Tuesday, November 28, 2017

Banning Lewis Ranch: $49 million in tax revenue over 30 years

Posted By on Tue, Nov 28, 2017 at 3:02 PM

click to enlarge blr_photo.jpg
Banning Lewis Ranch has long sat largely undeveloped, the result of restrictive rules that force  developers to foot the bill for so many public improvements that a major project was deemed unprofitable. Now, a study conducted by TischlerBise, an economic forecasting consultant, says loosening the rules for the 18,500 acres on the city's east side would enable the city to collect up to $49 million over 30 years.

The presentation on the Banning Lewis Ranch came at the City Council's Nov. 27 work session, which got off to a rocky start when two councilors complained they'd received the study just moments before it was presented.

"I want the public to know we never received that except a minute ago," Councilor Bill Murray said. "We're playing stump the dummy here, buddy."

Jill Gaebler reminded city Economic Development Officer Bob Cope that the Council requires back-up materials to be made available 24 hours before a meeting. "Being caught off guard really isn't proper," she said. "We should have received it in advance of the meeting."

But Council President Richard Skorman called the presentation "informational" and noted "we're going to have lots of opportunities" to review and comment at future meetings.

Banning Lewis Ranch was annexed in 1988 under an agreement that calls for developers to foot much of the bill for infrastructure, including fire and police stations, parks and roads. Not much has happened since then, with developers complaining the costs, estimated a decade ago at more than $1 billion, were a barrier to development.

Several years ago, Ultra Petroleum of Houston bought the property in a bankruptcy sale with plans to drill. Test wells proved lackluster, however, and Ultra sold the land in 2014 — minus the mineral rights — to David Jenkins, owner of Nor'wood Development Group, the region's biggest developer, for $28 million. Since then, Jenkins collected $2.4 million from Colorado Springs Utilities for 146 acres of that property needed for a the Southern Delivery System pipeline.

The TischlerBise analysis shows that while the city's net tax revenue gain for development of the ranch would total only $1 million in the first 10 years, over a 30-year span, net tax revenue would come to $49 million.

Included in the analysis was costs to the street department, police and fire and other city services.

Murray noted that while streets interior to Banning Lewis Ranch will be built by developers, the main arterials likely would need upgrades that will be paid by the city's taxpayers. The study didn't account for those costs, he said.

"Marksheffel [Road] and others will bear higher traffic," he said. "There's tens of millions not included in this. The rest of it is on our dime."

Cope and mayoral Chief of Staff Jeff Greene said there will be numerous points in coming months when Council will weigh in. Cope nsaid that because development has hopscotched over Banning Lewis Ranch due to its onerous 1988 annexation agreement, the city has lost 2,700 jobs, 1,191 temporary jobs and $4.5 billion in economic activity.
 
He also noted that although Mayor John Suthers soon will propose incentives for infill development, "that will do only so much." He noted the city needs 5,400 new jobs per year to sustain existing economic activity, and predictions call for the population to swell to 1 million by 2045. "Without land for future development, we will not have supply keep up with demand," he said.

Councilor Don Knight had mixed feelings about the study. "I’m a little worried about the costs to serve [BLR] in the first 10 years when we’re only looking at $100K coming in, and there could be $200K on the negative [expense] side," he said. "Overall this does give me comfort that development is basically going to pay for itself. It’s not a windfall and it won’t break the bank."

It's early in the process of approvals necessary, including changing the ranch's master plan, but Council President Skorman was upbeat about the project.

"We have a role to play in how we develop as a region. What I saw was a burdensome annexation agreement that created leap frog development over it," he said. "I’m excited we’re moving this forward. We will have a lot of good discussion as we move forward. This is really an exciting opportunity, the beginning of something really positive for the community."

Here's the city's press release:
Modification of the annexation agreement for Banning Lewis Ranch would spur development and generate $49M in net revenue for the City over the next 30 years according to an economic and fiscal impact report presented to City Council today. Further, the projected growth would add $41 Billion to the city’s economy over the same period. The study also indicates that development would bring $434 Million in additional net revenue to Colorado Springs Utilities. The analysis was prepared by TischlerBise, a national leading fiscal, economic and planning consultant.
click to enlarge screen_shot_2017-11-28_at_10.11.19_am.png
Projected growth in Banning Lewis includes 24,000 new homes for 62,000 new residents over 30 years. The area is also expected to generate 35,000 new jobs during that time. Net fiscal impact numbers were derived by considering the additional costs of service to the area (e.g. emergency services, infrastructure), against the potential revenues (e.g. sales tax) generated by the annexation.

“Putting an appropriate annexation agreement in place for Banning Lewis that pays for the cost of development and stimulates economic growth has been a priority over the past year. We know that development is currently leap-frogging the area and creating a donut effect, with business and residential development occurring in unincorporated El Paso County, rather than Banning Lewis Ranch,” said Bob Cope, economic development officer for the City of Colorado Springs. “The analysis indicates that future development in Banning Lewis Ranch will more than pay for itself over the short, intermediate and long term and will create significant positive economic growth for the city.”

Banning Lewis Ranch was annexed into the City of Colorado Springs in 1988. Since 1988, very little development has occurred. A major factor deterring development activity has been the Annexation Agreement put in place in 1988. This has resulted in lost economic opportunity, lost municipal tax revenue and lost utility revenue.

City Council will be presented with an opportunity to approve a modification to the existing BLR Annexation Agreement at future City Council meetings. 
Here's the presentation:

Tags: , , , , , ,

Favorite

Comments (3)

Showing 1-3 of 3

Add a comment

 
Subscribe to this thread:
Showing 1-3 of 3

Add a comment

Latest in The Wire

Top Topics in The Wire

Local government (14)


Local News (7)


Outdoors (5)


Health (4)


Sports (2)


All content © Copyright 2017, The Colorado Springs Independent

Website powered by Foundation