January 28, 2014 Updated: January 28, 2014 at 9:33 am
Colorado Springs City Council members received their first detailed look at City for Champions during a three-hour meeting Monday that was dominated by questions about an advisory board being created to oversee the $250 million tourism initiative and its financing plan.
Billed as a fact-finding exercise for council members, the meeting showcased a split within council's ranks: Some of its nine members said City for Champions held the potential to be an economic boon for the region, while others speculated about the fallout if the proposal were to fall short of backers' financial projections.
"All I hear are questions about why this probably won't work," Councilwoman Jan Martin said. "What I would ask my fellow council members is to help us find solutions. If what they hear isn't what they think might work, then offer some solutions rather than just questioning what they've heard so far."
City Council President Keith King, however, said he was concerned about the proposal's economic projections and whether a financing plan would inflate borrowing costs. City for Champions could be "potentially very good," he said, but also "potentially very risky."
By the time the meeting ended, King and councilmen Joel Miller, Don Knight and Andy Pico said a public vote on the project might be warranted. A ballot measure might ask voters to approve a general obligation bond issue as a funding vehicle, while Miller said a bigger-picture question might be needed to ask voters if the city should go forward at all.
"I just don't think it should be undertaken without the people being involved," Miller said.
At issue are four tourism projects that make up City for Champions - a downtown Olympic museum, a downtown sports and events center composed of a 10,000-seat stadium and 3,000-seat arena, a new Air Force Academy visitors center and a sports medicine and performance center at the University of Colorado at Colorado Springs. A 1,500-space parking garage and pedestrian bridge, among other downtown improvements, also are part of the $250 million cost.
Last summer, Colorado Springs Mayor Steve Bach submitted an application to Colorado's Office of Economic Development and International Trade seeking funding under the state's Regional Tourism Act. The law makes state sales tax revenue available for communities that show their projects would attract new, out-of-state visitors who'd pump money into Colorado's economy.
In December, the Colorado Economic Development Commission awarded an estimated $120.5 million in state sales tax revenue over 30 years to help finance the projects; the rest of the money must be raised from private and public sources.
On Monday, UCCS Chancellor Pam Shockley-Zalabak said the sports medicine and performance center would attract athletes and tourists from around the nation and has generated strong interest on the part of health care professionals who want to lease space there, she said.
"If the building were completed," Shockley-Zalabak said, "I could more than fill it tomorrow."
Former Colorado College president and Ohio governor Dick Celeste, who's spearheading an effort to build a downtown Olympic museum, said the facility would cement the city's ties to the U.S. Olympic Committee that's been based in the Springs since 1978.
The Colorado Sports and Events Center, meanwhile, would become home to Olympic-style events, said Bob Cope of the city's Economic Vitality Division. The city is home to about two dozen amateur sports groups known as national governing bodies.
A key next step for City for Champions is creation of an advisory board that supporters have said would oversee development of the projects. Bach has suggested that he, King and El Paso County Commission Chairman Dennis Hisey co-chair the board, which would include representatives from each of the projects plus community members. That panel, council members were told Monday, could be 11 to 15 members.
But Miller said the City Charter requires the council to appoint boards and commissions, while King wondered about the scope of the board's work and Knight questioned if the board would usurp the council's responsibility to enter into intergovernmental agreements that are envisioned as part of the City for Champions financing plan.
Council members directed the City Attorney's Office to craft a legal opinion on whether it's the council's job to appoint the board, the scope of its work and how its bylaws would be structured. No deadline was given for the opinion.
Cope, meanwhile, explained the $120 million in state sales tax revenue over 30 years would support $47.5 million in bonds that would help fund the projects and downtown improvements. Another $125 million in sales tax revenue from new out-of-state visitors would be captured by the city and county and used to support bonds totaling another $49.3 million; that money would be earmarked for the sports and events center.
But some council members questioned what happens if attendance and revenue forecasts don't pan out. Cope said investors would assume the risk of buying bonds and future revenues generated by new visitors would pay off the debt. Economist Tom Binnings, who's worked for City for Champions, said the projects would be fully vetted by bond underwriters.
Miller, however, said the responsibility of determining the projects' viability shouldn't be passed off to investors, while King and others said they wanted a bond payment schedule showing how the debt would be repaid.
King also said using general obligation bonds instead of revenue bonds supported by sales-tax-paying new visitors would carry a lower interest rate and save tens of millions of dollars in interest payments. Under the state's constitution, a general obligation bond issue would require voter approval.
Cope said the financial plan that was part of the application is preliminary. "This plan will evolve," he said.
Contact Rich Laden: 636-0228