Council inks redevelopment deal

Six years of planning came to fruition Tuesday when the Colorado Springs City Council sold 8.7 acres of downtown property for a hotel, parking garage, office buildings and residential development.

“We’re finally going to get the southwest urban renewal zone started,” Mayor Lionel Rivera said. “We’ve finally taken the step so that we’ll see dirt moving soon.”

That step was the move to sell property southwest of Colorado Avenue and the railroad tracks to the Colorado Springs Urban Renewal Authority for $4.1 million.

The only hangup for the deal, due to close June 28, is a pending environmental study.

The project dates to August 2001, when the council designated 100 acres of light industrial land southwest of Colorado and Cascade avenues as an urban renewal site.

The city has pumped millions of dollars into the 30-acre America the Beautiful Park, but progress has stalled in the zone.

It bought the 8.7 acres involved in Tuesday’s action in 2002 from Colorado Springs Utilities for about $6.1 million and agreed to repay the money by this year.

The city has repaid $2.2 million using money from land sales and grants but no general fund money, Deputy City Manager Mike Anderson said.

The city still owes $3.9 million, plus interest accrued since it last made a payment in 2005, he said.

The Urban Renewal Authority, an agency that redevelops blighted areas on behalf of city government, will repay the city over 25 years. The city will use the payments to retire its debt to Springs Utilities, also over 25 years, at a rate based on Springs Utilities’ borrowing rate.

Here’s the plan:

The authority will sell two parcels to Palmer Village Developers, composed of interests from Classic Homes and Nor’wood Development Group.

The old Springs Utilities gas building on the northwest section will be remodeled to accommodate offices for the U.S. Olympic Committee’s governing bodies. About 15 percent of the space will be leased by arts groups. The remodeling is expected to be done next year.

Developers also will build a 100,000-square-foot office building and a multistory residential complex that will overlook America the Beautiful Park, as well as 30 residential units on the south end of a narrow strip northwest of Cimarron Street and the tracks.

The developers also will construct a 600-space parking garage to be purchased by the

Urban Renewal Authority.

Rivera said the Olympic Committee is interested in relocating some personnel from its headquarters at Union Boulevard and Boulder Avenue and some governing bodies from other locations in Colorado Springs.

“It helps to keep the USOC headquarters here for years to come,” he said, a reference to talk the committee has discussed moving elsewhere.

Rivera called the USOC component a “key driver” to the city backing the project.

Chuck Miller, an Urban Renewal Authority consultant, said the authority will sell the land to Palmer Village for approximately the price it paid.

The authority will ask less for a parcel it plans to sell to Missouri hotelier John Q. Hammons, who plans to begin work in spring 2008 on a 300-room Embassy Suites hotel, Miller said. The authority will pay about $475,000 per acre but will sell several acres to Hammons for $241,000 per acre, Miller said.

He said the authority will make up the difference with tax increment financing, a method whereby the agency collects property taxes to pay for public infrastructure. That will be the source of money for a parking garage as well.

“This is a watershed action necessary to get the project started, because now the land is under our control,” Miller said.

There’s one more hurdle — an environmental assessment on land where a coal gasification plant once stood. The study is due before closing.

“We know what’s there,” Miller said. “We know there’s coal tar. It’s a concern.”

He didn’t know how much cleanup would cost. The authority has set aside $500,000 for the work. If it costs more, the authority would look to the city to pay.

Rivera said if environmental problems are identified, the city will help resolve them.

CONTACT THE WRITER: 636-0238 or pam.zubeck@gazette.com

OLYMPIC INTEREST

The U.S. Olympic Committee has voiced interest in relocating people to a downtown location.