By Pam Zubeck, Colorado Springs Independent

Interquest Marketplace LLC, an entity controlled by the region’s biggest developer, Nor’wood Development Group, has backed out of its request to exclude Scheels All Sports store from the business improvement district Nor’wood also controls.

Russell Dykstra, an attorney in Denver who represents the district, sent an email notification to city officials at 4:15 p.m. June 24, saying the petition for exclusion from the Interquest North Business Improvement District submitted March 26 was withdrawn.

“The intent of withdrawing the petition at this time is to allow additional opportunity for the petitioners and the Interquest North Business Improvement District to further evaluate the overall financial structure of the project and the public improvements yet to be built and financed by the District and the impact of the exclusion,” Dykstra wrote.

The last-minute withdrawal came less than 24 hours before City Council was to take up the exclusion on June 25, and after several stories by the Business Journal’s sister publication, the Colorado Springs Independent, raised questions about the accuracy of the financial data submitted to the city on the BID’s behalf. After those stories appeared, Dykstra wrote to the city saying a key figure presented in support of the exclusion was wrong.

Scheels, which plans to build a megastore in north Colorado Springs, was given a $16.2 million sales tax incentive spanning 25 years in February. The BID followed up in March asking that the retailer be excluded from the BID, thereby giving it a pass on the BID’s 51-mill property tax levy. The BID also collects a 1.25 percent Public Improvement Fee on sales, and it’s unclear whether Scheels will collect that PIF on behalf of the district.

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However, the city’s $16.2 million incentive deal also allowed Scheels to collect its own PIF.
The Scheels store will be built on property now owned by entities controlled by Nor’wood, which is owned by long time developer David Jenkins.

Although the exclusion petition has been withdrawn, the issue regarding developer control of some taxing districts might get further scrutiny.

Councilor Bill Murray, who’s out of town attending the National League of Cities, said via phone he wants to know more about the Interquest BID and others.

“I’m calling for a review of all the BIDs,” he said. “We want to see exactly what they [developers] have been doing with this money and the taxing authority we’ve given to them. The whole idea is this money is for public improvements. It’s now being used as a financial mechanism to wheel and deal.”

Tim Leonard owns Deepwater Point Co., a development management company that represents the two businesses in the BID that opposed the Scheels exclusion — BWR Investors LLC, owner and operator of the Burger King, and Riverside Restaurant Group LLC, owner of the Cheddar’s Scratch Kitchen.

He’s glad to see the item withdrawn.

“Withdrawal is prudent for the developer and Scheels, because an analysis has finally been done that shows it’s more beneficial for Scheels to be included and have taxes reduced for everyone than it is to give corporate welfare to the largest retailer [Scheels] in the district,” he said. “The property owners in the district are adamantly opposed to using district taxpayer money for the special benefit of a single retailer.”

The analysis to which he refers was conducted by Leonard.

Leonard also notes that the district now has a fund balance of $4 million. Should a project arise that the BID wants to fund — such as Scheels’ parking lot — it has adequate funds to undertake the project without issuing new debt, which would require city council’s permission. Spending the money on such a parking lot, however, does not require council approval.

It’s unclear if all district members support spending the district’s money in that way.

Chris Jenkins, president of Nor’wood, has been contacted for a comment but there was no response when this article was made live.

Editor’s note: This story first appeared at csindy.com