At its regularly scheduled meeting on Aug. 28, the Colorado Springs Urban Renewal Authority board approved the Copper Ridge Redevelopment Plan on a narrow 5-3 vote.

Of the nine active urban renewal projects approved by CSURA, Copper Ridge is easily the most controversial. City Council originally approved the plan in 2010, but deferred action on a comprehensive redevelopment plan until certain markers were met.

The plan called for the use of tax-increment financing to encourage the development of a major regional retail center to be located on 289 largely undeveloped acres located immediately east of Interstate 25 and south of Northgate Boulevard just within the city’s northern boundary.

[pullquote]Copper Ridge was declared blighted because of its “defective or unusual street layout.”[/pullquote]


To be eligible for TIF funding under state statutes, City Council had to declare the property “blighted.” While it may stretch credulity to imagine that a vacant parcel of land in a prime suburban location could be so described, the Council of three years ago cheerfully agreed to do so.

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The reason was simple: Powers Boulevard.

Developer Gary Erickson’s 2.5 million square-foot retail powerhouse would spin off enough tax revenue to complete the extension of Powers Boulevard to I-25. With the great recession’s effects still lingering, the center couldn’t be built without creative financing, and using a TIF structure wouldn’t deprive the city of any existing tax revenue — or so Erickson argued.

Tools for redevelopment

Statutes authorizing cities to form Urban Renewal Authorities, and giving these entities certain powers to tax and issue debt, date from 1970. They were intended to be tools for the redevelopment of blighted urban areas, where aging buildings, decaying infrastructure and population loss had taken a heavy toll.

In subsequent years, local governments throughout the state ignored the intent and used URAs as tools for spurring development outside central cities. In 2010, the Colorado Legislature amended the original statutes to prevent egregious misuse of URA authority, including designating agriculturally zoned land as “blighted.”

Much of the Copper Ridge property was considered agricultural, so Council had to act before the 2010 amendments became effective. Under the statute, the property needed only to exhibit one of 12 characteristics of blight to be so designated, if all property owners in the zone agreed to the designation.

Copper Ridge was declared blighted because of its “defective or unusual street layout.” Since there were no streets, the layout was ipso facto “defective.”

Since the original agreement, the Copper Ridge development has moved slowly forward. Fulfilling one of the agreement’s conditions, Erickson signed up a major anchor in Bass Pro Shops. Occupying a 120,000-square-foot building owned and financed by the developer, the store is scheduled to open in November.

Erickson predicts that the center will add nearly 500,000 square feet of space during the next 13 months, including two restaurants, a supermarket, a “grand resort” hotel, three anchor tenants and a major retailer. He anticipates full build-out by 2017, with a 1 million-square-foot regional mall anchoring the 400,000-square-foot “grand resort,” a 100,000-square-foot retail lifestyle center and a 200,000-square-foot office tower/lifestyle center.

Funding strategy

How will all this be financed?

According to the proposal approved by CSURA on Aug. 28, local infrastructure and improvements will be financed by a property tax levied by the Copper Ridge Metropolitan District along with a “public improvement fee” applicable to retail stores in the development. That amounts to, for all practical purposes, a private sales tax.

Powers Boulevard funding will come from 100 percent of all property taxes levied within the development (except the metro district tax) and a sales tax increment “based on 1.5 percent of the Colorado Springs sales tax levied for the city’s general fund.”

The city will retain 0.5 percent.

That’s a big chunk of change for the planned extension of Powers, but it depends upon the timely development of the center. And whether that development takes place as rapidly as anticipated is another question entirely.

A yet to be executed “cooperation agreement” between CSURA, the metro district and Erickson specifies that “it would be necessary to secure funds in addition to TIF to support construction of the center,” but does not specify where such funds might come from.

In that Aug. 28 decision, the three dissenting votes on the CSURA board came from Tiffany Colvert, Jim Raughton and Robert Shonkwiler. While none of them would consent to being quoted, their concerns may mirror those of a former CSURA board member, John Olson.

Olson faulted the project for sequestering tax revenue for an indefinite time and for transferring tax revenue from developments such as Chapel Hills Mall and First & Main to Copper Ridge. He also noted that although the Powers Boulevard extension has been long desired by the city, the present road network is perfectly adequate.

Even with full build-out of Copper Ridge, the city might incur a net revenue loss that could persist for a decade or more.

These considerations might persuade the CSURA board to rescind its approval of the Copper Ridge redevelopment agreement. A special meeting of the Urban Renewal board is scheduled for Sept. 18, when the agreement will be reconsidered.

According to sources close to the deal, Mayor Steve Bach is concerned that the amount of sales tax sequestered by the TIF is too large.

Since Bach appointees comprise a majority of the board, his influence may be decisive.

Can the development go forward if the TIF sequester is reduced from 1.5 percent to 1 percent of the city sales tax?

That’s a question that only Gary Erickson can answer — but so far he’s been agile and resourceful as he brings his ambitious project to life.


  1. John,

    As a former member of CSURA and the City Council that voted for Copper Ridge, I have no fault with your historical account. I do not, however, agree with your statement that in agreeing to grant urban renewal status to Copper Ridge “the Council of three years ago cheerfully agreed to do so”.

    There was nothing cheerful about it. After the majority of the then CSURA disapproved the granting of urban renewal status, the Council in 2010 carefully and seriously considered the request from the developer and spent much time looking at the project and its pluses and minuses.

    You are right in that Powers Blvd was THE issue. But there was no other feasible plan to fund it and with some of the dedicated right away due to revert back to developers before the end of the decade (which would have made the project prohibitively expensive in the future, if not downright impossible) the majority of Council felt that Copper Ridge was the only real solution to getting Powers completed.

    Scott Hente

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