Colorado Springs News, Sports & Business

Colorado Springs to seek $82 million in state rebates for projects to attract tourists

By Monica Mendoza Published: June 29, 2013 0

A plan to transform an abandoned swath of southwest downtown Colorado Springs into a bustling hub to attract a million new visitors a year will be presented to the state next month in hopes of winning millions in state tax rebates.

The plan includes building a multiuse stadium that would be home to the Sky Sox baseball team and a U.S. Olympic museum in an industrial area near America the Beautiful Park. It also calls for an Air Force Academy visitors center outside the base gates and a university sports medicine and performance center on North Nevada Avenue as part of a larger health and wellness village.

Colorado Springs is going after $82 million in state sales tax dollars to build the four projects that city leaders believe would transform the city and have a profound effect on development, Mayor Steve Bach said.

The plan is dubbed the "City of Champions" and is based on the idea that Colorado Springs has a history as a health destination, including being a training ground for military personnel and athletes.

"I don't think it is an overstatement to say this is a watershed moment in the history of our region," Bach said. "We could have an indelible impact maybe for 100 years or more."

The city is applying to the state's Regional Tourism Act program, which was created as a way for local governments to get sales tax rebates on projects that bring in tourists. The projects must be "unique and extraordinary" and attract out-of-state visitors, said Kathy Green, director of communication and marketing for the Colorado Office of Economic Development and International Trade, which oversees the program.

Colorado Springs officials believe its projects would bring in 400,000 out-of-state visitors a year who would spend $6.7 million in the local economy, with the other 600,000 coming from Colorado.

If the city wins approval, it would expect to have all four projects completed by the summer of 2016 and permanently employ more than 750 people, according to its application, which will be filed with the state by the July 8 deadline.

All told, the projects would cost about $218 million and the city would use a combination of public and private funding to pay for them. The city's application seeks about 38 percent of the total from state sales tax rebates; 28 percent to be raised in private money; and 34 percent to be raised from public sector money.

The details of the public funding would be hashed out if the city wins approval from the state, said Bob Cope, the city's principal analyst in the Economic Development Division.

Last year, the first year of state funding, six cities or counties applied, including Douglas County, where officials wanted to build an archaeological museum. The state awarded $81.4 million in state sales tax rebates over 30 years to Aurora, where developers have plans for a 1,500-room hotel, previously known as the Gaylord Rockies project and now operated by Marriott International. Under the state sales tax incentive program, Aurora would receive 65.8 percent of the new sales taxes generated, which is estimated to be $2.7 million annually.

Pueblo also was approved to receive $14 million in sales tax rebates over 30 years for its Professional Bull Riding University and river walk and convention center project. The city would receive 24.7 percent of the new sales taxes generated, which is estimated to be $493,000 annually.

The percentage of sales tax rebates to the cities is based on how successful the state thinks the projects will be. If the state sales tax does not grow according to the city's projections, then it does not receive the money, said Jason Dunn, attorney with Brownstein Hyatt Farber Schreck, who worked on the winning Pueblo application and was hired by Colorado Springs to work on its application.

"Colorado Springs took great care to ensure that the financial analysis is genuine and honest - there is no point in inflating the numbers because the money will not occur and the projects will not get built," Dunn said.

State officials expect only a handful of applications this year and will choose two proposals, Green said. The projects must go through a rigorous financial analysis by an outside consultant and be scrutinized by state finance officials.

Colorado Springs city officials and civic leaders have been quietly working on the application for six months. The city spent $75,000 to hire two consulting firms, and the Downtown Development Authority put up $75,000 to pay for consultants. The proposal also has gained support from El Pomar Foundation, the Convention and Visitors Bureau, UCCS and the Anschutz Family Foundation.

Since the early 1990s, city leaders have looked to the southwest corner of downtown, which is mostly industrial, as a place that could become a hub of entertainment and urban life. In 1998, voters approved an $11 million bond issue for the 30-acre America the Beautiful Park.

Then in 2000, the Colorado Springs Urban Renewal Authority established the Southwest Urban Renewal Plan with the goal of revitalizing 100 acres, bounded by Interstate 25 on the west, Bijou Street to the north, and from the rail lines east to Cascade Avenue.

But nothing took off.

"Some of it has been the economy," Bach said. "We went into survival mode and it takes your eye off the ball in terms of long-term projects."

Now, Bach believes a downtown multiuse stadium and an Olympic museum would be the catalyst to drive other downtown economic development, including housing and retail stores. Up north, moving the Air Force Academy visitors' center outside the base gates and closer to I-25 could double the number of visitors from 440,000 to 800,000 a year, according to projections. At the university, a sports medicine and performance center would be part of a UCCS health and wellness village, which is part of its master plan. City officials project the center would attract about 25,000 visitors a year, with about 7,500 being from out of state.

The state is looking for big ideas, Cope said. He believes the city's application delivers on unique and extraordinary projects.

"I couldn't be more optimistic," he said.

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