N. Colorado state tourism projects wait on funding

Grant conditions create delay

loveland» A regional tourism proposal designed to bring more than 400,000 new visitors to northern Colorado has missed a target date by a few months, but proponents say the venture hasn’t stalled.

Last November, the region’s application for state funding under the Regional Tourism Act won an initial OK, and a month later a state commission approved the proposal’s request for $86 million in tax increment financing over 30 years.

The tourism act allows local governments to put together “extraordinary and unique” tourism projects that can collect state sales taxes generated by the projects.

Northern Colorado’s bid features an outdoor whitewater adventure park and a separate indoor water park resort, both in Loveland, a horror-film center on the grounds of the Stanley Hotel in Estes Park and a luxury resort and conference center in Windsor.

Last December, the state said the project developers and Go NoCO, the organization pushing northern Colorado’s bid, had 60 to 90 days to reach an agreement with the state on contracts for the area’s four projects.

“I think the state was very optimistic in setting the 90day guideline, although each one of our project developers said, ‘We’re ready to go,’ ” said Alan Krcmarik, executive fiscal adviser for the city of Loveland. “They found it more difficult working with the terms and conditions they have to meet.”

Krcmarik gave the Loveland City Council an update on the Regional Tourism Act proposal during a closed session May 17.

The conditions to the grant are difficult, and so we’re in that phase that’s trying to convert difficult into doable.” Martin Lind, a northern Colorado developer

Deal taking time

The four projects would cost more than $330 million to build, and Go NoCO had to demonstrate that they wouldn’t fly without the funding from the state. The organization said it expects the projects, if completed, to attract 423,000 new visitors to Colorado each year. Original estimates put possible opening dates in 2018.

Martin Lind, a northern Colorado developer whose Water Valley Land Co. would develop the land for the Loveland and Windsor attractions, said he’s still optimistic that the proposal will go forward.

“There’s nothing stalled. It’s just all in the process,” Lind said. “There’s lots and lots of moving parts in this thing.

“The conditions to the grant are difficult, and so we’re in that phase that’s trying to convert difficult into doable,” Lind added. “It’s just a deal, and deals take time.”

The conditions include an unexpectedly high bar to clear before tax increment financing kicks in and some specific terms and conditions for each project.

In December, Fiona Arnold, executive director of the state Office of Economic Development and International Trade, released a list of recommended conditions, or “guardrails,” to be placed on the projects.

Krcmarik said the Stanley Film Center and the PeliGrande Resort & Windsor Conference Center had the toughest guardrails.

Loveland’s two projects face hurdles of their own.

The state decided that only the U.S. Whitewater Adventure Park met the definition of “extraordinary and unique,” Krcmarik said, and the Indoor Waterpark Resort of the Rockies could participate only on the coattails of the whitewater park.

“The kayak park had to have its financing completed before the indoor water park resort,” he said. “The kayak park is out trying to raise money ... and that has taken longer than they thought it would.

“The kayak park is the leadoff hitter, and the game doesn’t start until the leadoff hitter gets its financing,” Krcmarik said.

He explained that the longer it takes for the indoor water park to get started, the more likely it is that the project’s backers will take their money and invest in something else.

“Not a firm deadline”

Patrick Brady, chairman of Go NoCO, described his feelings about the process as not pessimistic but not overly optimistic.

“The longer it goes, the less likely that things will come to fruition,” he said. “Ultimately, time is not our friend . ... But I don’t think another 60 to 90 days is fatal.”

Brady said earlier RTA program awardees such as Pueblo and Colorado Springs also took a while to get their deals finalized.

Another difficulty for northern Colorado involves the base level that the state set for its tax increment financing. The state said northern Colorado can expect a 4.5 percent annual growth rate, so the projects can collect sales tax revenue only on amounts over that 4.5 percent level.

“That’s higher than any of the other areas that have been approved for this type of financing,” Krcmarik said. “What that means is the level of state money coming into the project is lower than it otherwise might be.

“We sized the application with that amount built in. The numbers work; they just don’t work as well as with a lower number,” he said. “We tried to negotiate that but were not successful in getting a different number.”

The city of Loveland will be asked to contribute more than $9.6 million to the two projects, Krcmarik said: almost $817,000 for the whitewater park and $8.8 million for the indoor water park. The money would come from local tax increment generated by the projects, he said.

Krcmarik said he believes that even if some of the northern Colorado projects aren’t built, the others could proceed.

“We have been told yes. We were told they still could go forward,” he said. “I think if three of the four dropped out, it might be a different answer.”

The Colorado Economic Development Commission meets again in June.

“In my opinion, there’s not a firm deadline,” he said. “My perspective is they’re expecting some kind of report from the Go NoCO regional tourism group, and June would be better than July.”