Through its redevelopment efforts, DURA provides financing for projects that otherwise would not be feasible. Redevelopment provides an anchor for further revitalization, enables affordable housing development, creates jobs, improves property values, generates new tax dollars and ensures investment in public amenities such as schools, infrastructure and art.
Urban renewal is the act of revitalizing a failing urban area in order to restore economic vitality and improve the safety of the area. The urban renewal statute can be used for development, as well as redevelopment. Understanding that redeveloping urban areas is much harder and more expensive than new development, Colorado has empowered local authorities with certain tools, including tax increment financing, to encourage urban renewal activities.
Tax Increment Financing (TIF) is a tool of urban renewal that allows an urban renewal authority to leverage future increased sales and property taxes to help finance urban renewal projects. TIF funds can be generated using sales and/or property taxes in the redevelopment area. When an urban renewal plan is adopted, a tax base for that area is established and the existing taxing agencies (counties, metropolitan districts, schools, etc.) continue to receive that tax base, adjusted for inflation, during the urban renewal period. As redevelopment happens, any of the incremental taxes collected above that base amount are invested in the redevelopment itself, through infrastructure, environmental remediation, or other amenities for the public good. After the development obligations are repaid, in 25 years or less, the incremental tax revenue is directed to the existing taxing agencies in perpetuity.
DURA’s involvement is needed because there are unique challenges in areas that have been determined to be blighted. Previously developed sites can be burdened with contamination from years of neglect or through prior uses, making redevelopment costly. Many of these sites have deteriorated, negatively impacting the surrounding neighborhoods and making the location less than desirable for new businesses. With such problems plaguing a site, there is little appeal for private developers to redevelop the site, and it can sit untended indefinitely. The tools provided to DURA through urban renewal support and encourage redevelopment of such sites, making the community safer and more productive, and generating new permanent tax revenues for schools and other special districts in the area.
If an area fits the criteria outlined in state statute – which declares that at least four out of 11 factors must be present and negatively impacting an area – then an urban renewal plan is drafted and an urban renewal area is formed. The plan identifies the conditions and describes the improvement plan. The planned redevelopment aims to improve conditions while also retaining the vision and goals laid out by the city’s comprehensive plan, BluePrint Denver, and/or neighborhood plans. As part of the process, DURA engages with the community to discuss the urban renewal area and the redevelopment plan objectives. Once the redevelopment plan has the Denver Planning Board’s approval, it moves to Denver City Council where it receives two hearings – preliminary action and then a public hearing followed by final action.
There are several points when the public can provide input in the urban renewal process. A developer may seek neighborhood input on a project even before coming to DURA for assistance. DURA engages the community through presentations and neighborhood meetings. When a redevelopment plan reaches Denver City Council for approval, the public has another formal opportunity to comment. Colorado Urban Renewal Law requires a public hearing on every plan before Denver City Council takes action, and that public notice is given not less than 30 days before the hearing in a general circulation newspaper. All property owners, residents and owners of business concerns in the proposed urban renewal area must receive written notice of the public hearing.
Urban renewal is critical to the success of local communities and the long-term prosperity of citizens living in urban areas. Without urban renewal, there would be no incentive for developers to tackle the challenges associated with redevelopment. In turn, blighted urban areas could see increased crime and safety problems, while continued growth on the fringes of communities could add to the problem of urban sprawl. Thanks to urban renewal, DURA has been able to save older parts of town and make significant improvements to communities in Denver.