Durango voters worried about the condition of a neighborhood and how it may affect property values have an avenue through the city to encourage economic redevelopment through private-public partnerships.
Communities that want redevelopment in blighted neighborhoods have an opportunity to organize and petition city government to offer financial incentives to developers to offset the high costs of development, city staff said at Tuesday’s City Council study session.
The concept is called an Urban Renewal Authority – a resident-initiated, city-run initiative to reinvest sales and property tax revenue increases brought by redevelopment into a specific geographic region to help developers build public amenities required by city codes.
“The idea is to make property owners partners – give them the opportunity and vision. This is an opportunity for them,” said Councilor Dean Brookie.
Simply put, whatever tax revenue over an average from neighborhoods participating in the URA that come after redevelopment would be reinvested in the same geographic region to encourage more redevelopment.
Reinvestment of increased tax revenues through redevelopment incentives is called tax increment financing.
“When a property redevelops, they often have to build new curb, gutter and sidewalks, a simple example of something that could be reimbursed (by a URA),” said city planner Scott Shine. “If we have this tool, we can also say, ‘You have a great project, but this area needs a gathering space, so developer you build it and we can reimburse you from (tax increment financing).’”
Establishing a URA is not an approval for higher taxes, Shine said.
URAs establish an Urban Renewal Plan, a document that identifies neighborhoods ripe for incentives to encourage redevelopment. A base of tax revenue generated in a certain geographic area would be established and whatever excess revenue generated over the base is reinvested in the area through incentives to pay for public improvements.
URAs use taxes that would not have been generated if it weren’t for redevelopment in an area.
“What it is, if we don’t intervene in these areas, property and sales tax may decline,” Shine said. “We want to intervene, make change if we can.”
But the city can’t establish a URA; it has to start in the community, Shine said. It takes at least 25 people to sign a petition requesting the City Council pass a resolution and appoint board members to form a URA. The 13 board members can include city councilors and must include representatives from at least three other tax districts, like La Plata County or Durango School District 9-R.
State standards require any redevelopment area within an Urban Renewal Plan to meet at least three of these criteria: deteriorating structures; inadequate street layout; faulty lot layout; unsanitary or unsafe conditions; deterioration of site or other improvements; unusual topography; title issues; fire hazards and other life-saving concerns; buildings with code violations and dilapidation; environmental contamination; and inadequate public improvements or utilities.
Statewide nonprofit Downtown Colorado Inc. and the cities of Durango and Montrose have partnered to gather and encourage private and public sector leaders to generate ideas and nurture innovation for redevelopment in western Colorado. The event is scheduled for the end of May at the Durango Public Library.
“We’re going to bring people to Durango from all over the region to look at examples of redevelopment,” Shine said. “It’s meant to be a collaborative forum between the public and private sector; what’s the best way to encourage redevelopment?”