Tuesday, November 26, 2013

UPDATE: City for Champs gets a $22 million boost

Posted By on Tue, Nov 26, 2013 at 10:12 AM

UPDATE: The City for Champions folks released this statement regarding its application:

City for Champions is looking forward to the Dec. 4 presentation to the state’s Economic Development Commission and providing the commissioners information and analysis that demonstrate the positive impact of City for Champions for the state, city, county and region. The third-party analyst report by Economic & Planning Systems, Inc. (EPS) is a component in the Regional Tourism Act process, and the group’s input is helpful. In particular, our response to the EPS report gave us the opportunity to make a great application even better by adding context and detail about the Colorado Sports and Event Center and the UCCS Sports Medicine and Performance Center. Our application has become stronger through this process, and we are ready to make our case to the commissioners.


——————————————-ORIGINAL POST, TUESDAY, NOV. 26, 10:12 A.M.————————————————
The state's consultant reviewing the city's revised City for Champions application for state sales tax rebates has concluded the tourist package warrants $53.1 million over 30 years, a nearly 70 percent increase from the original finding of $31.4 million.

The new figures might engender hope among supporters of the application, though the $53.1 million is still far short of the total price tag of roughly $250 million.

The latest analysis by Economic & Planning Systems, Inc., says the city's four projects warrant these amounts of state sales tax rebates:

click to enlarge logo.png
U.S. Olympic museum: $28.3 million over 30 years, or $942,000 per year. (The initial analysis said the project was worthy of $20.8 million over 30 years.)

Downtown stadium and events center: $15.4 million over 30 years, or $512,000 per year. (Previous analysis concluded the project, then a baseball stadium, warranted only $3.8 million over 30 years.)

UCCS sports medicine center: $9.2 million over 30 years, or $307,000 a year. (EPS eliminated this project in its earlier analysis, saying it was too undeveloped to analyze fully.)

Air Force Academy visitors center: $260,870 over 30 years. (The earlier analysis awarded $6.8 million over 30 years.)

From the report:
No funding participation from the USAF has been identified, although the Application states that there are no federal funds available for this type of project, and as a result of military downsizing, this project would likely have a low priority. No funding commitments for the private funds have been identified, although it is noted that the USAFA Endowment is beginning an extensive capital campaign.

As for the downtown stadium, here's the consultant's take on the city's projection of events it could attract:

The Applicant’s consultants met with representatives from the National Governing Bodies (NGBs) in Colorado Springs and other sports management groups to estimate the number of annual events, athletes and other visitors (coaches, family/friends, spectators) that the proposed Colorado Sports Events Center (CSEC) could attract. Included in the Supplemental Material, an analysis by Summit Economics estimates 53 annual events as follows. The NGBs estimate that 9 new NGB-sponsored events could be brought to Colorado Springs, and 23 events could be brought back to Colorado that are currently held elsewhere. The Applicant would target an
additional 15 multisport organizations (a wide range of sporting activities) and other large national events averaging 6.2 per year considering that some may not come to Colorado Springs every year, and some are more competitive to attract. 
Within the “New Non-Olympic Events” category, the Applicant is assuming that major events such as the X Games and the Mountain Dew Tour will be recruited each year. These are highly competitive and sought after events.
The facility would also target sports conferences and gatherings estimated at an average of 3.6 events per year. Among all athletes, 80 percent are estimated to be from outside Colorado based on information from the NGBs, and 73 percent of accompanying coaches, trainers, family/friends/spectators, are from outside Colorado. 

On Page 74 of the report, EPS lays out financing plans for the museum as follows (note the fourth bullet):

The status of the Museum’s funding commitment and development readiness is summarized below, from information provided in the Original Application and in the Supplemental Material.
Nor’wood Development provided a letter to OEDIT indicating its “enthusiastic commitment to sell, lease, condominiumize or otherwise convey the property needed for these amazing anchor venues”. Earlier in the process, it was reported that Nor’wood owned the Museum site, and that the other required sites for the Stadium and Sports Events Center were not owned or controlled by the Project Team. The status of land ownership, options, or other commitments is not clear.
 The funding and financing plan does not contain any specific funding commitments from individuals, foundations, the USOC, or the City. The Application does contain letters of interest from two foundations, the Chapman Foundation and the El Pomar Foundation. Specific funding commitments are not made, but a high level of interest in receiving a funding request is stated.
 A letter from Mayor Steve Bach indicates the City’s intent to utilize its bonding capacity to fund a portion of the City for Champions projects.
 A letter from four of nine City Council members states that they do not support increasing the City’s indebtedness or committing increases in General Fund revenues or expenses to the Project without a vote from the citizens of Colorado Springs approving such financial commitments.
 A letter from the Colorado Springs Urban Renewal Authority (CSURA) supporting the Application. The letter cites a Resolution that approves CSURA’s involvement in the City For Champions Project and its intention to utilize CSURA’s tax increment financing powers. The current Urban Renewal Plan estimates TIF capacity of $50 million in bonds. No documentation on the timing of these TIF revenues and bonding capacity was provided. TIF bonding capacity estimates are often based on real estate development projections which are highly uncertain. The CSURA is an arms-length independent agency of the City. Only one of CSURA Board Members is also on the City Council.
 RTA funds are assumed to provide the initial funding and financing source. The Applicant proposes to raise other public, private, and philanthropic funds after RTA funds are approved.
 An operating pro-forma was submitted rather than a project development pro-forma. A project development pro forma would include land and construction costs, estimates of other funding and financing sources, operating revenues, debt service, and the resulting funding/ financing gap for the project with and without the RTA funds. EPS therefore could not evaluate the project’s financial need given the uncertainties in the funding and cost assumptions.

For a rundown of the other projects funding outlook, go to Page 75 and 76 in the report:

Final_EPS_report.pdf
The city will present its proposal next week to the Economic Development Commission. A decision is expected later in December.

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