Loveland's Independent News Source
City and County Officials Clash
Over Urban Renewal Reform
Loveland, May 6, 2014

Ironically, Loveland and Ft. Collins, the two Colorado cities whose questionable urban
renewal practices inspired statewide urban renewal reform movements, argued once again
they support reform but just not the current bill being debated this week in the Colorado

Duplicity by city officials who pay lip service to urban renewal tax reform while trying to
strangle it behind closed doors boiled over last week at the Loveland/Ft. Collins Municipal
Airport during a joint meeting between the city councils of Loveland and Ft. Collins.  The two
city councils had gathered together away from the glare of their local cable access cameras
at the Ft. Collins-Loveland Municipal Airport (FNL) to discuss their lobbying strategies
against urban renewal reform along with some other issues.

Larimer County Commissioner Tom Donnelly, who was sitting in the audience, came forward
to answer a staff question but didn't return to the audience until after sparks flew between
the two councils.  The Ft. Collins City Manager called Loveland Councilman Clark's
comments "
offensive" while also blaming Commissioner Donnelly of "exacerbating" the
issue through misrepresentations to the public.

Donnelly complained staff didn't "
give you the full picture" explaining the "only time equal
percentages go into the deal is if we cannot reach agreement.
"   Later stating to
Loveland Mayor Cecil Gutierrez, "
Okay I'll stop but that is part of the bill."  When Donnelly
was asked whether he supports the bill, Gutierrez quipped sarcastically, "
he wrote it."

The reform legislation now making its way through the Colorado Legislature is the result of
years of work by Colorado Counties Inc. (CCI) and local service districts, school officials and
other agencies impacted by Urban Renewal Authority abuse by cities they accuse of
carelessly giving away precious property tax revenues through questionable urban renewal
authorities.  Even the Colorado Fire Chiefs Association has written extensively about the
impact abuse of discretion by local officials using urban renewal laws is having on their
departments (
see Colorado Fire Chiefs policy paper).

Four years ago the Colorado Legislature
passed a law aimed at Loveland's past abuses of
urban renewal tax incentives for McWhinney.  Previously, city councils enjoyed great
discretion in determining what properties in the community are "urban blight" deserving of
the special tax incentive that allows future property taxes to be diverted for 25 years to
repay public debt the developer is allowed to use in developing the project.  

In the case of Loveland, the city council declared productive farm land "urban blight" once
purchased by McWhinney thus enabling a monopoly for one developer using a powerful tax
incentive tool while denying the schools, county and other local services that rely on
property taxes from benefiting from the developments.  Ironically, the car dealerships, movie
theater and other businesses lured out to Centerra left real urban blight across Loveland in
their wake.

Urban Renewal Reform

The new reform is aimed at preventing a repeat of the City of Ft. Collins dispute with Larimer
County while redeveloping the Foothills Mall.  Despite pleas from the county to collaborate,
the city ignored the county and instead proceeded with a redevelopment that will severly
impact revenue for services the county is already providing.

Rep. Brian DelGrosso, Colorado House Minority Leader who represents Loveland, wrote
House Bill 1375 aimed at giving impacted local services a voice in the process of urban
renewal.  Contrary to a recent local article reporting the City of Loveland's false narrative
which claims the city supports urban renewal reform, LovelandPolitics
reported on a letter by
Assistant Loveland City Manager Rod Wensing to DelGrosso discouraging support of urban
renewal reform.

Now, Loveland City Manager Bill Cahill has drafted a letter to Colorado State Senator Kevin
Lundberg that borrows heavily from the previous city letter (written before 1375 was drafted)
making the same arguments again.  In fact, City of Loveland staff have served primarily as
the voice of developer McWhinney on the issue by objecting to any reform that might apply
to additions or changes to existing urban renewal authorities already authorized.

The joint meeting last week was intended to serve as a strategy session on defeating the
proposed legislation.  Loveland City Manager Bill Cahill reported to the councilors from
Loveland and Ft. Collins that HB 1375 was too restrictive.  Detailing his objections to the
legislation he failed to mention such restrictions apply only if the city creating an urban
renewal designation fails to get agreement from the other taxing entities.  In other words, HB
1375 permits any variety of arrangements between the taxing entities provided they can
agree and those impacted have a voice in the process.

Loveland City Manager Bill Cahill claimed certain ambiguities in the bill make it impossible to
support despite favoring reform.  Cahill stated, "
Our legal analysis at this point is not
clear on what exactly that means

Loveland Councilman Dave Clark contributed his reason for opposing the bill by stating,

The whole reason for this bill is because the City of Ft. Collins and Larimer County
had a disagreement and they couldn't come together and therefore they are creating a
bill statewide to solve a personal problem.....that is what is on the street"

Ft. Collins City Manager, Darin Atteberry, angrily responded "I think that some of the
rhetoric, quite frankly, that Tom [Donnelly] has stated exacerbated the problem.  I
think that it has been inappropriately represented ahh...umm....we advocated for, and
Tom knows this, we advocated for taking away green field blight ah we advocated for
significant reform.  I actually find it offensive that Ft. Collins is being used as the
example poster child for urban renewal reform now others in the room may have
different opinions..

Clark explained he wasn't trying to pick on Ft. Collins while acknowledging Loveland's own
role in creating the need for reform a few years ago (
see article on previous reform bill).   
Clark followed-up by explaining Loveland was the "
poster child" for URA abuse so his
comments were "
not meant to pick on Ft. Collins."  

Donnelly interrupted the argument over which city is the bigger poster child of abuse trying
to focus the discussion back on the statewide impacts arguing,

"Let me tell you this isn't a Ft. Collins and Larimer County issue.....I will tell you what
the issue is with TIF funding and URA's.  In 1991 $8 million was diverted into TIF's and
in 2001 that was up to $34 from $8 million in 2011 $153 million is diverted.  So $34
million in 2001, that is statewide, in 2013 $171 million.  In two years it jumped almost
$20 million, $170 million. $81 million in money is diverted from K-12 education in the
State of Colorado.  That money has to be backfilled by the state, the State Legislature
has to back fill that.  So we don't have additional monies for schools, especially rural
schools in Colorado, it is because the state is backfilling $81 million in TIF projects to
local districts.  Look, we don't think TIF's are the problem.  We want TIF's to stay as a
viable tool for blight mediation but there needs to be some sanity returned to the

Finally, Councilwoman Joan Shaffer, who first ran for council promising urban renewal
reform, said she couldn't support it likening HB 1375 to the POL (Protect Our Loveland)
petition to impose a fracking moratorium.  Shaffer stated she agreed with the concept but
found the law to be "bad law" alluding to council efforts to prevent the fracking petition from
coming before voters.

Crony Capitalism and Social Engineering
  Explaining Urban Renewal and TIF

Below is an excerpt from an article by Randal
O'Toole of the CATO Institute.  
Click here to read complete article

Tax-increment financing (TIF) is an
increasingly popular way for cities to promote
economic development. TIF works by allowing
cities to use the property, sales, and other
taxes collected from new developments—
taxes that would otherwise go to schools,
libraries, fire departments, and other urban
services—to subsidize those same

While cities often claim that TIF is “free
money” because it represents the taxes
collected from developments that might not
have taken place without the subsidy, there is
plenty of evidence that this is not true. First,
several studies have found that the
developments subsidized by TIF would have
happened anyway in the same urban area,
though not necessarily the same location.
Second, new developments impose costs on
schools, fire departments, and other urban
services, so other taxpayers must either pay
more to cover those costs or accept a lower
level of services as services are spread to
developments that are not paying for them.

Moreover, rather than promoting economic
development, many if not most TIF subsidies
are used for entirely different purposes. First,
many states give cities enormous discretion
for how they use TIF funds, turning TIF into a
way for cities to capture taxes that would
otherwise go to rival tax entities such as
school or library districts. Second, no matter
how well-intentioned, city officials will always
be tempted to use TIF as a vehicle for crony
capitalism, providing subsidies to developers
who in turn provide campaign funds to