Eagle River Station projected to have $165M in yearly sales
EAGLE ” It’s been a central debate point ever since Eagle River Station was first proposed ” what will it cost and what will it bring to the town’s coffers?
This week, the Eagle River Station developers presented their financial proposal to the Eagle Town Board. Their central points included cost and revenue sharing to finance construction of the public infrastructure associated with the development and assurances that the project is financially feasible.
Revenue sharing has been a key element of the $330 million Eagle River Station project since it was originally proposed. The developers say that the project includes a new Interstate 70 interchange, two new roundabouts on U.S. Highway 6, improvements on Eby Creek Road and a new water storage tank. They estimate these improvements will cost $62.5 million and have requested the town participate in a cost-share plan to finance that part of the development deal.
“Eighty-one percent of the project is private investment,” said Kelly Fitzpatrick of RED Development, developer of Eagle River Station.
Using those estimates, $267.5 million of the overall Eagle River Station construction bill would be financed by private investors. However, Fitzpatrick said it is typical for communities to partner with developers to help pay for street, water and wastewater improvements that come with new projects.
“I don’t know of too many projects like this that get done without a public/private financing structure.”
The proposal from RED Development includes:
– Formation of a metropolitan district to issue bonds for the infrastructure improvements. The town of Eagle would not issue the bonds. In the event of a default, the bond holders (not Eagle taxpayers) would be at risk, according to RED Development.
– The town would dedicate revenues collected from its 4 percent sales tax generated from Eagle River Station businesses. The money will go toward paying off the public improvements bonds. Once the bonds are paid, the sales tax money will go directly to the town. The bonds will be for a maximum term of 25 years.
– A 1.3 percent public improvement fee will be charged on Eagle River Station retail purchases. The fee, which will be similar to a sales tax assessment, would be applied to all goods purchased in the development, but would not be assessed on other retail sales in other parts of town. RED Development estimates $2.2 million will be generated annually from the fee and those revenues will go to the town.
– Eagle County sales tax will be collected at Eagle River Station. The town will continue to receive 0.15 of the 1 percent county sales tax earmarked to go to municipalities. RED Development estimated the town will see an additional $250,000 annually from Eagle River Station county sales tax revenues.
– An urban renewal authority would provide property tax relief for the development. Under the terms of the authority, several local taxing districts will continue to receive property taxes as they are currently assessed on the agriculture land, rather than the higher rate they would receive if taxes were assessed on commercial property. The districts exempted from the authority are Greater Eagle Fire, Western Eagle County Ambulance and Western Eagle County Metropolitan Recreation District.
– An estimated $3 million will be generated from real estate transfer fees on the initial purchase of Eagle River Station residential units.
– An estimated $4 million will come to the town of Eagle through use tax, impact fees and building fees associated with Eagle River Station.
Fitzpatrick said that Eagle River Station is projected to generate $165 million in annual sales. The development is proposed to open in late 2010.
Michael Hans of RED Development defended those numbers by saying two market studies have upheld the projections.
“Eagle River Station is designed to be a regional draw ” to draw people from at least 45 minutes away,” he said. “To get a similar mix of retailers, you would have to drive to Denver.”
Hans said there is a solid, signed letter of intent from an unnamed department store retailer for the 130,000 square-foot “anchor” space at Eagle River Station, representing approximately one-fourth of the entire retail base of the development.
“In addition, we have storing interest from a number of other tenants,” said Hans.
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