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Vail pursues "blight’ designation

Geraldine Haldner
Vail Daily/Melinda KruseLionshead's commercial core, built in the 1970s, is showing its age. The town of Vail is considering a variety of ways to finance its redevelopment, including Tax Incremental Financing, or TIF, which has been used by some cities across the nation to leverage future tax gains.
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That, however, would entail an admission of “blight.”

“It’s like everybody says, the best tax is the tax that someone else pays,” says Vail Director of Community Development, Russell Forrest.

“There are no slum-like conditions in Vail,” Forrest says. “What we need to do is show why Lionshead needs improvements in order to capture tax dollars for redevelopment.”

A 2002 study has identified seven instances of blight from a list of 11 categories outlined by the state. To receive a TIF designation, a city has to come up with at least four instances of blight.

Vail’s blighted areas, Forrest said, are limited to minor examples of an aging and outdated infrastructure. They include inadequate fire-truck access, cracked pavements and unscreened trash.

To bond for $9 million – other revenue sources are being explored for $34 million in other proposed projects – the town has to make the tricky admission that a rapid descent into “blight” can only be averted if Lionshead is revamped.

Rags to riches?

TIF has allowed cities across the nation from Pittsburg to Estes Park to leverage future tax gains against the redevelopments of areas in disrepair.

Originally intended to help cities redevelop slum neighborhoods, TIF nowadays is used to turn around the fate of abandoned malls or repair infrastructure damaged by natural disasters.

The establishment of a TIF district tends to get little attention in inner cities – but when affluent communities like Vail look at TIF, question marks aren’t far behind.

“It is a fine tool to help pay for public improvements,” says Forrest. “But it is important that residents understand how TIF works.”

In Vail’s case, TIF would allow the use of future, not-yet-collected tax dollars as collateral for a loan to rebuild the mall’s pedestrian areas with pocket parks, widen South Frontage Road and build a second transportation center at Lionshead.

How TIF works

The idea behind TIF is that once an economically-depressed area has been rebuilt, property taxes and sales taxes go up allowing for the payment of the loan. To capture the increment growth in sales or property taxes, a tax base is “frozen” at an agreed time and remains at that level for an agreed time. All taxes collected above the base are used to pay off a bond.

The Lionshead Redevelopment Task Force, which has been studying the benefits and pitfalls of TIF for the past six month, has recommended the Vail Town Council pursue a year-long process that would designate commercial center of Lionshead as an area in dire need of redevelopment, Forrest says.

The task force also has recommended the council begin the process of designating an Urban Renewal Authority, or URA, to oversee the process. To establish such an authority, 25 electors have to sign a petition, and the council selects members of the authority. Council members say they hope to have an renewal authority in place by spring.

Opposition in place

Forrest says Vail faces potential opposition from two sides:

– Other taxing entities – Eagle County, the Eagle County School District and Colorado Mountain College would see tax incomes remain at the same level until a loan has been paid off in 25 years. Task force members and town representatives have met with representatives of these entities to negotiate agreements that would ensure an “unchallenged” creation of a renewal district.

-Second homeowners, the majority stakeholders in Lionshead’s condominium-dominated landscape – Within a TIF district, the necessary admission of blight can be problematic. Owners of Lionshead properties have been notified of the TIF process in two mailings, Forrest said. Though property values stand to increase with new development, some property owners are concerned about the authority’s power to condemn property.

“We don’t want to condemn anything; that is not the goal of this plan,” says Forrest, adding that the authority will have to draft a precise plan that identifies areas, projects, schedules and costs of public improvements.

Jim Lamont, president of the Vail Village Homeowners’ Association, represents second-home owners in Lionshead and a member of the task force, says absentee property owners would be more likely to go with the plan if it includes an assurance that condemnation is not part of the process and that conditions of blight are limited to public areas, not private property.

Geraldine Haldner can be reached at 949-0555, ext. 602, or at ghaldner@vaildaily.com.


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