Looking toward the big payoff | PostIndependent.com

Looking toward the big payoff

Where once some city officials envisioned greens, they now are seeing green.Glenwood Meadows, on land once proposed for a municipal golf course, is now being looked to as a significant source of new sales tax revenue in a community that sorely needs it.The developers of the 403,000-square-foot commercial project estimate that it will bring in more than $3 million in new sales tax revenues per year to Glenwood Springs. The city’s own estimate is just $2.05 million.The difference is that the city estimate considers not only what the Meadows project will generate, but also what may be lost due to a drop-off in sales among competing businesses in Glenwood Springs.”Hopefully my estimates are low,” said the city’s finance director, Mike Harman.Whether it’s $2 million or $3 million, the new revenue will be welcomed in a city that has suffered from stagnant sales tax revenues in recent years. Absent the anticipated 19 percent increase in revenue next year from the project, the recent budget decisions City Council had to make would have been far more difficult, city manager Jeff Hecksel said.In September, council was able to avoid making proposed cuts to organizations such as Summer of Jazz and YouthZone, and to most of its recreational offerings. But it had to eliminate vendor fees paid to businesses for collecting sales tax, and raise utility franchise fees and payments in lieu of taxes – increases that may be passed on to consumers.The Meadows project brings costs to the city as well as revenues. Hecksel said it will put increased demands on the city’s streets, and on its police and fire departments. Yet for the time being, there isn’t money available to boost the budgets for the city’s public safety providers.’Enormous’ valueBut from the perspective of the city and especially the project’s developers, Glenwood Meadows brings a net benefit to Glenwood Springs.”It’s enormous,” Robert Macgregor said of the value Glenwood Meadows brings to the city. Macgregor is the president of Dunrene Group in Aspen and is the developer who spearheaded the project.”I think it’s generally agreed that this thing is coming just in time,” he said, referring to the city’s current financial situation. “Without something like this, I think the future was looking pretty bleak.””Millions and millions of dollars of sales tax are starting to flow as we speak.”Mike Maple, Dunrene’s chief operating officer, said developers have projected about $103 million in annual sales, almost all of it taxable, once Glenwood Meadows is fully built out. That would mean $3.3 million for the city under its current tax rate, Maple said, although that rate will go up or down depending on whether voters decide to replace an expiring 0.25 percent transportation tax with a 0.5 percent streets tax in November.Retailers at Glenwood Meadows currently are paying 7.95 percent in total sales tax, Maple said. That doesn’t include an additional 1.5 percent fee for the metropolitan district at Glenwood Meadows.The sales tax revenues also go to the state, county and Roaring Fork Transportation Authority, and will yield a total of about $8 million a year, Maple said.Said Macgregor, “We’re bringing the greatest commercial opportunity Glenwood Springs has ever seen. We’re going to be paying our way and then some.”Development costsMaple said the total development cost will be about $60 million. He said many local companies are being contracted to build it.The development and metro district will fund more than $15 million in structural improvements, of which at least $7 million will benefit the city, he said.Developers are investing about $1 million in on- and off-site trails, he said.They spent about the same on the massive debris flow structure on Red Mountain that protects not only the development but the Glenwood Springs Community Center and Municipal Operations Center.Developers also paid more than $3.5 million for the roundabouts at Exit 114 of Interstate 70 and $2.4 million for the intersection upgrade at Eighth Street and Midland Avenue, and associated projects such as bike/pedestrian access in the area, Maple said.Macgregor said developers were asked to address issues “that were not entirely of our making.””There’s a lot of stuff that needed paying for and that’s what the city wanted and this was the only way to get it done,” he said.”That’s all fine, that’s the bargain we cut. Glenwood should be proud of the deal, the bargain they drove here,” he said.He said developers also sold the city the community center land for a modest price, and the MOC land under a trade arrangement for future system improvement fees.Glenwood Meadows is being criticized by some shoppers for its metro district fee, but Macgregor said developers had no choice, given the expenses they faced.”There would be no Glenwood Meadows without that,” he said.That wouldn’t have broken everyone’s hearts in Glenwood.It could have been a golf course”I’d rather have seen a golf course there but got told no on that,” said Bob Zanella, a former Glenwood Springs City Council member and mayor.In early 1991, city residents voted 616-546 to reject a plan for a municipal golf course and residential development at Wulfsohn Ranch – what is now Glenwood Meadows, but was owned at the time by Unocal. Opponents questioned the revenue projections associated with the proposal, and some didn’t want the property developed at all.But those wanting the agricultural property kept that way didn’t get their way, either. In 1995, Glenwood Springs voters rejected an open space tax measure that proponents had hoped might be used in part to protect Wulfsohn Ranch. They turned down a second open space measure a year later.In retrospect, Zanella thinks the golf course proposal was a pretty good one from an aesthetic standpoint, compared to what the city ended up getting.”You can imagine what that area would have looked like now instead of what it does. … It would have been green.”Zanella said it also was projected that the golf course would have generated hundreds of thousands of dollars a year for the city after breaking even by its fourth year.But he recognizes the financial importance of Glenwood Meadows to the city.”Hopefully it will get the sales tax turned around, because that’s the way that we pay for everything is through sales tax. Hopefully Meadows will be successful not only for the sales tax … but what it will bring into the community as well – the stores and such.”Glenwood depends on sales tax revenuesGlenwood City Council member Larry Beckwith said the Meadows tax revenues will be important to a town so dependent on growth in sales tax income.”I’m not an advocate of growth, but the problem is in the past we’ve gotten ourselves into a little hole simply because we relied on the increases too much.”His worry is what will happen several years down the road, when the city’s needs again outstrip its revenues but there’s nowhere left to build more “big box” stores. Beckwith said the city needs to reasonably limit the growth of its government instead of continually counting on further sales tax growth.Maple said he recognizes that not everyone in western Colorado embraces growth.”I for one believe that Glenwood Meadows is a good development because the communities around Glenwood need a place to shop,” he said.He thinks it’s better for people to shop in Glenwood than for Grand Junction or Denver to reap the sales tax benefits.A question of balanceAndrew McGregor, the city’s community development director, said he’s pleased with how Glenwood Meadows has turned out.He added, “I think it’s what most people in the community wanted, and consistent with our planning goals.””It’s always been a question of balance. We still hope and believe that the balance will be good.” He said the city also will benefit from 200 acres of open space associated with the project.”I think there’s some neat recreational opportunities up there,” McGregor said.He hopes shoppers won’t forget downtown because of Glenwood Meadows. City manager Hecksel said that ideally, the new development will bring more people downtown.McGregor said Glenwood Meadows may change the commercial balance in town, but hopefully will be a catalyst for new jobs and housing. Now that it’s here, the city planner is pulling for Glenwood Meadows to thrive, and provide the city a lot of peripheral benefits in the process.”I guess time will tell,” he said. “My sneaking suspicion is it will be very successful.”Contact Dennis Webb: 945-8515, ext. 516dwebb@postindependent.com

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