The Durango City Council annexed land in Grandview for a new commercial corridor of big-box retailers Tuesday after a heated debate between supporters hungry for jobs and development, and critics worried about these stores’ cannibalizing economic impact.

Root Routledge anticipated a “slugfest” between already-established big-box stores like Walmart and newer big boxes where the “local stores become collateral damage.”

Routledge and others pleaded for more time for a fiscal impact analysis, wondering, for example, if these stores would have to recruit low-wage workers from outside the area. Others worried that Durango would lose its identity.

“I’m sorry, but we could become as hideous as Farmington,” said Lars Hansen.

Zachary Ray said the city should not have to put up the City Hall and the police station as collateral for the debt to build a new road for private businesses. “Let the business pay for the road and not risk our buildings,” Ray said.

But resident Robb Bourdon supported the economic development because it would “create jobs.”

Representatives from the construction industry and neighboring businesses in Three Springs as such Mercy Regional Medical Center, Anytime Fitness and other health-related businesses supported the project.

Planning for the project has been ongoing since Target representatives first expressed interest in the area in the late 1990s, supporters noted. Still, Councilor Dick White did not think the public had enough time to study such a complicated issue.

The council voted 3-1 in favor of the annexation with Councilor White opposed and Doug Lyon absent after City Attorney David Smith assured the council that they would not be committing the city to a specific financial deal for a building or a new road.

Rather, the city will annex 160 acres in Grandview, including 37 acres for a commercial strip. The area is north of U.S. Highway 160 and just west of Mercy Regional Medical Center along Wilson Gulch Drive. It’s one of the few undeveloped “flat sites” in this mountainous region available for commercial development.

City officials argued that the area could support more big boxes since the La Plata County market already is losing $40 million in potential sales annually because of residents shopping elsewhere, such as Target in Farmington.

They also noted that Durango has thrived since the arrival of Walmart in 1998. The downtown’s sales-tax collection has more than doubled to about $6.3 million as downtown businesses have adapted to survive the competition of new stores.

As part of the land annexation from the Crader family, the city had to approve a concept for financing the extension of Wilson Gulch Drive about 1.2 miles to the new interchange at U.S. Highway 160.

The city is planning to sell a type of bond called “certificates of participation” backed by the collateral of city property, such as City Hall and the police station. Officials are hoping for a relatively low interest rate of 3 to 4 percent, but won’t know for sure until the bonds are issued.

The city would not commit to building the road until a big-box retailer had committed to the site.

“There’s very little risk to the city because of the way we’ve structured” the deal, said Patrick Vaughn, representative for the Growth Fund Real Estate Group.

Vaughn suggested the Growth Fund might purchase the city’s bonds. If it did, he said the Growth Fund would not charge interest on the debt until the new stores were operating. This pleased city officials.

“We have that on tape,” quipped Paul Broderick, a city councilor.

The Growth Fund is backed by the Southern Ute Indian Tribe. The city is not offering the developer any incentives, such as special tax breaks.

The city would use 1 percentage point, or a third of its 3 percent sales-tax revenue from the commercial area, to pay for the road.

The road is estimated to cost $6 million with the city on the hook for about $4 million. La Plata County also is expected to pay for the other third of the road’s construction cost.

A consultant anticipates the city would need about 115,000 square feet of new department store space, or about two supermarkets, to pay off the debt over 15 years. There is 250,000 square feet of available retail property to be developed.

Land parcels in the newly annexed area will still be subject to normal review processes as stores get built and land is developed and subdivided.

“There is fair amount of time for people to weigh in how individual parcels will be developed,” said Greg Hoch, the city’s planning director.

jhaug@durangoherald.com