Business owners concerned about urban renewal plan

Filed under: commercial real estate,Government,Legislative,Real Estate |

Eminent domain is not just a policy; it¡¦s the law for local and state governments. The law allows the Urban Renewal Authority of El Paso County to usurp businesses in areas where urban renewal will occur. Furthermore, the law states that the URA is not legally bound to compensate business owners for any costs concerning their move or elimination.

¡§The whole philosophy of the board is that by law they have the power,¡¨ said Jim Rees, the city¡¦s urban development project manager. ¡§But to make the public feel more at ease, we let them know that we really don¡¦t want to use that power to implement the (urban renewal) plan.¡¨

The URA board made that philosophy a reality when it omitted some language in the urban renewal plan a half-hour before the board¡¦s meeting Feb. 15. The excised language was the clause that said the board had authority in deciding eligibility for relocation compensation. While business owners in the URA¡¦s proposed renewal area are happy with the attention and concern the board has shown to their plight, they still have concerns about language in the plan.

Concerns center on descriptions of compensation for relocating, definitions of how compensation is measured and reliability of selecting an arbitrator during a relocation dispute, said Jack Sperber. Sperber is a lawyer representing Berwick Electric, Olsen Plumbing, Rampart Supply and Robert Louden, a private property owner in the affected area.

Given the urban renewal plans for that area, Sperber said, ¡§If the plan goes forward, the businesses (in that area) might not move forward.¡¨

The plan states as a development objective that ¡§the authority will only use its powers and resources to support those projects which further the development objectives of the plan.¡¨

¡§I think the problem with the Urban Renewal Plan is that it doesn¡¦t really look at these businesses staying there, and they are looking at convention centers, hotels and entertainment, like LoDo in Denver,¡¨ Sperber said. ¡§They say (businesses) can stay and operate at this time, but there is nothing in the plan that would benefit these businesses.¡¨

The Urban Renewal Plan was approved at the meeting but the relocation policy part of the plan was still being addressed.

¡§A technical issue is (that) before City Council can approve the plan, by state statute there needs to be a relocation policy in place,¡¨ Rees said.

The working session when the board and property owners will consider the relocation policy is scheduled for March 1. A formal session, or workshop, for the plan will be held later that day.

In the interim, Sperber, business owners and the board will continue to hold informal discussions based upon the concerns brought to light. The board hopes to have the plan approved by the city Planning Commission March 8 and passed on to City Council for its March 27 meeting.

Doug Berwick, treasurer for Berwick Electric Co., 129 West Costilla St., summarized the business owners¡¦ sentiments. ¡§We philosophically disagree Ƒ{ very much so Ƒ{ with the concept of urban renewal and eminent domain, but do not want to stand in the way of this project if the sense is that the plan is for the betterment of the community.¡¨ (But) we don¡¦t feel there should be a cost to us personally to accomplish this.¡¨

Rees said he thinks that everyone is ¡§philosophically together¡¨ and sees the plan as a private-sector effort to better the community. He stressed that although the urban renewal plan is strictly market driven, that factor does not stop the city from addressing concerns of the business owners who will be affected by the plan.

Businesses want more input during mediation

Sperber said one concern is that business owners are only entitled to a certain number of relocation benefits, as the plan is now written. If there were no agreement between the board and a business owner concerning relocation compensation, a mediator would try to work out the problems; however, if mediation attempts failed, an arbitrator would be appointed by the board. Business owners would like joint appointment of the arbitrator or an appeal to the courts.

Also, the two groups are redefining how compensation is measured. Options include considering business profits, loss of goodwill and comparable replacement-property costs.

¡§It¡¦s included in the policy, but we need better language to really compensate the land owners for that,¡¨ said Sperber.

Rees said the main purpose of the URA is to bring ¡§decency¡¨ to the area and eliminate blight in the city. The biggest incentive the URA has is in pursuing the project is the tax-increment financing for it, said Rees. The difference between what land owners now pay and what they will pay once their property value increases will go in part to the URA.

The process of interviewing and contracting developers might begin this year. The URA is likely to continue to use Denver¡¦s Lower Downtown area as a model.

¡§LoDo in Denver has been a gradual transition and it can happen building by building, block by block. URA is a facilitator, not an owner,¡¨ said Rees.

Bill Cunningham, principal for Leland Consulting Group, which is the market and economic consultant to the board, agrees.

Cunningham, who helped design the plan, said the board made it clear that this plan was not like the urban renewal projects in the 1970s ¡§where they tore down buildings and then contracted developers.¡¨

¡§It doesn¡¦t mean the minute this plan is approved that businesses have to move. It depends on the development that occurs there. Only when a developer wants to come in and try and acquire the property does anything happen,¡¨ he said.