Steamboat City Council questions downtown blight designation and delays urban renewal discussions
Steamboat Springs — The Steamboat Springs City Council appears to be more skeptical than supportive of the city’s proposal to use tax increment financing to fund sidewalks, lighting and other improvements downtown in the coming years.
During one of its longest and liveliest meetings of the year, several council members questioned a recent designation of downtown as blighted along with the suggestion that the area is in need of the tax tool to correct that.
But despite the skepticism and opposition from some on the council and in the community, the idea of using tax increment financing downtown isn’t dead as some council members seek ways to compromise with those who are opposed to the idea.
The council decided it needed more time to weigh the city’s proposed urban renewal plan. The discussion will continue in November.
Proponents of the tax increment financing plan said it will benefit the downtown area by allowing the city to invest in public improvements that haven’t been realized for decades.
Waiting for private developers to come along and add sidewalks and other infrastructure has not yielded results, they said, and paying for the improvements now with the help of the urban renewal authority will encourage more private development.
“This is a tool that has been adopted and used in 49 out of 50 states in this country,” Planning Director Tyler Gibbs said. “It’s an investment by all for the benefit of all in the entire community.”
He pointed to the urban renewal projects at the base of Steamboat Ski Area as an effective local use of the tax tool.
Property values at the base area have risen more than the rest of the city because of its use, Gibbs said.
Some City Council members saw eye to eye with city staff and were ready to start using the URA downtown to build sidewalks and other things that have gone unfunded for many years.
But most on the council were either skeptical of the idea, opposed to its use entirely or in need of a lot more information to make a decision.
Kenny Reisman was somewhere in the middle.
“I can’t be rushed on it,” Reisman said. “I’m not looking to kill this right now, but by no means can I green-light this and say this is a home run.”
Saying its use at the base area spurred millions of dollars’ worth of private development he didn’t think would be there otherwise, council member Scott Myller said the city should go for it.
Council member Scott Ford called the tool flawed and cited the negative impacts it could have on other taxing entities as one of the reasons he wouldn’t support it.
City staff wanted to hold a public hearing about using tax increment financing in a downtown urban renewal area in October, but a number of obstacles kept the idea from advancing that quickly.
Routt County and the Steamboat Springs School Board are opposing the proposal because they think it would divert property tax gains they otherwise may get organically from new development toward the urban renewal authority.
Council members made it clear that they would not want to do anything to take money away from schools or other taxing entities.
Council President Bart Kounovsky, who voted with council members Reisman, Tony Connell and Scott Myller to keep the URA discussion alive, said he wanted to find a way to hold the other taxing entities harmless.
Council members then wanted an explanation from city staff for why some of the improvements that would be funded by the tax tool, especially on Yampa Street, were placed on a low tier of the city’s parked projects list, which it doesn’t have the funding to do right now.
Several City Council members also questioned the designation of blight in downtown Steamboat, which serves as the legal impetus for using the tax tool.
Reisman called the blight study “ridiculous,” while Ford said the finding of blight was “contrived.”
Council member Walter Magill also questioned the report, saying Yampa Street, one of the areas that would stand to benefit from an urban renewal authority and that was part of the blight designation, is “looking the best it’s looked in the 18 years I’ve lived” in Steamboat.
After much discussion, a divided council voted, 4-3, to continue the discussion about the tax tool but only after city staff had brought back a long list of information the council still wants to know about the URA plan.
Before advancing the conversation, the council also wants to wait to see the outcome of the election that will determine whether downtown property owners will impose a property tax on themselves to pay for maintenance in the downtown business improvement district.
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