(Editor’s note: This is the first of a four-part series on the reconstruction of the South Nevada Avenue corridor.)
Colorado Springs residents and visitors will be able to live, shop and eat at a variety of new businesses and infrastructure along South Tejon Street and South Nevada Avenue once the area receives a multi-million-dollar facelift, thanks to three determined developers and an approved urban renewal plan.
Within the next two years, the historic, blighted area located about a mile south of downtown Colorado Springs — which also includes Wahsatch Avenue, Tejon Street and Cascade Avenue — will be transformed into modern shopping centers, an upscale steakhouse, wine bar and apartments, with construction starting as soon as mid-2016.
It’s all happening in part because of the Urban Renewal Authority.
The 96-acre project underwent a six-month approval process, with the URA first reviewing the plan and designating the boundary as blighted urder Colorado’s urban renewal law. City Council approved the plan in November.
Currently, the area consists of deteriorating infrastructure and rundown motels. The “blighted” designation means that the cost to upgrade city infrastructure — estimated between $25-$27 million — could be completely covered through tax increment financing at no cost to the developer.
Upgraded city infrastructure would include sidewalks, power lines, roads and property along Cheyenne Creek.
“The winner is the community because the area gets transformed and it becomes an economic engine.”
– Wynne Palermo
“That area is a gateway to downtown and The Broadmoor,” said City Councilor Jill Gaebler.
“Right now it’s not very attractive. The renovations will infill public investment, serve as a catalyst for further development and hopefully encourage surrounding owners to take good care of their areas.”
Urban renewal incentive
“A misconception about the urban renewal process is that it pulls from regular sales tax,” said Wynne Palermo, chairman of the commissioners of the Urban Renewal Authority. “That’s not the case. For each project, the tax base generates an income for normal taxes, and anything surpassing that is revenue that funds city infrastructure upgrades.”
The base sales tax for the South Nevada Avenue project is $1.06 million.
Palermo said improving old infrastructure and increasing housing create a ripple effect.
“Residential additions create a beneficial economic cycle, as individuals spend money on new homes and shop in the area to purchase furniture, carpet, electrical appliances and more. One drives the other. We want the boundary to be a flourishing area,” Palermo said.
The three developers wanting to revitalize the district are local businessmen Danny Mientka, Sam Guadagnoli and Walt Harder. Although they must pay for private and city infrastructure costs estimated at $91.5 million, their hope is that the renovated area will attract new businesses and boost economic growth. Eventually, the goal is to reimburse the developers for city infrastructure from the accrued tax increment.
To do that, the general fund sales tax will be at 1.75 percent for the next five years and then decrease to 1.5 percent for the following 20 years.
“It’s a great economic development tool and can provide gap financing for projects with extraordinary costs,” said Jim Rees, CSURA executive director.
Currently, 10 urban renewal projects have been approved — including a controversial one involving Polaris Pointe off Northgate Boulevard. Some argued that the empty field located near the Western Museum of Mining and Industry didn’t qualify for urban renewal money. Other CSURA projects include renewals of the North Nevada Avenue corridor, Gold Hill Mesa and Ivywild neighborhood.
“It’s a big partnership,” Palermo said. “The winner is the community because the area gets transformed and it becomes an economic engine, creating jobs and connecting to the city’s viability.”
The city should work on its current infrastructure before building anything new, Gaebler said.
“I think it’s great these property owners are working together to bring about this visionary plan to infill and redevelopment for our southern downtown,” she said.