Vail closest URA model for Steamboat
When Vail went through the process of creating an urban renewal authority, the two largest obstacles were convincing homeowners they wouldn’t condemn their property and grappling with calling the base of a world-class ski resort “blighted.”
Although the URA is a relatively new concept for the Steamboat Springs City Council, the town of Vail has been looking at the idea for years. The town council eventually approved the creation of a URA last November.
The Vail Reinvestment Authority is the closet comparison in Colorado to what the Steamboat Springs City Council could set into motion Dec. 21 if it approves the Steamboat Springs Base Area Reinvestment Plan.
Although almost 40 URAs exist in Colorado, Vail is the only town that has used the financing mechanism to help improve its ski area base. The URA proposed in Steamboat could do similar work, only on a much smaller scale.
At Thursday’s Steamboat Springs Planning Commission meeting, Planning Director Steve Stamey mentioned Vail’s plan, noting Lionshead in Vail is very similar in age to Steamboat’s base area, which was heavily developed in the early 1970s and is in need of updating.
A URA generates money for public improvements through increases in property tax, and in some cases sales tax, which are generated by new development or redevelopment within the targeted area.
Creating a URA in Vail was not an easy feat, town officials said.
“It involved a lot of discussions with homeowners, getting them to understand what this tool was and that it would create tax-increment financing that, at the end of the day, would enable us to pay for public improvements, versus a sales tax and property tax of some sorts,” Vail Community Development Director Russell Forrest said.
The town of Vail created the URA to oversee public infrastructure improvements in its Lionshead district. The work represents the public component of the overall redevelopment of Lionshead. The private portion of the project foresees $750 million in new construction and redevelopment of property owned primarily by Vail Resorts.
The ski company is proposing to invest more than $350 million in Lionshead’s renewal, including the addition of 479 lodge units, an outdoor ice rink and 30,000 square feet of commercial and restaurant space, the town’s Web site indicates.
Vail Town Manager Stan Zemler said the town plans to spend $8 million to $9 million on public improvements. The money would go toward projects in the next few years and be bonded during 25 years. The money also would leverage $40 million of public infrastructure improvements from the private sector.
“I think the resort towns need to keep pushing. We need to periodically refresh ourselves, and this is one of the tools,” Zemler said.
Vail’s proposed projects include road, streetscape and pedestrian improvements; lighting, landscaping and snowmelt surface improvements to the pedestrian mall; and the removal and relocation of service and delivery areas, private skier drop-offs and local transit shuttles.
Some marked differences exist between the Vail authority and the Steamboat Springs proposal. For starters, Vail Resorts owns a considerable chunk of the base-area property, so the ski company and its plans are a large component and driver of the redevelopment.
Zemler said the town is waiting for the company to begin improvements before the authority starts the work. The major redevelopments Vail Resort has planned should drive other private property owners to make improvements.
“Once that starts popping out of the ground, we’ll start feeling more comfortable,” Zemler said.
Besides money for legal fees, the authority has yet to spend any funds, Zemler said.
In the Steamboat proposal, which involves a base area no longer controlled by the ski company or any one developer, URA proponents hope the city’s creation of the authority will drive individual developers to invest and make improvements in the base area. At the Steamboat Springs Planning Commission meeting Thursday night, local businessman Peter Patten said developers were watching the process.
“I can assure you these potential developers are waiting to see what happens here,” Patten said. “The private sector is out there waiting to see if the city is going to step up to the plate and get this done.”
Another difference was that Vail was able to gain the support of the other entities, such as the county and school district, whose tax dollars are being used to finance the improvements. With sales tax remaining untouched, just the increase in property taxes is being diverted to the authority and away from the other entities.
The entities realized the increase in property taxes that the URA should create eventually would will come back to them, Zemler said. The increase in sales taxes generated by improvements would be seen even sooner.
“People understand if we don’t do this renewal, both sales tax and property tax is going to get worse,” Zemler said.
For Steamboat, the major obstacles appear to be the lack of buy-in from the Routt County Board of Commissioners and the Steamboat Springs School District.
The city does not have a property tax, so it would not be financially affected by the authority. City Council members have said they would consider putting an annual allocation into the city’s budget for base-area improvements or to add an incremental sales tax into the funding mix.
Vail’s two major hurdles were condemnation and the media firestorm of classifying Vail’s base area as blighted.
“They were the two most significant issues we had to deal with, and I think we dealt with them successfully,” Forrest said.
Part of a URA’s power is the ability to condemn land. Vail property owners were concerned the authority could use this power to condemn land, acquire it and sell it to a third party for redevelopment, which is often done in urban slums.
To ease minds, Vail added to its plan the stipulation that it could not adversely condemn other people’s property, Forrest said.
Steamboat Springs City Attorney Tony Lettunich said condemnation should not be much of an issue for the city. In the proposed plan, condemnation is not allowed unless through an amendment.
If condemnation were to occur, Lettunich said, it most likely would be for the acquisition of land for public infrastructure such as turnaround points and pedestrian walkways.
“As always, the council is very cautious and concerned with using powers of eminent domain,” Lettunich said.
The other major concern for Vail was defining Lionshead as a blighted area.
Under state statue, before adopting the plan for a URA, a blight study must be done. The state has established a list of 11 criteria, for what a blighted area entails and an area must meet four of those criteria to form an authority. An authority also can be formed if one criterium is met and the property owners and tenants have no objection to the authority’s formation.
Steamboat and Vail might not seem to fit ideas of urban blight, but the state statue allows cities to apply the term to public infrastructure that is dysfunctional or in disrepair.
Vail was able to show that Lionshead exhibited blight conditions because of the predominance of inadequate street layout, deterioration of improvements and inadequate public improvements.
Forrest said the local media was able to understand the blight classification, but the scenario of a world-class resort claiming blight did make headlines in Denver and national media.
“With a Vail or Steamboat, it is certainly not perceived that we have blighted conditions here, which is the word we have to use legally to create this district,” Forrest said. “The biggest question, in short, was using that word and then basically having the media have fun with that word.”
At Tuesday’s Steamboat Springs City Council meeting, some council members also had concerns about associating Steamboat Springs with the word blight.
“I really have a hard time using that word about a town I love,” Councilman Steve Ivancie said.
Early this week, URS, a Denver-based firm hired by the city, released a study that determined that the base area met seven of the 11 criteria needed to demonstrate blight.
The study found that the area has deteriorating structures; inadequate street layout; faulty lot size in relation to adequacy, accessibility or usefulness (building lots that are so oddly sized and shaped that they are difficult to redevelop); unsafe conditions; deterioration of site or other improvements; inadequate public improvements or utilities; and substantial underutilization or vacancy of sites, buildings or other improvements.
“As you can see, blight is not your Webster’s definition,” Lettunich said.
— To reach Christine Metz call 871-4229
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Editor’s note: The story was updated at 8:33 p.m.