From Bull-Riding Dust To Business Pay Dirt

by Rick Langenberg

 

After years of experiencing a slew of setbacks, Woodland Park’s former cowboy and rodeo hub, known more as the “dirt of doom” around local circles, may finally bustle with actual business activity.

 

But the prospective development is a far cry from the original $60 million-plus vision, calling for a hotel, recreation center, shops, an entertainment hub, restaurants, multi-housing lofts and a ski village design that drew comparisons with Vail. Instead, Woodland Park leaders must grapple with the basic realities of an expanded hardware store, a bargain thrift outlet and auto parts center.

Nevertheless, the new projects may serve as a rescue boat for the Woodland Park Downtown Development Authority (DDA), give the city an extra $190,000 in sales tax revenue a year and provide an additional 20 jobs. But the DDA-sponsored development doesn’t come risk-free and still has to clear a few remaining hurdles. Unless developer agreements are signed with the prospective companies and infrastructure plans are finalized to facilitate new local facilities for Woodland Hardware, Family Dollar and O’Reilly Auto Parts, the projects could get stalled. Or the DDA and the project financer, Vectra Bank, may not be able to get repaid. Under the proposed timeline, it is fairly critical that the new business structures, totaling nearly 40,000 square feet of new retail space, get completed by the end of 2012.

Despite these risks, the Woodland Park City Council last week by a 5-1 vote signaled the green light for the development deal and agreed to issue a maximum of $3.5 million in revenue bonds for the DDA, which will allow the entity to incur anther $1.2 million in debt to finance new infrastructure improvements. The infrastructure which consists of drainage and street/sidewalk work and public enhancements, is the DDA’s enticement to get these companies to spend $4.5 million in new construction costs and to open up new facilities in downtown Woodland Park. “These projects would require assistance with infrastructure in order to be viable,” said Beth Kosley, the economic development director for the city, who also serves as the director for the DDA. “We have flogged this (development idea) to death.”

Under an extremely complex deal, the DDA would foot the bill for infrastructure work and public improvements around the business sites. These would be located at the former Saddle Club property area (called Woodland Station), where Woodland Hardware intends to construct a new 25,000-square-foot store, expected to cost $2.5 million; and at the Tamarac Center, between the Country Lodge and Gold Hill Square South properties, which will serve as sites for new Family Dollar and O’Reilly Auto Parts stores, with a price tag of a little more than $2 million.

In turn these companies would be required to complete their buildings by the end of the year, or at least get the vast majority of the construction done. They also would have to sign development agreements with the DDA. That timeline is critical as the money needed to repay the revenue bonds would come from the extra property tax revenue generated from the new construction through an elaborate system referred to as tax increment financing. (Under this system, the DDA is allowed to retain all property tax revenue it generates from new buildings and improvements, since the district was formed, for several decades.) Vectra Bank would actually purchase the bonds from the DDA and could emerge as the real loser if the deal falls through. The city’s role is in issuing the bonds and in signing off on the deal.

The council’s decision followed more than two hours of debate, with strong concerns voiced by a key civic leader and even a current business owner, who argued that some existing merchants will end up as losers with this deal. In the end, most council members believed the latest gamble is the best option for the city and DDA.

“It is a realistic project,” said Councilwoman and mayoral candidate Betty Clark-Wine, who has been critical of the DDA in the past. According to Clark-Wine, the current Teller County assessor, new construction is really the best solution for the DDA, the city and downtown. And if the city doesn’t okay the deal, she worries that the former Saddle Club property may sit idle for years and the DDA may not be able to pay its bills.

Mayor Steve Randolph agreed and described this as the most practical and viable plan for renewed business activity at this site. “It is private money (for the new projects). We need to do some soul-searching (if we don’t approve this),” argued Randolph. Mayor Pro Tem Jon DeVaux referred to the pact as part of the original DDA concept “to preserve the downtown.” Other council members reluctantly agreed to approve the pact, citing a desire to get something done at this site. Councilman Terry Harrison admitted he wished he never pushed for the original deal, allowing the DDA to purchase the nearly 10-acre property site from the Saddle Club, which once housed a clubhouse and the Bergstrom Arena. And Councilman Dave Turley, who has been quite critical of the DDA, cast the sole dissenting vote. Moreover, he questioned using government money to help finance business projects that could provide competition with current operators and may not enhance the overall business climate that much. “If it was something totally new, I wouldn’t have a problem with this,” said Turley. He was referring to the fact that Woodland Hardware is already a current business and is merely relocating to a larger facility and that the deal would create yet another auto parts outlet. He also reminded his peers about the amount of money that has already been squandered for DDA pursuits. “I have always been excited about Woodland Station. But we do have to evaluate the amount of money we have spent.”

But following the tally, Turley commented that he would do whatever is necessary to make the deal become successful for the city, the DDA and Woodland Hardware. “Get the Hell Out of Commercial Development”

The council decision, though, raised red flags among several business folks last week. Jerry Lowe, the co-owner of new forthcoming Lush Wine Bar, said the Woodland Station development would endanger their business pursuits and those of current operators. “This is just not fair to use government money to go against existing businesses,” said Lowe. “This really hurts our business plans. It will kill our view.” As a result of the city’s actions, he said the Lush Wine Bar operators, who had planned to open their business in April, are being forced to revaluate their options. He said other business owners in the area also have expressed concerns about the negative impacts this development would pose on them.

During last week’s hearing, Lowe asked for the Woodland Station project to be reviewed in more detail so it would not physically clash with current businesses. But Lowe was denied this request by city attorney Erin Smith. She said last week’s hearing wasn’t designed to approve specific details of any of the DDA-sponsored projects. Smith indicated that this review would occur at a later date.

The most vocal opposition, though, came from Curt Grina, the president of the Pikes Peak Regional Medical Center Association, and a key financial player in the community. “What the Hell are you doing in the commercial development business,” blasted Grina, when addressing the city council. He described the entire DDA and Woodland Station effort as a recipe for failure and suggested that private enterprise should deal with these projects, instead of city hall. “The (DDA) model does not work. I don’t see a lot of comfort.” Grina compared the failed DDA venture to the thriving hospital development, which was spearheaded by private financing and property donations, based on his analysis. Grina also claimed that future plans are in the works for locating a Lowe’s Home Improvement store outlet in Woodland Park. The association president argued that this development would completely de-rail the DDA’s bond plans.

Al Born, a board member of the DDA, though, referred to Grina’s argument as one of “ideology.” He cautioned that the DDA has to grapple with “reality” and the fact that the current economy makes it quite difficult for the free enterprise system alone to craft big development deals in a town like Woodland Park. Born said the DDA pursued that “rabbit hole” for years, but came up empty-handed. He cited the state of Texas as an example of a government that tried to facilitate more economic growth and development and now is reaping the benefits. Most council members agreed with Born. And contrary to many of the statements made by Grina, Randolph argued that the DDA has made much progress.

What’s Next?

With the council’s decision, the next step, according to Kosley, involves finalizing the engineering design plans for the proposed infrastructure improvements at the new business sites. Also, development agreements must be finalized among the three business companies, the DDA and Vectra Bank.

If everything proceeds according to schedule, dirt work could occur sometime this summer, vows Kosley. In a later interview, she described the pending projects as an “organic development,” where the project is partially facilitated by a group like the DDA, but that the private companies incur much risk. In the earlier years of the Woodland Park DDA, she said the group attempted what she described as a “catalytic development,” through trying to set the stage for a large-scale big-dollar project that would generate a lot more people to the area and involve attractions. Bids were then requested from key national and state developers. “There was nothing wrong with that approach. But unfortunately, Woodland Park is just not big enough of a market for something like that,” said Kosley.

Active development plans have been attempted at the Woodland Station site since 2005.