An ambitious redevelopment plan for southwest downtown is moving forward again, which could lead to thousands of residences, offices, stores, restaurants and hotel rooms as part of a $2 billion transformation over the next two decades.
The Colorado Springs Urban Renewal Authority on Wednesday approved a consultant’s report that found blighted conditions in southwest downtown — a first step toward reviving redevelopment efforts in the area.
The authority also approved the consultant’s forecast of new tax revenues that would be generated for local governments — such as the city of Colorado Springs, El Paso County and Colorado Springs School District 11 — as a result of the redevelopment.
Efforts to make over the mostly light industrial southwest downtown area aren’t new. The City Council in 2001 designated about 100 acres southwest of Colorado and Cascade avenues as an urban renewal site. Blighted conditions — such as dilapidated buildings, trash and debris and a poor street layout — were cited at the time. As a result, the consultant’s new report that found fresh evidence of deteriorating conditions wasn’t a surprise.
But economic downturns derailed redevelopment efforts in the area, and few changes have taken place in southwest downtown over the past 17 years aside from the city’s development of America the Beautiful Park.
Two years ago, Colorado Springs real estate giant Nor’wood Development Group, which owns much of the land in southwest downtown, launched a new redevelopment effort there.
In effect, Nor’wood and the Urban Renewal Authority are crafting plans to shrink the 2001 urban renewal area to about 80 acres, where a four-phased redevelopment effort would begin this year and span 20 years.
Nor’wood’s latest plan — which company officials say is likely to evolve — envisions an infusion of 5.2 million square feet of residential and commercial space into a portion of southwest downtown bounded by Cucharras Street on the north, Cimarron Street on the south, Cascade Avenue on the east and America the Beautiful Park on the west. More than 5 million square feet is the equivalent of nearly 4½ Chapel Hills Malls.
Included would be 4,500 townhomes, apartments and condominiums, 750,000 square feet of offices, 150,000 square feet of retail and 500 hotel rooms. As outlined to the Urban Renewal Authority, Nor’wood envisions multi-story residential buildings adjacent to America the Beautiful Park.
Private investment in southwest downtown would total $1.8 billion, while utility, stormwater, street and sidewalk upgrades — among other public improvements — would total $216.5 million, according to Nor’wood estimates.
Chief among those public upgrades: a revamped, pedestrian-friendly Vermijo Avenue between Cascade Avenue and the new U.S. Olympic Museum, which is under construction at Vermijo and Sierra Madre Street and will anchor the area’s redevelopment. The museum, in turn, will connect to America the Beautiful Park by a bridge spanning the railroad tracks.
Those improvements would follow the rebuilding of the Interstate 25 and Cimarron interchange, which was completed last year and is being counted on to be a gateway into southwest downtown.
“As you see the Olympic Museum coming out of the ground, and we’re living with the benefits of I-25 and Cimarron being finished and the additional improvements to the waterways and trails onto the Midland Trail as it ties into the Santa Fe Trail, this is city building, in an infill way, in motion,” said Nor’wood President Chris Jenkins. “And so, that’s what we do. And we’re really excited about this project.”
But several hurdles still must be cleared.
The Colorado Springs City Council has the final say on urban renewal projects, and it must sign off on changing the boundaries and goals of the 2001 plan. The revamped southwest downtown plan might not be presented to the council until September at the earliest.
The council also must approve a funding plan for the $216.5 million in public improvements.
As Nor’wood envisions, increased sales and property tax revenues generated by the new residential and commercial development would be one source of funding for public improvements. That’s typical for any urban renewal project, and it serves as incentive to get private developers to invest in downtrodden areas.
Also, two new metropolitan districts and a business improvement district covering southwest downtown, which the City Council approved last year, would contribute property tax revenues. Retailers and restaurants in the business district also would collect a public improvement fee on consumer purchases in the area, which would help fund the public upgrades.
Those combined revenue sources, however, would fund only $160.7 million of the $216.5 million in improvements to be done over the first eight years of the project. That leaves a nearly $56 million gap that must be filled by still-to-be-identified funds for the project’s final 12 years, according to Nor’wood’s presentation Wednesday to the Urban Renewal Authority.
Over the next several weeks, authority officials also will meet with representatives of local governments to discuss increased tax revenues they’ll collect in southwest downtown because of the new development. Those meetings will determine how much of that higher revenue will be earmarked to help pay for the public enhancements.
For example, Nor’wood’s plan assumes the city of Colorado Springs will allow all of the revenue from its 2 percent sales tax on retail purchases in southwest downtown to be set aside for public improvements.
But that’s a public policy decision the City Council still must make; in the past, the council sometimes has allowed only a portion of its increased sales tax revenue to go for upgrades in an urban renewal area.