Two Aurora residents filed suit against that city and its urban renewal authority Tuesday, alleging they skirted the state's Taxpayer's Bill of Rights when they approved tax subsidies to fund a proposed $824 million, 1,500-room hotel and conference center.
It's the second suit seeking to block the Aurora project, which, like Colorado Springs' City for Champions proposal, is receiving state tax dollars as a key funding source.
In September, seven Denver-area hotels and The Broadmoor sued Aurora, the state Office of Economic Development and International Trade and the Colorado Economic Development Commission. That suit alleged Aurora's application for state Regional Tourism Act dollars was faulty. The commission awarded Aurora $81.4 million in tourism funds in early 2012 for the project.
Colorado Springs, meanwhile, is slated to receive Regional Tourism Act funds that could total $120.5 million over 30 years. The state commission approved funding for City for Champions in December.
At issue in Aurora is a hotel planned near Denver International Airport that would be the state's largest and include 400,000 square feet of meeting space.
Tuesday's lawsuit, filed in 17th Judicial Court in Adams County, was brought by Aurora residents David Bishop, a former board member of Denver's Regional Transportation District, and Regina Thomson, president of the Colorado Tea Party Patriots.
They allege $800 million in tax subsidies over 30 years pledged by Aurora in 2011 are "invalid, illegal and unconstitutional" because they were approved without a public vote - a TABOR violation.
Their suit says Aurora engaged in an "unlawful scheme" in which the landowner of the hotel site appointed a representative to cast the sole vote to raise Aurora's sales and lodging taxes on its property. The suit says the public wasn't allowed to weigh in on the enhanced taxing district.
"It was a vote of one for an increase in taxes," Thomson said Tuesday. "In my mind, that violates not only the spirit, but the law of TABOR, that the taxpayers en masse have the opportunity to vote on taxes."
The suit also contends the undeveloped land for the hotel was designated as an urban renewal site, despite a 2010 change in state law that sought to prevent such designations of agricultural land unless new development on the property would create manufacturing jobs.
Aurora Councilwoman Sally Mounier said the project was approved after a "lengthy public process and ample opportunity to voice concern." The suit, she said, could block "creation of thousands of jobs for Coloradans and $273 million of new annual economic impact to the state."
She also said Bishop and Thomson were backed by the Aurora hotel opponents. Bishop and Thomson acknowledged this, and one of their attorneys, Shawn Mitchell, said two taxpayer groups were behind the legal effort. He didn't have the names immediately available.
Locally, the $250.6 million City for Champions proposal includes a downtown Olympic museum and sports and event center, an Air Force Academy visitors center and a sports medicine center at the University of Colorado at Colorado Springs.
The proposal's preliminary financing plan doesn't call for tax hikes, setting it apart from the Aurora project. But it does propose using future local sales tax revenue generated by tourists who come to the Springs to visit the new venues.
"It would not surprise me if they (Springs residents) watch this lawsuit to see what the implications might be," Thomson said.