Urban Renewal is where the City Council declares an area as slum and blighted.
Once the Council “finds” the area to be slum and blight it can condemn property and collect taxes belonging to other taxing entities in the urban renewal area. The collecting of taxes which belong to other taxing entities is called Tax Increment Financing, or TIF for short. The other taxing entities include Littleton Public Schools, Arapahoe County, South Suburban Parks and Recreation District, and Urban Drainage and Flood Control District
A property is usually condemned in order to “assemble” that property with other properties to make the combined properties more attractive to developers. This is what happened with Riverfront. The new urban renewal plans approved by LIFT and the Planning Board call for the use of assemblage.
The City already tried urban renewal once before and it resulted in millions of dollars in losses.
Riverfront, at the corner of Santa Fe and Bowles, was an urban renewal project. The urban renewal authority, then called the Riverfront Authority, condemned every private property in the area and sold the properties to Writer Corp. Writer Corp. built a shopping center, the Riverfront Festival Center, which lasted only 4 years before closing. The property remained vacant for 9 years until EchoStar purchased the property and moved its Dish Network call center into the former shopping center.
That urban renewal project resulted in $48 million in losses: $9 million lost by the City of Littleton, $22 million lost by Writer Corp., and $17 million in defaulted bond payments by the Riverfront Authority.
The City wants to do the same thing again at Riverfront.
LIFT, the newly renamed Riverfront Authority, has included the old Riverfront property in its new Santa Fe Urban Renewal Plan; it intends to convert the property back into a shopping center. That plan has already been approved by LIFT and the Planning Board; it will go to the City Council in October.
Urban Renewal and TIF will take part of the taxes that would otherwise go to Littleton Public Schools, South Suburban Parks and Recreation District, Arapahoe County, and other taxing entities.
LIFT has already included tax increment financing in its Santa Fe urban renewal plan to take a portion of the taxes from the schools and other taxing entities for a period of 25 years.
Urban Renewal and TIF will raise your taxes
The board of South Suburban Parks and Recreation District is putting a tax increase on the ballot this November saying the District doesn’t have enough money, while the City of Littleton and LIFT are creating plans to take some of South Suburban’s tax dollars for urban renewal projects in Littleton.
The citizens of Littleton passed a bond issue for Littleton Public Schools last year, and a mill levy increase for LPS a couple of years earlier, because the school district said it needed the money. Now the City Council will siphon off some of that money for its urban renewal projects – projects such as the failed shopping center at Riverfront.
The reality is if LIFT takes tax dollars away from other taxing entities which need those tax dollars, the other entities will either have to raise their taxes, or reduce their budgets.
Even with a successful urban renewal project the city will not see an increase in revenue for 25 years.
Tax increment financing (TIF) freezes the taxes collected in the urban renewal area for a period of 25 years. So even with a successful urban renewal project the City, and the other taxing entities, will not see any increase in revenue for 25 years. For example Sheridan used urban renewal to help build its RiverPoint shopping center at Santa Fe and Hampden (with Costco, Target, etc.). The mayor of Sheridan said that Sheridan will not see any increased revenue until 2039.
Since the City of Littleton plans to use urban renewal over and over (e.g. Riverfront) the taxes can be frozen for much longer. The taxes generated from Riverfront were already frozen for 25 years; with Riverfront 2.0 included in the new urban renewal plan taxes will be frozen another 25 years, resulting 50 years of no increase in tax revenue.
Urban Renewal is no guarantee of success.
Many urban renewal projects have failed to produce the results promised when the project started. Riverfront is just one example of a failed project, but there are many others. For example Englewood created a shopping center with urban renewal and then torn down the shopping center when it failed. Colorado Springs has a current urban renewal project called the North Nevada Ave. project which is failing to make its bond payments. The Arvada’s urban renewal authority cannot pay back the money loaned to it from the city of Arvada.
Urban renewal obligates public money for risky enterprises.
According to the Small Business Administration half of all new businesses fail within the first 5 years. When urban renewal is used to provide financing to businesses and developments, the result is that public money is spent and obligated for inherently risky projects.
When the business or project fails, public money is then obligated to make up for some of the losses. Which means tax dollars that would normally be going to fund government, like the schools, are now being spent to pay off bad business loans.
Urban renewal involves the City in areas where the City has no expertise.
When LIFT starts providing money to a business that can’t borrow the money it needs for its project, LIFT assumes the role of a bank. LIFT is determining that it knows better than the people in the banking industry whether a project is going to be successful. Yet no one on the City Council, or on the LIFT board, has expertise in banking.
The City doesn’t need urban renewal for properties to develop or redevelop.
Littleton Village on the old Marathon Oil site at Broadway and Dry Creek, Lowes, Chipotle’s, CarMax and all the new car dealers along Broadway, the Riverbend shopping center at Prince and Santa Fe and Prince (LaMars Donuts, Il Vicino), the Safeway at Mineral and Broadway are just a few examples of commercial redevelopment projects that happened in Littleton without urban renewal and without tax increment financing.
Littleton Hospital, Home Depot, Aspen Grove shopping center, the shopping center at Bellview and Prince (Office Depot, Freddy’s Frozen Custard, etc.), and the motorcycle dealers on County Line are just a few examples of development which happened in Littleton without urban renewal and tax increment financing.
In fact everything that has developed in Littleton, with the exception of Riverfront failure, has developed without urban renewal or tax increment financing
Littleton has developed very well without using urban renewal and without providing incentives for the last 25 years. What has changed in the last 2 years which now makes Littleton such an undesirable place for businesses? What has changed in the last 2 years that makes your government now have to pay businesses tax dollars from Littleton Public Schools in order to get the businesses to locate in Littleton?