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| Illegal URA Modification Puts High Plains Academy Funding In Jeopardy |
Loveland, May 10, 2014
Colorado's Department of Local Affairs (DOLA) is investigating a recent addition by the
City of Loveland into the McWhinney controlled Centerra Urban Renewal Authority that
appears to be in violation of Colorado State Statute.
Larimer County Assessor Steve Miller notified the City of Loveland last Thursday by
email (see email in right column) that Resolution #R-28-2014 adopted on April 15, 2014
by the Loveland City Council violates state law by declaring agricultural land as "urban
blight" while failing to notify Larimer County within thirty days of acting as required.
According to state law (C.R.S. 31-25-107), the City of Loveland is to provide the county
30 days notice prior to declaring the parcel blighted and part of and an Urban Renewal
Authority qualifying it for TIF (Tax Increment Financing). In this case, the City of
Loveland failed to notify Larimer County officials and included parcels previously
designated as agricultural land despite the fact the practice was outlawed in 2010.
House Bill 1107, introduced by Rep. Randy Fischer (D-Fort Collins) who complained
about seeing abuse of Urban Renewal authorities each time he commuted to Denver
along I-25, become law in 2010. Sometimes referred to as the "green field" protection
act, HB 1107 narrowed the discretion of cites to declare productive agricultural fields as
a "nuisance" allowing the formation of special taxing authorities to divert future property
taxes to repay public bonds issued for the developer to "restore" the blighted area.
In 2008 the Loveland City Council approved the first "flex" URA in the country by
abdicating its power to determine which parcels are blighted allowing McWhinney to
determine each year which parcels are included in the urban renewal area.
McWhinney has successfully used the governmental tool for manipulating land deals
towards their favor bestowing the advantages of urban renewal on properties or
projects McWhinney has been given a controlling interest.
High Plains Academy Funding In Jeopardy
Included in the city's expansion of the Centerra Urban Renewal area last month is the
parcel of land provided to Thompson School District to build the High Plains Academy in
Centerra. According to a 2006 agreement between McWhinney and the District,
McWhinney's taxing authority is to pay for the building of the Academy using TIF (Tax
Increment Financing) revenue gleaned from diverted property taxes otherwise bound
for school operations, county and EMS services.
McWhinney's taxing authority failed to put aside sufficient funds for the proposed
elementary school in Centerra it agreed to fund according to a 2006 agreement
between the district and McWhinney. McWhinney has asked the Thompson Schools
District to use bonds (public debt) for developing the proposed $15 million
environmental academy in Centerra's High Plains Village where residents must travel to
either Windsor or Loveland's Winona Elementary to attend grades K-5.
As part of McWhinney's plan, the Thompson School District will take full responsibility
for the approximately $1 million annual repayment of the bonds (to finance building the
school) while Centerra's urban renewal authority reimburses the school district using
TIF. The problem is the urban renewal authority may only divert property taxes (TIF)
funding into public projects within the established boundaries of the urban renewal
area. This ensures the "urban blight" those taxes are to remedy is where the money is
actually spent. Loveland also corrupted this purpose with the Lincoln Place urban
renewal authority by enlarging the boundaries to divert property tax dollars for a city
project unrelated to the original urban renewal plan.
If the parcel of land selected for the High Plains Academy cannot qualify for inclusion
into the current urban renewal authority than McWhinney cannot legally invest property
tax dollars diverted from other properties into building a public project located outside
the urban renewal boundaries.
Before a property is declared blight, the city council must find it meets the definition
below;
Colo. Statute 31-25-103. Definitions "Blighted area" means an area that, in its
present condition and use, and by reason of the presence of at least four
factors, substantially impairs or arrests the sound growth of the municipality,
retards the provision of housing accommodations, or constitutes an economic
or social liability, and is a menace to the public health, safety, morals, or
welfare:
For their part, the City of Loveland is claiming their action was legal and binding despite
the protest from Larimer County and the investigation by DOLA. According to the City
of Loveland, the change to the urban renewal boundaries is permitted for a number of
reasons including;
"....modification of the Plan to include the school parcel in the Plan Area should
not have a negative impact on revenues to the taxing authorities in that it will be
tax exempt and will not impact TIF revenues. It will, however, benefit the School
District by permitting the use of dedicated “School Increment” revenues for
construction of schools under the Master Finance Agreement."
This final argument by the acting Loveland City Attorney, Judith Yost Schmidt, is
already creating some controversy in various legal circles. In essence, she is arguing
the intent of the law (to prevent further loss of property tax revenue) is all that really
matters. In other words, a person stopped for speeding could argue it is unfair to
prosecute them because nobody was injured and laws that prohibit speeding were
enacted primarily to keep people safe.
Colorado's Department of Local Affairs (DOLA) is investigating a recent addition by the
City of Loveland into the McWhinney controlled Centerra Urban Renewal Authority that
appears to be in violation of Colorado State Statute.
Larimer County Assessor Steve Miller notified the City of Loveland last Thursday by
email (see email in right column) that Resolution #R-28-2014 adopted on April 15, 2014
by the Loveland City Council violates state law by declaring agricultural land as "urban
blight" while failing to notify Larimer County within thirty days of acting as required.
According to state law (C.R.S. 31-25-107), the City of Loveland is to provide the county
30 days notice prior to declaring the parcel blighted and part of and an Urban Renewal
Authority qualifying it for TIF (Tax Increment Financing). In this case, the City of
Loveland failed to notify Larimer County officials and included parcels previously
designated as agricultural land despite the fact the practice was outlawed in 2010.
House Bill 1107, introduced by Rep. Randy Fischer (D-Fort Collins) who complained
about seeing abuse of Urban Renewal authorities each time he commuted to Denver
along I-25, become law in 2010. Sometimes referred to as the "green field" protection
act, HB 1107 narrowed the discretion of cites to declare productive agricultural fields as
a "nuisance" allowing the formation of special taxing authorities to divert future property
taxes to repay public bonds issued for the developer to "restore" the blighted area.
In 2008 the Loveland City Council approved the first "flex" URA in the country by
abdicating its power to determine which parcels are blighted allowing McWhinney to
determine each year which parcels are included in the urban renewal area.
McWhinney has successfully used the governmental tool for manipulating land deals
towards their favor bestowing the advantages of urban renewal on properties or
projects McWhinney has been given a controlling interest.
High Plains Academy Funding In Jeopardy
Included in the city's expansion of the Centerra Urban Renewal area last month is the
parcel of land provided to Thompson School District to build the High Plains Academy in
Centerra. According to a 2006 agreement between McWhinney and the District,
McWhinney's taxing authority is to pay for the building of the Academy using TIF (Tax
Increment Financing) revenue gleaned from diverted property taxes otherwise bound
for school operations, county and EMS services.
McWhinney's taxing authority failed to put aside sufficient funds for the proposed
elementary school in Centerra it agreed to fund according to a 2006 agreement
between the district and McWhinney. McWhinney has asked the Thompson Schools
District to use bonds (public debt) for developing the proposed $15 million
environmental academy in Centerra's High Plains Village where residents must travel to
either Windsor or Loveland's Winona Elementary to attend grades K-5.
As part of McWhinney's plan, the Thompson School District will take full responsibility
for the approximately $1 million annual repayment of the bonds (to finance building the
school) while Centerra's urban renewal authority reimburses the school district using
TIF. The problem is the urban renewal authority may only divert property taxes (TIF)
funding into public projects within the established boundaries of the urban renewal
area. This ensures the "urban blight" those taxes are to remedy is where the money is
actually spent. Loveland also corrupted this purpose with the Lincoln Place urban
renewal authority by enlarging the boundaries to divert property tax dollars for a city
project unrelated to the original urban renewal plan.
If the parcel of land selected for the High Plains Academy cannot qualify for inclusion
into the current urban renewal authority than McWhinney cannot legally invest property
tax dollars diverted from other properties into building a public project located outside
the urban renewal boundaries.
Before a property is declared blight, the city council must find it meets the definition
below;
Colo. Statute 31-25-103. Definitions "Blighted area" means an area that, in its
present condition and use, and by reason of the presence of at least four
factors, substantially impairs or arrests the sound growth of the municipality,
retards the provision of housing accommodations, or constitutes an economic
or social liability, and is a menace to the public health, safety, morals, or
welfare:
For their part, the City of Loveland is claiming their action was legal and binding despite
the protest from Larimer County and the investigation by DOLA. According to the City
of Loveland, the change to the urban renewal boundaries is permitted for a number of
reasons including;
"....modification of the Plan to include the school parcel in the Plan Area should
not have a negative impact on revenues to the taxing authorities in that it will be
tax exempt and will not impact TIF revenues. It will, however, benefit the School
District by permitting the use of dedicated “School Increment” revenues for
construction of schools under the Master Finance Agreement."
This final argument by the acting Loveland City Attorney, Judith Yost Schmidt, is
already creating some controversy in various legal circles. In essence, she is arguing
the intent of the law (to prevent further loss of property tax revenue) is all that really
matters. In other words, a person stopped for speeding could argue it is unfair to
prosecute them because nobody was injured and laws that prohibit speeding were
enacted primarily to keep people safe.
| --------- Forwarded message ---------- From: Judy Schmidt To: Steve Miller Date: Fri, May 9, 2014 at 3:20 PM Subject: Non-substantial Modification of US 34/Crossroads Corridor Urban Renewal Plan (City of Loveland Resolution #R-28-2014) To: "millers@co.larimer.co.us" <millers@co.larimer. co.us> Cc: Bill Cahill <Bill.Cahill@cityofloveland.org> Mr. Miller, Bill Cahill forwarded to me your message regarding the referenced Resolution for review and response. You indicate that the County has two basic concerns – first, that the inclusion of the identified school parcel in the US 34/Crossroads Corridor Urban Renewal Plan is inconsistent with specified sections of the Urban Renewal Law (CRS Section 31-25-101, *et seq.*); and second that the County was not notified by the City of the change in the Plan. In response, please understand that the City Council made an express finding, as set forth in Resolution #R-28-2014, that the addition of the school parcel to the URA Plan Area “will not substantially change the URA Plan in land area, land use, design, building requirements, timing or procedure, as previously approved in the URA Plan.” Hence, the modification to the Plan was not a “substantial modification.” The statutory provisions cited regarding the inclusion of “agricultural land” were added to the Urban Renewal Law by HB 10-1107 in 2010. Section 7 of HB 10-1107 expressly provides that it only applies to urban renewal plans “approved or substantially modified” on or after June 1, 2010. A copy of HB 10-1107 is attached for your reference. Accordingly, the provisions of the Urban Renewal Law you cite are not applicable to the non- substantial (or minor) modification effectuated by the Resolution. In addition, the Urban Renewal Law requires notification of the County under CRS 31-25-107(3.5) (a) prior to the public hearing on an urban renewal plan or a substantial modification of an urban renewal plan. In this case, the changes made by the Resolution do not constitute a substantial modification,so no such notice was provided. Finally, on a more practical note, modification of the Plan to include the school parcel in the Plan Area should not have a negative impact on revenues to the taxing authorities in that it will be tax exempt and will not impact TIF revenues. It will, however, benefit the School District by permitting the use of dedicated “School Increment” revenues for construction of schools under the Master Finance Agreement. If you have questions or would like to discuss this further, please let us know. Regards, Judy Judith Yost Schmidt Acting City Attorney City of Loveland - Civic Center 500 East Third Street Loveland, Colorado 80537 Ph: 970/962-2545 Fax: 970/962-2900 Email: Judy.Schmidt@cityofloveland.org |
| Emails Available On the Larimer County Website From: Steve Miller Sent: Thursday, May 08, 2014 10:09 AM To: Bill Cahill Subject Deliberative Dear Bill: We came across Loveland's resolution #R-28-2014 (attached). We have a few problems with the resolution. The following is research done by this office: Prior to the school district's 01/13/2014 purchase of Parcel # 85092-35-901, the land was owned by C R Development Inc (parent parcel # 85092-003) and was classified as agricultural property and had been since at least 2010. The parent parcel had recently been combined with parcel # 85092-36-002 owned by Centerra Investments LLC, which was also classified as agricultural property since 2010. As a result of a new plat map recorded on 1/15/2014, the new parcel # 85092-35-901 described as Tract A, Millennium Northwest Fourth Sub, LOV (20140002625) was created and the parent parcel was deleted. The inclusion of Parcel 85092-35-901 appears to violate at least 2 of the following provisions of C.R.S. 31-25-107(1)(c)(III) C.R.S. *From ARL Vol 2 Sec 12.5: In addition, agricultural land cannot be incorporated into an urban renewal area prior to June 1, 2020, unless each of the following conditions found in § 31-25-107(1)(c)(III), C.R.S., is also satisfied:* *a. The agricultural land is contiguous to the urban renewal area, and the urban renewal* *area existed on June 1, 2010; and* Subject parcel will connect to URA plan area by way of a road right of way inclusion (also a part of this resolution) *b. Since June 1, 2010, the current owner has owned both the agricultural land and other* *land located within the urban renewal area that is contiguous to the agricultural land;* *and* *Fails this test -- Subject parcel is owned by Thompson School District R2J. Contiguous parcel 85042-06-033 <85042-06-033>(connected by way of the road right of way) is owned by Centerra Properties West LLC. * *c. developed solely to create long-term jobs related to manufacturing.* *Fails this test - Subject property is the proposed location of a new school, not manufacturing.* Not related to the substance of the resolution is another problem: this office wasn't notified of this proposed change to the URA. I have copied others in the county who have roles in matters like this, and a few in the Division of Property Taxation with whom we have consulted. When it's convenient for you, please contact me and we can discuss how to proceed. A meeting might be good. Best regards, Steve Miller Larimer County Assessor Office: 970-498-7118 Mobile: 970-692-3504 |
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