Modifying Colorado Springs' annexation agreement for the Banning Lewis Ranch property might generate $49 million in net revenue for the city while adding billions to its economy, according to a study from an economic consulting firm.
City staff and two members of TischlerBise Inc., a national firm, told the City Council on Monday afternoon that changing the agreement for the mostly dormant property on the city's northeast side could allow for the development of tens of thousands of new homes and create even more jobs.
With some exceptions, the property has remained undeveloped since 1988 when the property was annexed into the city, said Bob Cope, city economic development manager. The annexation agreement itself has acted as a deterrent to development, he said, which is leapfrogging the area.
In short, those who own property at the ranch - outlined by Woodmen, Marksheffel and Meridian roads and Fontaine Boulevard - must either build city infrastructure, or pay the city in lieu of that work, in order to develop their land, Cope said. The current pay structure, which includes different and cumbersome fees, deters property owners from developing the ranch, he said.
Changes to the annexation agreement would lesson that financial burden, encouraging more development for the area, Cope said.
The existing costs noted in the agreement vary from property to property, Cope said. Any changes to the document would align them with city code and development costs elsewhere in the city.
If the ranch is developed, Carson Bise and Julie Herlands, of Tischler Bise, said that over the next 30 years the city might rake in $49 million in net revenue and add $41 billion to the city's economy over the same time. In addition, Colorado Springs Utilities would see approximately $434 million in additional net revenue.
The city's potential net revenue would consist mostly of sales tax, brought in from new businesses, Cope said. The incoming revenue would start slow, essentially at a "break even" point for the city over the first decade, but it might ultimately average about $1.6 million a year over the 30-year span.
This process would ensure that the "development pays for itself," Cope said.
With the new development would come an anticipated 24,000 homes for about 62,000 residents, Bise said. Those numbers do not include homes already built on the property.
The roughly 24,000-acre ranch has gone through several owners since it was annexed. The largest single property owner at the ranch today is the Nor'wood Development Group, which owns about 18,000 undeveloped acres. The company bought the property in 2014 from Houston-based Ultra Petroleum, which had sought to drill for oil and gas there.
Ultra Petroleum previously challenged the annexation agreement in court and that legal battle against the city was adopted by Nor'wood after it bought the land. In August, 2015, a federal judge upheld the agreement, saying Colorado Springs is allowed to pass on development costs for streets, roads, utilities, parks and police and fire stations to developers rather than sticking taxpayers with the costs. A 2007 study and fee schedule for property owners estimated the cost of that work would amount to nearly $1.1 billion.
Asked why the city is now willing to alter the agreement, Cope deferred to City Attorney Wynetta Massey, who could not immediately be reached for comment Monday evening.
Aside from Nor'wood, there are several families and companies that own property at the ranch. Denver-based Oakwood Homes owns a 2,600-acre section which is divided into six pieces, dubbed Village 1-6, which are slated for homes, parks, trails and schools.
Village 1 is nearly complete, Village 2 is about half-finished and last month the council approved rezoning Village 3 so more than 1,000 homes can be built there.
Several council members chided Cope on Monday because their first glance at the study took place during the presentation and they wanted more time to absorb the information.
Council President Pro Tem Jill Gaebler and Councilman Andy Pico, whose districts include much of the ranch, could not immediately be reached for comment. In the past, they have supported changing the agreement to spur development.
Councilman Bill Murray said no changes should be approved until more information is available.
Cope said Monday's presentation was purely informational but the council might vote on whether to change the agreement in early 2018.