GREELEY — The pullout from a private/public financing option by the Weld County Board of Commissioners has some crying foul, claiming political payback, and others saying the program is just too big a risk to taxpayers.
C-PACE, which stands for Colorado Commercial Property Assessed Clean Energy program, is part of the Colorado New Energy Improvement District (NEID), which was put into state statute by lawmakers to give taxpayer-guaranteed financing to projects utilizing clean energy, up to 100 percent of the cost, for commercial and industrial property owners.
NEID covers only the counties in the state that pass resolutions to be included. Thirty of Colorado’s 64 counties currently participate, two counties — Weld and Mesa — have opted out.
However, in 2017, Weld initially voted to opt into the program, against the recommendation of both its finance director and its county treasurer. It wasn’t until recently that the commissioners changed their minds and pulled out.
Three commissioners, Chairman Mike Freeman, Barbara Kirkmeyer and Steve Moreno initially voted yes. Two commissioners — Scott James and Kevin Ross — were not on the board in 2017 when the original decision was made. All voted to pull out. James said he voted against it because it’s bad policy and leaves the county vulnerable if the projects don’t succeed.
Moreno said he wasn’t sold on the plan in 2017, but this time he acted on his reservations.
“There was strong recommendation not to enter into this in 2017 because of concerns our treasurer and finance director already had with the program,” Moreno said. “But we as a board got a lot of push about what could come if we did this. This is supposed to be a program to encourage renewable energy, not start a development with it.”
The decision, however, has some calling foul, including Windsor Mayor Kristie Melendez, who asserts the decision may have cost Windsor a $160 million sports complex, a development that has been on the books — but failed to come to fruition — for more than a decade. Out of state developers were hoping to borrow $20 million through the program to jumpstart the development planned for the east side of town.
“The lack of Weld commissioners’ support of the C-PACE program puts this project at risk of terminating and becoming a dead dream,” Melendez says in a news release on Windsor’s Website. “It’s a job killer and an economy crusher that once gone, we will never get back nor is there anything of its kind to replace it with.”
According to Melendez, a 118-acre sports tourism park planned for an area of Windsor currently known as Diamond Valley would have been an economic boom for all of Northern Colorado in a time when people are worried about the economic implications from government shutdowns in response to the Covid-19 outbreak.
“The jobs, the economics, the financial implications of this project are crucial and substantial and would greatly aid in our regional financial recovery,” Melendez said in the release. “It’s not what this project brings to Windsor, but what it brings to the entire Northern Colorado Region, specifically to Weld County and to our state.”
Estimations at full build out claim the park would attract hotels, restaurants and other support industries totaling 1,500 jobs, $50 million a year in revenues and more than one-half million visitors a year to the area.
It is unclear how long that growth would have taken with the economic fallout of coronavirus, as some say it could be years before people have enough disposable income to support a project as large as the one hoped for in Windsor.
Matthew Luzzetti, chief U.S. economist for Deutsche Bank, a multinational investment bank dual headquartered in Germany and New York, said in an interview with Marketplace that eating out, concerts, live sporting events and other entertainment could be the first things to suffer in a post-Covid 19 world.
Melendez’s supporters say it’s political payback for her decision to challenge Freeman for his seat on the board. Melendez is term limited from her seat in Windsor. Melendez advanced to the Republican primary in June for County Commissioner District 1 as the only candidate at the Republican County Assembly. Freeman skipped the assembly and successfully petitioned on the ballot.
“The de-authorization comes at a time when two Republican women are challenging two incumbent men for their seats on the BOCC, and both live in the town of Windsor where the project is located,” an editorial in NoCo Today reads in part. “… In Weld County, it is a spoken rule that you do not challenge an incumbent from your own party.”
The second woman referenced in the editorial is current House District 49 Rep. Perry Buck. Buck is challenging Kevin Ross for the At-Large seat. Ross was recently appointed to that seat to fulfill the term of Sean Conway, who stepped down in January.
Freeman said that is absolutely not true, and his decision has absolutely nothing to do with not supporting the facility or with politics.
“It puts the treasurer in a position not to collect taxes but debt on private loans,” Freeman said, referring to how the program works. “I have always made my decisions based on what I believe is best for the county. Not everyone always agrees with them, but they have never been political.”
Freeman said C-PACE simply does not put Weld County in a good place if something goes wrong.
Under normal circumstances, when someone defaults on their property taxes, their home or business goes up for lien sale, where bidders can buy the lien from the county. After a set of circumstances, if the property owner doesn’t redeem the loan, the buyer of the lien can request the deed to the property and become the new owner. The purchase of the lien is usually the amount of the back taxes, penalties, interest, etc., which makes the county and taxing districts (schools, colleges, fire, etc.) whole.
However, under the C-PACE program, a private company borrows money from a private lender, which is guaranteed under state statute. In order for lender to get that “guaranteed” payback, the property is given a special taxing status and the county treasurer collects both the usual property taxes accessed plus the additional special taxes over a specified time period. That extra “special tax” money is what the treasurer uses to pay back the loan on behalf of the borrower.
However, if the property owner defaults on the property taxes and the county treasurer puts the property up for lien sale, the lien can only be successfully sold if the bidder pays both the back taxes and the outstanding portion of the C-PACE loan. In the case of the Windsor deal, that would be $20 million, or whatever was left owed at the time of default.
Commissioner James said he doesn’t understand why anyone would support a program that turns the county into a collection agency.
“If a private lender wants to loan a developer money on a project, that’s fine,” James said. “That’s the free market. Government shouldn’t be involved in a personal transaction. You don’t need the government to do your collections.”
James said what bothers him most is if it is defaulted, and the treasurer is not able to sell it, the revenue goes uncollected and the special taxing districts it was supposed to support are left without, and the county is left with an unusable piece of property or building, along with possibly years of uncollectible property taxes.
Freeman said he supports the project and is willing to find other ways to help the developer, but he cannot support this program. The commissioners sent a letter to both Windsor and the developer explaining their reasonings.
“Weld County prides itself on our conservative financial management, as evidenced by no debt, no sales tax, fully funded retirement plan, and one of the lowest property mill levies in the state,” the letter reads in part. “There are times our decisions have not been politically popular, but in the end, Weld County’s decisions have proven to be the right ones. We are confident in the case of the C-PACE program this will be another decision looked back upon as the right decision.”