Littleton could soon be striking out on its own when it comes to the often contentious issue of urban renewal and the various ways cities use public money to help push forward redevelopment projects.
In a special election to be held in March, voters in Littleton will be asked to decide whether they should have the final say over urban renewal decisions in this community of 44,000, including the use of eminent domain and tax increment financing.
It would be the first time a city or town in Colorado put such restrictions on what has become a widely used tool for revamping distressed or hard-to-develop urban parcels in the state. Some projects in the past include the Denver Pavilions on the 16th Street Mall, the Streets at SouthGlenn in Centennial and Lakewood’s Belmar.
Backers of the ballot measure say deals between the city and private developers — where future tax revenues on new development are often used to pay for road and infrastructure improvements at the site — are not necessary and divert money from school systems and other taxing districts.
But opponents, including the majority of the Littleton City Council, say a requirement to get voter approval for every new urban renewal project will grind redevelopment efforts in the city to a halt and leave aging, but critical, commercial corridors in the city stagnant.
The dispute came to a head this month, with the City Council passing a resolution urging residents to vote “no” at the ballot box while at the same time proposing a ballot issue that would place limits only on the city’s ability to condemn property at urban renewal sites.
At a special meeting Tuesday, the council is scheduled to vote on whether to refer its measure to the ballot.
“Littleton certainly doesn’t need to wear that badge,” Councilwoman Debbie Brinkman said of the citizen-initiated ballot measure at a recent council meeting. “Urban renewal is a tool. It is not a mandate. It does not mean that we are blighting the city and condemning homes and kicking people out and filling developers’ pockets with money.”
Mayor Phil Cernanec said urban renewal is often the only mechanism a city can use to attract a developer to a distressed piece of property that no one would approach because it wouldn’t be feasible. He said passage of the anti-urban renewal initiative in March would harm Littleton’s economy.
“It sends a message that the city is not interested in development,” Cernanec said.
But Paul Bingham, a 52-year resident of Littleton and a main force behind the collection of signatures for the special election, said the city is doing just fine without “an extra bureaucracy” putting taxpayer money at risk.
He said the city already has been burned by an urban renewal effort that didn’t turn out so well — the ill-fated Riverfront Festival project dating to the 1980s.
Bingham points to a list of three dozen development projects on the city’s website — including the highly anticipated Breckenridge Brewery and a new King Soopers — that are being undertaken without the involvement of Littleton’s urban renewal authority, known as Littleton Invests for Tomorrow.
“We’re doing fine with the free market,” he said. “We all want Littleton to be prosperous, but we don’t agree on the tools.”
Four areas identified
The most commonly used of those tools, as set forth in Colorado’s urban renewal statutes, is tax increment financing, whereby sales and property taxes generated by new development at an urban renewal site are pledged upfront to pay for roads, utilities and other infrastructure. First, a city has to declare an area blighted and in need of redevelopment before urban renewal tactics can be put into play.
Littleton has made blight declarations for four areas throughout the city — mostly older retail centers along South Santa Fe Drive, Broadway and Littleton Boulevard. The city cites deteriorating buildings, floodplain issues, crime and environmental contamination as criteria for placing the areas within urban renewal districts. It also says many of the parcels are in the hands of out-of-state owners who may not be motivated to rehabilitate their property.
Jim Taylor, chairman of Littleton Invests for Tomorrow and a former mayor, said problems at aging retail centers are such that it is too expensive or too risky for a developer to take them on without some assistance.
“It’s typically because they are difficult to develop,” Taylor said. “These areas were found blighted because of deteriorating conditions there.”
But property owners who maintain their buildings and land vehemently contest the blight label they are often saddled with just because they are alongside properties that meet the state’s definition of blight.
That’s what happened to Dr. Charles Vail, owner of Littleton Equine Medical Center. His business was initially included in the South Santa Fe Drive urban renewal district.
“Our temperature did rise a degree or two when they called our property blighted,” Vail said.
The doctor managed to persuade the city to remove his horse hospital from the urban renewal district earlier this year and said he would take care of any future improvements to his property without the aid of tax increment financing.
“We don’t have a need for curb and gutter and that sort of stuff,” Vail said. “It just wasn’t appropriate for us to be included in it.”
Beyond the negative connotations of a blight designation, critics have blamed urban renewal for diverting future tax dollars away from school, fire protection and park districts in order to pay back bondholders, usually over a 25-year period.
“We’re concerned about education and were concerned about the amount of tax dollars that can be siphoned away from South Suburban Parks, urban drainage, Arapahoe County and Littleton Public Schools,” said Carol Brzeczek, who along with Bingham belongs to Your Littleton Your Vote.
Brzeczek’s and Bingham’s reservations about the potential negative ramifications of urban renewal activity aren’t unique. The state legislature passed a bill this year that would have required at least one seat on an urban renewal authority go to a county official and would have directed cities to compensate counties for a portion of future lost property-tax revenues.
Gov. John Hickenlooper vetoed the bill in June, saying it “goes a step too far.” The issue will probably come up once again in the 2015 legislative session, which starts its work Jan. 7.
Fight to March
Mark Radtke, a legislative and policy advocate for the Colorado Municipal League, said the assertion that school and fire districts are denied tax revenues as the result of tax increment financing is a bit of a red herring. Those tax revenues, he said, wouldn’t exist without the project.
“It doesn’t take money from any other taxing entity because it’s new money,” he said. “These dollars are created by the project, and they wouldn’t be there if the project didn’t happen.”
Mayor Cernanec said, for Littleton’s part, the city has worked out revenue-sharing deals with the school district, the flood-control district and the parks-and-recreation district. It is still trying to reach agreement with Arapahoe County — through arbitration — on what a tax split might look like with the county.
In the meantime, Your Littleton Your Vote won’t be without a fight leading up to the March election.
Besides the City Council’s denunciation of the group’s ballot measure and its decision to propose a competing measure to enshrine in the city charter a council resolution in October that pledged no taking of any property in urban renewal districts without the owner’s consent, a new group has formed taking the city’s side in the dispute.
Littleton Strong is a newly formed citizens group that came up with the language for the alternate ballot issue.
They want to make sure urban renewal practices are still available to the city where they can best protect the “interest of our economic stability, our property values and our cherished neighborhoods,” the group said in an e-mail.
John Aguilar: 303-954-1695, jaguilar@denverpost.com or twitter.com/abuvthefold
