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Durango looks at a new tool for development

Renewal districts could help boost city’s economy
City of Durango Planning Director Scott Shine, right, and City Councilor Dean Brookie led a discussion about Urban Renewal Authorities on Thursday at an Eggs and Issues Breakfast at the DoubleTree Hotel. Urban Renewal Authorities are designed to create special districts that spur economic development and support community development goals.

Attainable housing, investment in deteriorating parts of town and a new business park could all develop more quickly and less expensively through an Urban Renewal Authority.

About 50 community leaders gathered Thursday morning during an Eggs and Issues breakfast to delve into URAs, which are special districts allowed by the state to spur investment in poorer, blighted parts of towns where it’s difficult to attract private investment.

“URAs today are used to draw in community partners, both private and public, to address community needs, and the key tool that they use doesn’t raise taxes or fees. They use existing funding,” said Scott Shine, planning manager for the city of Durango.

The key tool is called tax increment financing, which Colorado created along with URA districts in the 1950s.

Tax increment financing allows a URA district to keep sales and property taxes collected within the district – to be dedicated to public improvements only within the URA. Taxes collected in the district are not disbursed more widely around the city.

The idea behind tax increment financing is that private development will be more attractive within a URA because financing is dedicated for the URA’s public improvements, such as roads, sewers, utilities and sidewalks.

In theory, the sales and property tax revenue will grow as vacant lots, environmentally blighted areas and boarded-up buildings are redeveloped and transformed into vibrant commercial zones – retail, business parks, housing developments or any use established by URAs.

City Councilor Dean Brookie said URAs look promising as a vehicle to build private-public partnerships to spur development of attainable housing or boost economic vitality in neglected parts of town.

“How can the city, in partnership with neighborhoods, be a driver of a shared vision and be purposeful and support a diversified community? This looks like a promising avenue,” Brookie said of URAs.

Boundaries for URA districts in Durango will come after discussions with neighborhoods about the suitability of establishing the districts. But some areas Brookie mentioned that might consider establishment of a URA include north Main Avenue, the Camino del Rio corridor or La Posta Road (County Road 213).

Bank of Colorado Regional President Greg Behn said URAs hold promise in supporting financing of public-private projects that spur economic activity as well as meeting community goals like development of attainable housing.

“Any way to improve the cost of development helps,” he said. “Driving down costs is important. Durango has relatively high costs of development. Any way you can mitigate those risks is an enhancement.”

Shine said the city is exploring using URAs to spur development in certain areas of town. Later this year, the city plans discussions with neighborhoods about establishing URA districts to spur economic revitalization or for other purposes. One idea is using a URA to facilitate development of attainable housing.

Success elsewhere

URAs have been used in other parts of the state to increase property values, update blighted areas and provide financial incentives to developers who otherwise might not be interested in a investing in a tough part of town.

Shine noted almost 30 URAs are thriving in metro Denver.

Next week, city officials plan to tour a URA in Montrose used to establish a business park to attract outdoor recreation manufacturers along the Uncompahgre River.

The Montrose URA was designed to finance infrastructure for the business park in an undeveloped area to meet a community goal of attracting light industrial jobs in the outdoor recreation manufacturing sector. The URA is now thriving, Shine said.

URAs have also been used in Arvada to clean up a brownfield area to redevelop for attainable housing and in Denver’s LowHi neighbor to create a successful retail district in a once-dilapidated area.

“They help pioneer developers go into an area that’s a little sketchy,” Shine said.

Bringing in other partners

Financial assistance can be provided through URAs to developers and businesses to fill gaps in loans for redevelopment or new development in economically or environmentally blighted areas. Payback for bonds or other financial assistance provided to private developers would come through the increased property values and sales taxes the URA district sees over time as development spurs economic activity.

The city’s current draft mission statement for proposed URAs in Durango is: “Nurturing reinvestment in underutilized areas to address community problems, increase values and create thriving places.”

Besides the city, other partners that might be involved in URAs include La Plata County, Durango School District 9-R, the Business Improvement District, private land and business owners, Fort Lewis College and Mercy Regional Medical Center.

The city has begun efforts to spur development in areas of town through its 11 character districts, and Shine said a URA might be a more powerful way to provide a financing mechanism to spur economic activity and shared goals within the districts.

Besides dedicating sales and property taxes to stay within URA boundaries, a URA can also issue bonds and apply for grants that are not available to the city and county, Shine said.

Another attractive feature, Shine said, is that because URAs cannot issue mill levy increases on property tax rates and they cannot raise sales tax rates, a URA is exempt from taxing and spending restrictions under the Colorado’s Taxpayer’s Bill of Rights.

parmijo@durangoherald.com

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