The Town of Castle Rock approved an urban renewal authority, opening the door to property owners interested in new development.
Councilmembers on May 7 voted unanimously to approve the authority, designed to trigger economic development in Castle Rock. Formation of an urban renewal authority is the first step in a process in which property owners can request a declaration that a property is blighted, and therefore eligible for an urban renewal area and plan.
If approved, a proposed urban renewal area and its accompanying plan could qualify for tax increment financing.
Tax increment financing allows the authority to collect the additional property taxes generated from improvements made on the property, and to use that money to pay for a portion of those improvements.
Supporters of the URA measure called it a tool for triggering economic development in Castle Rock.
Detractors called it another layer of government that gives developers an unfair market advantage.
The proof will lie in the structure of deals that remain to be seen, said Mark Stevens, town manager.
“You can have all the radical arguments you want … but the only real way to get at that is to have a project, run it past council, run it past the urban renewal authority and make a decision based on the merits of that proposal,” Stevens said. “I don’t know how you could debate the merits of possible proposals unless you do the work.”
Stevens worked with Castle Rock’s economic development council to research the possibility of a URA as an option to address the town’s shortage of commercial and industrial space. The council in 2012 pointed out the town is losing businesses to other municipalities because Castle Rock has run out of options for development.
The land is available, but the cost of making improvements is prohibitive to investment because of site challenges that range from drainage and topographical issues to environmental hazards, said Frank Gray, president of the economic development council.
A URA could open those properties up for development, by allowing the authority to help finance improvements through bond issuances secured by the increased property taxes expected from improvements, Stevens said.
It’s a matter of the owner using the increased taxes that owner expects to pay on the property to finance the improvements at the front end, Stevens said.
To qualify, the proposal must pass muster with an application and plan that may or may not include TIF financing, depending on whether the project can prove its financial viability, Stevens said.
“The town isn’t betting any funding,” Stevens said. “We organize the entity to entertain proposals that must pass financial scrutiny and financial analysis of what kind of revenue that property will generate.”
Among the residents who attended the URA public hearing were some who criticized the URA for its failure to address historical preservation and others who called it a diversion of taxes that benefits developers.
“The economic development is going to give an advantage to some builders and developers over other builders and developers,” said Castle Rock resident Ben Cox. “That advantage is going to be the use of public funds to make their projects come in on budget. We all speculate when we buy land. We know that when we can offset our costs we have an advantage over people who can’t offset their costs.”
Stevens pointed out that the formation of an urban renewal authority does not declare the entire town of Castle Rock blighted. Each plan must qualify for consideration to declare an area blighted with a plan that is unique to the urban renewal area, Stevens said.
Among those who attended the hearing were two property owners who said they intended to submit applications for consideration of an urban renewal area.
More information about the town’s URA is available online at www.crgov.com/URA.