The Air Force Academy's visitor center proposal advanced Tuesday when the Colorado Springs City Council agreed to annex nearly 200 acres, including the project site.
The annexation, with a few more procedural approvals, means the center could get $13 million in states sales tax rebates over 25 years through the City for Champions initiative, designed to increase tourism and spur economic growth in Colorado Springs.
The center would be part of a development of 60 acres or so with hotels, offices and other businesses west of Interstate 25 along North Gate Boulevard. The rest of the annexed land would remain open space.
"There are a lot of other things that have to fall into place, a lot of different moving parts," Councilman Andy Pico said before voting for the annexation. "I’m willing to take step one."
Council members Yolanda Avila and Bill Murray voted against the annexation, citing concerns about tax incentives that the developer, Blue & Silver Development Partners, is requesting from the city for the $58 million project.
"We are doing backbends, somersaults, side flips to make this happen," Avila said. "I would love to have the visitors center, but not at this cost, where the city has to do everything."
If all incentives are approved, Colorado Springs would contribute about $23 million to the visitors center over 25 years. That money would be used for needed public infrastructure, such as streetlights and sidewalks.
The rest of the development would be funded privately.
But the city would gain $37 million in sales tax revenue, plus millions more collected through the Pikes Peak Rural Transportation Authority, which authorizes a 1 percent sales tax, said Bob Cope, the city’s economic development officer.
The development also is expected to trigger $2.6 billion in economic growth over 25 years and deliver about 1,200 permanent jobs and 1,700 construction jobs, Cope said.
Councilman Don Knight said the project's economic potential makes the annexation worthwhile.
"We’re not getting anything today," Knight said. "And if we don’t do this, we’re not going to get anything."
The other City for Champions projects are the U.S. Olympic Museum being built at Vermijo Avenue and Sierra Madre Street; a downtown stadium an an affiliated hockey arena at Colorado College; and a sports medicine and performance center being erected at the University of Colorado at Colorado Springs.
The City Council, which also OK'd a rezoning for the visitors center Tuesday, must finalize approval of both ordinances March 12. Two more resolutions must be approved as well, but the council decided to wait because the Air Force hasn't yet signed an annexation agreement.
If the project didn't proceed, the annexation could be reversed in a three-year process, city officials have said.
The council also will be asked to approve making the project site an "urban renewal area" to earmark tax revenues generated by the future development.
The developer has asked that the center be allotted 1.75 percent of the city’s 2 percent sales tax and 1 percent of El Paso County’s 1.23 percent sales tax over 25 years, plus about 76 mills in property tax. Blue and Silver also has asked for some revenue from what the city's use tax generates from building materials for the development.
The developer has said the site meets the state's requirements to become an urban renewal designation, but some have questioned whether that label, typically used to rehabilitate blighted areas, is appropriate for open land.
"By no stretch of the imagination is this a blighted area," said Fran Silva-Blayney, chairwoman of the Sierra Club’s Fountain Creek Water Sentinels group. "This is just about pristine open space. That seems like a horrible misuse of this statute."
She and another Sierra Club representative urged the council to delay a decision on the annexation, saying the developer hasn't proved that the development wouldn't have negative effects on wildlife and Monument Creek.
An environmental analysis is underway for the site, which includes habitat for the threatened Preble's meadow jumping mouse.
Until the funding plan and environmental analysis are final, the Air Force won't sign off on a lease that would allow Blue & Silver to develop the land. Under the agreement, the developer would essentially pay the lease, in-kind, by building the visitors center.
The Air Force would contribute about $8 million of interior fixtures, furnishings and equipment.
The funding plan still is about $4.5 million short of the $58 million needed. But Dan Schnepf, president and CEO of project consultant Matrix Design Group, has said he has identified ways to close that gap, such as equity or donations.
Officials hope to issue bonds to finance the project this summer and start construction later this year.
Cope said projects like these often require time for all of the pieces to fall into place.
"This is a positive first step to keep the project on track," he said. "Anything that's not answered right now was not unexpected."