Four tourism projects that make up Colorado Springs' City for Champions proposal would draw thousands fewer new visitors to Colorado than proponents estimate, according to a report by an economic consultant hired by the state.
As a result, City for Champions would be eligible for less than half of the state sales tax money that proponents have requested from Colorado officials to help pay for development of the projects, the report says.
Doug Price, president and CEO of the Colorado Springs Convention and Visitors Bureau and a City for Champions spokesman, said Sunday that supporters are "100 percent confident" they'll adequately address concerns raised by Economic & Planning Systems.
At the same time, backers weren't surprised the report questioned their visitor estimates, Price said. The same consultant came up with similar critical findings last year when it was hired by the state to analyze a separate round of requests for state tourism funding by other cities, he said.
The 58-page report, prepared by the Denver office of Economic & Planning Systems Inc., will be used by the Colorado Economic Development Commission when it decides in December whether to help fund City for Champions by using tax money available under the state's Regional Tourism Act.
The report, released late Friday by the state in response to an open records request by The Gazette, isn't final. City for Champions proponents, who received their copy Oct. 28, have until Friday to respond and request that Economic & Planning Systems' revise its findings. The company has until Nov. 22 to update its analysis if warranted.
City for Champions calls for development of a U.S. Olympic museum and a combined baseball stadium/events center in southwest downtown. Also, it proposes a new Air Force Academy visitors center and a sports medicine center at the University of Colorado at Colorado Springs.
Springs Mayor Steve Bach submitted an application in July to the state Office of Economic Development and International Trade seeking $82.1 million in state tourism money to pay for a little more than one-third of the City for Champions' $218.6 million cost.
As part of the funding process under Colorado's Regional Tourism Act, the state hires an independent analyst to examine funding applications.
Economic & Planning Systems' report on City for Champions examined only three of the four projects; UCCS' sports medicine center wasn't "defined clearly enough or far enough along in the development process" to be evaluated, the consultant said. Price said applicants are working with UCCS as well as Air Force Academy officials to provide more information to the analysts.
The report's key findings suggest that new visitors coming to Colorado as a result of the museum, stadium and visitors center would total 214,243 a year, down almost 59 percent from the applicants' estimate of 521,493.
The report agreed with the number of new visitors the stadium would draw. But based in part on its research of how many out-of-staters visit museums for other sports, Economic & Planning Systems lowered the estimate of new visitors to an Olympic museum.
"The Olympics, while popular, do not have the same mass market appeal as professional sports such as baseball, football, basketball or NASCAR," the report said.
Also, the report lowered the number of new visitors projected to come to the academy visitors center. Some of those people would come for other academy events, not solely to the center, the report said.
Fewer visitors mean less spending by tourists for hotel rooms, restaurant meals, rental cars and the like. As a result, the state wouldn't capture as much increased sales tax revenue from the venues, which, under the state's Regional Tourism Act, can be made available for development of tourism venues. The report estimates that the city would be eligible for $31.4 million in sales tax funding over 30 years for the three projects, down from the $82.1 million sought for the full City for Champions proposal.
The report also said the City for Champions' application lacked several key pieces of data.
State tourism money is intended to serve as the final piece of funding for projects that have money committed from other sources, the report says. None of the four projects have such commitments in hand, the company said.
Price countered that the four projects are, in effect, not-for-profit venues and City for Champions proponents should be able to use state money as a vehicle to help them gain funding commitments from donors.
CITY FOR CHAMPIONS: AT A GLANCE
The program: Colorado’s Regional Tourism Act created a program by which communities could compete for state sales tax funds for projects that draw new visitors into the state. Local governments applying for funding must provide economic data that show how their projects would attract out-of-state tourism. The Colorado Economic Development Commission can approve up to two such projects in fiscal year 2014.
For this fiscal year, Colorado Springs’ City for Champions’ proposal was the lone applicant for state tourism funds.
City for Champions proposes four tourism projects and related improvements, totaling $218.6 million: a downtown U.S. Olympic museum dedicated to the Olympic and Paralympics movements; a downtown 10,000-seat minor league baseball stadium and events center; a sports medicine and performance center on the campus of the University of Colorado at Colorado Springs; and an Air Force Academy visitors center. That $218.6 million project cost includes $167.5 million for the four venues and $51 million for a series of downtown public improvements.
Supporters applied in July to the state Office of Economic Development and International Trade for $82.1 million in state tourism money to help fund the projects.
What’s new: An independent economic analysis by a state-hired consultant examined the proposal in a report that was released Friday. Supporters have until this Friday to respond to the findings.
What’s next: Backers say they’re scheduled to make a formal presentation to the Colorado Economic Development Commission on Dec. 4; the panel is expected to make a decision Dec. 16.
Who’s involved: A consortium of civic leaders brought the City for Champions idea to Springs Mayor Steve Bach, who submitted the application to state officials. The proposal, according to Bach’s office, was co-sponsored by the city, the Springs-based El Pomar Foundation, the Downtown Development Authority and the Anschutz Foundation. The Denver-based Anschutz Corp. owns Clarity Media Group, which purchased The Gazette last year.
Source: Gazette research; Economic & Planning Systems Inc.
Highlights of the Economic Analysis:
The Denver office of Economic & Planning Systems Inc. was hired by the state of Colorado to independently review the City for Champions proposal. Among its key findings:
• City for Champions’ supporters estimated that a downtown multipurpose baseball stadium and U.S. Olympic museum, a new Air Force Academy visitors center and a sports medicine and performance center at the University of Colorado at Colorado Springs would draw 521,493 new visitors to the state of Colorado each year. Economic & Planning Systems, however, deleted the UCCS project from its report, saying not enough information was submitted to support it. For the other three projects, the company estimates that new visitors to the state would total 214,243 a year.
The report supported City for Champions’ estimate that a new stadium would draw 51,093 new visitors to the state to go along with annual attendance of 672,271. However, the report estimates that a new Air Force Academy visitors center would attract only 88,150 new visitors to the state, down from the applicants’ estimate of 288,000. And, the report suggests an Olympic museum would generate only 75,000 new visitors, not 157,500 as applicants say.
• Because it expects fewer tourists would visit the City for Champions’ venues, the company calculates the city would be eligible to receive $31.4 million in sales tax funding over 30 years to help fund development of the projects. That’s down from the $82.1 million being sought by City for Champions supporters.
• State sales tax revenue for tourism projects is supposed to bridge the gap between funding committed to a tourism project and the money that applicants say they need to ensure it gets built. However, the report faults City for Champions applicants for failing to show they have such funding in hand.
“None of the four project components have met either the financial need or development readiness criteria. No firm funding commitments, letters of interest, letters of intent, or other evidence, have been provided by the applicant. The funding and financing plan described in the application only notes ‘high levels of interest’ from potential project funders. In addition, the applicant does not own or have an option or contract to purchase or otherwise acquire the land needed for the museum or stadium. For the USAFA project, it is EPS’ opinion that additional clarification is needed on the need for any permits or other approvals from the federal government or Air Force Academy, since the visitors center would be on federal government property.”
Source: Economic & Planning Systems Inc.
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