Published: March 17, 2014
The City for Champions (C4C) proposal is complex and complicated and includes changing the urban renewal district boundaries and possible financing at an 8 percent interest rate.
I am proposing a pathway that will hopefully be acceptable to the mayor, my fellow council members, and above all, the citizens of Colorado Springs.
What is that straightforward, simple pathway for the proposal?
Treat the proposal like a startup business and give it the best option possible to succeed from a business perspective.
Having started and opened 18 Waterbed Palace stores and four charter schools, I understand the three components that are critical to every startup:
- How much debt service you have to cover.
- The cost of the facility you are leasing or purchasing.
- How much working capital the business has to start, and how much capital it has to maintain itself through the first couple of years.
So, as with any startup, you need to put together the best financial package possible. This includes trying to raise as much equity as possible and then finance the debt at the best interest rate possible.
My commitment in this process is straightforward - I want the Champions proposal to have the best opportunity to succeed.
If it is possible to fund the projects without using local tax dollars, that would be great. However if the projects need funding from the city's general fund sales tax dollars using Tax Increment Financing or TIF, the citizens must have a vote on the proposal.
I believe that all of the city's elected officials need to work together with economists and bond dealers to structure a proposal that presents an honest picture of the project - a true evaluation of the economic forecast for 30 years, and an honest assessment of how it might benefit the city.
Projects like C4C cost money. They are not free. The sports event complex and parking garage will need local financing; however, the following projects are anticipating they will not need local financing: the Air Force Academy Visitors Center, the Olympic Museum and the UCCS sports medicine facility.
- Put together a straightforward, honest, uncomplicated plan of financing the proposal.
- Structure that plan in the most economical way for financial success and long term viability.
- Use the appropriate mechanism for capital expenditures.
- Use the conservative forecast of Economic & Planning Systems Inc. to predict the amount of revenue that will be generated by the projects.
- Figure how much it will cost, and then put it to a vote.
I am confident that citizens will pay for what they believe is best for the city. We can trust them again with the City for Champions proposal.
Keith King is president of the Colorado Springs City Council.