DPS FINANCING BUILDS
Complex financing deal also provides a new school
Denver Public Schools will pay for construction of a fire station as part of a complex Stapleton financing agreement that also will provide a new elementary school, a bridge and open space.
Denver Public Schools will pay for construction of a Northfield fire station — at least initially — as part of a complex Stapleton financing agreement that also will provide a new elementary school, a bridge and open space.
“This is about as complex as deals come,” Denver City Councilwoman Robin Kniech said this week after officials from several local governments presented details of the plan to a committee.
Officials from the city, DPS, master developer Forest City Stapleton, the Denver Urban Renewal Authority and the Park Creek Metropolitan District portray the agreement as an everybody-gives, everybody-benefits arrangement. The five-party agreement consists of about a dozen documents — including four that await Denver City Council approval on April 10 — that concern projects worth nearly $74 million.
They will address some pressing problems: Elementary-age enrollment has skyrocketed as the new neighborhood was built over the last 16 years, and the Denver Fire Department’s thin coverage north of Interstate 70 means response times in the Northfield area are nowhere near DFD’s 4-minute goal.
“We are actually out of capacity for schools within the Stapleton area,” said Mark Ferrandino, DPS’s chief financial officer. “We had assumed we would be O.K. with five elementary schools. Now we think we will need seven elementary schools for Stapleton,” given the area’s popularity with families.
The deal’s major focus is on Section 10, the final part of Stapleton’s Northfield housing developments to break ground. That section spans between East 56th and 64th avenues and Central Park Boulevard and Havana Street.
Essentially, the agreement shifts borrowing and repayment responsibilities around, as was done for some previous Stapleton public projects, because of the way that DURA’s tax-increment debt is structured from past projects.
Tax-increment financing, or TIF, set up for Stapleton captures the growing portion of sales and property tax proceeds that are attributable to growth and development in the area, to be used to pay for eligible projects. More than 23,000 residents, along with 10 million square feet of commercial development, now occupy the former airport land, the city says.
Ultimately, that set-aside tax revenue will pay for the Stapleton area’s sixth elementary school, the new fire station and a second bridge span on Central Park Boulevard over Sand Creek (south of I-70). It also will pay indirectly for most of the grading and drainage improvements that are underway in Section 10.
For all but the bridge, DPS — which needs drainage improvements and reliable fire coverage for the school — will issue debt in the form of certificates of participation to cover the costs. TIF money will pass through various channels to repay DPS by 2025.
Separately, Forest City plans to collect $12.5 million in homebuilder fees on Section 10 home sites. That money will cover the establishment of open space.
Council members including Chris Herndon, who lives in that area, praised the deal at this week’s meeting of the Finance and Governance Committee.
Here is more detail on the
• Elementary school: The project will break ground north of East 56th Avenue later this year, near the Paul Sandoval Campus, and the building will be the home of Inspire Elementary in fall 2018. DPS will borrow $16.5 million to cover the purchase of the 10-acre site from Forest City for $7 million, with the rest going toward the city’s fire station (below). Forest City will use that site purchase money to pay for Section 10 grading and drainage improvements. For the school’s construction, DPS separately will borrow $36 million, with repayment from the portion of voter-approved 2016 mill levy increases that is captured by the Stapleton TIF.
• Fire Station: To be located on Central Park Boulevard near East 50th Avenue, the three-bay fire station’s construction will be a city project. But DPS will provide $9.4 million from its borrowing and then be repaid using TIF revenue.
• Central Park Boulevard bridge second span: Denver will tap into a city budget item this year that set aside $8.4 million for the bridge expansion project over Sand Creek. The city will contract with the Park Creek Metropolitan District to design and construct the bridge span, and the Denver Urban Renewal Authority will repay the city by 2025 using TIF revenue.