Urban Renewal Authority - Regular Meeting

Recording in progress.

To order the urban renewal authority meeting on 07/08/2025. If I can get a call me to order order, roll call vote, and those in attendance please.

Commissioner Pesamorelli.

Present.

Commissioner Sheikh. Commissioner O'Connor. Here. Commissioner Orr.

Here.

Vice Chair Bell. Here. Chair Moore. Here. Commissioner Bear. Commissioner Peppler? Peppler is present. Commissioner Mortalero? Here. Commissioner Babbs? Present. Commissioner Hoback? I'm here. Chair, we have a quorum.

All right. Thank you. Let's see if we have motion to approve the agenda.

So moved. Second.

Who is first?

I think it was Commissioner Baffes. Is that right?

Yes. Okay.

Okay. We have an agenda. We have three items on the consent agenda tonight. The first is item twenty five three ninety five approval of the 06/10/2025 urban renewal authority meeting minutes. The second is twenty five four ten, a resolution of the board of commissioners of the town of Erie urban renewal authority approving a first amendment to the tax increment revenue agreement with the town of Erie for the Erie Town Center renewal plan. And the last item is item 25,394, a resolution of the Board of Commissioners of the Town of Erie Urban Renewal Authority approving the payment of funds to the Town of Erie for the Colliers Hill Historic District Erie Connection, the pedestrian bridge. Do I have a motion to approve the consent agenda?

So move.

Second.

We have a motion and a second. All in favor say aye. Aye. All opposed say no.

All

right. Wonderful. We'll move on to public comment. If address the commission with regard to the urban renewal authority. I don't see any present. Anybody online?

The nobody online signed up here.

Alright. Then we'll move right into general business of which we have one item tonight. And it is basically the overview of an urban renewal authority. And I believe we've got three, maybe four people joining us. Julie and Joaquin, director of economic development for the URA Lockheed Woods, URA development and accounting analyst and Corey Hoffman, URA legal counsel. So Julian, I'm going to assume I'm turning it over to you.

You got it. Thank you, Mr. Chair. Commissioners, good evening. I'm Julian Jackwin, the town's director of economic development urban renewal. We also have

Locky Woods, URA and development analyst.

Good evening. My name is Corey Hoffman of Hoffman, Parker, Wilson, and Carberry. We put

the attorney on his own table.

Well deserved. And I showered today, too.

All right. Kicking off this evening, this is going to be urban renewal one hundred and one. We did this last about two years ago. I think it was in about September 2023. So it might be a refresher course for some of you. But recognizing we have a few new folks thanks, Adam. And we'll go with the other one first. Adam, the attorney one. The one on the far right, not the Mountain View. We're getting there.

So this might be a refresher course for some of you. But I know we have a few new faces, a few new folks on council since the last two years. We also have at least one new member of the URA board since that time. So I thought it'd be a good opportunity for us to come back together, talk about what the town's urban renewal authority actually is, how it works, how it's different from the town, the background on the plan areas, how some of the fund accounting works. It's going to be kind of an open conversation.

We have some introductory slides from Corey from a legal perspective, which hopefully you all read your email, there is a memo that I sent to everybody god, that was probably yesterday morning, maybe Sunday with a little bit more detail from Corey just on a lot of the legal reference from the statutes as far as how urban renewal functions. So he'll kick off with his slides. Laki and I also have a little bit of staff perspective on Erie specific data pertaining to our authority and our plan areas that Laki and I will go to thereafter. So first Corey, then us. Then we'll kick off with some questions thereafter. With that, Corey's turn.

So good evening. As I said, my name's Corey Hoffman. I work with Kendra and represent the town's Urban Renewal Authority. And seeing Austin in here, you should know that probably he is just as able to give this presentation as I am. But tonight you're stuck with me. So you do have a memo in your materials. I would urge you if you suffer from insomnia, it is there for you. Put it by your bedside. It's good reading for that purpose. I'm going to try to do this at a very quick and dirty high level, hit the high points on Urban Renewal 101, and would encourage, if anyone has any questions, feel free to interrupt me.

I know that as Julian indicated, many of you have heard this. And so I don't want to repeat myself and would like to just really hit the high points. I'm going to tell a quick story about PowerPoint. Probably about twenty years ago when PowerPoint was first coming out, I was doing a presentation. And my kid looked at me at the breakfast table in earnest and said, dad, do you have a PowerPoint?

And he was about 10 years old at that point. I said, no. And he said, gee, dad, I hope it doesn't suck. I hope this doesn't suck. So urban renewal is a mechanism for blight remediation.

And blight is the term that's used in the statute. And frankly, when folks think of blight, I don't think they think of a place like the town of Erie. The terminology is in the statute. And it frankly comes from roughly seventy five years ago from federal law. But it still applies and has various factors that determine whether a property is in fact blighted.

And again, folks might think of it as kind of an inner city problem. But when you look at the factors of blight, it is conditions of property that are different in some way that make it infeasible, in some cases impossible, to develop. Urban development tool. It is a tool for blight remediation. Having said that, good blight remediation most of the time results in some sort of economic redevelopment.

But really, the tool is a blight remediation tool. And so this first slide is the first of five factors of blight. And in order to ultimately make a determination that property is blighted, you need to find four of 11 factors. The first factor is something I think we're all kind of think of as traditional blight slum, deteriorated, deteriorating structures. You think of maybe an urban area type structures.

The second is frankly much more common in a place like Erie and in other places, which is you may have old historic streets that go nowhere. You may have a street layout that just doesn't work. You may have utilities within those streets that make it more expensive. So when looking at this factor, there's a whole host of ways you can get to defective or inadequate street layout. Number three is related.

Faulty lot layout in relation to size, adequacy, accessibility, or usefulness. Many old towns, the historic areas, have really tiny lots. They may have lot lines where you need two or three houses for a legal lot of record, but you've got lot lines going down the middle of structures. So that's a pretty good example of faulty lot layout. Unsanitary or unsafe conditions, the first is, I think, fairly obvious.

But unsafe can be a lot of police calls. Areas that when you look at how they are, whether it's the way they're laid out, the result is that you get a disproportionate number of police calls. That's unsafe conditions. The deterioration of the site or other improvements. Again, if property as a whole has deteriorated for some reason I'll give you an example of a property that is not in an urban renewal area that I look at, not in an area, and I think of that's an urban renewal project waiting to happen.

What about the old sugar factory in Longmont? When you think of all of the factors and look at this, it's a good example of kind of traditional blight. Unusual topography or inadequate public improvements or utilities. Again, a lot of these overlap. But when you think of, for example, unusual topography can also cause drainage concerns, things like that.

So again, a traditional factor. Item number seven is one that I frankly recommend not using most of the time, because it is very specific. And it talks about rendering title non marketable. Not making it more difficult, it is actually rendering title non marketable. An example I can think of is my first urban renewal project, for those of you that have been in Colorado for decades, the old North North Glen Mall.

The old North Glen Mall, now the North Glen Marketplace, was owned by the New England. It got it through a foreclosure. And ended up being, frankly, non marketable and was one of the reasons that Northglenn ultimately determined, as part of an urban renewal project, to redevelop that property. Number eight, the existence of conditions that endanger life or property by fire or other causes. This is building code stuff.

This is a reason, frankly, oftentimes that properties are blighted. If you have old, sometimes historic properties that don't have the protections in place and allows the structures themselves to deteriorate, this too can be a condition of blight. And again, number nine is similar. Buildings that are unsafe or unhealthy for persons to live or work in, building code violations, defective design, environmental contamination. Frankly, that is a very, very common, in today's environment, condition of blight.

And urban renewal authorities are oftentimes uniquely qualified to remediate blight because frankly, the state knows that unlike private developers, the urban renewal authority is there for the duration. It's not going away. So if the urban renewal authority is the one that is remediating environmental contamination, that is often a plus for those that manage these. But that is certainly a condition of life. Then the last is the existence of health, safety, or welfare factors requiring high levels of municipal services or substantial physical underutilization or vacancy of sites, buildings, or other improvements.

I think, again, that one is detailed and somewhat self explanatory. Again, in order to qualify to be eligible for an urban renewal area to be created, you need four of these 11 criteria. So who does what? And in my view, this is probably the most important thing, especially because those of you on town council are wearing two hats. You are both council members and also members of the Board of Commissioners.

You as council members are the policymakers. So the town council is responsible for considering whether a property is blighted and making determinations that if blighted, it is appropriate for renewal plan and adopting the urban renewal plan. That is a policy determination. The job of the urban renewal authority is to implement the plan of town council. So those of you on town council, you have public hearings all the time for land use, if you want to create a new urban renewal plan.

By contrast, the only public hearing an urban renewal authority has is about the budget. Because it's not anything related to quasi judicial. It is the job of authority simply to implement the plan of town council. And there's two models. There is the one where town council acts as the urban renewal authority, as you do. And the other is to have a separate board. Board. There's no right way to do it. But one of the reasons that the job is different is because there's this idea that the urban renewal authority is somewhat insulated. Its job is singular.

Its job is to implement the plan. And so those communities that have separate boards often do it because you're not elected when you're on an urban renewal authority if you're a separate body. And some communities think that insulation is significant to allow a plan to be implemented and be free at some level from the political piece. Those that have town council as the urban renewal authority often are just the opposite. You want the same level of accountability as your urban renewal authority, the EIR's town council.

Now one of the fundamental things related to urban renewal and how urban renewal works is that urban renewal authorities are not TABER entities. Why is an urban renewal authority not a TABOR entity? Because it doesn't actually impose any sort of tax. It does not have the statutory authority to do so. What that means is that an urban renewal authority can issue debt without an election, because it is not subject to taper.

Whereas wearing your town council hat, obviously, you are. So this is just representative list of powers of an urban renewal authority. When we identify an urban renewal authority, it is known as what's called a body corporate and politic. But really, it's a form of government. You are acting as another governmental entity of the town.

And it is a creature of statute. So the urban renewal authority's duties are actually described by statute. So unlike, for example, the town's planning commission, when you're wearing your urban renewal hat, you're not an advisory body to the town council. That job is just to implement the plans of council. You are subject matter experts.

You may want to recommend, with your urban renewal hat on, new plan areas. But the idea is that ultimately the urban renewal side of the ledger is the subject matter expert on urban renewal. And so the ultimate job is to undertake urban renewal projects, consistent with the plans adopted by counsel. But a lot of these other duties that are in the statute are kind of ancillary to that primary purpose, which is, again, to implement the plan of town council. So in 2015, effective 01/01/2016, urban renewal in Colorado changed pretty dramatically.

There was a concern by fire districts and counties predominantly, but other taxing entities as well, that they did not have a place at the table when a municipality was looking at creating a new urban renewal plan area or a new urban renewal authority. And so effective 01/01/2016, the process for creating urban renewal plans changed dramatically. And the membership on the board changed dramatically. If you were on an urban renewal authority before 01/01/2016, you were not a county commissioner. You were not a member of a school district board.

You were not a member of a special district board. It was either a separate entity, the separate urban renewal authority, or the governing body of the municipality. But House Bill thirteen forty eight changed that. And so if a municipality either adopts a new plan or substantially modifies an existing plan after 01/01/2016, you are subject to House Bill thirteen forty eight. That's already happened here.

That's why this slide says already accomplished. But that's how you got here. And I'm going to go backwards every time. So what is the process, and how has the process changed? Well, the primary way in which it was changed is that the urban renewal authority is now required to negotiate with each of the taxing entities regarding effectively impact on services triggered by the new urban renewal plan.

And so when you talk about what the roles are, while the town council ultimately adopts the plans, interestingly, the way the statute's written, it is urban renewal authority that enters into the agreements with the taxing entities that ultimately allows the town council to approve a plan. So earlier this evening, you had one of those on the agenda. And in order to ultimately adopt a plan, you have to have either agreements with all the taxing entities or a waiver from those taxing entities. And the idea is that the tax increment that is generated from a new urban renewal plan is allocated between the tax taxing entity and the urban renewal authority, not based on some formula, but it's supposed to be based on the impact to the taxing entity. And so I will give you a pre-thirteen 48 example, example, because it's one of the best ones I can think of.

And that is that a community, as part of an urban renewal plan, assisted with a new assisted living facility. That assisted living facility, any time someone fell out of bed, had to call

the fire

department. And so there was no question but that that facility caused a disproportionate impact on the services

provided by House Bill thirteen forty eight. And so

caused that was one of the fire districts, frankly, that was most front end and kind of led the charge for House Bill thirteen forty eight, was that fire district that had that assisted living facility that it was responding to a large number of calls. And so part of what House Bill thirteen forty eight's negotiations was intended to address is if you have those sort of impacts, impacts, that should be part of the allocation to the taxing entity. At the county level, if there is more work for the sheriff, which is frankly unlikely unlikely in most cases. But if there were other county departments that are going to have more work, that's what you look at when you are having these discussions with the various taxing entities. If negotiations are unsuccessful, then mediation is the next step.

And the word mediation is the word used in the statute. It is frankly more arbitration, because there is ultimately a decision made on what the proper allocation is. So let's say hypothetically that a community is having an argument with its fire district. And the urban renewal authority thinks, well, here's the impacts we believe it will cause to you. And the fire district says, oh no, it's going to be all these new things.

Then you actually go to a mediation in front of either one mediator if you can agree on a mediator, or a panel of three if you can't agree on one mediator. And the whole mediation process is about the impact on services. And ultimately, result of the mediation, whatever it may be, is folded into the plan. And so I was I don't know if it's fortunate or unfortunate enough to be the chairman of the first mediation commission under this statute. It was a mediation up in Leadville.

And the sanitation district thought that it was entitled to more than the Leadville Urban Renewal Authority thought was appropriate. District frankly didn't have any evidence of impacts. And so parties went through that mediation process. And ultimately, in that particular case, the Urban Renewal Authority prevailed. But in my view, if you go to the mediation process, you've already lost.

Because even based on timing, it can often thwart a project. Because mediation can take up to a year. You've got this one hundred and twenty day process, but that doesn't talk about the time then to set up the mediation, the time to do all the proceedings in advance, ultimately have the hearing. And in the Leadville case, it did take an extra year. So always I recommend, if at all possible, avoid mediation.

Sometimes it's impossible. And if time is not a critical component and you have a taxing entity that you can't work with, sometimes necessary. And the statute's there for that process. But I think thirteen forty eight also is intended to create partnerships with your fellow governments. So certainly certainly the the idea idea is is to to agree agree when when you you can.

Can. And then last thing on House Bill thirteen forty eight. So statute authorizes the collection of TIF for twenty five years. It is a limitation on the number of years that TIF can be collected. But urban renewal, frankly, lasts forever.

There is actually a case that came out of Arvada a number of years ago where Arvada made a determination that blight had been cured. And then the Arvada Urban Rule Authority attempted to condemn property. And the court said, well, you told us blight was cured. So how can you condemn property? So practically speaking, what happens now is that blight's not cured.

It is an ongoing process. And so TIF is capped at being collected for twenty five years. But the plan can still proceed forward beyond the twenty five years. But when you get to the end of the twenty five years, the money has to be pledged. If it has not been pledged to an urban renewal project, that portion of revenue remaining in the special fund that is derived from property tax increment is returned to the taxing entities pro rata.

Truthfully, I have yet to see money returned to taxing entities. I think the reason is there's ability to continue to spend money in furtherance of a project to make sure it is sustainable. Because the goal, obviously, is to have sustainable blight remediation. And if you have to put the project in and then just walk away, are you gonna be repeating yourself over and over? Perhaps.

So the goal is a sustainable urban renewal project. And I would suggest that frankly makes it easy not to have money remaining in the special fund. And the last thing I'll just touch on is terminology. In the memo you have definitions of urban renewal plan and a renewal project. I'm going to tell you, in my view, it is totally counterintuitive.

Because when you think about how do you refer to a new development? You refer to it as a project. Project. We have this project on town hall project. Well, an urban renewal project is defined as all of the undertakings and activities to implement an urban renewal plan.

So let's say hypothetically that the town hall was in a larger urban renewal area, the redevelopment of the town hall would be one undertaking or activity. You wouldn't refer to it as a project as it relates to the nomenclature. And again, in my opinion, when House Bill thirteen forty eight was amended or was adopted, I think those that were trying to amend the statute wanted to have the ability to look at every single undertaking or activity and revisit an urban renewal plan every time there was a new undertaking or activity, that's not what the statute says. The statute says a substantial modification to the project, which means the entire plan. So that nomenclature in urban renewal is, in my view, critical.

I'm going to stop there because I don't like to talk at you for a long time. Not that I don't think this is really interesting, but I'd rather respond to questions if you have them or let Julian and Lockheed do their piece. And I'm certainly available to answer any questions.

I know I have a question, but I think maybe it's better to let you finish because maybe you'll answer them. Sure.

Definitely. We can take over. That's right with everybody. There's definitely going to be some overlap. I'll say Corey is best in the game as far as your attorneys go in Colorado. He knows more than anybody. I think Austin can probably attest to that. So he does a really good job at covering the basics. So there might be some overlap between his remarks and ours. We've had this for about an hour today.

So hopefully we'll get through our slides pretty quickly. Very highly today, we want to go over some of the more Erie specific data about our urban renewal authority. Corey hit on a lot of highlights of what URA is, how it works, the functionality. We want to talk a little bit more about Erie's perspective. So we'll talk about the URA, the plan areas we have existing existing and proposed, how tax increment financing works, especially for Erie's case, and then as we said at the very end, some questions.

So our authority, for those of you that may have been in Erie about fifteen years ago, was created resolution by the then Board of Trustees in 2011. There are certain requirements in the statute that enable a municipality to form that original authority. There are surveys that are done, plans that are approved, that really allow the municipality itself to form that initial authority. The authority as an entity follows the municipal boundaries. So the town of Erie and the town of Erie Urban Renewal Authority are the same boundary.

The difference is that within that boundary, we establish certain plan areas that then allow us effectuate the projects, the activities, the undertakings within those plans. Corey mentioned the job of a URA is not that kind of development. It's not development. It's not job creation. It's blight remediation. That's a very important part. As an urban renewal authority practitioner, that is our job, is blight remediation, not economic development. But there is a little bit of overlap between the two. Eliminating slum and blight does typically result in job creation, economic development, increased tax revenue. But again, blight remediation is our job.

The revenue stream that comes in through the URA is tax increment financing. We'll get into that a little bit more later. That tool, TIF, as we'll call it, allows us to really pledge a portion of taxes collected on an increase value attributed to development, redevelopment within that area. That tool allows us to use those funds to promote investment and development and redevelopment and remediating those blighting conditions. We have some tables later on that hopefully you've seen in the slide deck that establishes how, as values increase when development occurs, how the base value is set in stair steps over time, but then also how that increment is captured over that twenty five year period.

This is a lot copy and paste from Corey. It is an independent governmental entity. It's governed by this board, this body, the URA's Board of Commissioners. It does represent all underlying taxing districts. That's why there's 11 of you, currently 10 minuteus one.

That represent the greater good. It represents the seven town council members, county, represents the school, represents the general other underlying taxing districts currently served by a special district. And then because we have seven council members and the statute allows for those additional three, that creates a number of 10. And the statute says if you have an even number, the mayor gets an additional appointee to break that even number to make an odd number that gets us to 11, which is that eleventh person who's currently not here. Separate funds, separate budget, separate accounting.

It's really important to understand the difference between the two entities. Corey mentioned it is its own governmental body. It is a partner to the town, but it is entirely separate from said town. There are some exceptions to the rule, but typically municipal staff helps run the entity or helps run the authority. Lockhe, myself, Malcolm all have some amount of URA in our job description.

So there's some proportion of our role that is supported financially by the authority. Exceptions is some municipalities I listed Pueblo, Colorado Springs, and Arvada do have a separate organization, the Arvada URA, the Colorado Springs URA, Pueblo, that are an entirely separate organization with their own staff, their own funding, that run as their own entity, entirely separate outside a different building, even from municipality. I won't get into responsibilities. Corey touched on those. These are just a couple of examples of what this body is responsible for.

Some of you should remember this. These graphics are from the annual report we just presented a few months back, which we do now annually for the authority to kind of highlight the qualitative activities that take place within the authority each calendar year. Currently, and in about two hours, this map may change. So get ready for that. But the current existing plan areas map shows we have six existing URA plan areas. Corey mentioned in 2015 the laws changed. That's the main reason why we had five plan areas up until about a year ago. Because up until 01/01/2016, a lot of people across the state were creating a lot of new plan areas pretty quickly without too much extra interaction negotiating negotiating, mediation mediation with with the taxing

districts. So we have five that

were created back in 2013 and 2015. We created the first pretty new plan area in nine years last year at Erie Gateway Phase one. And then the Erie Town Center plan area, which is still shown as pending, is for a 20 acre site that the town controls right in the middle of town at the northwest corner of Erie Parkway and County Line Road. These plan areas are specifically bound by geographic areas to remediate prevent blight in those areas. And it's important to recognize that each plan area operates independently of each other.

Moneys generated by that plan area can only be spent within that plan area. There's a really important school of thought that the authority itself and the budget that the URA controls is not just a fund where funds can be intermingled and exchanged between plan areas. Let's say hypothetically for URA revenues generated in historic Old Town, those funds cannot then be used in the airport URA. They have to be restrained and restricted within just that plan area boundary. I won't get into the financials again because this is from a few months ago.

But to the point of monies in that area stay in that area, this is a highlight to show a snapshot based off the end of last year, 01/01/2005, we'll call it, where the financial accounting was for each of those then six plan areas. Beginning balance, revenues coming in both from property tax and sales tax in certain areas, and where funds were going out that resulted in net fund balance at the end of the calendar year based off the different revenue streams that a TIF can really capture. A couple more here quickly. TIF, we've talked a lot about this. It's been six months since a lot of you have joined this body.

So I think TIF should not be a new term for many of you. But the TIF allows those in this group to capture certain revenue streams based off that investment development, redevelopment within those boundaries. We are allowed through the authority to capture subject to negotiations, certain amounts of property tax, certain amounts of mill levy from the underlying tax in districts subject to those revenue sharing agreements executed between both parties. Like Corey said, there was one on the URA's agenda. There's one coming up on the town's agenda a little bit later.

The other revenue stream is it also allows the URA to capture a portion of the municipal sales tax levied by the municipality within the URA, also as a component of TIF, also then captured through the authority to be used within that area. The next graphics talk about base amount versus increments. So I'll kind of talk through those as we show them. Standard property, twenty five years. Every couple years, there's a reassessment.

Property values, even if there's no investment in that property values, naturally stair step over that twenty five year period. We'll call this the base value. If you have a property, nothing on that property changes, whether it's a standard commercial building that isn't improved over twenty five years. If it's an undeveloped site over that same twenty five period, there's just this natural stair step evaluation that occurs over that time. This, as you see at the very bottom in plan year from '0 to '25, this what is we refer to as that base value.

That amount of value and that amount of property taxes over that twenty five year period continues going to the underlying tax and districts as it always have. The TIF, the increment, is that amount of increase that occurs thereafter. As investment occurs, as development, redevelopment occurs, naturally as development occurs, the valuation increases. The property tax is paid on that increase, the increment, is what's captured as TIF. So the dark purple on this shows value.

That base value in this case, the assessed value about 4 and a half million. The taxes paid on that keep going to the town, to the county, to the school, to the fire. That doesn't change over that twenty five year period. The difference is as development occurs and the valuation goes up to 10,900,000.0, the taxes paid on that increment, that $4,000,000 gap, that's what we capture through the authority as TIF that we can then use to reinvest in the area over that time. And the benefit, hopefully everybody understands is that after twenty five years, the TIF goes away.

The increment has done its job. The tax base falls back to the underlying taxing districts, and everybody receives that benefit from having then an increased valuation, increased taxes, and then every taxing district receives their full mill levy, not just that portion captured as TIF over twenty five years. Very quickly, then I'll pass it to Lockheed. The but for finding. There is nothing in the statute that discusses or identifies concept in TIF.

It's usually how we, as staff, determine whether or not TIF is necessary to help support a project. Basically, but for the use of TIF, the development otherwise may not occur. It's a tool we can use to incentivize and accelerate TIF or accelerate development in areas whereby standard marking conditions, property values, development costs, addressing blight remediation for certain environmental, geotechnical conditions spoiler alert that is a tool that we can use to help address the conditions otherwise. But for the use of TIFF, development may not occur. I've given a couple TIF 101 and TIF two zero one trainings in the last couple of months with another group.

We talked through some of this. There are a couple different approaches to how folks can use TIF. And I just listed them kind of here briefly. One is more if you have a historical town like Erie. I would say probably twelve to fifteen years ago, historical Old Town, at least Downtown Briggs looked a little bit different.

There was not nearly the investment, the new businesses, the new development occurring in Downtown Briggs. So when the authority was formed and the Old Town Plan area was formed, the URA was a tool that allowed us to focus on infill development, redevelopment, and revitalizing historical Old Town Erie, Erie, whereby development that occurs across Old Town is captured by that Old Town Plan area that we as the authority can then use to facilitate and support other new investment to further help remediate any delay. In some instances where you can create a new URA to attract investment, that's what we did at Erie Gateway last year. We took an 1,100 acre area that had no development, no investment, really had a significant lack of infrastructure and utilities to facilitate investment, we created a large plan area out at I-twenty 5 to intentionally attract investment. And then the last is probably the most common used alternative, and that's where we, as a public private partnership, work with a developer for the one we're working on right now with Evergreen, whereby with our development partner we identify that there is a gap, there is a financial obstacle in place, whereby without the TIF development may not occur.

So in that case, we as the town, we as the URA, with our development partner to consider creating that new URA as part of the project. And then the last thing I mentioned, just as we've done this pretty recently in Erie, is intentionally to activate sites within that twenty five year period and also ensure that the URA and on behalf of the URA, the town staff, depending on which hat we're wearing we can use the URA to purchase real property within the boundary to really control the outcome. Control the property, control the outcome, purchase properties that competitively solicit new development interest and determine what is the right fit, what is the right use for the right property at the right time. And so in this instance, we have two properties, one that we own and one that's under contract in Old Town, that we've done exactly this to create new development interest investment where it otherwise may not have occurred without the TIF. Corey talked about a lot of this and how we create a new plan area.

So I will skip that one unless you all have any questions about it thereafter. And now it is Lockheed's turn.

Yeah. And I would just say that I was hoping to to use this opportunity this evening to kinda go over two specific issues with the town of Erie. You are either kind of unique. And from the conversations from the present presentation of the annual report, felt were worthwhile going over in more detail. But that will kind of take us in a different direction. So now might be a good time to kind of hone in on the URA 101 part and ask questions that you have.

All right. Well, let me bring it back to the commission. And I think I'll just start on my left and just work our way down, if that's Okay.

Nothing. Anything?

Nope. I had a quick question.

All right.

Go ahead. So you're seeing that the URA continues,

redevelopment may happen if you flight another property. Let's take the

airport URA, for example. It's Julian's favorite thing for me to bring up. So are we able to restart TIF TIF at some point? Or how does that work?

Yeah. The answer is at the end of an urban renewal plan, at the end of the '25 clock, or frankly, if conditions change sooner than that, an urban renewal plan area can actually be terminated if there's no debt. Or it can be reblited, if you will. But you have to start to go through the entire process. So I'm going to give again a Northglenn example, because I'm Northglenn city attorney.

I do a lot of work there. Northglenn Mall was done well over twenty five years ago. The TIF clock has expired. Is there more work to do there because a retail cycle probably goes only twenty five, thirty years? Absolutely. Could Northglen consider rebliting that area? They could. They would have to go through the entire process again, reblight it. Conditions would obviously be different today than they were thirty years ago. There are people that do this work for a living in terms of the condition survey.

But I am confident that if someone looked at that site now, what was a new pristine redevelopment thirty years ago or twenty five years ago needs work. And so yes, the answer is it can be reblited. But you have to start through the entire process again. And it doesn't have to be the entire area. Because conditions change, you may look at a portion and say, we want to do this portion and look at it. Or you may have a new project in a large area that needs twenty five years of financing, and carve it out and reblight just a portion. So you have a lot of options. Okay.

Thank you. Right.

Come around. Any other questions? Yeah,

my wife grew up in Northglen, so I

appreciate So those

we have a number of areas. Some of them were collecting sales tax increments. Some were collecting property tax increment. Some of them are commercial areas. Some are residential areas. I know the increment has to be relegated to that particular area. Are there any limitations on what exactly can be spent for improvements?

Disclaimer, I tend to be very conservative in this And so typically when you look at the factors of blight, the best expenditure of TIF is for public improvements. Because the costs when you look at the remediation of blight, a lot of those are related to impacts that whether it be building new streets, new utilities. And when you have a new redevelopment, those are disproportionately high costs that trigger urban renewal. But it doesn't have to be public improvements. But they have to be things are remediating blight.

So an example I like to give is if you have a restaurant space that needs work, my recommendation is you can do things like a grease trap. Why? Because any restaurant, by and large, could use a grease trap. But if you put a pizza oven in, you're really just doing it for a pizza place. And I'm not sure that is the type of sustainable blight remediation that's contemplated by the urban renewal law.

An iconic business in Wheat Ridge, Wheat Ridge Cycle Re, was part of an urban renewal plan area. And they did a mural on the side of the Wheatwood cycle re business. That absolutely, I would suggest to you, the type of eligible improvement that worked to remediate blight in that area. So there's a lot of flexibility. But I think the idea is public benefit remediating blight in the area, not benefiting a particular user for a particular purpose that's not really remediating blight in the area.

And the only thing I'll add on that is in some instances, when we go through the process to create the plan area and negotiate with all the other underlying taxing districts, the taxing districts can sometimes dictate what their portion of the mill levies can or cannot be used on. You know an example in Colliers Hill, it's up on the screen. The IGAs we have with the taxing districts are very specific in saying, our revenues can only be spent on street improvements on County Road 5, sewer, storm water, trail connections. That's where the money has to go because that's where they allowed us to use it. But outside of that, it's really what the law provides for.

Okay. Gotcha. And then my last question. With similar to what Commissioner Baer was talking about, you're going into an area where you're rebliding things, Fort Collins is going through this where there's an old Albertsons shopping center. So when you're condemning something like that that may have some structures that are nonviable, but there may be viable businesses that have ownership next to that. What are

the

legal guidelines through that?

So you used a word I did not in the presentation, which is condemn. Urban renewal authorities do have the power of condemnation. The statute was amended, I believe it was in 2011 to make it much more difficult for an urban renewal authority to condemn property. And there's a whole host of additional conditions that must be met to allow an urban renewal authority to condemn property, including approval by the governing body, the town council. I would suggest that the tool is best used for a holdout.

Because you could have a large assemblage and have one, what I'd call a grudge parcel, that just will thwart the entire project. I think that's really the purpose for an urban renewal condemnation. But it is a heavy lift, whether it is the urban renewal authority doing blight remediation or a municipality trying to do redevelopment. It doesn't have to be urban renewal. Often have a lot of owners, a lot of tenants, and it's just a complex process to try to work with those that are still viable and deal with others that aren't.

And one of the tools that urban renewal has is what's called relocation benefits. So urban renewal authorities will often use that tool to assist in finding a new location, ideally in the same community if it's a valuable business. But it's a tool to say, we can give you x amount per square foot to relocate your business to this other location so that we can do the the redevelopment in this location.

Thank you.

Any questions? Go ahead. One quick question is, let's say you do a large plan area like Gateway, for example. As development advances, you find conditions change. There's an opportunity for more intense development in a certain area within the plan area that will have disproportionate burden and future revenue. Can you layer TIF? And how would you go about carving that out? You can't have

two TIF districts on top of each other. You can have TIF districts adjacent to each other that may have different times. Each time you start the clock, that's a substantial modification. So you're going to have the discussion with all of the taxing entities. Now I believe if you have two TIF areas in one larger urban renewal plan area, you can use money across the different TIF areas, because they are in the same plan area.

And I'm going make one other statement that I might disagree slightly with Julian on something. He said you have to spend the money in the area. You have to spend the money to benefit the area. So for example, you could have a regional detention pond that's constructed right outside the urban renewal area, but that clearly benefits the area, I absolutely think that's an authorized expense. But can you have two urban renewal clocks on the same property layered? No, I don't find a basis in the statute for that.

What if there was a regional improvement that had direct benefit to the plan area, but that also benefit other areas? Would you have to figure out what that would be, but that would be allowed?

Yes. In fact, I have a client that is doing just that, that has a road that connects two urban renewal areas. And so they are proportionate shares from each urban renewal area to fund that road, because it benefits both. Thanks.

So I have one question. All my others are answered along this journey. When we start the TIF and we want to buy property, say in Old Town, there's no money yet available. How do we get the money to get it going?

Great sound. There's, I would say, two common solutions. And Corey or Lockhe, you may have others. The easiest is borrow it. There's cooperation agreement currently between this body and part of this body that allows that transfer of funds.

So in some instances, and we've done this successfully, you notice on this table there's a few plan areas that have a negative balance. It's because that plan area has borrowed money from the town. So for the time being, the authority owes whatever $300,000 back to the town via the terms of that cooperation agreement. So if we have a new plan area, and let's say in that new plan area, there's property that the URA would like to acquire per the terms of that cooperation agreement. And if both parties agree to it, the URA could borrow that money from the town to purchase that property.

Corey can probably give more details to it, but the URA, as a TABOR exempt entity, has the power to sell bonds, to issue debt. And without triggering TABOR, there's no public vote. As the authority, this body can sell debt, pledging future revenues to make those debt payments over time. So it depends on the value of the property. If it's millions of dollars or hundreds of thousands, if it's a low enough number and the town wants to front the cash to buy the property, that's the easier option. If it's millions and the town may not have that sitting in the kitty, the town can sell debt to then buy the property and pay it off over time. Corey?

And Julia is right. It is a chicken egg problem for sure with urban renewal. And so if an urban renewal authority issues debt, it is pledged by it is supported by the pledge is future TIF. And so there is an analysis that when you're selling in the market to assure that, in fact, that TIF will be generated. Another tool that's often used is the developer has to front the money.

And then when the TIF is generated, it is used to reimburse the developer. And the benefit to that is the only way the developer gets paid is if they generate the TIF to reimburse themselves. But it is definitely a chicken egg problem, urban renewal has to struggle with that. And what Julian mentioned in terms of cooperation agreements within which they operate, very common tool.

All right. And has the town of Erie, URA, ever done bonds? Yes.

The URA sold bonds four years ago to finance the construction of the downtown improvements. The Briggs revitalization project that's taken place for basically my entire life at this point. The URA sold bonds back in 2021, pledging property tax revenue from the We Cottages at Erie Commons. Knowing that project was entitled, under construction, right behind the Circle K and Ziggy's and Premier, that area, all those 150 units, we knew those were coming online. We knew there was deficiencies in the infrastructure in Downtown Erie. So the URA back in 'twenty one sold a $4,000,000 bond to have initial funding to pay for those improvements. Then we designed, we engineered, we construction, we hired contractors. Four years later, we actually have a street.

Got it. And then we'll get paid back over time?

We will make the bond payments as we receive property tax from that development to make those payments back to the bondholder.

Yep, okay, makes sense.

If I could jump just one other thing. That's another model of urban renewal for some communities that frankly look at making the areas prime for development is to actually use TIF simply to build public improvements. So the urban renewal authority issues debt to build new streets, build utilities, make those properties ready. And then the developer comes in and can do their own undertaking and activity, may not get TIF, but they got a pad ready site based on the investment the Urban Renewal Authority made.

Okay. All that makes sense. My last question is, how much has the town lend to the URA at this point? You know, how much does the URA owe the town? The

easy way is add up all the negatives and figure out what that number is. So I would assume based off those fund balances down at the bottom, Lockheed's the accounting guy, so he may know.

A little over 1,000,000 maybe?

Yeah, 1,200,000.0. About what looks like.

Okay, and that is just money that has come out of the general fund, I'm assuming, to do that. Okay. Great. Lockheed.

Thank you. All right. So kind of moving in a different direction here. We're going to talk through two kind of specific unique circumstances related to the town of Erie URA. The first one goes back to the conversation that we had with vice chair Bell most prominently during the discussion about the annual report.

And so this is about the Colliers Hill plan area and specifically the kind of $14,000,000 cliff that I was attempting and not doing a great job to articulate at that meeting. So I wanna take another another attempt at it and just kind of go over where does the actual so we talk about TIF and it's kind of unclear. It comes from these taxing jurisdictions. So I wanted to break down where does the money that kind of ends up in the urban renewal authority actually come from to explain why we have this kind of $14,000,000 cliff. So on this first slide, these are all the overlapping taxing jurisdictions for the Colliers Hill plan area.

Ir own public improvements. So the URA, you know, didn't retain any of their mill levy. From from the very beginning, they were being a 100% of the the TIF that was generated by their mill levy was being remitted back to them. For the town, the 100% was being retained, so the opposite. The URA was keeping all of that, all of the increment generated by the TIF.

And then we get into kind of more complicated ones. So High Plains Library District, Mountain View Fire Protection District, and Northern Colorado Water Conservancy District began at 100% retained. So the URA was keeping 100% of the increment generated by those taxing jurisdictions' mill levies. That stops, and it cut down from a 100% to 0% once we hit $10,000,000 of total tax increment collected for the URA. That happened in 2022.

So that's when, you know, that shifted. And you'll see on the next slide, we have a graph of kind of the revenue generation, and it and it drops off pretty substantially in 2022 because we go from having these three extra districts. And, also, you'll see Saint Vrain Valley School District. So there, you know, is a little more complicated. They have different mill levies that go to different functions.

So their program mill levy, their basic school funding mill levy, the URA retained a 100% of that up to that $10,000,000 cap. But for the bond and then mill levy overrides that were passed by Saint Vereen Valley School District, they kept 100% of those mill levies of the increment generated by those mill levies throughout the life of this. And then I do have an error here. Weld County, and this is where the $14,000,000 cliff is. It's actually a 100% retained up to 14,000,000.

So, yeah, thank you. My editor is fixing that for me as we speak. 100% retained up to $14,000,000 So if you go to the we can go to the next slide. There we go. And so just to clarify, this is a is a bit of a weird graph because we have different axes, but it's the only way to kinda make it readable.

So the right axis is for that blue line with the dots that's sneaking. That is the cumulative URA share that's been retained by the Towneveer URA from the Colliers Hill Plan area over the life since 2015 is when it started through 2024. So you can see in sorry. These the axis is is shifted by a year, so you just have to use your imagination to to pull the numbers back a year there. You can see in 2021, that's on the label.

Actually, 2022, that's the last year where we're seeing money come in from the High Plains Library District, from the Fire Production District, from the Water Conservancy District, and from the Saint Fran Valley School District. That's that last year. And then the next year, we go to we get this large drop off because we are no the URA is no longer retaining any of the mill levy, the increment generated by the mill levy from those taxing jurisdictions. And if you remember, I said the cap for Weld County is $14,000,000 So we're at $12,000,000 total generated. And if you look, we generated about $700,000 I'd say.

So we're going to hit $14,000,000 in about two and a half, three years. What will happen then is the blue line that you see on this graph will immediately drop down to zero. And the URA will be collecting increment from one source, the town of Erie. And now a that's a perfectly fine arrangement. We can continue that arrangement if the if the board so chooses.

But it could also, you know, be the decision of the board since you're wearing both hats to say, let's let that money go back into the general fund where the town council can choose to continue advocating to put that money towards public improvements in the Colliers Hill plan area, but maybe they have other priorities that they want to focus on. And so as Corey said, we can look think about terminating the the TIF clock earlier than the twenty five years because the only money coming in would be from the Town of Erie's increment from their portion of the increment generated by the town of Erie's general fund mill levy, which means we're taking from, you know, rallying from Peter to to pay Paul, so to speak, in terms of putting money from the general fund that would go to the general fund for the town of Erie and putting it in the urban renewal authority fund. Any questions on that kind of picture? Not looking for any specific guidance or thoughts or solutions. Just wanted to of represent this issue and just to make sure we all on the same page there after the conversation we had for the annual report.

Yeah. It really comes down to the point that once Erie is the only taxing entity, you can actually stop. Put it in the general fund, you could still spend that money in Colliers Hill, but it could also be used on other priorities if they are higher. Yeah. Yeah. Okay. Makes sense.

So if the TIF clock was terminated early, the money that was left over, if it's $14,000,000 would have to be pledged at that time, not at the original. Yeah.

And remember, it's only money derived from property tax. So if there were other sources, such as sales tax or if the urban renewal authority received grants, for example, that's not returned on a pro rata

basis. Yeah.

All right. So on to the second one. I just wanted to briefly go over 9 Mile Highway 287 and specifically kind of give a rundown on the tax sharing situation with the 9 Mile Metro District and Lafayette. So this is how the tax increment is distributed in the Highway 287 plan area. So after we had a recent amendment to the agreement, 99% of the property tax increment goes to the 9 Mile Metropolitan District for the repayment of the bonds that funded all of the public infrastructure on the project.

1% is maintained by their renewal authority as an administrative fee that started in May. Sales tax is more complicated. You can split it up into between the non King Soupers sales tax and the King Soupers sales tax. And the reason for that is that the original revenue sharing agreements with the developer for the project did not contemplate the King Soopers. And so the 9 Mile Metro District is not entitled to any of the sales tax generated by the King Soopers, whereas it is entitled to 50% of the sales tax generated by all of the other properties in the plan area.

So 50% of the non King Soopers sales tax goes to the 9 Mile Metro District. 32% of the non King Subaru sales tax is retained by the town, and 18% of the non King Subaru sales tax is allocated to Lafayette. The reason it's not a fifty fifty share there is because of the the balancing of the fact that Lafayette also has a 3.5% sales tax, point 0.5% of that is is restricted and can't be shared back with the town of Erie. So to even things out, that's how we took care of that problem. And then since there's no metro district with the King super sales tax, that gets split up in that same way.

57% goes is retained by the town, and 43% is allocated to Lafayette. So just to kind of give you a fun visual aid to to see what that looks like. So here is the sales tax the Town sales tax excluding King Soopers, 50% via the Town of Erie Urban Renewal Authority goes to the metro district. 14% is used to balance the sales tax rates. And then 36% goes into the sharing bucket, which gets split eighteen and eighteen.

For the King Super sales tax, 14% goes to balance the sales tax rates, and then 86 goes into the sharing bucket, which gets split 4343%. And you'll notice I said allocated to the city of Lafayette, not necessarily paid out to them. As this graph shows, when we had the global settlement agreement with Lafayette, they took on an obligation not only not only are we sharing the revenues generated by this project, but we're also sharing the expenses. And so the three upfront expenses were the land contribution, the ditch relocation, and the site development that were split with Lafayette. So what this meant is that they basically owed us money.

I say in quotes because the agreement stipulated that they didn't have to actually pay us that money, but it

would be

a balance that they would slowly pay off with the sales tax that was allocated to them through agreement. So as you can see, we started with just use tax, which is also part of the sharing agreement in 2021. And then over time, sales tax began to be generated and things really sped up in quarter one of this year with the King Soopers being fully online and none of that King Soopers going to the 9 Mile Metro District, meaning a lot of that sales tax revenue is getting shared with Lafayette. So you as can see through quarter one, the kind of negative balance is $172,000 And in quarter two, we haven't finalized the numbers yet, but that is going to be moving into a positive balance where we now owe money to Lafayette through the sharing agreement. And we'll be writing them a check to fulfill that obligation that we have through the sharing agreement this month.

I have a quick question. So back to where you were saying we share the expenses of the laying the ditch in the site development. I will assume, because I don't see it on here, none of that includes escalation of the dollar. Am I correct? It's just dollar for dollar over how many of our number of years? So essentially, let's just say it's ten years. So in ten years, we would have only made the money we initially gave them. There's no interest, no escalation of dollars. So inflation, thank you.

Yeah, no, there's

Inflation dollars.

There's no inflation built in. Didn't have to pay us the money. So theoretically, if we said we're splitting these costs, you have to give us $1,600,000 in twenty nineteen, twenty twenty, whenever this settlement agreement, that would be in our general fund. That would be generating interest invested, and we'd be collecting the investment revenue on that. But the way the agreement was just set up was that they didn't have to pay us that money up front. And so they have been benefiting from not having to make that payment up front. And then also these costs are just flat stagnant, the costs at the time, and haven't been escalated in any way.

So a quick question. And I know this is probably more in-depth than we probably need to talk about here, but just something that came to my mind. And I know we've had other conversations about this before, and I've asked this question before. I've asked this question before. Do we think about and I don't know if you were here when this was done and and some of the other ones. Do we think about those escalation costs? I mean, because it sounds like to me we lose money because we don't include that. Because the the dollar in 2021 is not the same as it is today. Today, right? And we all know that.

Yeah. And I'll start and I might even ask Malcolm because he was the one that was around at that time. But the global settlement agreement from 2019 between Erie and Lafayette set up the general structure and framework of revenue sharing, but it didn't establish the actual details of what revenue was being shared and what incentive expenses need to be split or offset by the other party. That was subject to a separate subsequent agreement that was negotiated between Erie and Lafayette in 2022 after development was underway, construction was occurring. We knew what the incentive expenses were and we knew what the revenue projections would look like.

That was a separate agreement between Erie and Lafayette that had to be negotiated and agreed upon by both parties to determine exactly those kind of factors. So this revenue sharing system that we have is specific to the Erie parcel. When Lafayette develops their side of the street on the West Side Of 287, there will be a separate agreement for their parcel in the same way there is ours. So those details on initial incentive expenses, what revenue payments are repaid and when is all subject to that agreement. That was again agreed upon by both parties. We'll do the same thing for Lafayette Parcel when that time comes, hopefully sooner than later. Malcolm, did I miss anything?

Just the revenue or the global settlement agreement covered more than just the two developments. It actually covered issues related to an intersection improvement on 119th And Highway 7, as well as operational issues associated with Lafayette's wastewater treatment plant. So it was a global settlement of lots of different issues. And it also resulted in Lafayette compensating the town of Erie for their legal expenses to pursue litigation related to some of the claims in the settlement.

I don't remember that part. Okay. All right. Thank you.

All right. Any other questions from the commission?

Going back to the King Soopers, non King Soopers allocations or distinctions,

was that something that was particularly particular to 9 Mile are

contemplated businesses usually a part of this and why was this

Let me jump in on that one because I think Lockhe said it wasn't contemplated. Actually contemplated. Was King Soopers didn't need incentives to influence them to come to development. So the developer was looking for getting an anchor development started that happened with the Lowe's. Lowe's needed and the developer needed additional incentives to actually do the development.

But once Lowe's and some of the other pad sites were activated, then it was already an appealing development for King Soopers. And so they didn't need to provide additional incentives to bring King Soopers in. So that's why it it's like the King Supers portion isn't affected by TIF. We get that directly.

Great, thank you. All

right, any other questions?

All right. Not seeing any. Thank you for giving us this 101 on urban renewal authority. Somebody who's new up here since these came to play, there's a lot of good material here. And I think equally important, your presentation is good reference material. So when we do get questions from the public, I'll certainly use it for that. All right. With that,

I'm So going chair, before you close the meeting, I just wanted to say that there was no vote on the agenda. We did a first and a second, and then I asked you the first was, but we never actually did a vote. Can we do

For the approval of the

The approval of the agenda. So can we do that really quick? Excellent.

All in favor of the agenda we just did, say aye.

No. Aye.

All opposed, say no.

Thank you.

If it's that, I will adjourn the meeting at 07:45PM.