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Colorado Springs would face difficulty building parks at Banning Lewis Ranch without help from developers

January 28, 2018 Updated: January 28, 2018 at 10:51 pm
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Cattails grow in an open space with trails between neighborhoods of the Banning Lewis Ranch development Friday, Jan. 12, 2018, on the east side of Colorado Springs. Colo. (The Gazette, Christian Murdock)

Colorado Springs' cash-strapped Parks, Recreation and Cultural Services Department could be in even more difficult straits if it is required to provide parks for the 24,000-acre Banning Lewis Ranch - unless developers tackle most of the work.

The City Council is considering whether to change a 30-year-old annexation agreement for the ranch. That document has often been blamed for decadeslong stagnation on the sprawling landscape by those who say it is too financially onerous for developers. Revising the agreement could spur development and add billions to the city's economy over the next 30 years, says a 2017 study from TischlerBise Inc., a national economic firm.

Developers are only required to set land aside for parks under the current agreement and the proposed changes. They are not required to build or maintain them.

Some question whether such a requirement from the city can ensure a substantial amount of green space for the more than 60,000 people expected to someday move to the ranch. If that responsibility falls to the city, they say, there's not enough money to make it work.

"Knowing the dire financial straits the city's Parks Department is in, nothing is going to change," said Susan Davies, executive director of the Trails and Open Spaces Coalition. "Unless (developers) build in a mechanism to both build and maintain parks, (the city) just doesn't have the funds to do it."

Parks Director Karen Palus, however, insists that if developers elect not to build parks in the ranch, the city can get the work done. However, considering the department's $200 million backlog of unfunded projects, the work wouldn't be finished in the same time frame as TischlerBise's study allows for developers, she acknowledged.

Palus, along with other city leaders and developers, have expressed confidence that those building out the ranch will voluntarily add parks, trails and open space to their properties. Those outdoor amenities will make the property more attractive to potential buyers, they say.

At least one potential developer at the ranch - Danny Mientka - has proposed to pay the city fees rather than dedicate a full park land requirement. That choice could leave residents who move to the property, the 162-acre Reagan Ranch, with less than half the park land originally slated for the area.

But Mientka said his proposal isn't set in stone and is instead a mechanism to afford his potential development some flexibility for the future.

"If a resident is going to want a park, I don't know a developer in this community that wouldn't go through great lengths to incorporate parks, trails and open spaces," Mientka said. "It just goes hand in hand with quality developments."

How it works

Banning Lewis Ranch is split among about 40 owners, three of them owning the vast majority of the land. Much of the property has changed hands multiple times since the existing annexation agreement was struck in 1988.

That agreement ensures developers build whatever infrastructure the area needs or pay the city in lieu of the work. And because the ranch was so far from the city at the time - east of Marksheffel Road and stretching from Woodmen Road south to Colorado Springs Airport - city planners who wrote the agreement exceeded their normal protocols to ensure taxpayers wouldn't wind up funding new infrastructure.

Now that the city has expanded east to Banning Lewis Ranch's territory, reducing those financial requirements makes sense and could spur development there, says the TischlerBise study. Over the next three decades, growth could add 24,000 homes to the area and create tens of thousands of jobs.

That study expects developers to set aside 135 acres of park land for four, 25-acre community parks and seven, 5-acre neighborhood parks, according to the study.

Developers may pay fees or donate open space land in lieu of dedicating park land, Palus said.

That's where developer requirements end. But Palus, Mientka and Jeff Greene, the city's chief of staff, all say more will likely be done.

Developers often will establish metropolitan districts on their property in these situations, Greene said. The districts are granted taxing authority and use the revenue to build parks and maintain them on an ongoing basis.

But requiring developers to form those districts for that work would be treating them differently from developers in other areas annexed by the city, Greene said. In addition, some within the ranch own too little property to form a district.

Therein lies the potential problem, Davies said.

"We have no concerns that the bigger developers, they'll do it," she said. "Our worry is that the smaller developers might not be able to form the metro districts."

The backup plan

If developers pay fees in lieu of dedicating park land, that money is dedicated to the parks department, Palus said.

"Those fees in lieu give us the ability to buy land, build parks and develop them," she said.

But without land dedicated within the ranch, those parks would have to be built elsewhere, she said.

On the other hand, if developers do dedicate park land but choose not to build the parks, the city can fund some of the work with the revenue it expects to collect over the next three decades, said Bob Cope, the city's economic development manager.

In all, development at the ranch could generate about $451 million in revenue for the city, Cope said. Subtracting the $403 million in expenses expected for the area yields the city's anticipated $49 million net revenue. Those expenses include $58 million specifically set aside for parks, trails and open spaces in the area, he said.

That money could fund the construction of all four community parks and one-third of the neighborhood parks planned for the area, Cope said.

While Palus agrees with Cope that the city can fund the construction, she admits the city couldn't build the parks as fast as developers could.

The last park built by the city was the John Venezia Community Park in Briargate. That construction took more than a decade and cost about $13 million.

New park projects at the ranch would fall in line with the rest of the Parks Department's $200 million backlog, Palus said. That work would not jump to the top of the list, she said.

Moving forward, the Parks Department's budget remains well below pre-recession levels. Its 2018 budget sits at about $15 million, short of its $20 million budget a decade prior.

Because developers are well aware of the city's shortcomings, Mientka said most would likely build parks rather than leaving dedicated park land to lie fallow as the city struggles to catch up.

"To the extent that you can bring parks into the neighborhood sooner, there's a competitive advantage," he said.

All the same, Mientka said he opposes the notion of requiring such an action of developers.

"Not all property owners have enough land to make sense of developing a park," he said. "Every situation is unique."

For those developers who don't build parks, Palus said others go above and beyond because the green space is so important. Such was the case in developments at Wolf Ranch and Cordera, she said. And the Denver-based Oakwood Homes, which owns a 2,600-acre section of Banning Lewis Ranch has set up metropolitan districts to fund park construction, she said.

Asked if the remaining developers at the ranch might leave the city responsible for building all the area's new parks, Greene said, "It's not going to happen."

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