Let’s Make a Deal

02/16/2012

by Rick Langenberg

     After more than 20 years of wrestling with what some leaders call a frustrating and politically-based anti-incentives law, Woodland Park voters may decide this April whether to let city hall loosen up its purse strings—at least when comes to giving a helping financial hand to new businesses and expanding operators. But how much this hand should be extended, if at all, is still in question. The big “I” (incentives) subject will command main stage attention this Thursday (Feb. 16) during a meeting of the Woodland Park City Council.  Local government observers expect plenty of verbal sparks to fly in what could become another marathon session.   

     The issue of killing the city’s current law, which bars allocating any municipal funds or resources for future and current businesses and developers, could generate much debate. Plus, Woodland Park voters have consistently said “no” to the question of offering city incentives. But with a lingering recession and a vastly different economic scenario from that of two decades ago, most current elected leaders say times have changed and they want to revisit this issue.  A public hearing has been scheduled for Feb. 16 that would place a council-sponsored initiative on the April 3 ballot. This proposal would end the city’s current prohibition against the use of municipal resources and monies, such as infrastructure waivers, fees or tax rebates, for future or current businesses and developers.

     Initially, the city council mulled the idea of just altering the current law to permit certain tax rebates to encourage more economic development. But following a recent discussion, most council members favored repealing the current citizens-generated law entirely, which is classified as section 9.17 of the city charter. “The economic conditions are vastly different from what they were 20 years ago. “We are in competition,” said City Manger David Buttery, in describing the plan to offer some type of a business assistance incentive plan.  Buttery was part of a task force organized to address ways to spruce up more economic activity through offering businesses certain types of financial assistance.  This idea has been endorsed by other civic leaders, including representatives of the Woodland Park Chamber of Commerce. However, on the other side of the table, several key current business operators told the Mountain Jackpot last week they are adamantly opposed to changes in the town’s anti-incentives law. “They (city officials) need a basic lesson in Economics 101,” said one veteran business owner, who didn’t want to be identified. “Are they trying to drive us out of business?  No one helped us when we came to town.”

Moreover, these operators say they are worried about the prospects of city officials playing with a rigged deck when it comes to fair competition. Limited incentives are now permitted in Woodland Park for a few large-scale business projects that are located inside the Downtown Development Authority (DDA) district through a rather complex tax increment financing system. These incentives mainly consist of tax rebates that are shared with businesses who locate in the DDA district. They deal with sharing a portion of future tax revenue between these businesses and the DDA for a certain period of time.

Mayor Pro Tem Jon DeVaux believes this policy needs to be expanded throughout the city. “We would give these city incentives from the money they (future businesses) are expected to generate,” said DeVaux, a big advocate of the ballot initiative. DeVaux cites problems Woodland Park has faced with its current anti-incentives law. Moreover he believes these restrictions may have lead to the Family Dollar Store’s decision last year to locate a new outlet in Cripple Creek rather than Woodland Park. Cripple Creek city leaders were willing to offer key financial incentives, in the form of infrastructure waivers and sales tax rebates. “Right now we are at a competitive disadvantage.   The only vehicle we have to offer new businesses any incentives is through the DDA,” explained DeVaux. “We are kind of a minority with how most cities operate.”

 A tough battle

     But the council’s ballot plan to kill the city’s current law may ignite a few political sparks. In fact, the new pro-incentives proposal could face a few hurdles just to get on the April ballot. During the Feb. 2 council meeting, the measure to repeal  section 9.17 of the city charter (regarded as the town’s anti-incentives law) only passed by a 4-3 council vote during the initial public reading process, which typically doesn’t permit public comment. Voting against the ballot proposal were Mayor Steve Randolph and council members George Parkhurst and Terry Harrison. 

In a later interview, Randolph said he supports efforts to change the city’s current anti-incentives law, but objected to how this matter was handled during the council’s recent meeting. He indicated that he preferred discussing the original proposal “on the table” that mainly would have permitted tax rebates and other assistance for future businesses or current operators undergoing a future expansion, but wouldn’t have killed the original law or used existing revenue for helping new businesses. But according to City Clerk Cindy Morse, most council members viewed that ballot measure as just too confusing and accepted a motion to repeal the city’s current anti-incentives law completely.  

     The main hurdle ballot proponents of the pro-incentive movement face deals with overcoming past history. The anti-incentives law was originally passed in 1988, as part of a citizens’ campaign to stop a plan for a one-time Wal-Mart center through the use of certain city financial monies, which would have been eventually repaid by the store developers.  The center would have been located at the current location of the Safeway shopping center. But the project died with the passage of the citizen-generated anti-incentives initiative, co-authored by Gold Hill Square Shopping Center owner Bill Page.

Then, city voters gave the anti-incentives law the thumbs-up again, when a charter review committee referred the issue to the voters 10 years ago. The measure included language that would have permitted the city council to okay incentives if a specific project offered a public benefit.  That plan to end the anti-incentives ban died by a 717 to 347 vote. However, most city leaders now believe it’s time to review this law again.  They also formed a task force to study ways to offer business assistance through tax benefits and other financial perks.  But the ballot issue under consideration now would allow for more leeway for city hall, when it comes to luring new businesses into town. According to DeVaux, the only way a new company or a current operator can receive any type of city-related financial assistance is through the DDA.  And this often forces the DDA to alter its district boundaries, a process that has raised a few eyebrows during the last year. “It’s a work in progress,” said the mayor pro tem, in describing the ballot proposal to do away with the ban against incentives.  He says the council is not set on any specific proposal, but wants to let the voters decide the incentives issue this April.  DeVaux believes the town’s economic situation is a key motivating factor for bringing the matter to the voters.