Vineyards developer moving ahead with urban renewal project
The developer behind Colorado Springs’ next major urban renewal redevelopment says his project is vastly different from the financially troubled North Nevada Avenue one, and that he’s moving ahead with plans to build a nearly $1 billion business park.
“I recognize and understand that sales tax revenues on North Nevada are down right now, but our project is not a sales tax revenue project,” Vince Colarelli, a Colorado Springs general contractor, said Friday.
“Ours is a property tax revenue project, and our project has always contemplated a public improvement fee to provide a backstop guarantee to bond holders. That makes it materially different,” he said.
Colarelli is proposing a business park that would house several high-tech data centers on what used to be the Vineyard Golf Course and Pikes Peak Vineyards winery in southern Colorado Springs. The 105-acre project is called the Vineyards Data Center.
“We work on our project every day, and we are making positive progress,” he said.
The next step is finalizing a reimbursement agreement that must be approved by the Colorado Springs Urban Renewal Authority, he said.
Neither Mayor Steve Bach nor the City Council have to sign off on the agreement, he said.
The authority came under criticism this week amid revelations that it defaulted on a repayment of money it borrowed for the North Nevada project, which is anchored by Costco, Kohl’s and other retailers. The authority sold bonds for the project to be repaid with sales tax revenue, primarily, from the development.
Bach also said the authority wanted to charge another urban renewal project known as Ivywild $50,000 a year in fees for 25 years — or $1.25 million total — when construction costs were only $3.2 million.
The mayor’s revelations triggered a public spat between Bach and Jim Kin, a member of the authority board, at Tuesday’s council meeting. Kin said the mayor had inaccurate information.
The blowup led to a private meeting in the mayor’s office Thursday.
Council members also expressed frustration that no one raised red flags about the default on bonds for the North Nevada project before they voted on creating a special taxing district for the Vineyards project. Council President Scott Hente represents the council on the authority and said council members received the authority’s meeting agendas and minutes, which reflected the financial problems.
The authority plans a special meeting early next week to discuss how it can improve communications with the mayor and council members, said Jim Rees, a retired city employee who manages the authority’s activities.
Rees said the authority never planned to levy $50,000-a-year in fees against the Ivywild developers. However, he acknowledged that the authority had created a spreadsheet that reflected that fee structure. But he said it was only what he called a “test.”
Rees said the authority typically charges every project a flat rate of $50,000 a year for no more than 10 years, depending on the project.
When the proposed fees against Ivywild “began to look disproportionate to the total amount of tax increment that was to be generated ... we changed it,” Rees said.
Rees also confirmed that the authority asked the city for a line of credit last fall. It was for a $300,000, he said.
Around 2006, the authority requested — and received — a $250,000 line of credit from the city, he said.
“We were in the same situation with a couple of other projects and then when they came to bear, we paid down the line of credit and had no balance,” he said.
The authority’s most recent request was in case of an emergency, Rees said.
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