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Does the Urban Renewal Authority stand to lose millions of dollars they intend to collect from the 25-year tax increment financing (TIF) agreement if Ballot Question 300 is upheld?
The Urban Renewal Authority (URA or Renewal Wheat Ridge) did not defend the Quadrant lawsuit (related to Ballot Question 300) because the URA would lose millions of dollars from the 25 year TIF if the Walmart development fails.
The Redevelopment Agreement between the Urban Renewal Authority and the developer for the Wheat Ridge Corners project was approved by the URA on June 16, 2015. This agreement includes approval for the URA to issue bonds up to $6.25 million in tax increment financing (TIF) for certain public infrastructure improvements to the property (Redevelopment Agreement See Exhibit C-1.) The TIF revenue is not allowed to be used to finance the vertical construction of the project.
If the agreement is not acted upon and the project does not move forward, the URA does not issue bonds to fund the infrastructure improvements on the property and no additional tax revenue is generated. Therefore, there is not a loss of existing funds.
What is a TIF? How does it work?
A TIF allows up to 100% of the new property tax and sales tax revenue generated by the redevelopment project to be collected by the URA, set aside in a special fund for the project. The URA then uses those revenues to repay the developer for the public infrastructure improvements (sidewalks, storm drainage, landscaping, environment cleanup, etc.) that were constructed and financed by the developer.
Once this debt is repaid, all future property tax and sales tax revenues divert back to the city and all other taxing districts serving the property or can be used to eliminate other blight within the specified urban renewal plan area. Additionally, TIF revenue is not used as operating funds for the URA nor is it used to benefit or pay URA representatives, who are volunteers.What is an Urban Renewal Authority?
Colorado state law (CRS 31-25-01 “Urban Renewal Law”) allows for urban renewal authorities to be established to address issues of blight in a community. URAs are authorized to enter in to contracts (CRS 31-25-105), among other things, to undertake urban renewal projects. Urban renewal projects are required to be approved by the “local governing body” (CRS 31-25-107). For Wheat Ridge, that entity is City Council.
Members of a URA are not allowed, by law, to benefit from urban renewal projects: According to CRS 31-25-104 Sec. 3: “No commissioner, other officer, or employee of an authority nor any immediate member of the family of any such commissioner, officer, or employee shall acquire any interest, direct or indirect, in any project or in any property included or planned to be included in any project, nor shall he have any interest, direct or indirect, in any contract or proposed contract for materials or services to be furnished or used in connection with any project.”