When it comes to installing the mechanics needed to launch City for Champions, the city charter would suggest that Colorado Springs City Council is to serve as chief engineer.
But Mayor Steve Bach is asserting control over creating a Regional Tourism Advisory Board — the big daddy of all boards tied to the $250 million C4C venture, which will birth four tourist attractions in the next 10 years.
The RTA Board will "make funding allocation decisions," according to requirements imposed by the state Economic Development Commission, for the $120.5 million in state sales tax rebates in the next 30 years. The board also will hammer out agreements that define relationships and authority among the agencies that build and run each attraction.
The City Charter vests authority to create boards and commissions with Council, including prescribing duties and appointing members. Asked last week about an RTA Board, City Council President Keith King was fuzzy on the steps the city must take. But Councilor Joel Miller, who's been an outspoken critic of C4C, was unequivocal: "Based on the Charter ... it should be Council's [role]."
Then he added the caveat, "But that assumes that one complies with the Charter."
Follow the money
Bach said Dec. 19 that he'd begin meeting soon with King and El Paso County Commission Chair Dennis Hisey to "talk about moving forward on governance of City for Champions" and "figuring out how that will look."
On Monday, the city communications department further clarified, telling the Independent that both the RTA application and the RTA statute "support the Mayor having responsibility for forming and appointing the RTA Advisory Board." The application, the city noted, contains a flowchart (see left) showing that all entities created to build and run the tourist venues will function under Bach. City Council, which had no input in drawing up the application, isn't mentioned.
"The City of Colorado Springs and the Mayor will establish an official City board or commission (an RTA Advisory Board)," the application states. "The RTA Advisory Board will be given the necessary authority to complete the City for Champions RTA venues, including the discretion to determine the allocation of funding to projects and to enter into all necessary contracts."
That means the RTA Board will hold the purse strings for the nonprofit entity that's forming to build and run the downtown Olympic Museum and Hall of Fame; the University of Colorado at Colorado Springs (or a new UCCS-affiliated nonprofit), where a new sports medicine center will be developed; and the Air Force Academy, with its new visitors center. It would do the same for a Stadium Authority, whose members apparently will be appointed by Bach to oversee construction and operation of the downtown sports and events center.
The money itself will move through the Colorado Springs Urban Renewal Authority — which is appointed by Bach, with Council approval — as it's charged with "issuing bonds and handling money," says Jeff Kraft of the state Office of Economic Development and International Trade. But it does so only upon order from the RTA Board, according to state documents.
The URA board is expected to issue bonds to be repaid with local tax increment financing, for which voters don't have to be consulted; whether voters will need to approve any additional city debt isn't clear. 'Upside benefits'
The city's statement Monday says the mayor will move forward on governance with advice from "leading experts" on the Regional Tourism Act, the City Attorney's Office regarding the charter, and "consultation" with Council, county commissioners, C4C "stakeholders" and community leaders.
But in addition to governance-related questions, much must be done to get C4C running. Among the needs:
• Land must be secured for the downtown venues;
• The Olympic Museum must obtain a license to use the Olympic logo, among other things;
• The Stadium Authority must secure at least 20 Olympic events for each of the first two years;
• And UCCS must secure letters of intent or service agreements with Olympic organizations to provide "some combination of specialized training, research, rehabilitation or related services to Olympic sports athletes."
The city will get 13 percent of new state sales tax revenue collected within the regional tourism zone, which covers most of the city, above a 1.5 percent annual growth factor. If growth lags, the city could get less than the $120.5 million; if it booms, the city could get more. Says Kraft, "We think that 1.5 percent allows for some upside benefits for them."
'Success fee': $100K
A Denver law firm that helped write the City for Champions application will receive a $100,000 "success fee" taken from the $120.5 million in state sales tax rebates coming to Colorado Springs.
Brownstein Hyatt Farber Schreck LLP helped the city draft and present its proposal to the Colorado Economic Development Commission, and was involved from the effort's beginning in October 2012.
"On a large deal like this, success fees are standard fare," says Brownstein attorney Jason Dunn. "The success fee is to shift that risk to me, so they could save money on the front end."
While City Attorney Chris Melcher used to work for the Brownstein firm, then called Brownstein Hyatt & Farber, in the mid-1990s, that connection probably had little to do with the retention decision. Dunn, after all, drafted and lobbied for passage of the Regional Tourism Act in 2009. "Obviously," he says, "I understand the statute better than anybody."
Dunn adds that success fees are especially common for clients who work on a project "on a shoestring budget."
"My original fee was significantly under water if you look at it from the perspective of an hourly rate," he says. "If the application isn't successful, we've probably lost money."
Dunn's agreement called for him to be paid $10,000 a month for five months. If the application was successful, he'd get the $100,000 bonus and proceed with drafting the city's agreement with the state Office of Economic Development and International Trade. That agreement, for which he will be paid another $25,000, is due within 120 days.
The application's funding came from the city, El Pomar Foundation, the Anschutz Foundation and the Downtown Development Authority, each of which gave $75,000, and city spokesman John Martin says the city wants to make it clear that Brownstein's monthly payments came from the coalition of partners, not just the city.
— Pam Zubeck
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