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Loveland City Council Asked To Bend Over
Backwards By McWhinney
In attempt to use development incentives intended for blight
Loveland - June 2, 2008

The purpose of the now infamous secret meetings held between Loveland’s City Council and McWhinney on a “land swap” is out of
the bag.  The deal McWhinney first sought support for in secret meetings is being promoted now as a request to add “flexibility” to their
current Master Financing Agreement (MFA) with the City of Loveland.

Flexibility is an appropriate theme according to one Councilor who described being asked to bend over backwards even further than
Gumby to accommodate this request by a developer who the Councilor has happily supported in the past.  No wonder McWhinney
preferred to pop the question with their supporters on Loveland’s City Council in private where the public could not witness the
exchange.

McWhinney Enterprises is asking its friends on Loveland’s City Council to make a legal determination that the properties McWhinney
owns near I-25 are “slums” and that according to the state’s definition “contribute substantially to the spread of disease and crime,
constitutes an economic and social liability, substantially impair or arrests the sound growth of municipalities.”  

McWhinney is requesting the City Council do this on camera and with a straight face while pretending the property located between the
Loveland Outlet Malls and Co’s BMW dealership and the property just south of the Outlet Malls meets the State of Colorado
definition of “blighted.”  Absent a clear finding of blight by the City Council, McWhinney will be unable to include newly annexed and
acquired properties into their redevelopment district.

Ironically, the very City Councilors who boast of the many successes by Centerra and other developments in east Loveland are now
being asked to pretend in public that those areas are instead a menace to the community where no development could occur without
significant intervention through government assistance by first designating the area as blighted.  The complexity of previous changes to
the MFA meant the public largely ignored amendments to the controversial agreement with one exception - the subsidized trolley which
was shot down by Council amid public outcry.  Now McWhinney is taking no chances by first introducing the "flexibility" plan in
private.  

The McWhinney agreement with the City of Loveland to retain both sales taxes and property taxes in their development areas for the
next 25 years operates under the authority of a state law intended to spur development in blighted areas.  Therefore, no property can
qualify for such a designation until it is determined by the local governing body (Loveland City Council) as blighted.  Click here to see
read an overview of Colorado’s redevelopment laws provided by the
Council of Development Finance Agencies.  

LovelandPolitics has been informed that the secret meetings between McWhinney and Loveland’s elected City Council were held to
convince councilors that McWhinney is looking to replace, in the Urban Renewal Area, land already qualified for the incentives but not
developed, with newly acquired properties (thus the term property swap) where near-term development is imminent.  This is strange
since the state statute (law) specifically limits benefits of redevelopment agencies to blighted areas; not ones where development is
inevitable.

Redevelopment agencies were never intended to bestow certain privileges upon a gentry class in the community but instead apply to
properties least likely to develop thus removing dangerous and costly blight from the city.  In other words, property owners who own
valuable land along the I-25 find themselves forced to sell to McWhinney since they appear to hold the magic key to turn 25 years of
taxes back to their own Metro District that supplements development costs.  Property owners in truly distressed areas of town outside
downtown Loveland enjoy no similar privileges.

A national public interest group calling itself Good Jobs First
published a report last February regarding the phenomena of prosperous
and wealthy developers benefiting almost exclusively in a community from redevelopment schemes while the areas with poverty and real
blight are ignored.  Below is an excerpt from a 2003 report from the same group that appears to describe Loveland's predicament;

“….the original goals of reducing poverty and blight are being replaced by economic development that benefits wealthier
unrelated interests. Programs that were originally intended to provide tax incentives to businesses for locating in
impoverished neighborhoods now often end up subsidizing economic development in affluent areas.”

Colorado passed a redevelopment law first in 1975 that allowed for the creation of local “authorities” now called Metro Districts to
receive taxes diverted from local government.   In 1999 the laws were amended to restrict further the definition of “blight” to ensure
only truly needy areas were receiving this definition.  However, the only “check” against fraudulent claims of blight are the local
governments charged with regulating the creation of metro district within their municipality.

Unfortunately, the definition of “blight” has been largely abused by city officials trying to satisfy campaign contributors instead of
complying with the intent of the law.  As with most abuses of local power, the courts are now stepping-in to regulate city governments
that may be abusing the law.

City Manager Don Williams, as an example, has often promoted McWhinney's redevelopment agency as a way to gain more tax
revenues through accelerated development.  However, the Sheridan Redevelopment Agency of Arapaho County, Colorado found itself
on the wrong side of a court decision last year when the court stated the following;

"the project was not based on the proper public purpose of eliminating blight but on an improper purpose of increasing
tax revenues;"

Court of Appeals No.: 06CA1967

The Thompson School Board plans to discuss the issue at their meeting Wednesday night (June 4).  The Loveland City Council is being
asked to first annex some property into the city the McWhinney’s may want to include in their Metro District before it comes before
Council.  The tentative date for the Council to discuss the MFA amendments (which should include further blight designations) is
sometime in late Jun 2008.

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