Fort Collins Council Approves Mall Financing

The Fort Collins City Council acting as the Urban Renewal Authority approved several resolutions to approve the public financing mechanisms needed to renovate the Foothills Mall. The City will use a complex package of funding instruments, two of which impact property taxes and two affect sales taxes.  The creation of a metropolitan district means increased property taxes can be levied and property tax increment financing allows the City to fund improvements using the taxes generated by increasing property values. On the sales tax side the City can add a public improvement fee and utilize sales taxes generated above a base level.

Larimer County Commissioners passed a resolution the day before the vote urging the Council to reject the finance package. The County’s primary concern is the use of tax increment financing, or TIF. Commissioner Steve Johnson argues that TIF is “essentially taxation without representation.” Entities such as the City will see impressive amounts of new sales tax (estimated to be roughly $4.3 million a year after debt payments). However, the County and other jurisdictions that rely heavily on property taxes will not share this revenue and will “lose” the additional property tax increases generated by the new mall.

In an effort to alleviate some of the concerns raised by the County, staff suggested that the City and the Urban Renewal Authority (URA) give the County 50 percent of the property tax increment generated from the residential units associated with the Foothills Mall redevelopment project, as well as the personal property tax increment revenues from the Mall. (The County’s resolution suggested that it should receive 50 percent of the property tax increment for the entire project.) A similar revenue sharing arrangement was used in the formation of a Brighton URA in a voluntary share-back with Weld County.

In addition to revitalizing the aging mall, the project includes  $8 million to replace the Youth Activity Center with a new facility and the construction of an underpass for College Avenue that would connect the mall to the MAX bus rapid transit system. Alberta Partners, the mall’s developer, has proposed a total of 735,000 square feet of commercial space and up to 800 residential units. Analysis by City staff and consultants indicates the mall project will create 2,905 construction jobs and 1,434 permanent jobs upon completion.

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