A Daily Post reader complained to me that she didn’t see any clear connection between a hit song by Madonna — “Material Girl” — and the November 5 decision by the Pagosa Springs Town Council to create an ‘Urban Renewal Authority’ in our community… a connection I seemingly implied by yesterday’s editorial installment.
I can understand the complaint. We don’t often think, in our personal, small-town lives, about the relationship between money and power. Yes, it’s obvious to everyone that trillion-dollar corporations exert tremendous influence in Washington DC and London and Brussels and other centers of international power; that money and the love of money can generate wars and famine and massive inequality. Money can also establish ‘power relationships’ within a romance between a male and a female, or between two people of the same sex. Thus my reference to local activist Mark Weiler, and his oft-shared maxim, “There’s no romance without finance.”
There is potential romance, and potential discord, in certain financial relationships among the various taxing entities in Archuleta County.
At a November 25 meeting at Town Hall, Town Manager Andrea Phillips and Mayor Don Volger gathered representatives of our six special districts, to explain that, under Colorado law, the new Urban Renewal Authority has the power to force these six special districts — against their will, perhaps — to give up future tax revenues for up to 25 years, to finance development projects chosen by the new Authority. The Town also explained that the 11-member Authority would include at least seven voting members representing the Town government, and would include only one voting representative representing the six special districts collectively.
Maybe that one voting representative would be drawn from a hat? Or perhaps elected by a committee of special district delegates?
Several of the district representatives expressed displeasure with this proposal, considering that it appeared — based on recent information — that the County government, the School District, and the special districts collectively might be contributing over 95 percent of the future taxes used by the Authority.
Following the November 25 meeting, Ms. Phillips sent out, to the participants, a summary of the resulting discussion.
“Thank you all for your time this week in discussing the URA Board’s next steps as it relates to the special district appointee. We had members from all of the special districts attend the work session on the 25th…
“Feedback was varied and included the following…
“Some felt that there needs to be more seats on the URA Board from the special districts aside from what the statute allows (one seat from school district, one from county, one from special districts, and one mayoral appointee-who could be a member of a special district as well plus Town Council). The Town adopted Resolution 2019-18, which formed the Authority and the Board according to state statute. There is another model of organization provided in the statute, but it is not typical— especially with those formed since the law changed in 2015/2016. It was discussed that the top 3-4 affected districts should have seats in order to get more buy in. This will need to be discussed further with the Town attorney, Council, and the URA Board (which currently includes Council and the County Assessor). In order to change the representation on the Board, there will need to be some legislative changes made by the Town Council. The process for that is unclear at this time…”
Ms. Phillips might be accurate when she states that “it is not typical” for towns to allow full representation of the other taxing districts on a town-created Urban Renewal Authority. Presumably, in most “typical” towns, the municipal government contributes the lion’s share of the Tax Increment Financing (TIF) revenues for approved URA projects, and — since the Colorado legislature gave cities and towns the legal right to take money out of the special districts’ pockets — we might presume that most “typical” towns will want to populate the URA Board with overwhelming town representation.
But the Urban Renewal Law clearly allows a town government to provide the other taxing districts full representation on the URA Board. It’s just that most towns might want the “finance” without the “romance.”
Here’s part of the quote from Pagosa Springs Town Council member Nicole DeMarco that I shared yesterday in Part Four. She gave this explanation on November 5, right before she voted “Aye” on a resolution to create a municipal ‘Urban Renewal Authority’ within our community.
“I think we’re constantly trying to address things that market economics won’t address. That’s what the public sector does. And I feel — particularly when we talk about affordable housing — I feel really limited on what it is we can do to move forward with that. I think this Authority will give us the ability to push a project, that might consider only market-rate housing, into the ability to have affordable housing. So I think the Authority is a tool for us to consider.”
We can agree that our governments often address things that market economics won’t address. That’s indeed what the public sector does. Sometimes.
Other times, the public sector provides “economic incentives” to very wealthy developers and corporations, with little or no benefit to the larger community. The proposed Springs Resort expansion — the proposal that brought about this whole ‘urban renewal’ controversy in the first place — appears to many people to belong in this second category.
As Ms. DeMarco explained prior to her “Aye” vote, an Urban Renewal Authority might be a useful tool for promoting the construction of affordable housing. An Urban Renewal Authority, with its ability to refund incremental property taxes to selected developers, might possibly have — in some instances — enough financial influence to generate housing options in places where a developer would not otherwise locate such housing.
During the presentations I’ve attended at the Springs Resort, developer David Dronet has been very clear. The development group he represents has no intention of building any affordable housing adjacent to the Springs Resort. Nor does BWD Construction, the current owners of the vacant property, have any intention of building affordable housing there. Here, we are listening to Jack Searle, owner of BWD Construction, explaining at a public presentation last September why TIF tax subsidies are being requested for the Springs Resort expansion:
“I can probably address that, because I own the 27 acres here, and I used to be a partner with Bill Dawson and Matt Mees, and we actually went out looking for [investment] partners. And what we heard was, that — with the small community, isolated, somewhat isolated, we don’t have a commercial airport — and commercial properties in this town haven’t done all that well…”
“It’s very risky. That’s what we kept hearing — that it’s just too risky. There are easier places…”
Audience member: “Well, maybe we shouldn’t do it, if it’s that risky.”
Mr. Searle: “Well, there’s no risk to the Town. That’s the thing. When you say ‘we,’ that’s David and I [who are taking the risk]. And I’ve only committed the land. I’m not committing any investment dollars, other than an equity position as a result of land…”
At this point in Mr. Searle’s explanation, he was interrupted by David Dronet… perhaps jumping in before Mr. Searle could say things he would regret later? And steering the conversation away from an apparent lack of developer commitment?
Mr. Dronet: “The argument that… ‘Well, it will just happen’… that’s up to you. If you believe that’s the case, I don’t know that we can convince you otherwise. I know that we won’t do it [without tax subsidies]. It just simply doesn’t pencil. The infrastructure has a $30-$35 million price tag, in an area that’s already 25% more expensive than the Front Range and major towns. So we’re already starting out the gate as much more expensive…”
“The bottom line is, [our project] will surely not pencil, and we will surely not pursue it, and so if the answer is that ‘No Growth is the Plan’ — I’m not going to disagree with that.”
No one in the presentation audience had proposed that “No Growth is the Plan”. And no one had suggested that “Well, it will just happen.” (Meaning, the development of Mr. Searle’s vacant land, without tax subsidies.)
We had, in fact, asked just the opposite question: “If it won’t happen without taxpayer subsidies, then why should it happen at all?”
But the main question, at the moment, is whether the Town Council will allow the tax-contributing special districts equitable representation on the Urban Renewal Board.