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Vail takes first step toward urban renewal

Stephen Lloyd Wood
Daily file photoLionshead, built mostly in the 1970s, is headed toward urban renewal, with nearly a billion dollars in private investment on the table. The town of Vail, meanwhile, is looking to fund another $9.8 million in public improvements with an innovative, sometimes controversial funding tool known as tax incremental financing, or TIF.
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The Vail Town Council, with little discussion or fanfare on Tuesday, unanimously approved creating an urban renewal authority – known as the Vail Reinvestment Authority – which will oversee repairs to streets and other public properties for the next 10 to 25 years. It’s the public component of an overall plan that includes up to $750 million in new construction and redevelopment to private property, much of it by owned Vail Resorts.

“It’s a big, very important step to take,” says Vail’s mayor, Ludwig Kurz, who, since 1999, has presided as chairman of a group of community leaders called the Lionshead Task Force. “After a lot or research and advice, we decided this is the best way to proceed.”

How it works



The Vail Reinvestment Authority is one of two ways allowed by the state of Colorado – the other being a downtown development authority – to implement an innovative, sometimes controversial funding tool known as tax incremental financing, or TIF. It leverages future anticipated tax-revenue growth associated with redevelopment by allowing the town to issue bonds to pay for necessary public improvements. When the redevelopment is completed, the increase in property taxes generated due to increased assessed values – or the increment – are used to pay off the bonds. By law, the authority is dissolved in 25 years.

The town expects to borrow about $9.8 million in bonds, with the rest of the $40 million coming from development deals with Vail Resorts, as well as from the Colorado Department of Transportation.



“It’s complicated, but it appears to be a very good tool,” says Kurz.

The “B’ word

Urban renewal, by law, can only come after a municipality has identified an area within its limits as meeting the criteria defining “blight.” The word alone first sent chills up the spines of owners of businesses and homes in Lionshead, who envisioned their properties being condemned and taken over by the town much as some large cities have done to slums and other dilapidated areas. In many cases, those condemnations came as first steps toward redeveloping the blighted areas for commercial purposes, with TIF basically providing incentives for developers.



Kurz said assuring owners of homes and businesses in Lionshead their properties would not and could not be condemned was “the biggest hurdle” in moving toward urban renewal.

“Nobody likes condemnation,” Kurz said. “People understand when it’s a street or something for public good. What they object to is condemnation for the benefit of a developer.”

“Some trepidation’

Jim Lamont, who represents a large number of Vail homeowners, including those in Lionshead, as executive director of the Vail Village Homeowners Association, was at first a harsh critic of bringing an urban renewal authority to Vail. He became a part of the process, nonetheless, joining the task force and ultimately endorsing it – with a long list of conditions protecting local property rights.

“This is a very worthy effort. The debate has been a learning experience for all of us,” he said Tuesday, before the council gave its final nod. “We urge you to approve this, even though we all have some trepidation.”

Other concerns over TIF have come from the other local governmental entities that receive property taxes from the town of Vail, such as Eagle County and the local school district. After all, it appears the money being “leveraged” to pay back bonds for public improvements in Lionshead is money they currently collect.

Stan Zemler, Vail’s town manager, says the county and the school district have nothing to worry about, however, as it’s the increment between current assessed property values and future values that actually goes to debt service. Assuming those assessed values increase once the property is developed – almost a certainty – the property-tax revenues ultimately will see a huge jump when construction is finished. And it’s far better, he says, than doing nothing, not redeveloping, and watching property values decline.

“Because we’re not taking a sales-tax increment, they’ll do fine,” Zemler says. “We’re dealing with an increment that’s not even there now.”

“A fair trade-off’

County Commissioner Arn Menconi says he’s not heard of any opposition to TIF within the administration, either.

“It’s a fair trade-off. Our economy is based on tourism, and if our infrastructure doesn’t keep up we wind up losing in other areas,” Menconi says. “This appeals to me in its initial phases, to maintain Vail as the No. 1 ski resort in the future. Somebody’s been very creative here.”

Zemler, meanwhile, says despite all the hoopla surrounding TIF, Vail is using it in a relatively “conservative” way. While the town has 25 years to pay off the $9.8 million in bonds, it very well could take much less time.

“We’re using only the property tax increment to make a public area more pedestrian friendly – amid private development,” Zemler said. “Vail Resorts is not asking us to subsidize their development. They’re even willing to help fund some of ours.”

Long road to TIF

As with most of the other projects in store for Lionshead, TIF is far from being implemented. On a long list of things that must happen first is finalizing what’s called the Lionshead Public Facilities Development Plan. Then there’s a slew of public hearings by the town’s Planning and Environmental Commission and the Town Council, as well as negotiations with Vail Resorts as to what public improvements for which the company will pay.

Russell Forrest, Vail’s director of community development, says the ball is now in Vail Resorts’ court as to when TIF gets implemented because the town will not take action until the ski company is ready to begin construction as part of its Lionshead Redevelopment Plan. That probably will include projects on the North Day Lot, the West Day Lot and the Old Gondola Building.

“Issuing a building permit is what really pulls the trigger,” Forrest says, adding he doesn’t expect that to happen before 2005.

What’s “blight’?

The Lionshead Task Force – which included Vail Town Council members Ludwig Kurz, Diana Donovan, Bill Jewitt and Chuck Ogilby, as well as Jim Lamont of the Vail Village Homeowners Association and Bob Lazier, owner of several commercial properties in Lionshead – spent four years studying a variety of factors before it finally recommended the council approve the Vail Reinvestment Authority.

Much of that work involved determining whether Lionshead actually meets the definition of “blight,” according to the Colorado Urban Renewal Law, which defines it as an area that “in its present condition and use … substantially impairs or arrests the sound growth of the municipality, retards the provision of housing accommodations, or constitutes an economic or social liability, and is a menace to the public health, safety, morals, or welfare.”

“It’s kind of misleading,” says Lazier. “It’s really not a definition of a property, it’s a definition of the law.”

The law establishes 11 criteria, requiring a municipality to identify least four of them exist. And despite Vail’s reputation as a well-to-do, world-class resort town where a condominium’s market value can range into the millions of dollars, the task force indeed found Lionshead met seven of the 11 criteria, including:

– A predominance of defective or inadequate street layout.

– Faulty lot layout in relation to size, adequacy, accessibility or usefulness.

– Unsanitary or unsafe conditions.

– Deterioration of site or other improvements.

– Unusual topography.

– Environmental contamination of buildings or property.

– Inadequate public improvements or utilities.

Lazier says its important, too, to understand “blight” – in the case of Lionshead – pertains only to public property, such as sidewalks, stairways, etc., and not private property, like stores, hotels or condominiums.

“Vail’s standards are pretty high,” he says. “We just have to use that term for legal reasons.”


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