Response awaited in DDA lawsuit
The lawsuit challenging the Glenwood Springs Downtown Development Authority’s tax increment financing system was officially served to the city Tuesday, July 9. Now it’s the city’s turn to respond. The suit, which also includes Garfield County and two taxpaying citizens as plaintiffs, was originally filed in April, but service was delayed so all sides had a chance to negotiate a non-litigious solution.But negotiations have since stalled, prompting CMC attorney Glenn Chadwick to serve the city. “They’d normally get 20 days, but we’ll give them 30 days to respond,” CMC spokesman Joe Marquez said. Glenwood Springs city attorney Teresa Williams declined Friday to comment on the suit and DDA officials could not be reached for comment Friday. “If it does go to trial, it might not be for months or a year,” Marquez said. Negotiations broke down when city officials declined to set a cap on how much money they could collect with the tax increment financing. Also, college officials were hoping for some pledge that Glenwood Meadows would not be annexed into the DDA, Marquez said. 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, or ad valorem, 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 from that year will be allocated to the DDA to pay for ventures such as the construction of a parking structure or other downtown improvement projects.In the text of the suit, there is a long list of claims as to why the plaintiffs feel the TIF system is unconstitutional and should be stopped. Among other claims, the suit alleges:-That the state statute allowing a DDA is supposed to be used for a blighted area, but downtown Glenwood Springs is not blighted.-That the Glenwood Springs DDA “includes vacant lands with known development plans and potential.”-That 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, which 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.-That approval of the TIF financing plan by the Glenwood Springs City Council was “invalid, void and an abuse of discretion.”In addition to asking for the nullification of the TIF financing plan, the suit also requests attorney fees to be paid by the defendants.
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