Urban Renewal Authority - Regular Meeting

Here.

Commissioner Sheikh?

Here.

Chair Moore?

Here.

Commissioner Orr? Here. Commissioner Peso Morelli?

Present.

Vice chair Bell? Here. Commissioner O'Connor?

Present.

Commissioner Babbs? Commissioner Baer? Present. Commissioner Mortalero?

Here.

And commissioner Peppler? Present. Chair, you have a quorum.

Alright. Wonderful. Do we have a motion to approve the agenda tonight? So moved. Second. Alright. Motion second. All in favor say aye. Aye. All opposed say no. Alright. We have an agenda and we're gonna immediately go into an executive session. I'm gonna turn that over to vice chair, Bill.

Actually, mister mayor Yes. First or chairman. There's the consent agenda. Thank

you. Let's see. We have one item on the consent agenda, twenty five six fifty seven, approval of the 11/18/2025 URA meeting minutes. Do we have a motion to approve the consent agenda?

I move to approve. Second.

All right. We have a motion and a second. All in favor say aye. Aye. All opposed say no. All right. Now we'll go into the executive session, and I'll turn it over to Vice Chair Bell.

Thank you, mister chairman. I move to go into executive session to hold a conference with the Tanaviri URA executive director to determine positions relative to matters that may be subject to negotiations, develop a strategy for negotiations and or instruct negotiators pursuant to CRS 24,640,240

E, all regarding the Towne Center DDA. All right. Do we have a second?

Second.

Second, think that was Ash. Is that right? No? Yep. Okay. We'll give it to Ash. All in favor say aye. All opposed say no. Motion carries. We'll, adjourn to the executive session and then we'll come back for public comment.

Anybody signed up for public comment tonight? Alright then we will go on to our first item of general general business. And that item is 20 fivefiveninety six, the resolution of Board of Commissioners of the Town of Erie Urban Renewal Authority approving the restated disposition and development agreement for the Erie Town Center. All right. So I will turn it over to Julian.

Thank you, Mr. Chair, Commissioners. Good evening. Julian Jacklin, Econ Development Director for the Town of Erie. And we also have Lachlan Woods, URA and Development Accounting Analyst. And we may have Sarah Nomela. She's probably out in the hallway coming back from exec session. But if she comes in, we'll bring her up as well. We do have a very brief PowerPoint. We've walked through this several times, both in public meetings and exec sessions including tonight. So I won't go through the details. I will just briefly highlight Town Center. This is there she is. We have a 20 acre property owned by the town at the Northwest corner of County Line Erie Parkway, owned by the town purchased in 2022. We've been negotiating with Evergreen for the last three and a half years on a proposed development program for this project.

This right now as of the DDA that is in front of you includes Evergreen proposing development for a retail phase of about seven ish acres on the close corner to County Line Erie Parkway outlined in blue on this diagram on the right. We have validated the financial gap of their overall development program. In total, it's about $43,000,000 first retail phase. We hired third party outsourced consultants to validate that financial gap, showed there's a gap of about $21,000,000 that needs public financing support to make a reasonable rate of return of about 8.9% return on their investment. This highlights that gap showing at the time.

This is now about a year ago, validating that over $20,000,000 gap and the revenues ultimately captured by the URA within the new Town Center URA. For this body, you all may remember we created the Town Center URA plan area back in July. It was approved, pledging certain amounts of property tax revenue and sales tax revenue generated by development in this area to support eligible project costs, which is exactly what we're doing here tonight. The DDA, it's pretty deep document, about 35 pages, so I won't hit on all the details. In total, there's a couple of different obligations, both by the town for the next meeting, reading the future in about twenty minutes, and then for the URA.

The total financial gap as validated is about $21,300,000 That gap is divided based off obligations for the town and the URA. This site is heavily undermined with old abandoned underground coal mines. The town will fund $5,100,000 in underground coal mine mitigation for this property that is required for any development to occur at this location. We've talked about that a lot. There's also a slide in the deck that shows the extent of that mining.

And then for this purpose, for the URA and your obligation, the URA will fund potentially either bonds sold by the URA or COPs issued by the town using that pledged property tax revenue, sales tax revenue over the next twenty five years up to a project fund of $15,700,000 to support that gap. And on the premise of TIF, this development would not occur but for the use of TIF. The site is currently vacant today. It's not generating any money for the town today. This is how the deal is intended to get done to create this massive injection in the town's tax base development, our anchor grocer, 100,000 square feet of retail, and so on that we've all talked at this point extensively.

And then last is also for the town, which is more a council piece to the puzzle. But if the bonds do not clear a project fund of $15,700,000 the town will authorize up to a maximum additional $2,500,000 for road improvements from Transportation Impact Fund, again, only if the bonds don't yield that $15,700,000 project fund for the overall gap. There is a maximum of that gap in the financial assistance of $21,300,000 Only the revenue generated by this first phase will go to support these costs. Revenue generated by the future phases within this property will not go to this DDA. It will instead be available to the URA for future purpose, for future development, yet to be determined.

Because of the nature of the pro form a and the gap that we've identified, this first retail phase, the town is intending to convey the land, the hard land for this project directly to Evergreen at no cost to them to make the numbers work. There's some additional detail in here on the cost breakdown between the town and Evergreen that shows what improvements, what public improvements the town and the URA are pledging to address with that public financing assistance. And that far right column showing the public costs as well as additional detail. And last, I'll head on very briefly. Obviously, this is a big project.

It's a huge investment for the town. This is our town center. It's the corner of Maine and Maine, Erie Parkway and County Line Road. This is the opportunity for our major anchor grocery store in the middle of town. We've been working on this for a long time since the town center PD was approved now five years ago.

So obviously, it's a big deal for all of us. Over the life of the TIF, over twenty five years, we forecasted that the TIF may generate about $27,000,000 in property tax and sales tax revenue to then reinject back into the TIF to support these project costs. The TIF does capture a portion of the mill levies imposed at this area, not all of them. But it also captures 3.25 of the town's 3.5% sales tax. So over the twenty five years, there's still about $05,000,000 coming back to the town through that URA agreement, for that sales tax sharing plan.

And then lastly, one of the benefits of TIF, it's in place for twenty five years. It was approved earlier this year, 2025. So in 2050, when the TIF expires, all that value, all that tax base stays in the tax rolls and starts going to the underlying taxing districts. So the town will see, on average, about $1,000,000 a year in annual surplus in tax base, sales tax, property tax thereafter. Currently, like I said, the site's generating no money.

It's heavily undermined, so it won't generate any money until we address those issues. We have this deal, executed by Evergreen, in this presented restated DDA. And tonight, we are requesting approval of resolution twenty five zero three eight, which will execute it by the URA. If the URA does approve it, it will go to counsel immediately thereafter in their regular meeting here in a few minutes for fully executing all three signatures. And then we're off to the races with our grocer, with site point review, to get all their approvals done in the next year and start construction shortly thereafter. That was quick, but we had five minutes. Laki, Sarah, anything? Happy to answer your questions.

All right. Sounds good. I will bring it back to the URA committee here and just see what questions we have.

Go ahead.

The $5,100,000 for undermining, is that a fixed number? Or is that the estimate and the town is fully responsible to deliver the undermining necessary for this project?

Based off our due diligence costs from our geotechnical consultants at CTL Thompson, it is a maximum not to exceed number based off this development program. There's a very likely chance they pump concrete, hit a wall, and we spend less.

So if the site plan changes some, is that refined, is the town on the hook for any overage, if there's a change and that maximum is exceeded?

If through our efforts to reevaluate or refine the site plan over the next year and with our consultants at CTL Thompson, if the mitigation plan requires revisiting and there's extra costs, the town would have to consider supporting those, yes.

And any changes to the actual cost of undermining mitigation, that would kind of open the floodgate, so to speak, on increased costs there

as well.

Correct.

All right. Other questions? Comments? Okay. I'm going to see if there's a motion and second then I'll have a comment from there. So is there a motion to approve URA Resolution 25,038?

Move to approve.

Second.

Do have a motion? I think, we had a second, from commissioner Baer. Okay. So before I call the vote on this, I have been struggling with this, greatly. I think most of you know that, I watch the numbers closely. I'm just fiscally aware and I, my risk tolerance probably isn't the same as a lot of other, folks. And, with that, I started to look at what are the positives of this property. And without a doubt, there are two huge positives for this, and that is more retail space, right? It's one of the biggest complaints that I'm sure that, we hear all the time. I want to come to the town and there's no place to for me to go.

And the other is a small format grocer. There's nothing in the middle of our town. If you want groceries, you've got to go out to the edge. And I think in the survey, we saw that this is a huge ask of our community to find a way to make this happen. On the on the side of the fiscal side that's really got me caught in this dilemma of what I'm going to vote, tonight is that the original charrettes that came up with this walkable community and the small segment, that we're talking about tonight on this corner, was done really void of the financial costs of it.

It was the, hey, if you can get anything, what would you want? And the good news of that is this is pretty cool if we could afford to do it. However, the subsidies that would be required to make this happen are at least known at this point of somewhere around $21,000,000 $5,000,000 of that is for the undermining that we have spoken about. I'm 100% in support of getting the undermining taken care of because if we don't do the undermining nothing can be built there regardless of this plan or some other plan. But that still remains a $16,000,000 deficit that we have to fund some way otherwise the developer will not build the property.

So what are the constraints on this property? First off, it's relatively small and so there is only so much that you can do on this particular property. There's a performing arts center slated for the northern part of the property that is not part of this. That likely won't happen because the surveys were pretty clear coming back that our community wasn't looking to tax themselves to build a standalone performing arts center. There are roads that are a part of this that peel off from County Line.

Well, they take up room which also limits the amount of retail so that further puts constraints, on the property. And this is what is creating this incentive. When I spoke to the developer, yesterday, he said that there have been two constraints from day one that have been non negotiables and that's the road configuration that takes up land. But it was it's also the fact that there are constraints about drive throughs and the types of businesses. So there's like no gas stations that would be part of this, which is, I think, most of us are probably in agreement.

We really don't want that to happen. But it also doesn't allow the developer to use the other land that's to the north where the performing arts center would be, so once again, small and constrained. So then that leaves us to where do you get the $16,000,000 to do this? And the bottom line for that is that it comes out of the sales tax that and the property taxes from all of our taxing authorities with the exception of Boulder County. Why?

Because Boulder County said, we're not going to play in this game. We're not going to help invest in this. We want our tax money the day these businesses open and we're going to get our money. And if you can do it with all the other taxing authorities, great, but we're not going to play. And so that constrains the amount of money that's available for us to actually pay for this.

It's still doable. I think there's a lot of great spreadsheets that anybody can look at on how it pans out. So I'm not worried about it will pan out. But it does take tax revenue for twenty five years off of that property that will not be available for us to use for our police, our parks, our growing staff and other needs that we generally take out of the, general fund. In addition to that, the sales tax will, there'll be an additional 1% sales tax at the grocer and there'll be an additional 3% tax on any of the services in this facility.

So if you have a nail salon there or you have a physical therapy building those would be a 3% surtax and that is so that we can generate enough money to actually pay back this large subsidy. I worry about this that we'll go forward. We take all the risk off the developer and we put it on the backs of the town. If everything goes well, that's not a big deal. But if it falls apart, then it becomes a big deal because it means the general fund will have to make up whatever isn't being generated by the tax revenue that we hope to get.

So I don't think there's support to look at the whole property. When I say the whole property, the property north of what we're looking at and to look at it broader to remove at least some of the constraints. And so we're really just in faced with this particular parcel and agreeing to these subsidies to make it happen. And so it's a dilemma for me. And I'll probably make my decision as we're voting. Alright other comments before I call the vote? Councilmember Ribera.

Thank you. I appreciate you raising your those concerns. I know that this is one of the most studied and considered parcels of land in the town. Right in the center of town, it goes back to decades long promises to our old town folks for a grocery store and activating this area for services for them. And so I'm excited for the development and design that the town really put together over years of of outreach.

And while it is a small portion of the town center land, it it really activates the entire parcel. So but for spending the money on this section, we wouldn't be able to do the rest of it. And and if we don't make the investment here, we will never see an increase in commercial development in this area. So for those reasons, I'm really excited to support this. And as far as the tax revenue for twenty five years, yes, URA investment does require that TIF.

And so that is an unusual. And then the 31% fees are not taxes. They are PIFs. And they would likely exist exist whether or not we made this investment or for anything that goes into these areas. Or that's my understanding. So I don't think that our decision here would impact the decision to implement PIF there. That's, as far as I understand, a decision made by the developer and not the town or the URA. So for those reasons, I'm very excited to see some activation in this area and to see what else is possible and to keep promises to our

residents. All right. Thank you. I

appreciate all the work that's gone into this. I understand it's been years years in the making. And I am fully supportive of the the $5,000,000 in the mitigation, all the work that's been done, you know, to get the grocers in place. And and and also the tiff to support it because I understand, you know, we you know, this is how we jump start how how we get things going. And we don't get a payback on it ever if we don't get something started.

But my struggle is the twenty five year return on investment. And the constraints that were put on this property to that hurt the opportunity for additional revenue. And

so

like some of the constraints, some of the but I think there is still opportunity to look at, some higher retail revenue driven products in this space that would shorten that twenty five years. So that's

All right. Commissioner Hoebeck.

Thank you. Yeah. This this project reflects very much what the residents said they wanted five, six, six years ago when the were done. And we've been promising a grocer ever since and trying to get our wheels rolling on this on this project since then. There's going to be risks no matter how we approach it.

And if we delay and don't approve this tonight, we risk having to go back to the beginning with respect to a grocer. We spent a lot of years trying to court grocers. And maybe the grocers will say, they're not serious anyway. So I'm I'm I'm concerned with that. The delay adds costs, which are ever escalating, as we all know, every year, adding risk.

The delays, probably most seriously, reduce our ROI because the our revenue will dwindle with every year that we delay because the TIF front ref TIF revenue clock is already ticking. We can only collect TIF for twenty five years. That clock has started. So if we have another three years, that's zero revenue to the town from that plot of land. So if we can make something bigger and better later, okay.

Maybe we get more different revenue, more sales tax. But how how at the cost of how many years of of nothing coming in. Many of the subsidies are over time because they are based on the TIF revenue. So it's not cash up front that the town's having to pay for other than, obviously, the undermining in the in the the town the ground. So, yeah, I I think this is a is a is a well thought out plan.

We've been discussing it for months and years with the developer, with town staff, and it's it's based on what the residents say they wanted. So I wanna get a grocer in there and and get the ball rolling. Thank you.

Alright. Thank you. Vice chair, Bell.

Yep. Thank you. I'll keep this short because we're all out here. Just want say, think reflect a lot of the thoughts that were made here tonight. Obviously, this has been a long time in planning.

This is something that I think as future design charrettes go on, as the chairman mentioned, the design charrette was in 2018. And there's been a lot of changes just in the economy and various things along the way. And so one of the things that I've noticed, especially in the Town Center PD that's in the Erie Commons areas, we've struggled to get some applicants in that area. So I kind of worry about that with constraints in this area that, again, we are able to maximize the profitability in this. We're throwing a lot at this.

And to a certain extent, I understand and I agree that it's the only way to get a grocer in there. So I support moving forward. I just ask that in the future, we just look at, especially the northern parcel that we look at opportunities to maybe maximize revenue generation there to kind of offset some of this.

All right. Yeah.

So I had two points. One is we could achieve this in phases, and phase one will just kick start the activity in the area and increases the value in phase two, and it keeps the area being utilized. And I also believe, like, without investing in some of these projects, be it infrastructure, utilities, we cannot kick start, like, economic activity. And it's the heart of Erie, and we need some activity going there. And all the residents wanted a grocery and some other retailing there.

Another thing I was going to say is delaying this project would cost more money in future with, like, any infrastructure or utility projects. And I had one question for Julian. So when we did all the analysis and did the and everything, did we do any financial analysis of how much it will generate and just the planning? I I I don't think anything goes without financial place in the mind, right?

Sure. The financial analysis at the time of the charrettes was more on what is the market demand for these uses, which it indicated far beyond this, there's demand for this amount of retail and grocer and hotel. It also quantified just how much revenue and sales activity were leaking out of Erie to neighboring communities, which I know Malcolm was here and the rest of us weren't at that time. But at the time in twenty eighteen, twenty nineteen, there was $400,000,000 in annual sales leaving the town and taking those tax dollars to other neighboring communities. So it showed the demand for the use, how much revenue could be captured by Erie if we have the retail in the town to support it. Thank you. Sure.

I just wanted to kind of build on something Commissioner Hoback said regarding the longer we take because the TIF clock is ticking the longer we take to kind of activate the site and begin generating revenue, the higher any eventual TIF may have to be to kind of build back that lost opportunity cost. So, I mean, I was here during the original Charettes back when we were first analyzing use of the site and, you know, participating as resident. And the demand for this kind of this specific location to have specifically a small format grocer, it's been repeated back then and since then over and over again. You know? It's just something that has never died out of the minds of residents.

It's a huge kind of gap in just eerie feeling like that true small town. And so, you know, I I support obviously, I support this site because I've you know, living in this town and seeing how all of this talk has gone, like, there's a huge demand for it. Yes. There's risk involved. But there's also risk involved in not doing it in terms of lost revenue, lost opportunity cost, and just potentially losing any commitments from patrons who have are waiting for this site to open.

Commissioner?

Yeah. Thank you all for your hard work over the years on this important project. There does seem to be a good alignment of interest with this project suffering from significant and overwhelming conditions contributing to light, which the ORA is intended to remediate. It's a big gap. And I would just impress upon staff if this passes tonight to, without sacrificing intent, be flexible and creative with the developer and The planning efforts to maximize that revenue so we ensure this is a successful project financially As you know a critical piece of our willingness to enter into these agreements

Commissioner O'Connor, thank you.

I just wanted to mention one thing to the residents regarding the PIF, the public improvement fee, the 1% on the sales of goods and 3% services. That actually, in this agreement, once the bond construction of all eligible public improvements and expiration of tax increment financing for the town center phase one, Basically, upon written request of the town, that PIF can be removed. So it's not forever. It can come off once once those obligations are paid for. That was something that I

figured should be highlighted the residents.

Yeah, that's a good point. Is that automatic? Or is that something that we have to follow-up on?

We would submit a written request to the developer. Upon request, they would terminate it.

Got it. Otherwise, they're just generating money for themselves at that point.

PIFs are used commonly in the Front Range for renovating older, aging shopping centers, not as much for new. So after twenty five years, if there's no need for it, there's no need for it. Okay.

And the TIF is not necessarily guaranteed for twenty five years, right? If we generate enough revenue early enough, then that TIF terminates early Yeah. And all of that money

By comparison, the nine mile forecasting should expire seven years early.

Thank you, Chick fil A. It could go the opposite way, though, as well. That if you don't generate enough money, that's where the town comes in as the backstop to basically be able to pay off the bonds over and above

for that maximum $2,500,000 for road improvements but that's it.

Other comments?

All

right. Well I'll say that Commissioner Schack and Commissioner Orr has their two comments has helped me get to the yes side of this certainly the clock ticking on the URA cannot be ignored once we enact these then we have twenty five years to make it happen. So any time off of that basically reduces our amount of time that we can utilize the tax revenue to make it happen. And then Commissioner Orr I think your comments of working with the developer in a creative way and this is where it comes back to the roads and the northern property if there are ways to maximize the revenues I think that's so important to take the burden off the taxpayers if possible. Alright.

With that, I will call the vote. I think we'll just do a roll call vote. Lots of discussion here tonight.

Commissioner Hoback.

Yes. Can you, I'm sorry, clarify. If we a yes vote is approving

Yes.

The DDA.

The resolution 25 Okay. Three.

Yes. Thank you.

Sorry. Commissioner Sheikh?

Yes.

Chair Moore? Yes. Commissioner Pesamorelli?

Yes.

Vice chair Bell?

Yes.

Commissioner O'Connor?

Yes.

Commissioner Baer? Yes. Commissioner Mort Mortalero? Yes. Commissioner Commissioner Orr?

Yes.

And commissioner Peppler? Yes. The motion passes.

Alright. Thank you. Thank you. Let's get that grocer. All right. We'll move on to our second item tonight, which is item 25,652, a resolution of the Board of Commissioners of the Town of Erie Urban Renewal Authority approving the disposition and development agreement for 130 Wells And 570 Cattell Street. And I'll turn this over to Stephanie Piznagas, our economic development manager.

Hello, Board of Commissioners. Can you all hear me? Yes. Okay. I'm Stephanie Pizznagas. I'm the economic development manager. I'm going to keep this real tight because we

Could you pull the microphone? Yes,

Thank you.

Also with me today, I have Scott Skiba from you may know him from Birdhouse, but he will introduce himself. And he's here to answer any questions, because this is relevant to him. Going to go straight into reminding everybody the property location. This is across the street from Coal Creek Park on Wells And Cattell Street. Here's some of our proposed design images.

The URA acquired this property in September 2025 for a purchase price of $500,000 at an RFQ. Mr. Skebo was our successful applicant for that. And he is proposing a one and a half story commercial building, which includes a restaurant, an ice cream shop, a bakery, and two small retail storefronts. The DDA in front of you, I'm going to go over the core deal terms and the repayment plan for that.

The property will be conveyed to the developer only after he obtains all of the required approvals, which include the site plan, the final plat, and the development agreement. And the deadline for that is the end of the year of 2027. The developer must begin construction by twelvethirty onetwenty twenty seven and obtain a certificate of occupancy by the end of the following year. Toro will reimburse Mr. Skiba a total of $1,900,000 total, or for the remaining life of the TIF, whichever comes first.

So if the $1,900,000 comes in before the plan area sunsets, then that is the amount. Otherwise, no. And the sunset is 2,038. And that breaks down as $1,100,000 in property tax increment, which is 100% of the new property tax being diverted to repay that, and 40% of the sales tax increment up to $800,000 to pay that portion as well. Currently, there's nothing on the site, so there is no property or sales tax being generated at the moment.

The reimbursement begins only after a certificate of occupancy is issued and increment has been generated and after all the conditions I just mentioned above satisfied. The developer is paying for all the construction, permitting, and entitlement costs for the project as well. So I know the repayment of the purchase price was something we discussed at length last time you heard about this. So the developer will be receiving the property at no cost, but must repay Torah's $500,000 purchase price using that non increment portion of the sales tax revenues, that 60%, if not repaid by the end of the year in 2032, all property and sales tax increment will then go to Tura until we are fully If post construction there's a lapse of three months in receipts of any sales tax or the balance remains unpaid, the developer has opportunity to repay us directly, or a lien may be recorded against the property if not paid. And Touro may repurchase the property at no cost if the developer fails to meet the approvals or construction milestones that I mentioned on the previous slide.

So the recommendation is to approve the resolution in front of you. It has a long title I'm not going to read, because I want to give you guys ample time to ask me any questions. And Scott is here available for questions as well.

All right. Great. Well, first, thank you for coming out tonight and being part of this. And certainly, the Birdhouse is one of my favorites. And I think doing something to enhance Old Town is a positive thing. Let me just bring it back to the commission and see what types of questions we might have. So let me just ask if there is a motion to approve resolution twenty five zero four two.

Motion to approve.

Second. Okay.

So I think we had commissioner Pesramelli and commissioner Mortariello as the second. Alright. Any further discussion? All in favor say aye. Aye. All opposed say no. Motion carries. Prime piece of property, looking forward to seeing your building come out of

the ground.

That's awesome.

Thank you.

Good luck to you.

Alright. Thank you.

Alright. With that we will adjourn the Urban Renewal Authority meeting 12/09/2025. Thank you all. We'll take a few minutes, and we'll convert over to the town council meeting.