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 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.