Colorado Springs News, Sports & Business

Gazette Premium Content Colorado Springs, other cities work on financing projects

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By Megan Schrader Updated: August 10, 2014 at 8:32 am

The three cities that won state sales tax incentives for quasi-public projects since lawmakers created the Regional Tourism Act in 2009 are still working on financing so construction can get underway.

The Regional Tourism Act is set to expire next year, and the city of Denver is expected to be among the final applicants seeking state funds. Denver officials say they would use the money to renovate the National Western Stock Show facilities.

Under the law, the state's Economic Development Commission can award a portion of future state sales tax revenue to projects that are "unique in nature" and "anticipated to contribute significantly to economic development and tourism in the state."

Aurora was awarded an estimated $81.5 million over 30 years in 2012 for the Gaylord Rockies hotel and conference center.

Pueblo received money in 2012 to expand its downtown convention center and create a training center for professional bull riders.

Colorado Springs landed $120.5 million in 2013 for the City for Champions project that includes a visitor center at the Air Force Academy, a University of Colorado at Colorado Springs sports medicine complex, a downtown Olympic museum and an adjacent sports arena.

All three projects that have been granted RTA dollars have five years from the date the money was awarded to break ground.

Aurora awarded the developer of the proposed Gaylord Rockies hotel and conference center an estimated $300 million in tax incentives over 33 years in a complex incentive agreement to help finance the project.

Depending on who ultimately finances the conference center, it could either be owned by the developer or by the city. Aspects of those incentives are being challenged in court.

John Batey, executive director of the Pueblo Urban Renewal Authority, told the state's Economic Development Commission this month that the city is still looking for a way to finance the $14.4 million needed to expand its convention center.

Colorado Springs and El Paso County officials will decide how to finance one piece of City for Champions - a downtown stadium.

"Cities all over the country are really competing to make themselves attractive to not only the residents, but also to tourists and businesses," said Bob Cope, principal analyst for Colorado Springs' economic vitality division. "In order to do that, communities have to invest in themselves."

Cope said a decision on financing and ownership of the stadium project is a long way away, and before the city gets to that point, a community conversation will involve taxpayers and stakeholders.

One plan floated to finance the stadium project - a city and county partnership to establish a taxing district across much of the city to dedicate some of the increased tax revenue to the development - has never been done in the state, Cope said.

A document submitted in December as part of the Regional Tourism Act application estimated a new taxing district could generate $49.3 million for the project. In addition to a large taxing district to help pay for the project, the document indicated the city will try to renew an existing urban renewal district over the proposed site of the sports arena in southwest downtown that could generate an additional $46.8 million in sales and property taxes over 30 years for the project.

Tax increment financing - the tool used in the Regional Tourism Act - dedicates the future increase in tax revenue attributable to a new development to pay for construction costs over time.

"This would be the first time that this type of a TIF was established, so we would have to work with the City Attorney's Office to set it up in the appropriate manner," Cope said.

In Pueblo, Batey said the urban renewal authority tried to get the city to loan the project money interest-free from a half-cent sales tax. That would save the project money over time, as it wouldn't have to pay interest on a traditional bond.

Batey said the City Council, on the advice of the city attorney, turned down that proposal.

"The project didn't fit within the parameters of the ordinance," Batey said to the state's Economic Development Commission. "It's just the city being somewhat conservative. This is taxpayer money."

There's likely to be a similar struggle in Colorado Springs when it comes to using tax increment financing from an unprecedented tax district to fund the arena.

Colorado Springs City Councilman Don Knight said he wants a vote of the people before taxpayer dollars are spent on a downtown arena. Other council members agree and have signed a letter to that effect.

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Contact Megan Schrader:
719-636-0644

Twitter @CapitolSchrader

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