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Commission: Olympic museum or bust for Colorado Springs' City for Champions

August 14, 2014 Updated: August 15, 2014 at 7:26 am
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Without the Olympic museum the City for Champions project won't be a success, members on the Colorado Economic Development Commission said Thursday, when they proposed making 16 percent of state funding for the project contingent on completion of the museum.

"This was really sold to us as the Olympic museum," said Board member Frances Koncilja, a Denver trial attorney. "We gave you the opportunity for there to be these standalone projects, but none of this is really going to be successful without the Olympic museum."

In December the commission approved giving $120.5 million over 30 years in state income tax revenue to the City of Colorado Springs to facilitate development of four projects known collectively as City for Champions.

Monday the commission hashed out the final details of that award in a complex resolution that could get approved next month if all the parties can agree on a few minor sticking points - including whether the state should pick up the tab for a $100,000 "success bonus" pledged to the city's attorney on the project and whether the incentive should be capped at 30 years or stretch up to 50 years.

But the big question is how much money from the state incentive - the Regional Tourism Act - will be spent on each of the four projects.

Commissioners and Colorado Springs project manager Bob Cope agreed on allocations for three of the four projects.

The Olympic museum and hall of fame proposed for downtown Colorado Springs would receive 42 percent of the funding.

The adjacent Colorado Springs stadium and event center would receive 23 percent. A proposed sports medicine facility on the University of Colorado at Colorado Springs campus would get 14 percent.

At issue is how much, if anything, should be earmarked for the U.S. Air Force Academy visitors center.

Cope said the city would like to keep with the original proposal and dedicate 11 percent to the visitors center.

But Jeff Kraft, director of business funding and incentives with the Office of Economic Development and International Trade, recommended that no money be directly allocated to the visitors center. Instead, he wants the remaining 21 percent of funds to be in a flexible account that could be spent on any of the projects or downtown infrastructure - if the Olympic museum and stadium projects go forward.

"We said you don't have to spend any money on the Air Force Academy Visitors Center because we don't feel it's going to drive any net new visitors to the area," Kraft said. "To get that 21 percent you have to initiate certain project elements ... The more you build all the projects, the more you get to spend on each project."

Cope said the visitors center will attract significant new visitors because since the Sept. 11, 2001, terrorist attacks, visitors have been unable to easily pass security and enter the academy, which has drastically reduced visitors.

A new center would be accessible to all, he said.

"The Air Force Academy visitors center is on a faster track than we thought they would be, and it's going to be a shame to tie their revenue to any other stream," Cope said.

Board member J.J. Ament, an investment banker, offered that 16 percent of the unallocated 21 percent of funding could be tied to completion of the Olympic museum, and the rest could be dedicated to the visitors center.

The board and Cope were amenable to the compromise.

Unlike prior Regional Tourism Act awards given to Aurora and Pueblo, the Colorado Springs project will be capped.

The act allows for the state to allocate any increase of future state sales tax revenue generated by a specific area (Regional Tourism Act Zone) over the course of several years to help finance projects that are unique in scope and will attract new visitors to the state and region.

The final dollar amount is an estimate based on the percent of future sales tax revenue promised to the applicants, so the actual number could be higher or lower, depending on how slowly or quickly revenue grows.

"I think they are going to get to that number much quicker than 30 years," Kraft said.

But Cope asked that since the dollar amount is capped, the agreement be stretched to 50 years, so that if revenue growth is slower than projected the city would have more time to reach the cap.

Commissioners were divided on the issue of extending the time.

Also debated Monday was whether Regional Tourism Act dollars could be spent retroactively on the city's expenses for applying for the incentives.

Cope said one incentive is a $100,000 "success bonus" promised to the attorney who handled the application, Jason Dunn with Brownstein Hyatt Farber Schreck. The city would like to pay Dunn, who earned the bonus when RTA was signed last December, out with incentive dollars.

"It was our understanding that certain costs would be reimbursed, and we structured some of our costs based on that understanding," Cope said.

Commissioners were dubious of tying up money dedicated to the project for fees that have already been incurred.

"If you go down that path, Jason is very good. So why stop at a $100,000 success fee? Why not have a $1 million success fee or a $10 million success fee," Ament asked.

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Contact Megan Schrader: 719-636-0644

Twitter @CapitolSchrader

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