Title
A Resolution Approving and Authorizing the Mayor to Execute the First Amendment to the Cooperation Agreement with the Colorado Springs Urban Renewal Authority Regarding the South Nevada Area Urban Renewal Project.
Presenter:
Bob Cope, Economic Development Officer
Jariah Walker, CSURA Executive Director
Body
Summary:
The South Nevada Urban Renewal Plan and the related Cooperation Agreement were approved by City Council in 2015. Situated in the South Nevada and South Tejon corridors (south of Downtown Colorado Springs), and located between I-25 and Southgate Road, the project is located at a strategic retail location that over recent decades has experienced deterioration and blight.
In 2015, City Council agreed to allocate 1.75% general fund municipal sales tax to the project for the first five (5) years of the existing Cooperation Agreement, and to allocate 1.5% general fund municipal sales tax to the project for the remaining twenty (20) years of the existing Cooperation Agreement.
Since 2015, significant redevelopment has occurred primarily through the efforts of three development groups: SNA Development Inc., Ivywild Core Development, Inc., and EVC-HD Nevada South LLC. While significant development has occurred, the project has been challenged by high land acquisition costs, high infrastructure and public improvement costs, COVID-19 related delays, and escalating construction costs.
Based upon the existing allocation of 1.5% general fund municipal sales tax, it is projected that sales tax increment revenues will be insufficient to cover the cost of public improvements and infrastructure already constructed, as well as the cost of public improvements and infrastructure necessary to support the remaining development of the project. SNA Development, Inc. is requesting that the existing allocation of 1.5% general fund municipal sales tax be increased to 2%.
Background:
The South Nevada Urban Renewal Plan and the related Cooperation Agreement were approved by City Council in 2015. Situated in the South Nevada and South Tejon corridors (south of Downtown Colorado Springs), and located between I-25 and Southgate Road, the project is located at a strategic retail location that over recent decades has experienced deterioration and blight.
In 2015, City Council agreed to allocate 1.75% general fund municipal sales tax to the project for the first five (5) years of the existing Cooperation Agreement, and to allocate 1.5% general fund municipal sales tax to the project for the remaining twenty (20) years of the existing Cooperation Agreement.
Since 2015, significant redevelopment has occurred primarily through the efforts of three development groups: SNA Development Inc., Ivywild Core Development, Inc., and EVC-HD Nevada South LLC. While significant development has occurred, the project has been challenged by high land acquisition costs, high infrastructure and public improvement costs, COVID-19 related delays and escalating construction costs.
Based upon the existing allocation of 1.5% general fund municipal sales tax, it is projected that sales tax increment revenues will be insufficient to cover the cost of public improvements and infrastructure already constructed, as well as the cost of public improvements and infrastructure necessary to support the remaining development of the project. SNA Development, Inc is requesting that the existing allocation of 1.5% general fund municipal sales tax be increased to 2%.
Previous Council Action:
City Council approved the South Nevada Urban Renewal Plan in 2015. City Council approved the South Nevada Cooperation Agreement in 2015.
Financial Implications:
An Economic and Fiscal Impact Analysis has been prepared that analyzes the impacts based upon two scenarios: (1) the existing Cooperation Agreement and (2) the proposed Amended Cooperation Agreement. The analysis identifies net increases in economic and fiscal benefits under the Amended Cooperation Agreement scenario. The findings include an estimated $819 million in additional economic growth, 794 additional estimated permanent jobs, and $19.9 million in estimated additional net new City revenue over twenty (20) years.
City Council Appointed Board/Commission/Committee Recommendation:
The Colorado Springs Urban Renewal Authority recommends approval of the Amended Cooperation Agreement with the general fund municipal sales tax allocation increased from 1.5% to 2%.
The Administration recommends approval of the Amended Cooperation Agreement with the general fund municipal sales tax allocation increased from 1.5% to 1.75%.
Stakeholder Process:
N/A
Alternatives:
N/A
Recommended Action
Proposed Motion:
Approve a Resolution approving and authorizing the Mayor to execute the First Amendment to Cooperation Agreement with the Colorado Springs Urban Renewal Authority regarding the South Nevada Area Urban Renewal Project with the general fund municipal sales tax allocation increased from 1.5% to 2%
OR
Approve a Resolution approving and authorizing the Mayor to execute the First Amendment to Cooperation Agreement with the Colorado Springs Urban Renewal Authority regarding the South Nevada Area Urban Renewal Project with the general fund municipal sales tax allocation increased from 1.5% to 1.75%.
Summary of Ordinance Language
N/A