Businesses opposed to urban renewal plans

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

Members of the Urban Renewal Authority patted one another on the back last week after finally resolving the relocation policy associated with urban renewal. However, some business owners and concerned citizens who attended the URA¡¦s board meeting were less enthused, crossing their arms and shaking their heads.

¡§They may have a great vision for what they think the downtown should look like, but that¡¦s no excuse (for them to force businesses to relocate),¡¨ said Tim Pleasant, a candidate for City Council.

The policy, unanimously approved by the URA, guarantees the Authority¡¦s responsibility to owners of land and businesses in the area targeted for restoration who might be forced out through eminent domain. The policy also requires developers to pay relocation costs incurred by businesses.

Developers, in turn, will be reimbursed by the URA. Tax increments will provide the funds for the authority to reimburse the developers.

If developers cannot negotiate a price with businesses, developers must wait three years before the URA steps in to condemn the property.

Chuck Miller, group support manager for city development and urban projects, said developers would benefit from being extremely generous to business owners during negotiations.

¡§Time is money and, otherwise, they¡¦d have to wait three years for us to condemn the property,¡¨ he said.

Earl Roberts, president of Lowell Development Partners, said it¡¦s common for developers to pitch in for relocation fees. He said developers wouldn¡¦t do so if potential payoffs from the purchases weren¡¦t sufficient.

City Councilman Lionel Rivera said the success of urban renewal relies on business owners being part of the process.

¡§If property owners aren¡¦t satisfied with what developers are offering, there¡¦s a problem.¡¨

King of pain: eminent domain

¡§It¡¦s been a painful process,¡¨ said Miller. ¡§I say it at every meeting, but I mean it: This issue is more complicated than (those) in the past, and this is the best exercise I¡¦ve been through.¡¨

The Urban Renewal Authority started discussions on urban renewal in the southwest downtown area in January 2000 and, a month later, had Leland Consulting do an urban-blight study of the area. Discussion focused on the possibility of building a convention center, moving Sky Sox Stadium downtown and creating an area like Denver¡¦s LoDo.

Business owners, while unable to participate in the vote on relocation policy, had significant input during the discussions.

Eminent domain gives the state and local government the power to acquire property for public use, even if the owner doesn¡¦t want to sell his or her property. In this scenario, the URA said, ¡§elimination of blight¡¨ would be the main public benefit. The government is usually prohibited from taking any more than the minimum amount of property necessary to serve the public purpose.

Business owners in the area demanded that they receive more than ¡§just compensation,¡¨ which is what the law requires. Thus the relocation policy was born.

The policy requires developers to pay most of the fees incurred by the relocation of the business and limits city government¡¦s ability to invoke eminent domain. While most of the affected business owners consider the new language in the policy effective, none are completely satisfied with the concept of urban renewal.

The flip side

For some citizens, the guarantee might as well be written in invisible ink

¡§They (URA) have a commitment to a developer, but they don¡¦t know what that exact commitment is,¡¨ said Pleasant. ¡§They have a commitment to the businesses but we don¡¦t know how much that¡¦s going to cost. So far as we know we¡¦re writing a blank check.¡¨

After the unanimous approval of the policy by the authority, Bill Neal, owner of Ross Auction at 109 S. Sierra Madre St., rose to his feet, protesting the approval of the policy and any urban renewal in the area.

Ross Auction started in Colorado Springs in 1921 on Cascade Avenue and, ironically, in the 1960s eminent domain forced the company to relocated to its current location.

Neal bought the business in 1998.

Neal said some people fly in from as far away as New Jersey to buy items they see listed on the company¡¦s Web site and about 250 customers each week register for the auction.

Neal understands the business world; therefore, is understanding of why his landlord, California-based Supperstein & Eskanos, increased his rent 25 percent. Neal said his landlord told him the rent increase was to prepare him for what was to come: condemnation.

He likened the prospect to buying a car.

¡§If you haven¡¦t bought a car in 10 years, well, once you see the price – it¡¦s sticker shock.¡¨

Neal attended three meetings and said he feels urban renewal is ¡§just something they want to do and the authority wants to go ahead with it.¡¨

He said the businesses in the area bring in more sales tax than a future convention center would and while a ballpark might do some good, he is against urban renewal. He thinks it might help if landlords submit written information about their employment rate and sales tax revenue to show the city that the southwest area is not ¡§blight.¡¨

¡§But that¡¦s one insignificant business owner¡¦s idea,¡¨ Neal said.

Is that your final answer?

City Councilman Bill Guman said the Urban Renewal Plan is a ¡§mixed bag¡¨ because most of the City Council members are opposed to anything resulting in condemnation.

¡§On the surface it sounds good,¡¨ he said. ¡§But I know there was a concern about government acquiring property. We don¡¦t want to be landlords.¡¨

Guman said he will reserve final judgement until after the urban renewal policy is presented to the Planning Commission on March 8.

The relocation policy, however, won¡¦t be presented along with the urban renewal policy because it is strictly a safeguard for businesses, not a formal document.

¡§The (planning commissioners) tend to get more into the nuts and bolts of the plan,¡¨ said Guman. ¡§URA takes a broader-brush approach, (saying) ¡¥here¡¦s the place we want to renovate and here are the businesses that don¡¦t fit.¡¦¡¨

Nonetheless, the approval of the relocation policy is expected to pull weight in April when the urban renewal policy is expected to go before City Council.

¡§I don¡¦t want to force anyone to sell their property because of condemnation,¡¨ Councilman Rivera said.

Pleasant agrees with council and warned that history should not be repeated.

¡§First, look at the history of urban renewal in Colorado Springs,¡¨ he said. ¡§What has it done for us in the past? It¡¦s reunited the Lowell neighborhood and has torn down old historic buildings and then put parking lots up.¡¨

Pleasant said the 40 businesses in the area are economically vital to the community and the authority labeling the area a blight on the community and saying the area is a danger to public safety and morals is absurd.

The only segment of the study area that he said could be truly classified as blight is the area between the railroad tracks and I-25, he said.

¡§I think that this proposal for urban renewal should be scrapped.¡¨

But if council does pass the plan, the URA will issue a request for proposals from developers. The RFP will be issued on a national scale.

¡§We may e
nd up with a big mess on our hands,¡¨ said Miller. ¡§But we want to see how it works.¡¨

Dreaming of tourism

Beth Spokas, executive director for the Downtown Partnership, said the group is generally supportive of the plan, although members haven¡¦t yet heard a full presentation of the vision for the area.

¡§We think it sets the stage for a lot of neat things,¡¨ she said.

Board members are also reserving final judgment, she said, because they don¡¦t yet know what will end up in the urban renewal area, whether it¡¦ll attract tourists, or if it accommodates offices.

¡§This is going to evolve and the urban renewal policy provides certain tools to help it along,¡¨ Spokas said. ¡§I¡¦m very pleased they have managed to negotiate this (the relocation policy) and get it settled. It¡¦s very exciting.¡¨

Will Temby, president and CEO of the Greater Colorado Springs Chamber of Commerce, shares Spokas¡¦ sentiment.

¡§We are thrilled with the revitalization of the area, with any potential of other avenues, like the ballpark and convention center.¡¨

Temby said he doesn¡¦t know if the southwest area is the right place for the possible venues, but will look at the issue with ¡§no preconceived notion for one standpoint.¡¨

Proponents of urban renewal say that wherever the renewal goes, money flows.

Temby said the long-term impact of urban renewal of downtown could be similar to what happened after the construction of the World Arena Ƒ{ over the years it became a multipurpose facility attracting local and out-of-state tourists, as well as other businesses to the area.

¡§In regard to the economic impact of revitalization, many models of downtown facilities show an increase in the spending multiplier,¡¨ said Temby. ¡§But it¡¦s not an immediate payback.¡¨