Tax complaint against Glenwood dismissed by judge |

Tax complaint against Glenwood dismissed by judge

Greg Masse
Post Independent Staff

GLENWOOD SPRINGS – A lawsuit challenging the legitimacy of using tax increment financing to fund projects in the downtown core was dismissed Monday by Ninth District Judge Thomas Ossola.

The suit, filed by Colorado Mountain College, the Garfield County Commission and others in April 2002, challenged the Glenwood Springs Downtown Development Authority’s planned use of TIF to fund projects within its boundaries.

The Colorado Mountain College Board of Directors plans to meet in executive session today to decide whether to appeal Ossola’s decision, CMC spokesman Joe Marquez said.

“We were hoping to get a full hearing on it,” Marquez said on Monday. “The administration is very disappointed in the outcome.”

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 – excluding inflationary gain – within the district since that year will be allocated to the DDA.

It will pay for ventures such as the construction of a new parking structure or other downtown improvement projects.

CMC officials and the Garfield County Commission claimed in the lawsuit that the DDA will unfairly get tax revenues that rightfully belong to them.

In Ossola’s seven-page order, he found that each of the plaintiffs lacked “standing,” meaning that the use of TIF by the DDA would not cause them financial injury.

“It all hinged on whether or not we had standing, whether or not we would become an injured party by TIF,” Marquez said. “Obviously we thought we’d become an injured party.”

Glenwood Springs city attorney Karl Hanlon said the city is “very pleased and excited” with Ossola’s decision.

“We’re very pleased with the outcome and would hope we can get started with some important projects for downtown,” he said.

Marquez said one benefit of appealing Ossola’s decision to a higher court is that a decision in CMC’s favor could serve as a precedent for other towns considering the use of tax increment financing to help fund projects.

“It does have wider significance,” Marquez said. “Vail and Breckenridge are looking at doing this and a ruling at a higher level could actually turn out well for us.”

Marquez, however, pointed out that the initial vote by the CMC board on whether to file the lawsuit was a marginal 4-3 vote in favor.

DDA director John Simmons said he and the members of the DDA were “confident” the case would be ruled in their favor.

“It’ll free the DDA up for starting the planning process for projects, and those projects should also benefit the county, the college, the school district and private entities in the downtown area,” Simmons said.

Hanlon said he had no indication as to whether the CMC board will appeal Monday’s decision.

“They have 45 days to file an appeal, so we’ll just have to see what they decide to do.”

Contact Greg Masse: 945-8515, ext. 511

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