Like a night-long game of poker between three contenders, the future of a landmark Colorado Springs events center hinges on the availability of liquor. And the El Paso County commissioners are holding a hand that might be difficult to beat.
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<br> A covenant is in the works between the Penrose Heritage Foundation and the county commissioners on whether the El Paso County Penrose Equestrian and Events Center remains in the hands of the county, is passed on to the newly formed foundation, or simply closes its doors for business altogether.
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<br> This preliminary agreement, a joint effort between the county attorney and representatives of the foundation, was presented to the county commissioners at Monday’s work session. Although both sides want the center to remain in business, the clincher involves the ownership of a liquor license.
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<br> Since Judge John Anderson ruled in favor of the Colorado Springs Rodeo Association Inc. on Nov. 8, giving it the right to continue paying only $4,000 for its two-week event, details – including who has the right to the grounds’ liquor license – have not been ironed out. The Rodeo Association is insisting on holding the license, but the county-owned Equestrian Center needs the revenue the liquor license would bring to continue its operations. Although the county is willing to negotiate with the foundation for ownership of the land and buildings, the foundation won’t accept an agreement if it does not have the liquor license.
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<br> "If our liquor license is truly jeopardized where we cannot control what happens on public property with the serving of liquor, I’m saying no," said County Administrator Terry Harris. "The foundation needs the revenue from the liquor. If they walk and Penrose can’t get the license, I will tell the board of commissioners to shut it down."
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<br> According to Judge Anderson’s ruling, the rodeo can take control of the grounds during the two-week period, but will be responsible for utilities, maintenance, and securing all needed licenses, including the liquor license, said Harris.
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<br> As part of a preliminary consulting assignment, local economist Dave Bamberger drafted an economic report. Because of the numerous improvements and expansion projects, the center will be able to accommodate approximately three to four times more events and activities, said Bamberger. This increase in events will produce an increase in revenue.
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<br> He projected that within five years of operation by the foundation, the revenue from city sales tax would increase from $249,000 to $1.055 million. The county would get $386,000 in increased city sales tax receipts, up from $96,100. The overall economic impact on the community would jump from $21.4 million today to more than $84.7 million by 2005 in sales and output annually. Local jobs would increase from 440 to 1,420, and the city payroll would escalate from $7.5 million to more than $16 million in 2005.
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<br> In the contract for private operation of the Penrose Equestrain Center, the foundation agrees that it must "accept complete responsibility for the annual funding, operation and capital investment in the center" and the center must be used for recreational, community and equestrain activities only.
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<br> The foundation needs to raise $4 million in cash, services and property before the county will grant it temporary ownership. It must raise another $6 million before the ownership reins are permanently handed over. The foundation has nearly all of the $4 million in commitments and a number of donors have expressed a "serious interest" in contributing the remaining $6 million, said Jon Schultz, chairman of the citizens’ masterplan committee.
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<br> When the business agreements and lease documents are completed in January, the foundation will have met the basic qualifications and could begin its lease within 45 days.
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<br> "I don’t see anything to date, nor do I anticipate anything, that would be a deal breaker," said Schultz.
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<br> Except the liquor license.
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<br> If Judge Anderson’s ruling – required by Jan. 7 – is in favor of the Rodeo Association holding the liquor license, the county commissioners will have to consider closing the center.
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<br> "This deal can’t be signed until that issue is addressed," said Harris.
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<br> If the deal goes through, both Harris and Schultz believe the foundation must prove its stability within two to three years before taking complete control.
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<br> In addition, at least 80 percent of the employees must be hired from the county and offered comparable pay and benefits. Of the $3.5 million the county has committed to the center’s renovation and construction projects over the next five years, county employees would first be considered for contract work. After five years, the foundation would have no further obligations to the county. Also, nearly half of the 150 acres would remain with the county where a portion would be rezoned for the parks department.
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<br> There are other parts of the agreement that are still under negotiation, as well. The city of Colorado Springs must approve the $1 sale by the county to the foundation. But if the foundation later decides to sell part or all of the land, the county has first right of usage at fair market value.
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<br> If construction interferes with environmental issues, the foundation would be responsible for any damage. This section of the agreement refers to the high probability that the grounds may contain environmental hazards and pollutants because the milling of gold ore was once conducted in that area.
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<br> Improvements planned by the foundation include covering the stadium, enclosing the east end of stadium, building two enclosed pavilions – one about 30,000 square feet and the other about 15,000 square feet – adding 45,000 square feet of indoor arena space, adding enclosed showstalls, relocating the boarding operations, increasing the number of parking spaces, and building two to three museums, art galleries and possibly an event-oriented retail store.
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<br> The cost would be about $9 million and the remaining money would be invested in infrastructure, such as lighting, utilities, and interior roadways. Schultz said the construction timeframe would be three-and-a-half years.
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<br> "This is a win-win for everybody," said Schultz.
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