Colorado Springs was the only city to apply for a state sales tax rebate award, but that does not guarantee the city win the award, or that the tax rebates would be enough to pay for project funding.
The city submitted an application Monday for a Regional Tourism Act tax rebates that would allow the city to create a type of Tax Increment Financing district to support four proposed projects.
Those projects include: a new downtown multiuse stadium that would be the home of Sky Sox baseball team; a U.S. Olympic museum near America the Beautiful Park; an Air Force Academy visitors center, and a university sports medicine and performance center on North Nevada Avenue, as part of a larger health and wellness village.
A proposal submitted by the city estimates that the creation of the four projects would generate $82 million in new sales tax revenues from additional tourist dollars. The sale tax rebates to the city would not come from existing, or reoccurring, state funds. Instead, the money would be returned to Colorado Springs as a percentage of only new sales tax revenues specifically generated by the four new projects, said Jeff Kraft, director of Business Funding and Incentives for the Office of Economic Development and International Trade for the state.
For example: if the state approves the tax rebate at a rate of 20 percent, and the sales tax generated from tourist attractions within the city now totals $100 million, and the four new attractions increase tourist revenue to $150 million, the city would receive 20 percent of the additional $50 million in revenue, Kraft said.
"And, yes," he said, "if enough tourists don't come to make up the projected contribution, then the funding for the projects must come from other sources."
"Other sources" means Colorado Springs taxpayers.
The fact that the city was the only applicant for the award does not mean it will win state approval to create the districts, said Cathy Green, communications director for the office of Economic Development and International Trade. The city's application must be reviewed by the by the state and a third party to assess its feasibility, Green said.
Springs officials have said taken together, the four projects would cost about $218 million. Those officials also have estimated the four projects would bring in 400,000 out-of-state visitors a year who would spend a combined $6.7 million.
But if state officials and the third-party project assessor believe the city's new projects will reduce tourist spending at any other in-state attractions, such as the Royal Gorge, then the percentage of the rebate to the city would be reduced, Kraft said.
City officials estimate that about 38 percent of the total cost to construct all four projects would come from state tax rebates, if awarded to the city. That amount could be less, depending on the percent of the rebate awarded to the city, the number of tourists brought in and other economic factors.
The city's application was made to the state's Regional Tourism Act program, which was created to give local governments sales tax rebates to create tourist-friendly projects.
The projects submitted must be "unique and extraordinary" and attract out-of-state visitors to qualify for the sales tax money. This is the second year cities have been able to apply for the rebates.