Denver’s flagship REI store on the South Platte River was partly the result of a tax increment financing project in the late 1990s. (John Leyba, Denver Post file)
An ongoing battle between cities and counties over the fairness of urban renewal districts has prompted a measure in the legislature giving counties a bit more say over the process. But the bill doesn’t go far enough.
Naturally, the debate is all about money: tax revenues and which government gets what after taxpayer-financed incentives come to play in development.
The fight goes to the very core of tax increment financing (TIF) and what it’s designed to do.
The idea behind TIFs is to take a “blighted” area and offer deals to developers to assume the risk of building a project.
The problem, from the counties’ point of view, is that a fat slice of their future tax revenues from such redevelopment is taken from them and used to repay loans to build, for instance, infrastructure to make the project possible.
But the way cities see it — and it’s cities that are at the helm of creating these projects — is that they are the ones with skin in the game, so to speak. They believe these new tax revenues wouldn’t exist without their effort and investment to prompt redevelopment.
Why should they give up any more power over the projects or revenues from it?
It should be noted that not just counties have concerns over TIFs. Special districts do, too, and for roughly the same reasons that counties cite.
Senate Bill 135, which advanced in the legislature last week, would give counties one seat on urban renewal boards that approve these projects.
While one chair on a board of up to 13 members is a voice, it’s far from veto power. However, Mark Radtke of the Colorado Municipal League makes the case that even one seat will give counties more leverage in reaching an intergovernmental agreement on a project that addresses their concerns. And he says that happens regularly even now.
Yet, it seems to us that counties deserve more power in this arrangement.
Last year, the governor acceded to the objections of cities and vetoed an urban renewal reform bill supported by counties, saying it went a step too far in prescribing how tax revenues would be used.
Perhaps that measure wasn’t the right fix, but it seems clear this bill isn’t adequate, either. When another bill on this topic drops — and we hear that will be the case — then a more fruitful discussion should begin about how to more fairly apportion power and money in urban renewal projects.