Pue­blo tourism pro­ject bucked by state, for now

Pue­blo’s Re­gional Tourism Act pro­ject is hang­ing on for dear life, try­ing to avoid a face plant af­ter some un­ex­pected twists and turns.

The Denver Post - - BUSINESS - By Aldo Svaldi

The Colorado Of­fice of Eco­nomic De­vel­op­ment and In­ter­na­tional Trade has cut off fund­ing for the pro­ject un­til the fun­da­men­tal ques­tion of what unique tourism draw it will of­fer is re­solved.

“There is no sense in spend­ing tax­payer money un­til we know what that is,” J. J. Ament, amem­ber of the Colorado Eco­nomic De­vel­op­ment Com­mis­sion, said at a monthly meet­ing Thurs­day.

In May 2012, the com­mis­sion ap­proved $ 14.8 mil­lion in state tourism fund­ing over 30 years for Pue­blo’s “Her­itage for He­roes” ap­pli­ca­tion.

Key to draw­ing out- of- state vis­i­tors and win­ning state ap­proval was Pro­fes­sional Bull Rid­ers Inc. lo­cat­ing a “univer­sity” and hold­ing events at a greatly ex­panded city con­ven­tion cen­ter.

Ini­tially, Pue­blo’s RTA pro­ject was lauded as a suc­cess story, and it seemed on the fast track com­pared with the pro­posed 1,500- room Gay­lord Rock­ies con­fer­ence ho­tel in Aurora ap­proved

at the same time.

That pro­ject, which would cre­ate the state’s largest ho­tel just south of Den­ver In­ter­na­tional Air­port, lost its ini­tial de­vel­oper and had to over­come mul­ti­ple law­suits.

Aurora on Tues­day cel­e­brated an of­fi­cial launch cer­e­mony for the Gay­lord Rock­ies. Pue­blo, by con­trast, could see its pro­ject de­rail.

In­Au­gust, the state dis­cov­ered that it was pay­ing Pue­blo way too much due to a math er­ror made by a third­party con­sul­tant. Since then, COEDIT and Pue­blo have been try­ing to ham­mer­out anewa­gree­ment, ex­pos­ing an even more pro­found threat.

In April, WME- IMG, a sports and en­ter­tain­ment com­pany, ac­quired Pro­fes­sional Bull Rid­ers from Spire Cap­i­tal Part­ners, a pri­vate equity group, and other share­hold­ers.

While PBR’s new own­ers have ex­pressed their com­mit­ment toPue­blo, they won’t con­trac­tu­ally agree to placeatrain­ing­fa­cil­ityat the­ex­panded con­ven­tion cen­ter. It ap­pears the best Pue­blo can get out of PBR is a let­ter of com­mit­ment.

Fiona Arnold, the state’s eco­nomic de­vel­op­ment chief, con­sid­ers a let­ter suf­fi­cient to move for­ward, but com­mis­sion­ers de­bated how much bite any let­ter should have, while ex­press­ing wor­ries about leav­ing PBR’s new own­ers with a “sour taste.”

Pue­blo, which pro­vided PBR heavy in­cen­tives a decade ago to re­lo­cate from Colorado Springs, has an agree­ment with the group that lasts un­til 2020.

The fear, en­hanced by PBR’s un­will­ing­ness to en­ter into a bind­ing con­tract, is that the state could for­ward mil­lions of dol­lars to Pue­blo for a con­ven­tion cen­ter ex­pan­sion with no sig­nif­i­cant tourism draw.

Jerry Pacheco, the new ex­ec­u­tive di­rec­tor of the Pue­blo Ur­ban Re­newal Au­thor­ity, said the fund­ing freeze has stalled de­sign­work, mak­ing the start of con­struc­tion this sum­mer un­likely.

The longer the im­passe drags on, the more the pro­ject risks bump­ing up against a five- year dead­line, com­ing in May 2017, set for the start of sub­stan­tial­work on an RTA pro­ject.

“We can’t af­ford to com­pletely pull the brakes on the pro­ject,” Pacheco said. The risk Pue­blo faces is in­cur­ring ex­penses for a pro­ject that it can’t com­plete on its own should the state refuse to pro­vide fund­ing.

An­other item was added to the long list of headaches that the RTA has caused: The sales tax baseColorado Springs pro­vided in it­sCity for Cham­pi­ons RTA ap­pli­ca­tion was way off mark.

TheColorado Depart­ment ofRev­enue found that the start­ing tax base the city pro­vid­ed­was un­der­es­ti­mated by 70 per­cent. Also, the rate of sales tax growth fromthat base, pro­jected to be 1.5 per­cent, is run­ning closer to 5 per­cent, Jeff Kraft, COEDIT’s di­rec­tor of busi­ness fund­ing and in­cen­tives, in­formed the com­mis­sion.

What that means is Colorado Springs will claim its more than $ 120 mil­lion in RTA in­cen­tives much more quickly than any­one ex­pected.

“It could be paid off in 15 years rather than 30 years,” Kraft said.

An­other huge miss, which the third- party an­a­lyst also didn’t flag, gen­er­ated a re­ac­tion of dis­may from com­mis­sion chair­man Dick­Mon­fort.

One con­cern the faster pay­out to Colorado Springs raises is whether the state will bust through the $ 50 mil­lion max­i­mum it can pay out on all RTA projects in any given year.

Kraft said there was no risk of that. Early pay­outs to Colorado Springs might leave more room for large RTA projects in Den­ver and north­ern Colorado that will take longer to ramp up.

Union Av­enue in Pue­blo spans the His­toric Arkansas River­walk. The Colorado Of­fice of Eco­nomic De­vel­op­ment and In­ter­na­tional Trade has cut off fund­ing for a Pue­blo pro­ject un­til a ques­tion is re­solved. Grant Hindsley, The Den­ver Post

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