Colorado downtown development authorities see changes to the structure of how DDAs work as potentially harmful
Proposed changes to the Downtown Development Authority law aren’t receiving a warm welcome in Loveland.
Downtown Development Authorities, “quasi-public agencies,” are districts in downtown areas that use tax-increment financing for public improvement projects, such as The Foundry in Loveland’s case.
While voters in Loveland’s downtown area approved the formation of the DDA, they turned down ballot measures twice to increase property taxes in the area and allow the DDA to take on debt.
Still, executive director of the Loveland Downtown Partnership and the Downtown Development Authority Jacque Wedding-Scott told city, state and Colorado’s federal representatives Friday at a meeting that the groups don’t necessarily support the changes being offered by Colorado Counties Inc.
Wedding-Scott said various communities in Colorado have seen successes with their DDAs, including Loveland’s former DDA. But the proposed changes to the 40-year legislation came from an issue Teller County was facing with its DDA and tax-increment financing distribution.
“It should be noted that the Colorado DDAs believe the DDA statute functions effectively and is in no need of repair,” stated a document from the Colorado DDAs that Wedding-Scott passed out Friday.
The three proposed changes to statute include requiring representation for counties, special districts and schools on DDA boards; providing equitable distribution of tax revenue after project expenses are paid; and requiring municipalities and other local government entities to enter into intergovernmental agreements specifying how the redevelopment costs would be allocated.
City Council members expressed concern that these changes could potentially ruin the effectiveness of DDAs. They could lead to a similar situation that cities faced with urban renewal authorities after reform, Mayor Cecil Gutierrez has said previously.
But DDAs function differently than urban renewal authorities, and even though Larimer County commissioners backed those reforms, they weren’t necessarily sold on the DDA reform.
There can only be one DDA in each municipality, Commissioner Tom Donnelly said, and they don’t generate as high of a tax increment as urban renewal authorities.
“Statutorily, they’re different than URAs. They can’t issue bonds without the vote of the people,” Donnelly said.
He added that if he were representing the cities, he might push for changes in DDAs to make them more like URAs.
“We have a great relationship with our DDA in the county. … We’re very supportive of your work and the downtown (efforts) and want to see your work continue,” he said.
In Loveland, Wedding-Scott said, there’s already a county seat on the DDA board and statute is already very specific on how the tax-increment financing is distributed. As for the third change, Loveland’s DDA opposes it, she said, because the city has a long history of cooperative agreements and it doesn’t want to deal with a situation that could lead to mediation.
“I think it’s really important as we move forward that we focus on DDA successes,” she said.
She also said they really are different than urban renewal authorities.
She said the Loveland DDA proposes that if the legislation does move forward that parts of the language be clarified.