You can’t leave this one up to the voters,” said an individual close to the Colorado Springs strategy for the Regional Tourism Act process, requesting anonymity. “This is too important. The future of the city is on the line, tens of millions in private funds, a chance to build a real downtown where’s there’s nothing but decay.
“You think that the people behind this are stupid enough to risk everything on an election they can’t control? Think again.”
If the city’s application for state tax-increment financing for four major projects under the RTA’s provisions is successful, project supporters will have to find more than $70 million in “local public funding.”
What about the Taxpayer’s Bill of Rights? What about iron-clad provisions in the Colorado Springs City Charter and the Colorado Constitution, which require a public vote on new taxes or new debt?
Those provisions may not be so iron-clad. Just as City Council was able to issue $32 million in new debt without voter approval to support a retention package for the U.S. Olympic Committee in 2009, there may be ways for Mayor Steve Bach to avoid any citywide vote on public RTA funding.
An examination of the proposed funding structures for each of the four projects shows that “local public funding” will only be used to support the downtown baseball stadium and infrastructure improvements to southwest downtown, which will also benefit the proposed Olympic museum.
Of the stadium’s total $60.6 million cost, $42.4 million will come from local public-sector funding, while $18.2 million will come from state sales tax increment funding (SSTIF). Southwest downtown urban renewal area improvements, including a 1,500-space parking garage, a pedestrian bridge to America the Beautiful Park, streetscape improvements and utility upgrades, are projected to cost $51 million. Tax increment funding will account for $19.8 million of the total, with local sources kicking in $31.2 million.
So how do you find $73.6 million in local public-sector funding without the messy necessity of a public vote?
The city’s RTA application is remarkably vague on that crucial point. In a footnote to financial projections on page 52 of the 80-page application, the following sources are cited: “Downtown Development Authority, Colorado Springs Urban Renewal Authority, improvement districts, new market tax credits, municipalities, bonding, etc.”
The administration appears to be zeroing in on the Urban Renewal Authority, which is not legally a part of city government. From the organization’s website:
“CSURA is a 9-member board appointed by the Mayor of Colorado Springs and approved by City Council members … CSURA is governed by Colorado State Statutes and is independent of any budgeting entity other than their own. CSURA is a tool to assist with the restoration and redevelopment of specified areas determined to meet the State Statutes for blight. CSURA promotes projects that supply public benefit, provide quality sustainable places, create jobs, promote public art, offer affordable housing and raise the standard of development in Colorado Springs. These projects are achievable through the coordinated partnerships of private and public entities, civic leaders, financial institutions and the use of tax increment financing.
“When CSURA partners with a private developer and provides assistance to help finance redevelopment of a blighted property in Colorado Springs, the main tool it uses is called tax increment financing. … TIF is a mechanism to capture the net new or incremental property taxes that are created when a vacant or underutilized property is redeveloped, and use those revenues to help finance the project.”
Southwest downtown was declared a blighted area in 2001. That’s a problem, since a 25-year clock starts when an urban renewal plan is approved and recorded. Any redevelopment could only collect tax increment financing for 13 years.
That means that the old plan has to be junked, then a new plan approved by CSURA and approved by City Council. But a new district within the present district’s boundaries might not generate enough sales and property tax revenue to support $73.6 million in TIF bonding.
Here’s the likely solution: Enlarge the district to include much of downtown, and to include both sales and property tax increments. The only voters would be business and property owners in the new district, many of whom ardently support downtown renovation and rebirth.
Such a structure has many benefits. No new taxes are levied, no municipal funds are used, and the city assumes no liability.
That’s particularly important for the Bach administration, since it seems certain that some sort of stormwater funding package will be presented to city voters in November 2014.
If the ballot also contained a $73.6 million request for RTA projects, it’s possible that neither would pass. And then what would we have?