The Steamboat Springs City Council was right to not take action Tuesday on an urban renewal authority for the downtown area. There are simply too many questions about the impacts such a district would have on other taxing entities.
But, even though we are not yet sold on a downtown URA, we fully support the goal of increasing public investment downtown, and we believe the city is responsible for leading that effort.
The good news? There's not a better investment the city can make. The downtown area is key to city sales tax revenues. Downtown improvements can boost revenues well beyond the cost to make them.
There is opportunity for revenue growth downtown. Between 2000 and 2005, sales tax receipts rose 23 percent citywide, going from $13.2 million to $16.3 million. During the same time frame, downtown sales tax revenues rose just 8 percent. In six years, downtown lodging has declined, and miscellaneous retail and sporting goods sales are flat. If not for restaurants, the downtown area would show no growth at all.
So what needs to be done? Downtown needs more parking, pedestrian improvements and greater public space along the river.
The only way to get more parking is a multi-level garage, most likely between Oak Street and Lincoln Avenue. And instead of hassling business owners to take care of individual sections of sidewalk, the city should assume responsibility for sidewalk and curb maintenance, with a long-term goal of installing heated sidewalks.
With the justice center going in west of town, it makes sense to move public safety facilities there as well. Imagine the possibilities along Yampa if the police and fire facilities, as well as the ambulance barn and Yampa Valley Electric Association, weren't taking up space. Picture a revitalized river corridor with commercial, residential and public amenities.
A URA certainly could fund such improvements. URAs rely on tax increment financing, getting property tax revenues that result from increases in valuations in the district. It provides owners an incentive to invest in their properties - doing so will generate new tax dollars that will be reinvested in district infrastructure. Those public investments generate more private investment, perpetuating the cycle.
The irony is that a URA affects every taxing entity except the city, which has no property tax. It takes potential tax revenues from not only Routt County and the Steamboat Springs School District, but also Horizons Specialized Services, the Purchase of Development Rights program, the library district, Colorado Mountain College and others. Given the major downtown redevelopment projects slated to replace Westland Mobile Home Park, the Harbor Hotel and the Alpiner, those revenues stand to be significant.
The city makes no financial investment yet is the biggest beneficiary because its sales tax receipts will grow. Something seems inherently unfair about such a deal.
The city should waste no time putting together an aggressive downtown revitalization plan and then looking for ways to fund it. Reinvesting a dedicated portion of downtown sales tax revenues back into downtown is one idea. A general improvement district - with matching funds from the city - is another. Ultimately, the URA may prove to be the best way to go, but it sure seems like that's letting the city shirk its financial obligation to downtown.
The city has neglected its heart and soul for too long. This City Council has a great opportunity to reverse that trend and lead a downtown revitalization effort. But the council would be wise to consider the fairest way to pay for such an effort.