Guest opinion: Urban renewal should equal economic development

By Bryan L. Baum
03/13/2010
http://www.dailycamera.com/ci_14665406
http://longmontledger.com/longmont-opinion/urban-renewal-bill-will-help-communities-grow-and-improve-economic-viability/

Have you ever wondered if the work done at our state capitol affects you in your hometown? Right now there is a bill going through the state legislature that deals with urban renewal of blighted lands. It may have a formal title but what it is really about is taking care of our community -- the way it looks for existing businesses and families as well as potential new business partners and citizens.

We need to make sure that urban renewal tax incentives are used only for their original intent -- to redevelop blighted urban areas -- and not to ruin Colorado`s agricultural lands at taxpayer expense. We all want to see smart redevelopment on blighted urban areas such as abandoned factory lands or brownfields where the contaminated property sits empty in a city center because additional clean-up is needed before the land can be repurposed. Using urban renewal to redevelop these properties is good for the community and can help bring new economic development to our towns and cities.

One of the best tools for turning coal into a diamond is tax increment financing, or TIF. This is a smart economic financing tool for redeveloping truly blighted lands. Here`s how it works. A city can use its authority to declare the property blighted and then include it in an urban renewal project. The city can then take the net benefit in increased property taxes that will be generated by the project and use it to help the developer recover the increased costs of redeveloping the blighted land by helping offset the cost of public improvements.

House Bill 1107, sponsored by Rep. Randy Fischer and Sen. Morgan Carroll, would preserve tax increment financing as an important tool for urban renewal that redevelops truly blighted lands, while greatly restricting its use on agricultural lands that are not blighted to certain enumerated situations. This bill would also reduce the practice of "state backfill" which has a direct impact on Colorado`s general fund budget. When a TIF is in place, local schools lose the taxes that would have been generated. Under our current school finance equalization laws, the state of Colorado is required to "backfill" those lost tax dollars to our school districts even during this economic downturn, when our legislators are fighting every day with budget cuts.

A TIF should be a win-win tool, but the problem is that somewhere along the way the purpose of it got lost. Some developers and cities started using TIF as a general economic development tool rather than what it was intended to be -- a special tool to clean up blighted urban areas, and to enable redevelopment projects to succeed when they would otherwise be infeasible. As a result, the award of TIF has now become such a part of doing business that some developers expect taxpayer subsidies as an entitlement for any new projects.

Adding insult to injury, this financing tool meant to be used to redevelop blighted urban areas has instead been used to develop green spaces and productive farmland. And because urban renewal areas often divert taxes for 25 years, the cumulative effect on the taxes for school districts and therefore state taxpayers could rise to $200 million by 2020 if nothing is done to stop these greenfield developments.

All of these reasons are why Longmont and towns, cities and counties across Colorado are supporting House Bill 1107 which is currently in the State Senate, where we hope that Senate President and Longmont resident Brandon Shaffer will support the bill. This is a sensible approach for reform that has the support of cities and counties, environmentalists, planners, fiscal policy experts, and agricultural groups. This is what government is supposed to be doing. Urban renewal is about keeping our communities clean, safe and attractive to the people who live here and who are thinking about moving to our city.

Bryan L. Baum is the mayor of Longmont

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