Durango City Council approved the designation of an urban renewal area along north Main Avenue on Tuesday, allowing the city and property owners to use grants and loans to redevelop blighted areas and build 22 townhomes, including 10 workforce housing units.

The area contains 23 individual parcels and 19 property owners, Scott Shine with the city’s Community Development Department said at Tuesday’s council meeting. It covers 16.6 acres.

Mayor Kim Baxter, Mayor Pro Tem Barbara Noseworthy and councilors Melissa Youssef and Jessika Buell voted to approve the designation while Councilor Olivier Bosmans voted to reject it.

North Main Gateway, the city’s second urban renewal area, will place an emphasis on housing and mixed-use and walkable developments with multimodal transportation. Its growth relies on partnerships with businesses, entrepreneurs and developers, Shine said.

By contrast, the Midtown urban renewal area, adopted in March 2021, contains 108 properties, 156 property owners and 50.4 acres. Midtown took a broader, “neighborhood level” approach, he said.

Shine said 22 townhomes are planned on a 1-acre parcel a half-block from north Main Avenue near the Animas River in what he called “a very multimodal location.” The townhomes were proposed after a plan for five single-family homes costing about $1.5 million each was rejected. The townhomes gained favor because the area has been designated as a high-density residential area, he said.

“Through our ability to partner on the project and contribute financially on the project, we were able to shift the direction of where this project is going,” he said.

Because the city will help pay for some development costs such as public infrastructure, 10 of the 22 proposed townhomes would be permanent workforce housing. The workforce townhomes will be ownership opportunities, Shine said.

“A lot of the rental product coming in helps to meet our housing goals, but we’re not seeing as many homeownership opportunities, especially in a great location like this in the city,” he said.

Some townhomes will be offered at a reduced price. For others, prospective buyers may face requirements such as a history of living or working in La Plata County for a number of years, Shine said.

The North Main Gateway renewal area will serve as a template for future larger projects, he said.

Future urban renewal opportunities may include revitalization projects, housing developments and Urban Renewal Authority partnerships, according to city planning documents.

Other land parcels within the urban renewal area are underused and can be developed or adapted for use, according to planning documents. For example, the 33rd Street and Main Avenue intersection needs improvements, city-owned properties can be transformed into “iconic” public spaces, and walkable residential areas with multimodal transit access are possibilities.

The Durango Renewal Partnership, the urban renewal authority, can finance design and construction of urban renewal projects through loans and appropriations from the city, federal and state grants and loans, and through tax increment financing. The latter includes using property and municipal sales taxes within the urban renewal area.

City Council committed to a related Tax Increment Finance Agreement in a separate vote on Tuesday that allocates property tax mill levies and the general fund’s sales tax (2%) revenues from within North Main Gateway to the Durango Renewal Partnership for projects within the area.

In an impact report, Shine said projected property tax revenues that would be diverted to the Durango Renewal Partnership over 25 years are $362,489. Projected sales tax revenues over the same time frame amounted to $2,117,925.

Councilor Bosmans was hesitant to adopt the North Main Gateway urban renewal designation. On Tuesday, he said he was concerned because “every existing neighborhood would have blighted areas that would qualify for a URA.”

He said benefits to property owners would be restricted to residents of the urban renewal area and that the city should treat all property owners the same, fairly and equally.

“We have about 1,800 units in different stages of design and construction within city limits,” he said. “I think if we want to address housing, we need to be very active and proactive in making those units come to fruition.”

The Tax Increment Finance Agreement passed on a 4-1 vote, with Bosmans voting against it.

cburney@durangoherald.com