30 years and going strong
Original loan program aided Old Town upswing
2006 marks 30 years since a development corporation began helping to save Old Colorado City.
Back then the seven-block commercial area between 24th and 27th streets was run down and half-vacant, and there was the distinct possibility that the city would demolish the turn-of-the-century brick buildings in the name of urban renewal.
With the guidance of its small-business leaders, the Old Colorado City Development Corporation became a tool in reversing Old Town's slide. It was so successful that it essentially outgrew itself, expanding its loan programs to the region over time and changing its name to the Pikes Peak Development Corporation.
“In the beginning, the corporation made little loans of 10 to 50 thousand dollars,” said Douglas Adams, the agency's executive director for the past 14 years. “Now the loans are in the millions.”
The private agency has become “a major source of job creation and economic development in the region,” added Mace Porter, a real estate broker who has been a volunteer director for the corporation for 26 years.
Gene Brent, an Old Colorado City gun shop proprietor from 1975-83, recalled how in its early days the Development Corporation was part of a multi-pronged renovation effort that he and other small-business owners began organizing in '75 through the West Colorado Springs Commercial Club. Two years later, the merchant leaders hired Dave Hughes, who continues to be an active force on the Westside, to implement many of the time-consuming details of their vision.
At the time, Brent recalled, the historic shopping district was a less savory sort of place, with only 40 percent occupancy, and some of that occupancy consisted of “porn shops, cat houses and everything else.”
The corporation had originally been set up by the city in 1975 to receive federal block grants through the Colorado Springs Urban Renewal Effort (CURE). But within a year the business people were convincing the city to redirect the money toward their incentive plan of bringing back Old Colorado City by promoting its historical buildings instead of (as some in government desired at that time) tearing them down. And, City Planning's community development arm began working with the merchants' West Colorado Springs Commercial Club on renovation strategies.
The corporation's loans, in conjunction with bank loans guaranteed at 90 percent by the Small Business Administration, enabled property owners/business people to obtain full financing to fix up their buildings, as long as their plans fit Old Colorado City's historic-restoration theme. An interest rate of 3 to 6 percent was established between the city and the corporation.
“We'd piggyback on SBA or private-sector financing to make deals work,” Porter said. “We never competed with the banks. We always filled the gaps.”
At the time, such a public-private financial partnership was not a common formula for success. Also, considering the nature of Old Colorado City at that time, many of the loan applicants were far from affluent. Porter described them as “high risk. A lot of the loans were seconds and thirds.” Depending on who is talked to, the program had zero or almost zero loan-payback defaults. According to Adams, “a couple of them got in trouble, but we worked things out.” However, Brent said there were two defaults - a restaurant in the 2500 block, “soon after a complete rehab,” and a stained glass business on 25th Street “about 10 years later.”
Typical loans were for signage or façade upgrades. In all, according to Adams, nearly $1 million went out to small-business people through the program. Few if any of those original loans remain, having been paid off or amortized over time, he said.
“Most banks would envy the default record,” Porter said. “They scratch their heads on how it was handled.”
The project even earned a citation from the United States Department of Housing and Urban Development, under a national recognition program for community development partnerships, Adams noted.
A key reason for the success was the personal aspect. Unlike many lending programs, the main intent was not to make money, but to find people who were committed to moving Old Colorado City closer to its renovation goals. The corporation's board of directors included merchants such as Brent, who helped keep that focus.
“A question we always asked with a loan application was, 'Will it help or hurt?'” Porter said. “With economic development loans, there are a lot of things besides being able to pay it back.”
The ripple effect of the Old Colorado City comeback has been well documented. Tax revenues “skyrocketed,” Porter said. And, a residential revitalization followed, transforming what was once an officially blighted area to one with property values that are higher nowadays than in some new parts of the city.
“The payoff of the loans and increase of the retail sales tax built up a $1 million fund that went into the city's Lowell school project,” Hughes said in a recent interview. “so Old Colorado City was a producer not a consumer of city resources.”
After the Old Colorado City revitalization program peaked, the Development Corporation expanded to other areas. “Since the early and mid-80s, we've been all over the city, and now we're all over the state,” Adams said.
In 1992, the name was changed to Pikes Peak Development Corporation. This was consistent with the addition of SBA programs to its financial mix, Adams explained.
At present, the corporation's portfolio is “approaching $60 million,” he said, with annual loans of about $15 million.
That's not to say the corporation no longer cares about small businesses or the Westside. But certain key aspects that existed 30 years ago no longer exist today, Porter pointed out. The federal CDBG funds to cities have been cut back considerably, and “you don't have a city planning department focused on community redevelopment,” he said.
But Old Colorado City can still claim lasting results from the corporation's early days, including a nearly 100 percent occupancy rate in the Old Colorado City storefronts, a still-strong business association and an active maintenance district funded solely by the district's property owners.
“It's fantastic that it's continuing,” Brent commented.
Westside Pioneer article