Your Questions Answered about Urban Renewal

6 Nov

Downtown Colorado, Inc. is proud to support Urban Renewal Authorities across Colorado. Whether an URA is long-established or still in formation, DCI has resources to ensure that this important economic development tool is as useful to its community as possible. We frequently host presentations on topics related to URAs, the latest being our October Development & Improvement Districts (DIDs) Forum. If your community is considering adding this tool to your economic development belt, you might want to consider these answers to commonly asked questions about implementing urban renewal.

Urban renewal is a controversial topic. How do I garner community support? Urban renewal does not need to be controversial. Go through planning and visioning processes with your community first. With a strong foundation of community engagement and clearly articulated goals for the community, you will be able to present urban renewal as a useful tool for achieving those goals. You must also be very vocal. Do not wait for the media and angry mobs to come to you. Establish a good relationship with your local media and be proactive about getting out clear facts and information about the urban renewal process and its benefits.

There are a lot of terms associated with urban renewal: authority, area, plan, project – what’s the difference? An Urban Renewal Authority is the financially independent, quasi-governmental entity granted the power to use tax increment financing and sometimes eminent domain for the purpose of eliminating blight. The Authority creates urban renewal plans that designate urban renewal areas within the municipality as blighted and details projects for remediating those areas. An urban renewal project is the action being taken under an urban renewal plan; it may take up an entire urban renewal area or may be as small as a single building façade.

No one wants to hear about “blight” in our community. Do I have to use that word? Yes, you do. The objective of an URA must be to eliminate slum and blight. Although economic development or job creation may be the ultimate goal for your community, the language in your URA statute objectives must focus on remediating slum and blight.

How much blight is enough blight? In order to adopt an urban renewal plan, the URA must conduct a conditions survey in the area(s) that will be designated by the plan. There are 11 factors considered to be “blight”, and there only need be one occurrence of a factor to include it in the conditions survey. If the urban renewal plan has the documented consent of all property owners in an area, then only 1 blight factor must be identified. Otherwise, 4 blight factors must be identified. In order to be authorized to use eminent domain, 5 blight factors must be identified.

How is the TIF (tax increment financing) calculated? When will it start and stop? Tax increment financing (TIF) for URAs is based on the idea that urban renewal can be attributed for the large increase in tax revenues within an urban renewal area. Therefore, the tax revenue (either property or sales) within a designated urban renewal area that goes above and beyond the base year tax revenue is given to the Urban Renewal Authority to fund urban renewal projects in that same designated area. The base year tax revenue is recalculated every two years.

The “TIF clock” does not start when the Authority is formed, and it may or may not start when the Authority adopts an urban renewal plan. It all depends on when the magic words are added to the plan. Whether it is at adoption of a plan, or added later as an amendment, as soon as the legal language is formally added to an urban renewal plan, the “TIF clock” starts counting down. Since the TIF clock is linked with a specific urban renewal area, there can be multiple “TIF clocks” in one plan. Time is up at the end of 25 years. Even though the TIF ends, the URA may continue remediating blight in the urban renewal area as long as funds are available.

DCI would like to thank our URA experts Mark Heller of the City of Thornton and Carolynne White of Brownstein Hyatt Farber Schreck for presenting on this topic. If you would like more information on how to properly form or run an URA, be sure to attend our annual full-day URA Training and watch for related topics in our monthly DIDs Forums.

Nancy Sprehn is the OSM/VISTA Community Assessment Coordinator for Downtown Colorado, Inc. During her year of service as an AmeriCorps VISTA, Nancy hopes to put her planning and placemaking knowledge to use while learning everything she can about the communities of Colorado.  

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