People gather at the promenade at the base of Steamboat Ski Area for the Free Summer Concert Series show featuring Carolina Chocolate Drops. Steamboat used tax increment financing to revitalize the base of the Steamboat Ski Area.

File/Matt Stensland

People gather at the promenade at the base of Steamboat Ski Area for the Free Summer Concert Series show featuring Carolina Chocolate Drops. Steamboat used tax increment financing to revitalize the base of the Steamboat Ski Area.

Hickenlooper vetoes urban renewal authority bill

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— A bill that would have given Colorado counties more say in how cities redirect tax dollars to redevelopment projects died on the governor's desk Friday afternoon.

City and county officials here now expect the long statewide debate over cities' use of tax increment financing to continue.

"There needs to be a day of reckoning here," Routt County Commissioner Doug Monger said Monday after the bill was vetoed by Gov. John Hickenlooper. "I fully believe we'll be seeing this discussion again next year, which I welcome."

House Bill 1375 was passed by the Legislature and sought to reform how cities use urban renewal authorities and tax increment financing to restore or improve blighted areas.

The city of Steamboat used both tools to revitalize the base of Steamboat Ski Area with such things as a promenade and other infrastructure.

But several Colorado legislators said this year the process was in need of reform because it has been abused statewide by other cities over the years.

The bill would have required municipalities to contribute as much of a proportion of their sales tax revenue to a project as they did property tax if a deal could not be reached with their county.

It also would have given counties the power to appoint a member on a city's URA board.

Counties have been wanting more representation in the process because they feel the redirection of property taxes to redevelopment projects can have a negative affect on the county.

Several cities argued the bill went too far and that TIF agreements should be handled locally.

In his letter announcing the veto, Hickenlooper wrote the bill was overreaching.

"The bill's provision that mandates the percentage of allocated property tax increment not exceed the percentage of allocated municipal sales tax increment does not account for the complexity and variety of urban renewal projects," Hickenlooper wrote.

Hickenlooper did write that he was supportive of the part of the bill that gave county officials the ability to appoint a member of a city's urban renewal authority board.

Monger, a supporter of the bill, said he understood why it was vetoed.

"I thought it might have been a little stretch to have the counties ask for that (sales tax provision) in the first place," Monger said. "I'm understanding of why he did veto that."

Monger said it still was essential for counties to have a say in the process.

"At least the Legislature understood there were some other players and the URA is holding all the cards," he said.

The urban renewal authority reform bill was supported by Colorado Counties Inc. and opposed by the Colorado Municipal League.

The city of Steamboat Springs, a member of the Municipal League, stayed on the sidelines during the debate over the bill and chose not to join other cities that publicly opposed it.

City Manager Deb HInsvark said she didn't see the bill as Steamboat's fight to fight.

"I think the city of Steamboat Springs has used the tax increment financing and urban renewal authority mechanism as it was intended to be used and done it well," Hinsvark said. "While we looked at that legislation and thought 'hmmmmm,' it really wouldn't have changed the way we do business."

In his veto letter, Hickenlooper wrote that URAs and tax increment financing are "important tools that have facilitated transformative projects and stimulated employment opportunities across the state."

The city of Steamboat is currently researching the prospect of using tax increment financing to fund downtown improvements.

Hinsvark said the city will talk about the plans in more detail this summer with county officials and other taxing entities, such as the Steamboat Springs School District and the Bud Werner Memorial Library, that could be affected.

The city is in the final stages of working with a consultant to determine the potential of using tax increment financing downtown and how that would impact other taxing entities.

"Downtown is clearly a more sales tax-driven TIF than a property tax-driven TIF," Hinsvark said. "It's going to have some real strong legs to help revitalize our downtown area and make some needed improvements."

Read more about the history of the bill and lawmakers debate over it .

To reach Scott Franz, call 970-871-4210, email scottfranz@SteamboatToday.com or follow him on Twitter @ScottFranz10

Hickenlooper veto letter

HB14-1375 Veto Letter

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