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Momentum for tourism request spurred by Colorado Springs leaders

August 10, 2013
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After Pueblo landed state money last year for a pair of economic development projects, the question in Colorado Springs became "why not us?"

But even as Mayor Steve Bach has been seen as the point man for a plan to build four major tourist attractions, he wasn't the one asking the question.

The proposal, called City for Champions, began with a small circle of influential civic, academic and business leaders including Bill Hybl, El Pomar Foundation chairman and CEO; Lt. Gen. Mike Gould, outgoing U.S. Air Force Academy superintendent; Pam Shockley-Zalabak, University of Colorado at Colorado Springs chancellor; Dick Celeste, former Colorado College president; and Steve Bartolin, The Broadmoor hotel president and CEO.

They had read about Pueblo's success in winning $14.8 million in state sales tax rebates to build a professional bull riders university and expand the city's Historic Arkansas Riverwalk. They wanted Colorado Springs in on the state incentive program, Hybl said.

"It seemed to me and others that Colorado Springs was not participating for tourism as a destination to the extent that we should," Hybl said. "We have a lot of great projects, a lot of great ideas in the Pikes Peak region."

The group, which also includes Doug Price, Colorado Springs Convention and Visitors Bureau president and CEO, and Susan Edmondson, Downtown Partnership president and CEO, met privately to discuss tourism projects that might have a chance of winning the state dollars.

They settled on four projects: a downtown U.S. Olympic museum, a downtown baseball stadium, a university sports medicine center and an Air Force Academy visitor's center.

The group saw the state sales tax money as the only way to jump-start the projects and put up $300,000 - El Pomar Foundation, the Anschutz Foundation, the Downtown Partnership and the city each put up $75,000 - for lawyers and accountants to draw up the plans. Bach was on board early on, but he did not develop the details of the four projects, he said. Hybl asked him to support the group's proposal, Bach said.

"I didn't know about it until he told me about it," Bach said.

Colorado Springs is the only city that this year applied to the state's sales tax rebate program, called the Regional Tourism Act. There is no guarantee that all or any part of the four proposed projects will qualify for the rebates. State law says the projects must be of "extraordinary and unique nature and contribute significantly to economic development and tourism." A final decision by the state is expected in December.

If approved by the state's Economic Development Commission, the projects would be paid for using $82.1 million in state sales tax money to fund a little more than one-third of the proposal's $218.6 million cost.

The rebates would work like this: A portion of state sales tax generated by the four projects would be rebated to the city. That money would be used to retire bonds issued to help pay for the projects.

Organizers also pledge to raise about $61 million in private money and would seek about $74 million in public money, which could include $24 million from the Colorado Springs Urban Renewal Authority; $10 million from new market tax credits, which are used to attract investment capital through federal tax credits for individual and corporate investors; and $40 million raised from the sale of municipal bonds. The venues could be open by the end of 2016.

Behind the scenes, the ideas for at least three of the projects had been discussed long before anyone had heard of the Regional Tourism Act.

Last year, Celeste assembled a board of directors for a downtown Olympic museum project and was in early stages of raising private money. The El Pomar Foundation and the Colorado Springs Downtown Partnership each put up $50,000 for some initial studies.

Celeste was eager for the museum to be included in the city's proposal. He said the injection of state money would solidify the estimated $60 million project to potential donors and cement a relationship between the city and the U.S. Olympic Committee, which has its headquarters downtown.

"One of the issues in the minds of the folks who sit on the board of the USOC, is why would we do this in Colorado Springs?" Celeste said. "The notion of the state entertaining, and hopefully funding, this (museum) is very important in ratifying this in the minds of the USOC."

For at least four years, officials at the Air Force Academy have wanted to build a new, more accessible visitor's center, said David Cannon, academy spokesman. Gould was concerned about the sharp drop in visitors to the academy since 9/11, when security checkpoints were installed.

Gould wants to move the visitor's center closer to Interstate 25, just east of Falcon Stadium, and allow it to be open, no ID necessary. But there is no stomach in Congress now to fund such a project, Cannon said.

"The only way to do it, is with seed money from (Regional Tourism Act) - with that seed money and donors giving us money through the endowment," Cannon said.

The University of Colorado at Colorado Springs had a sports medicine facility in its long-range strategic plan, which was approved by the state and the regents last summer. Shockley-Zalabak said the sports medicine facility, which could bring in 25,000 visitors - 7,500 from out of state - a year, would have been built in the next decade. But the state sales tax money would accelerate the project.

"There is a huge emphasis in the city on helping us grow because of our economic impact and the potential for increasing our economic impact," Shockley-Zalabak said.

Over the years a downtown stadium had been discussed, once in earnest in 2008 when a committee formed around the idea of a youth-sports stadium. But like other downtown ideas, it went nowhere, Bach said.

That stadium idea morphed into a Sky Sox minor league baseball stadium, Bach said. Local economists say a downtown stadium would draw more fans to every game, spur downtown development including restaurants and stores around the stadium and create jobs.

Of the four projects, the stadium has received the most push back from critics who say there are more important issues facing the city, including the $700 million in backlogged stormwater projects, on which city leaders should be focused.

Sky Sox team and stadium owner Dave Elmore did not ask for the Sky Sox stadium to be included in the city's tourism proposal or to be moved to downtown, he said. But he would not resist if the city and fans like the idea. Of course, he said, the deal would have to be a good move for the team and for him. He recently spent millions upgrading the stadium and said about two-thirds of the fans come from within 10 miles of the stadium, which is at Tutt Boulevard and Barnes Road off Powers Boulevard.

In July, the Sky Sox reported a franchise attendance record of 64,748 during an 11-game homestand. Summit Economics, a Colorado Springs research firm, projects that game attendance would increase by 45 percent if the stadium were downtown.

"I think there is so much that the people in the community have to decide," Elmore said. "I personally don't know about their habits - would they drive downtown to a game?"

The state's sales tax rebate program is available only for three years and is now in its second year. There seems to be new energy for taking ideas off the shelf and making them happen, Hybl said.

"I believe this community has been waiting for an opportunity to advance from an infrastructure and tourism point of view in what is available for visitors," Hybl said.

The Regional Tourism Act was designed for big ideas, said Jason Dunn, attorney with Denver-based law firm Brownstein Hyatt Farber Schreck. Dunn helped craft the state legislation and worked on Pueblo's winning application last year. He was hired by the Colorado Springs group, along with the Denver-based firm Ricker-Cunningham, to write its application.

When the Regional Tourism Act law was being drafted in 2008, Colorado developers were in talks with International Speedway Corp., which owns and manages NASCAR tracks. ISC was looking at Denver for its next big track but wanted state incentives to make it happen, Dunn said. The law was written with the racetrack project waiting in the wings, Dunn said.

"Then, the economy tanked," Dunn said.

ISC pulled out and the proposed legislation went cold until 2010 when lawmakers approved it and opened the door to two projects per year over three years.

"It was revolutionary in terms of economic development," Dunn said. "In my view it's the most game-changing piece of economic development legislation in Colorado."

Originally, the state incentive program was written for a city to build one big tourism project. But last year, Pueblo was approved for state sales tax rebates to build multiple projects including a professional bull riders university, which they say will draw professional rodeo clowns and bull riders from around the world. Pueblo also will expand its convention center and enhance its historic river walk. Pueblo will receive $14.8 million in sales tax rebates over 30 years .

"Pueblo showed a variety or a combination of projects when viewed in totality can draw tourists," Dunn said. "Colorado Springs has taken the Pueblo concept to the next level."

The Colorado Springs organizing group liked Pueblo's idea of putting together a package of projects, thinking that one on its own would not meet the criteria of "extraordinary." Bartolin, The Broadmoor president and CEO, persuaded the El Pomar Foundation and the Anschutz Foundation to cover the expenses for putting together the application, which included financial and economic forecast reports.

"When I look at this, The Broadmoor has no vested interest," Bartolin said. "Any one of these projects would be positive for Colorado Springs. But, when you look at the magnitude of all four projects simultaneously, if you look at that scope, it's a game changer."

The Broadmoor is owned by the Denver-based Anschutz Corp, whose Clarity Media Group owns The Gazette.

Bach has been criticized because there was no public input, including from the City Council, into the city's proposal. He said the organizing group had to move in secret so it wouldn't tip off other communities about their plans or the state program.

He is promising public meetings to discuss the scope of the projects in the coming months.

"If it seems exclusionary to have a small group of people put together a package like this, I didn't mean it to. I don't know how else we could get it done," he said.

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