Work on a new visitor center outside the northern gate of the Air Force Academy could start before the end of the year, after progress on the project was slowed by a collapse of the bond market caused by the coronavirus.
Bonds to fund the center and commercial buildings in the 51-acre development found no takers when initially offered for sale March 10, said Bob Cope, economic development officer for the city of Colorado Springs. The lack of buyers isn't surprising, since coronavirus slammed the bond market in March, making buyers skittish.
The business improvement district established to pay for the center expects to put the bonds back out for sale in October and construction could start immediately after they sell, Cope said. The district will be marketing $80 million in bonds for the visitor center and $200 million in bonds for the commercial construction at the site.
The project is part of the City for Champions scheme paid for, in part, with $120.5 million in future state sales tax revenues generated over 30 years by new, out-of-state visitors to the projects themselves, under a 2013 measure approved by the Colorado Economic Development Commission.
"The Visitor Center has received significant support from government at every level (state, local and federal) and it has a dedicated and talented project team. Failure is not an option – this project will happen," Cope said in an email.
The bonds must be issued this year under terms of a land deal with the Air Force. The military is providing the land near Interstate 25 on a long-term lease and gets a visitor's center outside the academy's security perimeter that's easy for the public to reach. While the deadline could be renegotiated, no one is intending to do that, Cope said.
Preparations to issue the bonds are underway and the market has improved since March, Cope said.
"It’s been a slow and steady return to normalcy. We are not there yet. But you are seeing more and more municipal bonds," he said.
Once financing is secured, crews will start building the commercial portion of the development before work starts on the $58 million visitor center. Commercial properties are needed to start generating revenue for the bond repayment, he said. The entire 51-acre development includes a hotel, retail and commercial space and an indoor skydiving facility that will be shared by the cadets and the public, he said.
The entire project, including the visitor center, must be completed by 2023, Cope said.
The visitor center is the final project for the City for Champions endeavor, which includes the recently opened U.S. Olympic and Paralympic Museum; a sports medicine and performance center at the University of Colorado Colorado Springs; a multiuse downtown stadium and an indoor arena at Colorado College.
Money from state sales tax revenue for the projects started to flow in Jan. 2014 and about $2 million has already been set aside for the visitor center project, Cope said.
"We want to make sure we get a visitors center which will be an iconic draw," said Jeff Kraft, director of business funding and incentives for the Colorado Office of Economic Development and International Trade.
The center is expected to draw 158,000 new visitors to the academy each year, generate $67 million in annual tax revenue and create 650 permanent jobs, Cope told the Colorado Springs City Council in 2019.
In addition to state sales taxes, the business improvement district formed for the development will levy a property tax and fees to pay back bonds. The development was also named the True North Commons Urban Renewal Area by city council last year, which is expected to collect $16 million in tax revenue over 25 years.
The diverse revenue stream adds some safety to investing in the bonds, Cope said.