Steamboat Springs City of Steamboat Springs officials told Routt County commissioners Monday that they expect Steamboat Springs City Council members, acting as the Urban Renewal Authority, will get a chance this fall to decide whether to go forward with a plan to use tax incremental financing (TIF) to fund downtown public improvements, such as sidewalks, increased street lights and improved public access to the Yampa River but not land acquisition.
The tax mechanism would set aside future growth in city sales tax revenues as well as in property taxes from new development collected by a variety of taxing districts in downtown Steamboat for those improvements. Depending upon on how much of its future sales tax revenue the city committed, the TIF could raise $20 million for public improvements, most of it from city sales tax, according to a consultant on the matter.
The expectation is that the public improvements would convey a confidence in Steamboat’s core shopping, restaurant and entertainment district on the part of the public sector, triggering more investment on the part of the private sector.
City planning director Tyler Gibbs, finance director Kim Weber and economic development intern Casey Earp called on the county commissioners to bring them up to date on their research into the TIF. They also sought to make the case that even though the URA would capture some future growth in property taxes within the downtown district that otherwise would have gone to the county, the net result would be to increase the county’s take from its 1 percent sales tax and its existing property tax base.
“It does not take the increase in value to the base,” Gibbs said. “That continues to flow back to the county. It’s not like the county base would be frozen at 2014 levels. It’s only on the new development. Over the 25 years (that the TIF would be in place), we’ll see a considerably increased property tax base. Creating an increase in the base and sales tax will outstrip the TIF revenue.”
Commission chairman Tim Corrigan said he wants to know how other taxing entities, from the Steamboat Springs School District, which benefits from any growth in the Education Fund Board’s half-cent sales tax, to the museum district, Horizons Specialized Services and the East Routt Library District would be affected.
“We feel a lot of responsibility to those other districts,” he said.
The downtown urban renewal district likely would run east to west from Third to 13th streets and south to north from Yampa to Oak streets. But a second alternative could expand the area where projects could be carried out to include the area around Old Town Hot Springs on the east end of town to West Lincoln Park and to public parks and facilities on the south side of the river at Howelsen Hill.
Earp told the commissioners that city staff is in the process of developing a formal plan to present to City Council by autumn, and Gibbs confirmed that could result in council members, in their role as the URA board, voting whether to go forward this year.
The URA board could give preliminary approval for the TIF, but it would be referred to an attorney who specializes in URAs before a final vote. And the URA would give 30 days of public notice prior to a vote.
“I have a lot less heartburn with this than I do over the" existing TIF at the base of the ski area, Commissioner Doug Monger said. “At the same time, I would hope we’re not going to be doing a lot of things the city should be doing anyhow, and freeing up a lot of money for other things, like storm water management, especially.”
Weber said the downtown TIF would rely more heavily on growth in sales tax revenues than on a property tax increment, and the big question for City Council, should it decide to go forward, is how much of future sales tax growth it is willing to commit.
Based on a consultant’s projections, if council decided to commit the full amount of growth in revenue on its 4 percent sales tax, the TIF, throughout 25 years, would generate about $20 million for downtown improvements. Of that, $2.4 million is expected to come from property taxes generated by new projects, and $18 million is projected to come from sales tax.
Weber said the city would not have to wait to spend the full amount. The presumption is that the city would bond against revenue from anticipated future tax growth. The idea is to build the public improvements up front to inspire private-sector investment and drive the revenues, she explained.
Monger asked the city representatives to give the county a voice in the URA/TIF developments through the URA advisory board.
The Colorado Legislature passed a bill this year that would have given counties a direct role in URAs within their boundaries, but Gov. John Hickenlooper vetoed it, in part because he thought a requirement that cities match captured property tax revenues with an equal amount of sales taxes was too constraining.
“We would look forward to participating rather than just being dragged along,” Monger said.
To reach Tom Ross, call 970-871-4205, email tross@SteamboatToday.com or follow him on Twitter @ThomasSRoss1