES - HOMEOWNERS WHO CAN'T PAY WILL LOSE HOMES!
I can't emphasize this more -- if you buy into the Sun's front-page assault
you will put yourself at a disadvantage. Don't say you weren't warned
when your company flounders because you can't afford taxes or the rent
increases in lock step with property values. It happens in all Olympic
regions and it's happening here too. North Vancouver SMBs are already
experiencing tax increases of over 40%, but the Sun is doing a good job
of emphasizing only one side of the story. (NEWS
UPDATE: Finally, 6 days after the MILLION DOLLAR HOMES hype-fest the Sun
ran an article about North Van businesses being subjected to 40%+ tax
increases) If you think this is odd, read my article about Media,
John Furlong and the new 2010 logo Ilanaaq the Inukshuk (You can also
find the link in the left column at the top of the page -- Media
Panders to Furlong). Relationships between newspapers, Olympic organizations
and the public are more complex than you imagine.
It's no secret that BC is insular. In fact most residents pride themselves
on being gloriously wedged between the mountains and the ocean, and cutoff
from the rest of the world. If you want to leverage Olympic momentum this
attitude has to change. Ironically, Krieger's admonishment of being media-challenged
amounts to little more than a threat when you consider that Olympic organizations
got us into this mess in the first place. He shouldn't be criticizing,
he should be helping. Brian Krieger should be offering free media training
by dangling a carrot for small and midsize businesses that will provide
owners with skills to raise the visibility of their companies and help
grow their business, while at the same time improving their media skills
relative to the Olympics. If SMBs had access to a media trainer with
international experience everyone would win. Unfortunately the more you
learn about Olympic organizations the more you will realize that when
it comes to small and midsize businesses, win/win isn't in the Olympic
If you doubt it all you have to do is look at the Olympia restaurant on
Denman St. Instead of exploring a mutually agreeable resolution with the
small pizza and souvlaki restaurant, true to form, the COC and VANOC hit
them hard right out of the gate with threatening letters from corporate
lawyers. Surprisingly though, this feisty little business stood it's ground
and is tenuously holding the big Olympic machine at bay. Is this win/win?
Could the Olympic organization have engineered a more tasteful solution
for everyone, including the reputation of our region? Personally and professionally
-- I'm behind the Olympia. I hope they make a statement for businesses
in every Olympic region around the world. You might also find it interesting
to know that the Vancouver Sun is the only large local mainstream media
company that has not given equal time to the Olympia restaurant's side
of the story, coincidence - highly unlikely.
Some smart companies take it upon themselves to become more globally attuned
because they realize the Olympics offers an incredible opportunity to
grow their businesses -- it will be the least work they ever do for the
most gain. We've done extensive research and know that a frighteningly
high percentage of business operators in some vertical sectors in BC mistakenly
feel they have absolutely nothing to gain regarding the Olympics. Even
worse though, they don't realize they have so much to loose.
The Olympics is coming whether you like it or not. If you think you can
simply burying your head in the sand or play dodge ball you're mistaken.
Journalists will search you and your industry out, and either help you
or hurt you. The choice is yours.
Are you really that averse to being featured on a television broadcast
or radio show, or having a complimentary quote on the cover of the New
York Times, or the Guangzhou Daily (Beijing's largest newspaper), or maybe
the Globe and Mail? Unless you speak the language and make an effort you
could be quoted all right, but not in the manner you envision.
Learn to speak media, and most importantly learn to trust that media will
do the right thing if you converse with them professionally. Media is
a business, and they have an agenda. It's your job to align yourself with
the agenda that complements you. The more you know about how media works,
the better you will be able to position your company. A little knowledge
goes a long way.
to improve your media skills . . . click
SEA TO SKY CORRIDOR FOLLOW-UP
I explored above, and also in a previous issue (Brian
Krieger 2010 Commerce) the twists, turns and surprises lying in wait
for businesses in the Sea to Sky Corridor. Your responses were interesting.
Most business operators had no idea how complicated their lives would
become as the Olympics approached. They also didn't have a clue it costs
more to operate a business in an Olympic region.
Some were also surprised to learn that plans to close the Sea to Sky during
the Olympics to everyone but local residents, official Olympic vehicles
and spectator-busses have been on the books from day one.
Your responses truly underscore how much SMBs really don't know.
A number of documents exist regarding plans for the Sea to Sky, and if
you would like to see for yourself there are "official" documents hosted
online by Olympic organizations. I included a link below. You can find
the "Closing Highway" article on page 13 in the right column, second paragraph.
It's one of many examples. You can also go to the VANOC site and search
for documentation that will corroborate our reports.
In case you don't have Acrobat on your computer I copied the segment from
page 13 of the Olympic.org document, it reads verbatim -
"During the Games, the Sea to Sky Highway will be closed to all traffic
except 1) residents of communities along the highway, 2) controlled off-peak
hour delivery and commercial vehicles, 3) Olympic Family vehicles, and
4) dedicated spectator buses."
is the PDF link.
You will need Acrobat to read it.
If you qualify, VANOC plans to issue special stickers for your vehicles
so you can get through anti-terrorist security checkpoints -- similar
to what Olympic organizations proposed in Salt Lake City in 2002. Utah
also planned to close highways through the Wasatch Mountains to private
vehicles, but the SLC Olympic organizing committee dropped the ball and
ended up causing substantial environmental damage. At the last minute
they had to clear cut Wasatch Mountain forest to provide parking space.
It was a debacle for residents and small businesses alike when Olympic
organizations couldn't lease enough busses to follow through with their
plans. Yes it sounds silly and improbable, but the 2002 Games were so
woefully mismanaged that when Olympic organizations couldn't contract
enough busses to support their transportation plans they panicked and
scrapped plans midstream.
As we've maintained from the beginning, if you want to leverage Olympic
momentum you have to start now and develop ways to capitalize on the increased
attention being directed at the region leading up to the Games over the
next five years. Because rest assured, if you don't search it out, it's
not going to find you. Also, don't trust anyone, especially the government
or Olympic organizations to deliver anything promised.
Make sure you also read the MEDIA BOOGYMEN article above to see how Krieger
responded when I asked him directly whether the Sea to Sky would be open
to the general public during the Games.
* We invested over three years and a six-figure budget researching
Olympic organization relationships with sponsors, contractors, suppliers,
partners, etc. The results surprised us too -- mouseover below
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Olympic organizations are
BIG BUSINESS MACHINES that attract corporations like Kodak,
CocaCola, McDonald's, Wal*Mart, etc. Consequently, VANOC (Vancouver
Organizing Committee) will be stretched thin trying to also develop ways
to assist small and midsize businesses leverage Olympic momentum. Surprisingly,
many people don't realize the event can also be lucrative for smaller
businesses including agriculture, manufacturers, entertainment, technology,
retail & obviously tourism, even when they don't have products
or services that appeal to Olympic fans or serve a direct Olympic need.
The information we share here is invaluable in helping
small and midsize businesses leverage Olympic momentum.
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