A plan to boost redevelopment on the north end of downtown could conservatively generate up to $10.3 million in a 25-year period to devote to attainable housing the area.
An analysis of the area dubbed by the city as MidTown – stretching from West Ninth Street to just north of East 15th Street and from the Animas River to East Second Avenue – divided potential redevelopment in the area into four tiers.
The four tiers are based on how likely various properties in MidTown are to redevelop and increase their property values if an urban renewal authority was created for 25 years that would provide incentives to spur development of community-identified needs – in this case, attainable housing.
The most conservative tier estimated increased property values from Midtown redevelopment might generate $10.3 million to finance attainable housing. The most ambitious tier for redevelopment estimated increased property values might bring in $35.7 million to pay for attainable housing.
Still to be analyzed is how much new sales tax revenue might be generated by redevelopment in the area, and that money, too, could be devoted to spur additional development of attainable housing in the north downtown area.
Andrew Arnold with SEH, formerly Russell Planning & Engineering, presented the analysis, an economic impact study of the MidTown area, to the Durango Renewal Partnership board on Tuesday in a Zoom meeting.
“Level 1 includes properties that have the fewest barriers for redevelopment. Level 4 includes properties that have significant challenges to redevelopment,” Arnold told Durango Renewal Partnership board members.
The study estimated Level 1 redevelopment levels would finance 102 new units of attainable housing while Level 4 redevelopment, if it could be achieved, would pay for 500 new units of attainable housing.
With Durango School District 9-R’s administrative campus up for sale, the MidTown area was chosen as the first place to study using the city’s ability to create an urban renewal authority, which allows for tax-increment financing.
Tax-increment financing would devote increased tax revenue generated from higher property values and increased sales taxes spurred by redevelopment within the URA district to infrastructure improvements within the district – in this case, to subsidize housing development to create more affordable multihousing units on the north end of downtown.
Without the URA’s tax-increment financing, the increased taxes generated by the redevelopment could not be targeted to improvements in the MidTown district. Instead, the increased property tax revenue would go into the general funds of the city and other taxing districts.
For MidTown, the idea is create a mixed-use development area – half of it made up of new and redeveloped retail and commercial space and half of it devoted to new multifamily housing. The increased property and sales taxes generated within the district could then be allocated to support development of attainable dwelling units in MidTown.
Another benefit of creating a URA in MidTown, is that it could be used to legally protect Buckley Park, which is part of the 9-R administrative campus, from development – keeping it as green space. Protection of the downtown park is another community-identified need.
Durango City Council still needs to approve creation of the MidTown URA, and city staff members expect to bring a resolution to councilors in late March or April for their approval to formerly create the MidTown URA.
Before the council vote, in February, the city is expected to formalize tax-increment financing agreements, or TIF agreements, with all the taxing entities that collect tax revenue from MidTown properties.
Essentially, the TIF agreements would still protect the base amount of tax revenue generated by the properties before establishment of the MidTown URA for use by the taxing entities’ general funds. However, the increased property tax values and increased sales taxes generated by redevelopment in the MidTown URA district would be devoted to financing attainable housing within the special district’s boundaries.
The plan for creation of the MidTown URA could go before the Durango’s Planning Commission in February or March.
Also in March, Alex Rugoff, the city’s business development and redevelopment specialist, said the city is expected to discuss development possibilities opened up by the creation of the MidTown district with local developers and developers active in Colorado and the region.
The city is working with Downtown Colorado Inc. and the Colorado Office of Economic Development and International Trade to organize outreach efforts to developers in March to discuss avenues for redevelopment and development should the MidTown URA be approved.
City Councilor Kim Baxter, who is also a member of the Durango Renewal Partnership board, said the idea to bring denser residential development to the north end of downtown holds benefits for all merchants on Main Avenue.
“The more people we have living downtown, the greater possibility they’ll be spending downtown,” she said.