City attorneys discount TIF suit | PostIndependent.com
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City attorneys discount TIF suit

Greg Mass

Glenwood Springs’ answer to the lawsuit filed against the Downtown Development Authority’s tax increment financing system is to deny everything. Glenwood Springs city attorney Teresa Williams and Boulder-based attorney Paul Benedetti, who specializes in Colorado DDAs, disclaimed the majority of the plaintiff’s arguments against the DDA’s controversial financing system. The lawsuit was filed by Colorado Mountain College, Garfield County and two county taxpayers – CMC vice president Bob Spuhler and assistant Garfield County manager Jesse Smith – against the Glenwood Springs Downtown Development Authority. The lawsuit was served July 9.Tax increment financing, or TIF, is a system of generating money to pay for projects by using a portion of sales tax revenues and the rise in property tax revenues.The year leading up to Feb. 28, 2002, was designated as the “base year” for the TIF. So 50 percent of the growth in city sales tax revenues in the downtown district and 100 percent of the rise in property taxes within the district following that year will be allocated to the DDA. It could pay for ventures such as a new parking structure or other downtown improvement projects.Tax entities such as CMC and Garfield County oppose the TIF because they fear the system will rob them of millions of dollars during the DDA’s life span. Glenwood Springs officials insist they followed the state statute to the letter in creating a DDA, so there are no grounds for a lawsuit. Also, aside from denying the majority of allegations, the city disavows the roles Smith and Spuhler play in the suit. It says in addition to their roles as taxpayers, both are employed by the entities involved in the suit and so should not be personally involved. The city’s response goes on to claim Smith, Spuhler, CMC and Garfield County “lack standing” to bring the suit.”None of the plaintiffs have suffered or will suffer an injury … as a result of the allocation of TIF financing revenues,” it said. Another argument against the suit is that district court lacks jurisdiction over most of the matters alleged in the complaint. Williams and Benedetti also characterize the plaintiffs’ claims as “premature and not ripe for ajudication.”The city asked the court to dismiss the complaint with prejudice, pay the city’s attorney fees and award any other relief the court might find proper. A trial could be a year or more away, CMC officials said. Negotiations between the city and CMC – the main plaintiff in the suit – broke down earlier in the summer when city officials declined to set a cap on how much funding they could take with the tax increment financing. Also, CMC officials were hoping for a vow by the city that Glenwood Meadows would not be annexed into the DDA. But plans for the West Glenwood development have long called for annexing the Meadows into the DDA district.In the text of the CMC/Garfield County lawsuit, the plaintiffs included a long list of claims why the TIF system is unconstitutional and should be stopped. The suit alleges:-The state statute allowing a DDA is supposed to be used for a blighted area, but downtown Glenwood Springs is not blighted.-The Glenwood Springs DDA “includes vacant lands with known development plans and potential.”-The TIF financing system proposes to utilize a portion of the property tax revenues produced by the mill levies of the county and of the college. That could force those entities to raise taxes for Garfield County residents who did not get a chance to vote on the creation of a DDA or on the implementation of the TIF financing system.-Approval of the TIF financing plan by the Glenwood Springs City Council was “invalid, void and an abuse of discretion.”


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