El Paso County has agreed to contribute millions in future tax revenue toward two urban renewal projects in downtown Colorado Springs, giving backers a big boost as they seek to get the projects off the ground.
County commissioners on Thursday approved a pair of revenue-sharing agreements with the city’s Urban Renewal Authority. The county would set aside increased sales and property tax revenue it collects as a result of the new residential and commercial development.
That money would go to the Urban Renewal Authority to help pay for utility, sidewalk, street and other upgrades to support the projects over 25 years.
Those projects, however, still need Colorado Springs City Council approval. The council is to decide Dec. 11 whether to designate them as urban renewal sites, while also determining if the city will contribute its tax revenues for the projects too.
A local development group wants to build an eight-story, 261-room, Marriott-branded hotel on 1.5 acres in the 400 block of South Tejon Street. It would have meeting space, two restaurants and a two-level, underground public parking garage with 224 spaces.
The other project would bring offices, apartments, restaurants and the like to 82 acres in southwest downtown, where the U.S. Olympic Museum is being built.
Nor’wood Development Group is the master developer for that area, bounded by Colorado Avenue and Cucharras Street on the north, Cimarron Street on the south, Cascade Avenue and Sahwatch Street on the east and Interstate 25 on the west.
The area includes America the Beautiful Park.
A consultant found blighted conditions in both areas, qualifying them as redevelopment sites.
The Urban Renewal Authority, working with the hotel developers and Nor’wood, wants the council to declare them urban renewal areas.
To encourage investment in blighted areas, local governments can use tax revenue that springs from development to cover costs of public improvements, which encourages developers to tackle projects in downtrodden areas.
Under one of the revenue-sharing agreements approved Thursday, the county will provide the southwest downtown project with 100 percent of increased sales and property tax revenues it collects over 25 years.
County staff estimated the project would generate about $52 million in new revenue over that period; about $10 million will go to the county, with the rest going to the Urban Renewal Authority.
Commissioners approved the southwest downtown agreement on a 3-1 vote, with Peggy Littleton absent.
Commissioner Mark Waller called the project a “freakin’ great deal for the citizens of El Paso County and Colorado Springs,” citing jobs, increased tax revenues and other economic benefits.
“Our job is to create an environment for business to be successful and then get out of their way to let them do it,” Waller said. “That’s what we’re doing.”
Commissioner Longinos Gonzalez Jr. opposed the deal, saying he was concerned it could affect county revenues more than expected.
Under the other revenue-sharing agreement, for the hotel, the county will provide the Urban Renewal Authority with all of the increased property tax revenue it receives over 25 years. That project is planned by commercial broker Jim DiBiase of Olive Real Estate Group in Colorado Springs, Kevin Engelhardt of Hotel Operation Services in Monument and Springs general contractor Vince Colarelli.
But the hotel agreement has a different sales tax split. Over the first 13 years, the county will contribute 100 percent of higher sales tax revenue it receives. But it will contribute only half of its increased sales tax collections over the final 12 years. Commissioners voted 4-0 to approve that pact.
County staff projected the hotel project will generate about $3 million in new revenue, about $2.5 million of which would go to the Urban Renewal Authority.
The county levies a 1 percent sales tax; the increased revenue that will go to the URA won’t include money from a public safety tax of 0.23 percent levied to support the Sheriff’s Office.
“Our job is to create an environment for business to be successful, and then get out of their way to let them do it. That’s what we’re doing.” Mark Waller, El Paso County commissioner