Tuesday, February 11, 2020

UPDATE: City Council approves developer debt, public improvements to revive southwest downtown

Posted By on Tue, Feb 11, 2020 at 11:11 AM

Here's a map of the Southwest Downtown project. - COURTESY CITY OF COLORADO SPRINGS
  • Courtesy city of Colorado Springs
  • Here's a map of the Southwest Downtown project.
UPDATE: This just in from the city's economic development official Bob Cope about the lag in transferring city property to Nor'wood Development Group:

“The Cimino land exchange was originally approved by City Council on April 25, 2017. On October 23, 2019 City Council approved a Resolution allowing 25 Cimino and 125 Cimino to be conveyed separately. Since October 23, 2019 the parties have been conducting the necessary due diligence to complete the sale of 125 Cimino as the first leg of the transaction. We expect the transfer of 125 Cimino to occur in the very near future.”

——————-ORIGINAL POST 11:03 A.M. TUESDAY, FEB. 11, 2020—————————

City Council voted unanimously Feb. 11 to goose development of the long blighted southwest downtown by approving a "cooperation agreement" with the developer — Nor'wood Development Group — that pledges at least $20 million in public spending and allows a newly formed business improvement district to issue $50 million in debt.

The public money would be spent on parking, drainage, street upgrades, including an overhaul of Vermijo Street from the Olympic Museum to Wahsatch Street, utilities work and more.

As the agreement states:
The vision set forth in the Urban Renewal Plan is to create a world class urban neighborhood, comprised of new residential, office, retail, restaurant and hospitality uses catalyzing around the Museum, Hall of Fame, the [America the Beautiful] Park and their connections to the downtown core area and the City in general.
Before the votes, Councilor David Geislinger noted the city had conducted its due diligence, noting an "extensive, extensive, extensive" involvement by city officials "over the last several weeks or months."

The roughly 100 acres at issue has been designated for urban renewal for 20 years but nothing happened until the Olympic Museum project, at Vermijo and Sierra Madre Street, arose a few years back — it opens in May — along with plans for a stadium to host Switchbacks soccer club games a block or so south. It's slated to open in 2021.

Nor'wood's plan in the near term calls for building 300 residential dwelling units to the east of American the Beautiful Park, a multi-story office building of 180,000 square feet and a 240-room hotel. The 20-year build out will see construction of 4,500 residential units, 750,000 square feet of office space, 150,000 square feet of retail and restaurant space and 500 hotel rooms.

Here's a list of what will be funded with public money to help the developer get that ambitious redevelopment off the ground.

• $8.8 million from City for Champions state sales tax rebates. C4C is the tourism venture approved by state economic development officials in 2013 that also includes a new Air Force Academy visitors center, the museum, downtown stadium, Colorado College hockey arena, and sports medicine facility at the University of Colorado at Colorado Springs.
• $12.25 million from the Pikes Peak Rural Transportation Authority, funded with a 1 percent sales tax for regional road, bridge and trails projects.
• $1.55 million from the city's parking enterprise.
• $1.35 million from city stormwater fees collected from residents and property owners.
• $3.5 million from Colorado Springs Utilities.

Read the cooperation agreement here:
Here's file:///Users/pamzubeck/Downloads/SWD%20Infrastructure%20-Exhibit%20F%20(1).pdf" target="_blank">more about infrastructure costs.

Council also granted the Southwest Downtown Business Improvement created by Nor'wood authority to issue $50 million in debt to execute the first stage of development. Here's an artist's rendering of the area, with America the Beautiful Park on the left:

click to enlarge COURTESY CITY OF COLORADO SPRINGS
  • Courtesy city of Colorado Springs
Note the multi-story buildings immediately northeast of the park in this rendering. Those would sit on property at 25 Cimino Drive, which the city agreed to trade to Nor'wood in exchange for a small tract to the south that serves as a trail connection made necessary by the Cimarron Street interchange.

But that was three years ago and the land still hasn't changed hands.

The site is plagued with pollutants left behind by a coal gasification plant that sat there 100 years ago, and Nor'wood initially accepted the liability for cleanup. Now, the delay could signal the developer is trying to make a better deal. We've asked Nor'wood President Chris Jenkins about that and will update if and when we hear from him.

We've written about this issue here, and here and here also. It's also worth noting that the Cimino property gave rise to a lawsuit that remains pending, which we wrote about here.

We've also asked the city what the hold up is in transferring the land to Nor'wood but haven't heard back. We'll update when a response lands in our in-box.

To see the file:///Users/pamzubeck/Downloads/PowerPoint%20(1).pdf" target="_blank">presentation about the $50 million debt plans, go here.

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