Special district may fund work downtown

A major downtown property owner hopes to use a special district to help finance redevelopment of five downtown buildings, including one being eyed by the U.S. Olympic Committee for its headquarters.

The Colorado Springs City Council on Tuesday approved the creation of four districts for LandCo Equity Partners, including one for the five properties.

Such districts are common financing tools for new development, but they are rarely used to renovate older downtown properties. The districts could issue up to $112 million in bonds that would be repaid by property taxes on land or buildings in the district.

Developers have used spe- cial districts to finance public improvements because they are less costly than bank loans, can finance improvements local governments can’t afford and can easily bypass state revenue limits, said Pete Susemihl, a Colorado Springs attorney who is setting up the districts.

The buildings in the downtown district include the proposed Stratton Pointe project, an office building at 19 N. Tejon St., the historic Mining Exchange Building and two adjacent buildings. The other districts include a planned shopping center and a housing development on Powers Boulevard and nine retail and office properties scattered around the city. All are owned or being acquired by partnerships Land-Co controls.

LandCo is renovating the North Tejon Street, Mining Exchange and adjacent buildings. It also plans to gut the former Design Center, add four floors and transform it into the sixstory Stratton Pointe, which would include a skybridge to a nearby city parking garage.

The downtown district can use the money it raises to remodel the facades and make safety improvements to the downtown buildings, including adding fire sprinklers and elevators, as well as to redo sidewalks and landscaping, according to documents included in Tuesday’s council agenda.

The USOC is considering a move of its Colorado Springs headquarters from its training center near Union Boulevard and Boulder Street to Stratton Pointe, some businesspeople familiar with talks between city officials and the USOC said earlier this month.

LandCo Chairman Ray Marshall declined Wednesday to say what potential tenants are considering Stratton Pointe or talk about any of the districts.

City Councilman Jerry Heimlicher said Tuesday he is “hoping the whole issue (with USOC) will be done and finished by the end of this month.”

USOC spokesman Daryl Seibel said Wednesday that the group’s board of directors will discuss “the review of various proposals” USOC has received from the Springs and other cities for its headquarters at a regularly scheduled meeting Feb. 22 in Atlanta.

Seibel said he didn’t know whether USOC President Jim Scherr and consultant James Didion will be ready to recommend a proposal to the board. He declined to comment on whether the USOC is considering Stratton Pointe as a site for its headquarters.

The districts for the properties outside downtown are designed to finance public improvements such as utilities, traffic lights and parking.

The property at Barnes Road and Powers Boulevard is across from the city’s first Costco warehouse club, scheduled to open Wednesday.

Susemihl said the four districts can issue tax-exempt bonds at an interest rate of about 4 percent, which is about 2-3 percentage points less than LandCo would pay to borrow the same amount from a bank.

Though the districts could issue up to $112 million in bonds, the documents in the agenda estimate the cost of all improvements at $31.2 million.

About $11 million would be used for redevelopment of the five downtown buildings, according to the council documents.

Susemihl said such districts often request a higher bonding ceiling than needed so they don’t have to seek another approval if they later want to issue more bonds.

The districts still must gain approval from a 4th Judicial District judge, and LandCo and its partners must vote to form the districts and issue the bonds in a mail-ballot election expected to be completed in mid-March, Susemihl said.

LandCo wants to get the districts created and bonds approved by mid-March, or under state law it will have to delay the elections six months, he said.

CONTACT THE WRITER: 636-0234 or wayneh@gazette.com