Editorial: Blight law is good start toward building a more complete finish

By THE VOICE OF AURORA
The Aurora Sentinel
Published: Thursday, April 22, 2010
http://www.aurorasentinel.com/articles/2010/04/24/opinion/editorials/doc4bd069d2ee460755145124.txt

State lawmakers created a good compromise in their zeal to slow cities from using urban renewal procedures that critics say unfairly drain state coffers.

Gov. Bill Ritter signed House Bill 1107 into law last week, toughening requirements for cities to designate agricultural land as "blight" to take advantage of urban renewal tax incentives.

While there has been a long history of metro-area cities using the state's urban renewal law in this fashion, it was a recent move by Aurora and developer Lend Lease that prompted the change in law. Lend Lease wants about $90 million in tax incentives in exchange for building a host of public amenities among a massive $1.8-billion, mixed-use development at E-470 and Tower Road.

What's unusual about the deal is that it involves tax breaks for a residential project. Such tax deals for homes aren't unheard of, but they are rare - just as rare is the Lend Lease Horizon Uptown project itself.

It's a 500-acre proposal that has the potential to create many jobs to construct the project, many jobs to work there once it's built, a massive school project and other public amenities. A big part of what Lend Lease is promising is to bring in a Fortune 500-caliber company, providing big-salary jobs and acting as a magnet for others.

In exchange for allowing Lend Lease to get financing based on a promise of $90 million in future tax receipts, Aurora gets a long list of benefits that neither it nor the school district can afford right now. The region gets a new economic engine and all the stimulus the construction and implementation that a project this size will bring. And the state gets giant chunks of money from sales taxes, use taxes and corporate and personal income taxes.

Some state lawmakers are upset about the deal Aurora has now penned with Lend Lease because it's the state that must "backfill" any new school district taxes that the city gives away under the pact. While it's true that the state must continue to provide per-pupil funding for any new students who go to the new school, claims that Colorado must backfill all of these taxes aren't exactly accurate.

Study after study shows that tax-incentive deals like this benefit the state and communities economically and in many other ways.

It's a valid point to question whether this and all tax incentives are nothing but corporate welfare, but the reality is that every state offers similar deals, and Colorado must offer them, too, in order to remain competitive in drawing jobs and construction to the state.

What set so many critics off on this deal is that Aurora used the urban renewal "blight" distinction on what is essential pasture land far from cliche urban grit.

It's hardly the first time. As we've pointed out before, the same "trick" has been used at what is now the Odium Events Center in what used to be the middle of a cow pasture on some of the most valuable land in Colorado. Previous "blight" was also designated where the Interlocken Business Center is in Broomfield, as well as the Jefferson Center for Mental Health in the pristine foothills on the west side of Arvada.

Lawmakers have now restricted the use of such agricultural "blight" designations, but left behind a host of ways cities can do an end-run around the intent of the bill should Google or another lucrative enterprise want an urban-renewal package to open up somewhere in the plentiful Front Range prairie.

It's a good compromise, and the point of designating open fields as urban blight is well taken.

But this is a starting point in the discussion, not the end. State lawmakers should look closely at these deals and make their own determination as to whether there's a net benefit to local communities and the state. Given that everyone can almost certainly benefit from such urban renewal projects, the state should find ways for communities to enable more of them, rather than to discourage them.

There isn't a reliable national forecaster or indicator that doesn't make it clear that economic recovery in Colorado will be a slow and sputtering process. The wisdom behind seeding economic recovery with projects spurred by tax incentives is solid and should be scrutinized in this case to see if more can't be done, rather than less.

Printable Version of this Page