| Does Louisville need to finance urban renewal along Highway 42 with scarce tax dollars? |
| Every city or town as old as Louisville
has areas that citizens might agree could use improvement. The Hwy 42
corridor falls into that category. But the question posed by urban renewal laws, and the creation of an urban renewal authority (such as the Louisville Revitalization Commission), is not whether an area needs "improvement." The real question is this: "Is there blight and, if so, do we need to use scarce taxpayer dollars to eliminate it or will private investment dollars eliminate it?" Leland Consulting, which conducted the "blight" study and helped the Louisville Revitalization Commission create the proposed urban renewal plan, acknowledges that's the real question. It said "[t]he mission of the LRC is to encourage private reinvestment within designated areas where redevelopment would not occur solely through private investment." It also said that TIF financing can only be used when a blighted area "cannot be redeveloped without public investment." The LRC, led by Leland's consultants, believes there is blight along Hwy 42 (and beyond) and tax dollars are needed. That is, the LRC believes the blight will not be remedied--Hwy 42 will not be redeveloped--unless the City uses its own tax dollars (and that of the county and school district). Let's examine the LRC and Leland's findings. Is there blight? "Blight" is an extraordinarily vague and subjective term. As one Louisville citizen pointed out, "One man's blight is another man's affordable housing." We've pointed out that the Colorado law defining the term barely limits the vagueness or subjectivity of the term. While some of the areas in the core Hwy 42 area would fall within the state law definition of blight, it's all but apparent the LRC is including areas for reasons other than elimination of blight. Councilmember Don Brown at the October 3, 2006, Council meeting acknowledged it, saying including those areas was needed to "increase the potential for [tax] increment" and to "expand the potential [tax increment] funds.". Are tax dollars needed? What is extraordinary about the LRC and Leland's conclusion that City tax dollars are needed is the complete lack of any analysis of why that's so. In fact, if you look at Leland's August 15, 2006, presentation to the City Council, Leland jumps from the development/redevelopment of the Hwy 42 corridor to "How Can Tax Increment Financing Dollars Be Used?" Nowhere do we see an analysis of whether private developers would invest private dollars into the area, especially now that an RTD FasTracks commuter rail station will be located in that Hwy 42 corridor. The only "analysis" was at the August 15 Council meeting. Leland principal Ann Ricker suggested to the Council that taxpayer dollars were needed to remove the blight because developers would not use private dollars. The evidence that no developers would use private dollars, Ms. Ricker suggested, was that to date no developer had. Taken to its logical conclusion, this remarkable "analysis" transforms all undeveloped land and all long-unremodeled buildings into "blight" that requires taxpayer dollars to remedy. It takes little imagination to understand why LRC's consultant Leland would want to designate blight liberally and to create an urban renewal area that is as expansive as possible: it's in the development business. It plans and facilitates development for municipalities and private developers. It has no incentive to be concerned about the impact on the larger community--its concern is with the new development/redevelopment. To see how Leland serves both municipalities and private developers' sometimes-conflicting interests, consider this: When Leland was hired by the City to conduct fiscal analysis for our Comprehensive Plan, its principal Bill Cunningham concluded in July 2005 that every home in Louisville results in a $6 operating surplus, i.e., every house contributes $6 a year to the City's operating budget. When it was hired by developer McStain to provide a fiscal analysis of McStain's "Gateway" development, Mr. Cunningham concluded a year later, in July 2006, that the 25 homes in Gateway would contribute $6,991 a year to the City's operating budget, or $279 per home--or 4,600% more than the average Louisville home. In short, Leland's first analysis contradicts his second. Which one are we citizens supposed to believe? Maybe neither: The town of Superior conducted its own fiscal analysis and concluded in March 2006 that each new $350,000 home results in a net operating loss of $300 each year. But to answer the question, Would private developers spend private dollars in the Highway 42 corridor if no taxpayer dollars were used? It would seem more likely than not. One of the impediments to redevelopment in the Highway 42 corridor was concern over the possible existence of environmental contamination. To date, no contamination has been found. When the LRC was "reactivated" in December 2003, FasTracks was not approved and it was uncertain whether a commuter rail station would be located in Louisville. In November 2004, however, the voters approved FasTracks and it is anticipated that a commuter rail station will be located in the Highway 42 corridor. The presence of a commuter rail station will have a dramatic and positive effect on the property values in the Highway 42 corridor. One study concludes that property value premiums near commuter rail stations increase between 3% and 40%. The American Public Transportation Association has collected numerous studies confirming that commuter rail stations increase the value of land near them. Because commuter rail stations are a "lucrative urban housing, retail, office and community gathering space," they "spur real estate development" and can by their existence cause development that results in the generation of significant sales tax revenue. Even if Leland were right and investment of public tax dollars is needed or the Hwy 42 corridor won't be redeveloped, Leland conveniently forgets that the RTD will be investing an estimated $100 million to build the commuter rail station in the Hwy 42 corridor and millions more to build a 400-car parking garage. Isn't this enough of a taxpayer incentive to developers? The LRC and Leland, which has credibility problems, are conspicuously silent about this. If the LRC cannot explain why $100+ million in RTD taxpayer money is insufficient to draw private developers to the Hwy 42 corridor, it has no chance of explaining why we should spend an additional $77 million in taxpayer money. |
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