Business/Economy, Colorado Springs, El Paso County, Featured, John Suthers, Original Report, Scott Weiser, TABOR, Taxes, Uncategorized

Colorado Springs City Council looking to approve another tax exemption for Scheel’s All Sports

At the City Council’s March 28 work session Carl Schueler, the city’s Comprehensive Planning Manager presented a request by the Interquest North Business Improvement District (INBID) for an ordinance to exclude the new Scheel’s All Sports store from the district.

Schueler said that there is “full agreement from the parties,” and outlined the tax obligations that Scheel’s would avoid by having its 3.88-acre building footprint removed from the district.

The exclusion request does not include the parking lots or roadways around the building itself, which would remain within the district.

Without the ordinance Scheel’s would pay the district a 50-mil assessment on the property’s assessed value and 1 mil for “operations,” as do all the other businesses in the district. On top of that there’s a 1.25 percent public improvement fee (PIF) that will still apply to the entire district, including Scheel’s.

According to Scheel’s estimates the assessed value of the excluded property is $3.8 million, which would ordinarily generate $193,800 per year in gross district property tax revenue.

Scheel’s estimates its annual sales at $20.4 million, which would result in annual PIF revenues to the district of $255,000.

Scheel’s All Sports development site

The rest of the district property, including the Great Wolf Lodge, Cinemark movie theater, and other stores along the north side of Interquest Parkway east of I-25 up to Voyager Parkway, excluding the apartment complexes, has an assessed value of $1.74 million and generates $88,948 in gross property taxes and $20,333 in PIF revenue according to Schuler’s presentation.

Schueler said the city’s budget committee asked for clarification on the numbers.

“The PIF-only analysis is 38 percent more for the [Scheel’s] PIF [with the exclusion] than PIF and property taxes,” Schueler said. It’s unclear to what he was comparing the PIF-only analysis.

The total property tax and PIF revenues from all businesses other than Scheel’s comes to $186,818. Scheel’s revenues without the exclusion come to $448,800.

Schueler said, “Because Scheel’s creates such a large public improvement fund, the public improvement fund itself is greater than a combined PIF and property tax of a typical shopping center kind of use for this site. So that’s the justification.”

Excluding the Scheel’s store footprint reduces Scheel’s costs by an estimated $193,800 per year.

Without the property tax revenue Scheel’s would contribute $255,000 and all other businesses would contribute $186,818.

Schueler said that normally, exclusions from business improvement districts are for residential property or because the property is part of another district.

This is not the case with the INBID, which is under the control of Nor’wood Development Group, one of Colorado Springs’ largest property developers.

According to the district’s 2019 operating plan and budget, the INBID board is composed exclusively of executives and employees of Nor’wood including Tim Seibert, President, Chris Jenkins, Vice President, David Jenkins, Secretary, Frederick Veitch, Treasurer and Delroy Johnson, Assistant Secretary.

Aside from the $16.2 million sales tax credit agreement ordinance the City Council created on Feb. 26 to allow Scheel’s to keep half of the city’s 2 percent sales tax for 25 years, excluding Scheel’s from the INBID would further lower its cost of doing business by exempting it from collecting INBID property taxes.

Lowering Scheel’s cost of doing business improves its position in the competition for customers between it and other area sporting goods stores like Bass Pro Shops, located 2.3 miles north, Dick’s Sporting Goods, located 3.2 miles south, and Sportsman’s Warehouse, 10.7 miles south, among others.

Scheel’s is known for driving hard bargains with cities, demanding subsidies and tax concessions as a condition of development.

Scheel’s Johnstown store, located just off I-25 and U.S. Highway 34 garnered incentives worth $93 million in 2017.

Neighboring Loveland’s 2019 budget points to Sheel’s Johnstown opening as the cause of a 15.4 percent decline in their sales tax revenues on sporting goods in 2018.

Schueler said, “The exclusion is a result of negotiation with Scheel’s property owner.”

“We like it when both parties agree,” said City Council President Richard Skorman.

Council members asked for the matter to be placed on the consent calendar for its June 11 regular meeting.

SUPPORT COMPLETE

Our unofficial motto at Complete Colorado is “Always free, never fake, ” but annoyingly enough, our reporters, columnists and staff all want to be paid in actual US dollars rather than our preferred currency of pats on the back and a muttered kind word. Fact is that there’s an entire staff working every day to bring you the most timely and relevant political news (updated twice daily) from around the state on Complete’s main page aggregator, as well as top-notch original reporting and commentary on Page Two.

CLICK HERE TO LADLE A LITTLE GRAVY ON THE CREW AT COMPLETE COLORADO. You’ll be giving to the Independence Institute, the not-for-profit publisher of Complete Colorado, which makes your donation tax deductible. But rest assured that your giving will go specifically to the Complete Colorado news operation. Thanks for being a Complete Colorado reader, keep coming back.

Comments are closed.