Tax revenue flowing into urban renewal "black hole"

Colorado Springs is collecting taxpayer money for a controversial and dormant urban renewal project that some say will never get off the ground.

“This is another boondoggle by elected officials who maybe didn’t really understand the full ramification of the vote,” City Councilman Tim Leigh said Friday.

In May 2010, the former City Council, which didn’t include Leigh and five other new council members, voted unanimously to designate Copper Ridge in north Colorado Springs as an urban renewal area.

The public criticized the decision because such designations are typically used to revitalize blighted neighborhoods. Copper Ridge, where a 2.8 million-square-foot retail complex with an enclosed mall is planned, sits on undeveloped land in a suburban area.

Despite the public outcry, the council moved forward, saying the designation could be used to generate sales and property tax revenue to help pay to extend Powers Boulevard to Interstate 25.

The city tried to get El Paso County to participate in the deal by contributing sales tax revenue toward the estimated $80 million road project. County commissioners refused.

Opinions vary about whether the county’s decision put the project in peril.

The proposed agreement involving the city, county and a special taxing district called for the district to issue bonds to finance the 4.5-mile extension of Powers from Colorado 83 to I-25. Those bonds would be repaid over 25 years with revenue provided by the three parties.

Even though the county didn’t get on board, the council’s urban renewal designation triggered the collection of property taxes by the Urban Renewal Authority.

The authority says it is sitting on about $90,000 and that it expects to collect $90,000 more this year. That money is supposed to be spent on the Powers extension.

The authority, whose financial records are now the subject of an investigation launched by Mayor Steve Bach, is in the crosshairs of the Copper Ridge project.

But not by choice.

The authority recommended against the urban renewal designation for Copper Ridge.

“We didn’t think it was blighted,” board member Jim Kin said.

When the council decided to declare Copper Ridge an urban renewal area, “we made it clear to the city administration that we wanted to play a minor role,” Kin said.

That role, he said, is to receive so-called tax increment financing funds and disperse them based on the city’s redevelopment plan.

“We don’t know what the status of that urban renewal area is,” Kin said. “That is the responsibility of the administration.”

Steve Cox, chief of economic vitality and innovation for the mayor, said the mayor’s office is waiting for developer Gary Erickson to make the next move.

“Right now, we’re just kind of in a wait-and-see mode,” Cox said.

Erickson did not return calls requesting comment.

Erickson told The Gazette he was moving forward with the project and that he expected to announce this summer the names of two anchor stores that had committed to Copper Ridge.

Erickson made the same promise last year.

Councilwoman Angela Dougan, who represents council District 2, which includes Copper Ridge, said she’s confident the project will come to fruition.

“If I ever had to believe in anybody, I would believe in Gary Erickson to get the job done,” she said. “I believe it’s still on track and that it’s still moving forward.”

Others aren’t so sure.

“I would doubt that it’s going to happen because I don’t know anybody who has the money to put into the deal,” Leigh said.

“How in the world do you designate an open prairie as urban renewal?” he added. “How does that work? So I would say that the (tax increment finance) funding for that is probably DOA, realistically.”

Cox said he didn’t know whether the project would work, including extending Powers, without the county’s participation.

“You probably have to talk to Gary on that because I haven’t seen any numbers of late that would show me whether it would or it wouldn’t,” Cox said. “The ball is in Gary’s court.”

County Commissioner Sallie Clark said she found it “disturbing” that tax dollars are being diverted to what she called “a black hole” at the Urban Renewal Authority.

“This is sort of what I would call a dormant district that’s doing nothing and yet it’s deferring taxes from taxing entities that could be using those dollars to provide services to their citizens,” she said.

“It seems ridiculous that this taxing district was created and it’s not providing any use to the community.”

Council President Scott Hente, an Urban Renewal board member, said the money is in the bank.

“We’re not going to have a big party and go spend the money,” he said. “We’re going to sit on the money until the project starts to become due, and then we’re going to use it for what it’s designed for.”

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Contact Daniel Chacón: 476-1623
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