You mean large private developments can be done without huge public subsidies like tax increment financing?
Even Aurora city officials have apparently come to that conclusion. The administration has had a road-to-Damascus conversion and unexpectedly abandoned its effort to push through a tax-increment financing plan for the $850 million Gaylord Rockies Hotel and Convention Center, which is supposed to be built near Denver International Airport.
According to the city’s Web site, the project will include a year-round water park featuring multiple pools and water slides, a lazy river and a “hot springs experience.”
Aurora had staged a bogus one-man tax election in 2011 in order to grant RIDA Development Corp. of Houston, builder of the project, somewhere between $86 million and $121 million in TIF subsidies.
But two Aurora taxpayers sued to invalidate the election on grounds it violated the state’s Taxpayer’s Bill of Rights. Last winter Brighton District Judge Ted C. Tow III agreed with them.
The city, firm believers in crony capitalism, appealed. But last week the city unexpectedly dropped its appeal on grounds the legal process delayed the project, which, they maintained, didn’t really need the subsidy anyway.
The improbable winning attorney for the pro-TABOR plaintiffs was Mark Grueskin, long a successful attorney for Democratic causes and clients. He seemed almost disappointed that he won, in effect, by forfeit.
“The city was so adamant throughout the district court proceeding that what it was doing was thoughtful and legally appropriate,” Grueskin said. “I was hoping the [Colorado] Supreme Court would get an opportunity to weigh in.” If the plaintiffs were successful there, that would end the likelihood of future mini-elections for TIFs anywhere in Colorado.
But Grueskin may have been lucky the city quit when it did. Historically the high court has been hostile to TABOR.
The 2011 TIF “election” involved one voter, Brandon S. Wyszinksi of Denver, who had been hand-picked by the corporation that owned the land — and employed him. He approved two measures, one raising the lodgers tax on the site from 8 percent to 10 percent, and the other the admissions tax from 3.75 percent to 10 percent.
According to the ballot title, the lodgers tax would raise $1.7 million a year for 32 years, and the admissions tax1 million annually over the same period. That multiplies out to $86.4 million, all of which under TIF would go to the developer. But a state consultant estimated the total would be 40 percent higher than that, or a total of $121 million.
Whatever the total, “I don’t see how they have the wherewithal to go forward,” Grueskin said. But the city’s lawyer, Dan Lynch, said in June that losing the TIF would cost the city only $15 million to $30 million.
Mayor Steve Hogan and Wendy Mitchell, head of the Aurora Economic Development Council, insisted the project would go forward as planned. “The project is under construction, the size and scope of the project is unchanged,” said Mitchell.
If the project were to be scaled down it would have to go back and be re-evaluated by the economic development commission, Grueskin said.
“Maybe their water park will become a series of sprinklers that people get to run through,” joked Grueskin.
Hogan maintained there is no need for a broad citywide vote to reinstate the TIF — although he could change his mind.
It’s not as though the project is losing all its subsidies. It is still in line for $81.4 million from the Regional Tourism Act, another subsidy program established by the legislature that bestows funds upon politically favored enterprises.
That award was protested by a group of mostly Denver hotels on grounds that it should have been withdrawn after Gaylord Entertainment Co., the original developer, sold out to Marriott International and RIDA shortly after winning the award in May 2012.
The hotels, of course, are concerned that the huge new Aurora center would draw away some of their own convention business.
The hotels — some of whom enjoyed subsidies themselves — lost in Denver District Court, when the new retired Judge Norman Haglund ruled the hotels had no standing to sue. The hotels have taken the case to the Colorado Court of Appeals.
If in fact RIDA can develop the project without TIF financing, maybe it can also get along without the tourism money, should it lose the hotels’ suit. It’s too much to hope for.
Longtime Rocky Mountain News political columnist Peter Blake now writes twice a month for CompleteColorado.com. Contact him at firstname.lastname@example.org You may re-publish his work at no charge and without further permission; please give full credit to Peter Blake and www.CompleteColorado.com.