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Despite Westside builder's complaints, downtown-only fee waiver plan moves forward

       As part of a continuing effort to bolster the downtown, the Colorado Springs Mayor's Office is pushing a plan to waive various public costs that developers building homes there would normally have to pay.
       Eddie Bishop, a Westside-focused developer, argued to Colorado Springs Planning Commission July 17 that the strategy is unfair. As a result, “I've got one hand tied behind my back as a developer,” he said.
       But he was unable to convince the majority. The commission voted 4-2 for the first of such proposals: to exempt the downtown from a 1973 ordinance requiring residential developers to donate land for parks or pay fees in lieu of land, based on the size of the project.
       The issue will now go to City Council, which has the final say-so and could act on it as early as its next formal meeting July 22.
       The fee savings for downtown residential builders would be nearly $1,800 per unit in a high-density project, city figures show.
       City staff had initially suggested waiving the requirement for a five-year trial period, but the Parks Advisory Board, in a review prior to Planning Commission's, asked that the matter be re-examined after three years. Staff did not object, and that's what the commission approved.
Eddie Bishop, a developer who focuses on Westside projects, shared this graphic at the City Planning Commission meeting. He was making the point that four of his current projects or plans for projects are located no farther than 1 1/2 miles from the downtown. But under a proposal from city staff, downtown developers would get waivers on park-related fees to the city while Bishop would not.
Courtesy of Eddie Bishop
       At the Planning Commission meeting, Bret Waters, the mayor's deputy chief of staff, emphasized the city executive branch's belief that a key goal is having “young professionals” living downtown. But he also asserted that building homes there is more pricey - particularly to provide parking - and that a break in fees “will help bridge the gap” to make construction more affordable. As it stands, in the past five years, only six projects, representing 15 units in all, have come forward downtown, according to a slide Waters displayed.
       In his comments, Bishop said he has in progress four projects with a total of 135 units, none of which is more than 1 ½ miles from the downtown. But if the proposed waiver goes through, he said he would end up paying over $200,000 more than downtown builders would for the same number. “It's a question of fairness,” he told the commissioners. “I shouldn't be penalized for building on the wrong side of the highway [I-25].”
       He also disagreed that it costs more to build downtown.
       The parks waiver is the first of several that city staff is looking at. Another that's in the works for the downtown is the schools requirement for residential developers (also land or fees). That requirement results in more than $1,500 going to School District 11 for every new high-density unit, city figures show.
       The city is also looking at waivers on five other fees that the city could charge in connection with new construction downtown, according to Waters' presentation.
       Staff opinion is that any fee-revenue losses would be outweighed by an overall improved economy. “We think a vibrant downtown is key to the city,” Waters said. “We believe that if we enhance the downtown, enhance residential development, we enhance our image and our business climate. This is a catalyst to some extent to move us forward.”
       City officials made no secret of having hammered out the the fee-waiver plan with two development groups that want to build downtown but think it's too expensive now. A representative of one of those groups spoke at Planning Commission: Darsey Nicklasson, who is planning a 33-unit apartment building, called Blue Dot Place, in the 400 block of South Nevada Avenue with longtime businesswoman and one-time councilmember Kathy Loo.
       Nicklasson said the 1973 ordinance was meant to apply to “greenfield” projects (meaning open-land areas, typically on the outer edges of the city). By contrast, her project is properly described as “infill,” she said, which is defined as an area surrounded by existing development. She suggested that the city give incentives to infill projects throughout the city, in large part because they don't force extensions of city services.
       On that point, she was in agreement with Bishop, who described his projects as infill, too.
       Waters also spoke to that subject, saying that as part of a general effort to be more “business-friendly,” the city is “launching an infill initiative which will involve the Planning Commission on infill in the city and how to make it work more effectively.”
       However, that initiative is not part of the current proposal, and no dates were announced for when it would come forward.
        Regarding parks, Nicklasson said there already are 80 acres of parks within a mile radius of Blue Dot's planned project, so paying a fee for them doesn't make sense. In general, “we can take advantage of the infrastructure around us,” she said.
       Adding to the downtown-subsidy argument was Sarah Harris, development manager for the Downtown Partnership. She said there are currently 230 possible lots downtown that could be used for residential development. The fact that very little is happening with that is equivalent to a sick human body, she analogized. “If you don't have a healthy heart, the body's not functioning well.”
       Commission member John Henninger was one of the two “no” votes, but his position was that 230 lots was too small a number to attract a big developer. A parks fee waiver “is too little to have an impact,” he said. “It [a developer incentive] has got to be bigger and broader.”
       The only commission voice that actually opposed the waiver was Mike Ham (the other “no” vote), who worried how fee favoritism would impact development in other parts of town and how City Parks would cope with reduced revenues. “City services shouldn't suffer because we want development downtown,” he said.
       Ryan Tefertiller of City Land Use Review told the commission that “quite a bit of thought” went into the proposal and that “this is just one piece of the puzzle” for downtown revitalization.
       He recited a list of previous steps that have been taken, including the Imagination Downtown study, the establishment of form-based code (which allows more development flexibility), a downtown master plan, the City of Champions proposal, a downtown arts emphasis, and a study by the national Urban Land Institute. The latter study, in 2011, found an “immediate demand for around 300 units in the core of the downtown,” he said.
       Chairing the Planning Commission meeting was Robert Shonkwiler, who agreed with staff that the downtown needs city support and that implementing fee waivers could lead to economic success. “I don't think it's possible to encourage too much investment, especially in the downtown” he said.
       The other three commission members present and voting in favor were Rhonda McDonald, Eric Phillips and Carl Smith. Charles Donley recused himself because he said he owns property downtown.
       For the purpose of the park-fee waiver, the geographically defined downtown area matches that defined in the master plans, Tefertiller said. It's bounded on the west and south by I-25, on the north by Cache la Poudre Street and the east by El Paso Street.
       This is the second time in three years that the Mayor's Office has backed a plan specifically for the downtown. In 2012, the city attorney wrote an ordinance for a downtown-only no-panhandling zone. After being approved by City Council, it was later thrown out by a federal judge.

Westside Pioneer article
(Posted 7/18/14; Land: Development Issues)

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