Tuesday, January 14, 2014

A new tax to fund City for Champions?

Posted By on Tue, Jan 14, 2014 at 4:14 PM

More questions about City for Champions, the plan to build four tourist venues, are being raised by City Council members after Council President Pro Tem Merv Bennett attended a "stakeholders" meeting. Among those is a possible tax increase to fund the $250 million proposal, which calls for building a downtown sports center, Olympic museum, new Air Force Academy visitors center and University of Colorado at Colorado Springs sports medicine center.

Bennett told his colleagues toward the end of yesterday's Council meeting that he stood in for Council President Keith King at a meeting Jan. 9, because King couldn't attend. The meeting was called by Mayor Steve Bach and was attended by Bach, El Paso County Commission Chairman Dennis Hisey; Dick Celeste, who's heading up efforts to build the Olympic museum; UCCS Chancellor Pam Shockley-Zalabak; attorney Jason Dunn, who handled the city's application for state money; and Bob Cope, the city's economic vitality official.

Several other city staffers, as well as officials with the Urban Renewal Authority and Air Force Academy, were on hand, too, Bennett says.
click to enlarge Bennett: Council must be engaged.
  • Bennett: Council must be engaged.

The meeting wasn't posted as being open to the public, and Bennett says there was discussion of whether future meetings should welcome citizens.

"I think the Council needs to be heavily engaged in this," he tells the Independent, suggesting it might be a good idea to require stakeholder meetings to be open to the public.
 
During his comments to Council on Monday, Bennett outlined a complicated process to meet state requirements to ensure the city receives $120.5 million in state sales tax rebates. Those include creating a Regional Tourism Advisory Board, a phasing plan for when each venue would be built, and other requirements.

Points Bennett reported from the meeting:

• City for Champions is a package deal. All projects must be built. If they're not, the city must pay a penalty.
• Substantial work must have taken place within the first five years, but substantial work could simply be the hiring of an architect.
• All four must be completed within 10 years.
• The projects can't be cross-collateralized, meaning using one as an asset to borrow against to fund another.
• Each must stand financially independent of the others.
• A contract with the city must be submitted by April 16.
• City Council must reset the 25-year tax increment financing clock in the urban renewal area where the two downtown venues will be built.
• The Cimarron interchange will be completed in 2017, prior to the projects being completed. (The city's application says the downtown stadium would open in 2017 and the others in 2016.)
• The Gazette is sponsoring a public meeting in Armstrong Hall at Colorado College the night of Jan. 23.

Councilor Don Knight suggested seeking a legal opinion about establishing the RTA Board, which will oversee cash allocations to each project and the development of each project. But he noted the City Charter is clear that Council creates and appoints all boards and commissions.
click to enlarge Miller: Relying on CORA.
  • Miller: Relying on CORA.

Interim City Attorney Wynetta Massey said the board's function is advisory to the state Economic Development Commission. However, the state's terms and conditions describe a dual responsibility: reporting to the state, as well as overseeing the projects' funding and construction. Bach has asserted he will appoint that board.

Councilor Joel Miller noted the Council has yet to be briefed on the city's application; yet, Council will be asked to take many actions to enable City for Champions in coming months. "I'm still having to file CORA [Colorado Open Records Act] requests to get information," he said. "Nor'wood employees were given the opportunity by the Economic Development Commission to redact information on my CORAs for Council."

(Nor'wood is a development company whose owners own a significant amount of property in the area of the downtown sports venue and museum.)

Miller also says considering that the state money provides only 19 percent of the total amount needed to build the projects, "to say it's full steam ahead is premature.

"I'd like to know who's paying for bond counsel, who's hiring architects, who's paying for all this" work on the state contract, he added. "I asked those questions and was denied answers from the [city] economic vitality specialists. I'm having to file CORA requests to get information, and I think that's outrageous and I think it's despicable."

Councilor Val Snider wanted to know if anyone kept minutes of the stakeholder meeting last week; Bennett said none were kept.

"That is absurd," Snider said. "That is absolutely crazy."

Said Miller: "The deal was with the city of Colorado Springs. It wasn't with the [Colorado Springs] Sports Corp. It wasn't Nor'wood. If there are meetings of stakeholders, it should have minutes and it should be transparent."

Today at 11:30 a.m., Council held a working lunch meeting where the topic again came up.

King brought two pages of questions about City for Champions to underscore the lack of information provided to Council by the mayor and others. Bennett noted there are assumptions being made, and he can't tell what's reality and what's not.

Council members tentatively set 9 a.m. to noon on Monday, Jan. 27, as a work session to which attorney Jason Dunn will be invited to speak to Council, along with Cope.
click to enlarge King: How ’bout a tax increase?
  • King: How ’bout a tax increase?

King went so far as to suggest that it might make more sense to seek a sales tax increase to fund City for Champions, because the city's interest rate on general obligation bonds issued against the sales tax revenues likely would be lower than the interest rate on bonds issued by the Urban Renewal Authority, Parking Authority or some other entity.

"We might save the taxpayers a lot of money if we go with a quarter-cent sales tax rather than go with all the different bonds," said King, who was vehemently opposed to any kind of tax increase during his campaign last spring. "These are some things I've thrown out. What kind of flexibility do we have? I don't even know."


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