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City Council grants taxing authority to Nor'wood Development Group

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Developers plan to remold southwest downtown - COURTESY CITY OF COLORADO SPRINGS
  • Courtesy City of Colorado Springs
  • Developers plan to remold southwest downtown
On Sept. 26, Colorado Springs City Council granted taxing authority totaling $325 million — the single biggest special-district debt limit in the city’s history — to Nor’wood Development Group, the owner of 67.8 acres in southwest downtown. Nor’wood will now hold a required election among affected property owners (in this case, themselves and any other property owners in the area or those with contracts to buy property) to create two metropolitan districts, and possibly a business improvement district.

It’s fairly common for the city to grant a developer a special taxing district to make public improvements. If the developer owns all the land in the district, he makes the rules and selects the board for the district, while future property owners (like those that buy houses the developer builds) pay off those debts through taxes later on.

This is what’s happening on a massive scale with Nor’wood, the region’s largest developer, which plans high-rise residential and office buildings in an area generally bounded by Interstate 25 on the west, Cascade Avenue on the east, Colorado Avenue on the north and Cimarron Street on the south. It’s the site of America the Beautiful Park and the under-construction Olympic Museum, but much of the land consists of vacant lots and unused buildings, spurring little commerce.

The Council action means Nor’wood can form the districts, issue debt to be repaid with property taxes charged to future property owners within the districts, and use the money to fund public improvements, such as utilities upgrades and streets. The plans will come back to Council at certain junctures for its approval. The service plan calls for a tax of 30 mills for debt and 10 mills for operations. A mill is $1 for every $1,000 in assessed valuation.

Critics on Council are Bill Murray and Don Knight. Murray questioned approving the debt authority without more details and called it “a blank check,” while Knight questioned the size of the authorization but said he was enthusiastic about the plan in general. Murray cast the lone dissenting vote, and Councilors Andy Pico and Merv Bennett were absent. The issue has been on Council’s radar since summer.

City Planning & Community Development Director Peter Wysocki said, “The intent of the redevelopment area is to create a unique vibrant place for residents and visitors and stimulate development and redevelopment throughout the entire city.”

Council President Richard Skorman, also an advocate, noted the proposal embodies the concept of growth paying for itself, while Downtown Partnership CEO Susan Edmondson said, “This is what great cities do to make great cities happen.”

Citizen critic Tim Hoiles, a former Gazette owner, said it’s not government’s job to give away taxing authority and noted the city is negotiating with Nor’wood on two other matters — amendments to the 18,000-acre undeveloped Banning Lewis Ranch’s 1988 annexation agreement to ease developer investment, and an alleged violation of the Clean Water Act at Nor’wood’s First and Main commercial district, as noted in the Environmental Protection Agency’s lawsuit against the city.

Regardless, Council’s vote cleared the way for the districts to incur debt. Nor’wood has filed petitions with the Fourth Judicial District Court for both metro districts, and on Oct. 20, back-to-back hearings will be held about the petitions’ sufficiency. If declared sufficient, Nor’wood can proceed to elections to form the districts, issue debt, impose taxes, and elect directors. Five people signed each petition, including David Jenkins, who founded Nor’wood, and his son, Chris, Nor’wood’s president, who didn’t respond to a request for comment.

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