Durango Adopts New Development Tool

THE CITY OF DURANGO HAS A NEW FINANCING TOOL TO SUPPORT CONSTRUCTION OF AFFORDABLE HOUSING, EMPLOY LOCAL CONTRACTORS, AND IMPROVE RUN-DOWN OR BLIGHTED NEIGHBORHOODS. YOU’E WATCHING THE LOCAL NEWS NETWORK, BROUGHT TO YOU BY THE DURANGO SPORTS CLUB. I’M WENDY GRAHAM SETTLE. THE DURANGO CITY COUNCIL EARLIER THIS SPRING AUTHORIZED FORMATION OF THE DURANGO RENEWAL PARTNERSHIP, AN URBAN RENEWAL AUTHORITY THAT GIVES THE CITY THE FLEXIBILITY TO PROVIDE DEVELOPERS WITH FINANCIAL INCENTIVES TO BUILD HARD-TO-FINANCE PROJECTS LIKE AFFORDABLE HOUSING, INFRASTRUCTURE IMPROVEMENTS OR PRESERVE HISTORIC BUILDINGS. IT’S A TOOL THAT’S BEEN AVAILABLE TO COLORADO COMMUNITIES SINCE THE 1960s, AND IT’S MOST OFTEN ASSOCIATED WITH REDEVELOPING SLUMS OR DETERIORATING URBAN AREAS. BUT IN COLORADO, THE TOOL CAN BE USED AS AN INCENTIVE TO DEVELOPERS TO INVEST IN INFRASTRUCTURE, DEMOLISH UNSAFE BUILDINGS TO MAKE ROOM FOR NEW DEVELOPMENT, AND EVEN HIRE LOCAL CONTRACTORS.
WHAT IT DOES IS IT ALLOWS US TO BECOME MORE OF A PARTNER IN THE DEVELOPMENT PROCESS. INSTEAD OF JUST REACTING TO DEVELOPMENT PROPOSALS THAT THE PRIVATE SECTOR BRINGS TO THE CITY. WE’RE ABLE TO SET UP AREAS WHERE WE WANT TO SEE NEW INVESTMENT, AREAS THAT MAY BE WHAT WE CALL NEGLECTED OR OVERLOOKED. WE CAN ESTABLISH PROGRAMS IN THOSE AREAS THAT ARE, MAKE DEVELOPMENT IN THE AREA MORE ATTRACTIVE.STATE LAW ALLOWS LOCAL GOVERNMENTS TO FORM URBAN RENEWAL AUTHORITIES WHEN FOUR OR MORE BLIGHTING FACTORS EXIST OUT OF A DEFINED LIST OF ELEVEN CONDITIONS. THOSE CONDITIONS INCLUDE FACTORS LIKE DETERIORATED BUILDINGS OR NEGLECTED LOTS; POOR STREET OR SIDEWALK CONDITIONS; ENVIRONMENTAL CONTAMINATION, OR OTHER FACTORS THAT MAY NEGATIVELY AFFFECT THE HEALTH, SAFETY AND WELFARE OF THE COMMUNITY. A RECENT STUDY BY THE CITY’S COMMUNITY DEVELOPMENT DEPARTMENT IDENTIFIED AT LEAST FOUR OR MORE BLIGHTING CONDITIONS IN EACH OF THE CITY’S CHARACTER DISTRICTS. AS AN EXAMPLE, A NEGLECTED LOT MAY BE IDENTIFIED AS A BLIGHTING CONDITION. IT ALSO MAY MAKE A PERFECT SITE FOR AN AFFORDABLE HOUSING DEVELOPMENT, BUT ACCESS UPGRADES AND INFRASTRUCTURE IMPROVEMENTS DRIVE UP THE COST OF CONSTRUCTION. THE CITY CAN OFFER THE DEVELOPER FINANCIAL ASSISTANCE TO DEFRAY THOSE COSTS AND KEEP PRICES AFFORDABLE THROUGH A TOOL CALLED TAX INCREMENT FINANCING. THE FUNDING TOOL ALLOWS THE CITY TO KEEP ALL EXISTING SALES OR PROPERTY TAX REVENUES BASED ON A PROPERTY’S PRE-DEVELOPMENT CONDITION, BUT IT PLEDGES ANY FUTURE GROWTH IN TAX REVENUES THAT THE DEVELOPMENT MAY GENERATE TO OFFSET THE DEVELOPER’S COSTS. TAX INCREMENT FINANCING IS NOT A TAX INCREASE. IT MERELY DEVOTES NEW REVENUE GROWTH FROM THE DEVELOPMENT TO DEFRAY THE COST OF THE DEVELOPMENT. THINK OF IT AS BORROWING MONEY THAT WILL BE REPAID FROM FUTURE REVENUES, A PRACTICE THAT MANY BUSINESSES EMPLOY TO PURCHASE NEW EQUIPMENT AND HIRE NEW EMPLOYEES. IN RETURN FOR THE FINANCIAL SUPPORT, THE CITY REQUIRES THE DEVELOPER TO MEET CONDITIONS THAT ALIGN WITH THE CITY’S ECONOMIC AND DEVELOPMENT GOALS.
BUT THE IDEA OF TAX INCREMENT FINANCING IS THAT MONEY WOULDN’T BE THERE UNLESS THE PROJECT HAPPENS. AND SO IF THERE’S A GAP IN THE FINANCING THAT’S MAKING IT NOT POSSIBLE FOR THAT PROJECT TO HAPPEN, TIF CAN STEP IN AND FILL THAT GAP, LIKE I SAID, USING THAT FUTURE REVENUE, THE PROJECTIONS OF THAT FUTURE REVENUE.THE DURANGO RENEWAL PARTNERSHIP RECEIVED SUPPORT FROM DURANGO SCHOOL DISTRICT 9-R, THE BUSINESS IMPROVEMENT DISTRICT, THE LA PLATA COUNTY ECONOMIC DEVELOPMENT ALLIANCE, THE REGION 9 ECONOMIC DEVELOPMENT DISTRICT AND LOCAL-FIRST. COMMUNITIES STATEWIDE HAVE USED URBAN RENEWAL AUTHORITIES TO GROW THE ECONOMY, CREATE JOBS AND REDEVELOP DETERIORATING NEIGHBORHOODS. MONTROSE USED ITS AUTHORITY TO BUILD INFRASTRUCTURE IMPROVEMENTS FOR A BUSINESS PARK WHICH HAS SINCE ATTRACTED NEW MANUFACTURERS. SHINE SAID TAX INCREMENT FINANCING CAN BE USED TO SPUR ECONOMIC RECOVERY FROM THE PANDEMIC BY PROVIDING FINANCIAL INCENTIVES FOR DEVELOPERS TO HIRE LOCAL WORKERS AND CONTRACTORS AS A PERCENTAGE OF THEIR WORKFORCE OR TO PURCHASE GOODS AND SERVICES FROM LOCAL VENDORS. IT ALSO CAN BE USED TO SUPPORT A HOUSING REHABILITATION PROGRAM FOR LOW- AND MIDDLE-INCOME HOMEOWNERS; PURCHASE LAND FOR REDEVELOPMENT OR OPEN SPACE; FINANCE HISTORIC PRESERVATION OR FUND ENVIRONMENTAL CLEAN-UP PROJECTS.
I LIKE TO THINK OF IT AS, LIKE A PARTNERSHIP, WHERE WE HAVE SOME THINGS WE WANT TO SEE HAPPEN IN THE DEVELOPMENT AND WE’RE NOT JUST REGULATING IT. WE’RE NOT JUST SAYING, YOU HAVE TO DO THIS, BUT WE’RE SAYING IF YOU DO THIS, THERE’S A BENEFIT TO YOU BECAUSE THERE’S INCENTIVES AVAILABLE.IF YOU’D LIKE TO LEARN MORE ABOUT THE DURANGO RENEWAL PARTNERSHIP, VISIT THE CITY’S WEB SITE AT DURANGO GOV DOT ORG AND NAVIGATE TO THE COMMUNITY DEVELOPMENT WEB SITE. I’M WENDY GRAHAM SETTLE FOR THE LOCAL NEWS NETWORK.