Colorado Springs submitted its ambitious $218.6 million tourism tax proposal to the state Monday, shedding more light on Mayor Steve Bach's plan to build a baseball stadium and an Olympic museum downtown; a wellness center at the University of Colorado at Colorado Springs; and a new Air Force Academy visitors center.
As it happens, the Springs' 80-page application was the only one received by deadline, according to the Colorado Office of Economic Development and International Trade. But that doesn't guarantee the city will win funding through the Regional Tourism Act, according to Jeff Kraft, OEDIT director of business funding and incentives.
"It still has to meet the statutory criteria," says Kraft.
For example, criteria call for applicants to have "land control (assemblage, options, leases) in place" and "commitment of public and/or private capital for the project." The city has neither. And while the proposal claims the projects will generate a total of 1,068 jobs during and after construction, 578 of those will pay less than $35,000 a year.
Of course, the city also has to win over local residents, who've had little input so far. And the application does take one step toward that goal: It mentions no likely tax increase. Instead, it proposes to divert property taxes and sales taxes from the Urban Renewal Authority to fund the downtown projects.
Outside the lines
Dubbed "City for Champions," the proposal calls for about $82.1 million in state sales tax rebates to funnel into the projects. Another $61.5 million will come from private funding, largely donations.
The rest — about $75 million — will come from public funding. The only specific method listed in the application is tax increment financing (TIF) through the Urban Renewal Authority and federal tax credits. TIF results from diverting new city property taxes and sales taxes generated in the Urban Renewal Area southwest of downtown to the two downtown projects.
Those are a baseball stadium/events center, which the application says will host "numerous musical and cultural events," and an Olympic museum.
But when it comes to details, the application is confusing. A map shows the stadium southwest of Colorado and Cascade avenues, with the museum to the southwest of that. It's a location that would abut the Pikes Peak Center to the south, but a rendering shows Pikes Peak Center lying east. And though the application states "at least three sites amply support the stadium and are owned by long-standing, community-supporting, locally based organizations," it fails to name those organizations.
In fact, the stadium site represented in the application's renderings is owned by entities in which David Supperstein holds an interest.
"They haven't contacted me," Supperstein says. Not that he's against selling — he says a "fair price" would be $3 million, which is about three times the value listed by the El Paso County Assessor's Office.
Immediately south of the Supperstein property lies a city block owned by entities in which Michael Trapp holds a stake. Trapp, who runs Olson Plumbing and Heating, says he hasn't heard from the city, either.
"I'd like to know a lot more about what they're planning," he says. "I don't know enough about it to be for it or against it."
While state criteria requires applicants to outline "specific viable sources" of public and private funding, the city's application doesn't do that. Instead, it talks in terms of "public/private partnerships" and states, "The RTA project financing plan anticipates a public/private partnership between the State of Colorado, City of Colorado Springs, El Paso County, Colorado Springs Convention and Visitors Bureau, the Colorado Springs Urban Renewal Authority (CSURA), venue operators and various private and nonprofit investors ..."
Another example: Speaking to the UCCS project, the application states, "Buildings in the UCCS Health and Wellness Village will be funded through various sources. They may include: lease revenue, clinical revenues, bonds, private philanthropy, public financing and support from the State of Colorado."
Private funding for the academy project, which will cover $11.3 million of the total $20.5 million cost, will come from the academy funds, including USAFA Endowment.
The $59.4 million Olympic museum would get $32.7 million from private sources, a combination of donations and endowment funds. The application adds that "exploratory presentations" have resulted in several foundations and individuals willing to "entertain a request" from $250,000 to $10 million.
Mayor at the top
Kraft, who hadn't seen the application as of our interview, says a failure to show "land control" of the downtown projects and securing of public funding isn't a deal-breaker. But he notes, "The ideal application is to have all those things locked down." Without them, he says, an assessment "gets harder and trickier."
That assessment will be done by a state-hired consultant based on the city's visitor spending projections; market impact assessments; number of new jobs created by job category, wages and health benefits; fiscal impact on local governments, and a financial feasibility analysis.
The city hired Ricker-Cunningham, a Denver-based independent economic consultant, to analyze various aspects of the projects. The firm concluded the projects would attract 1.1 million new visitors to Colorado Springs per year, with about 450,000 being "net new" out-of-state visitors. Also cited in the application is an economic impact study of the stadium done by Summit Economics.
As for how the state-rebated tax money to build the projects would be handled, a flow chart in the application shows the mayor over everything, including a city RTA board not yet created. The RTA board would be over the Urban Renewal Authority, which would actually hold and spend the state money.
If state funding is approved, the city has five years to achieve "substantial progress," defined by statute as issuance of debt, erection of permanent structures, excavation or grading.
The city's application will be weighed by the state Economic Development Commission, a nine-member body that will add two more members in September.
Springs developer Chuck Murphy, owner of Murphy Constructors, was recently appointed to the group by state Sen. John Morse. The board chair, appointed by Gov. John Hickenlooper, is Dick Monfort, owner of the Colorado Rockies, parent club of the Sky Sox.
Murphy owns property north of Colorado Avenue, just northwest of the area to be developed for the ballpark. In fact, the city's map of the area shows hotel and retail development on Murphy's land, underscoring Mayor Steve Bach's prediction that the stadium and museum will cause "spin off" economic development.
EDC members are subject to the state's standards of conduct, which state they "shall not perform an official act which may have a direct economic benefit on a business or other undertaking in which such member has a direct or substantial financial interest."
Asked about a potential conflict, Murphy says, "If I feel it's important and necessary, certainly I will" step away from voting on the Springs' proposal.
As for Monfort, the Rockies organization refers questions to the EDC. The EDC's Jeff Kraft says members will be asked to disclose potential conflicts, which will be reviewed by the governor's legal staff, the EDC chairman (yes, Monfort himself) and staff. Based on that review, a recommendation will be made on whether the member can vote. — PZ