EDITOR’S NOTE: The Town of Pagosa Springs has invited local district board members to attend a discussion about the recently approved Urban Renewal Authority at 5pm tonight, November 25, at Town Hall. Mr. Walsh makes reference to that scheduled meeting in the following op-ed:
The Town of Pagosa Springs sent an invitation to all local governments last week:
“We are creating an exciting new branch of unelected government and you’re invited! We anticipate spending millions, perhaps as much as $100 million, on exciting projects. Maybe more! We’d like you to contribute 97.4% of the funding for these projects and in return we are giving you 3 seats on the 11 person board (though we might choose one of those three too).”
Okay, that wasn’t the literal wording. But that, unfortunately, is the reality.
And – oddly – it might work. But only if cooperation and mutual respect define this new Urban Renewal Authority, and Town power plays are minimized.
Now, betting millions on cooperation and mutual respect in local politics is risky but it can be rewarding. And the reasons to be skeptical are evident. This URA was pushed by a Texas-based developer, David Dronet, with an uneven track record (including some successes) and a local landowner who recently full-court-pressed the Town to pay for a $7 million bridge to his private development. That landowner, Jack Searle, to be fair, has also completed two very attractive developments in downtown Pagosa without any government subsidies.
Dronet and Searle’s demands for this project are staggering: $79 million in corporate welfare from the entire community for two luxury hotels, a colony of “luxury cottages” (a very pre-crash Pagosa phrase) and blocks of boutiques, offices and expensive condos destined for the short-term rental market.
The rationale for the welfare – “we’re investing our own taxes” – is rather silly. What business or household wouldn’t benefit from keeping all their property and sales taxes and investing them for the next quarter century. It’s a preposterous line of argument, though superficially effective.
Dronet and Searle’s project doesn’t include a single major employer guaranteeing high wages. Yet somehow 93 new full-time real estate agents and 75 new doctors and dentists will be working at the development. In return for the $79 million taxpayer subsidy Dronet and Searle don’t propose a single unit of affordable, attainable or workforce housing. Not one.
It’s really a breathtakingly selfish proposal. Luckily it’s also illegal: County sales taxes (split between Town and County) and Town lodgers taxes can’t be spend by an Urban Renewal Authority. More than $55 million of the corporate welfare is very precarious, at best.
This puts the Town in a peculiar position. Town property taxes are remarkably low (they fell 80% during Ross Aragon’s terms as mayor). So, the Town will contribute next to nothing to any project approved by the URA. Yet the Town will control at least 8, and perhaps 9, of the 11 members on the URA board while the County, the school district and all the local governments paying 97% of the bills will be minor players.
Sounds dysfunctional, yet the outlines of a partnership are present if the Town wants genuine cooperation with the local governments paying the bills. The URA can only approve projects it determines are worthwhile. The County, the school board, the fire district, PAWSD (full disclosure, I’m a board member), the hospital district and all the other taxing districts have to then agree to provide the funding.
Promising so far, right? Not so fast. State law also grants the URA the right to force other governments into binding arbitration when they refuse to fund a given project. Is this a tool the Town should use against another local government if it determines a project doesn’t provide a genuine community benefit?
Look at the Dronet/Searle project. More than $9 million dollars of school funds are demanded. For what exactly? Corporate welfare for luxury cottages and $750,000 condos? Nine million dollars within a balanced URA project could build 35 units of workforce housing for recruiting young teachers and helping lower paid school employees.
If the school board were to refuse to fund the Dronet/Searle project, would the Town really drag the schools into binding arbitration?
Such a power play would poison local politics.
The Town should take the lead on the URA board. All potential developments will occur within the Town and the Town has the staff, expertise and demonstrated practical ability to oversee these projects. Yet the Town should also respect the decisions of the governments asked to fund these projects. Project proponents will have to present their plans and prove their projects are solid investments in order to receive funding.
Narrow and selfish corporate welfare schemes will fail. Projects which provide generous tax breaks to provide balanced development for the whole community will be approved.
The Town can choose to respect the decision of the boards providing the funding by refusing to drag its partners in this URA into binding arbitration. It can choose to invite non-voting members from every board to every meeting. Better discussions will create better decisions. It might be a wise policy to approve no project unless both the Town and County support it.
Or the Town can choose to provide 2% of the funding and make 100% of the decisions and drag everyone who has a different opinion into binding arbitration.
Shaking hands or arm twisting? We’ll find out the Town’s intentions at tonight’s meeting.