URA may want ‘green’ upgrades for TIF breaks

The City of Fort Collins’ Urban Renewal Authority is considering a variety of changes in its policies, including requiring businesses seeking tax increment financing to make oftentimes expensive environmental upgrades to their buildings.

Buildings would have to be LEED silver-certified by the U.S. Green Building Council.

Megan Bolin, who works in the city’s economic health office, the idea is still being hashed out and will have to go before the City Council for its approval.

The idea stems from a mandate that all city-owned buildings must achieve LEED certification. Projects applying for TIF dollars, a form of public money, could be required to meet the same level of environmental-friendliness.

“The initial thought was, ‘If they’re getting public financing, they should be held to a higher standard (than buildings that are privately financed),’” Bolin said.

The business community is not sold on the idea.

Requiring LEED certification is too expensive for small businesses, according to former Mayor Ray Martinez, a member of the executive board of the South Fort Collins Business Association.

Such a requirement could discourage developers from proposing projects in the URAs or keep small businesses already located in the areas from applying for TIF dollars to make improvements to their facilities, said Martinez.

Clint Skutchan, executive vice president of the Fort Collins Board of Realtors, expressed some of the same concerns, saying that placing environmental requirements on a tool meant for redevelopment could mean that many projects would no longer make financial sense.

The Commons, a student housing project under construction by Alabama-based Capstone Cos., is the first project in the Midtown Urban Renewal Area expected to achieve LEED designation, Bolin said.

Skutchan stressed that he supports green initiatives, but thinks that because certification can take a lot of time and money, a more viable alternative might be simply requiring that businesses be required to meet the LEED standards set forth by the USGBC, but only receive certification if they choose to do so.

This would ensure that Fort Collins’ “built environment” is moving in the right direction, toward the “green” goals set forth by the city, but would spare small businesses some of the expense, according to Skutchan.

Nothing has been decided yet, Bolin said, and won’t be until the URA staff can hold an educational meeting and engage in more public outreach to make sure that business owners and others are apprised of the issues at hand. Meetings have not yet been scheduled, but they are expected to occur within the next few weeks, according to Bolin.

Another potential URA policy changes pertains to affordable housing. Under the proposed revised rules, projects within URAs that aim to include affordable housing would have to exceed the minimum City Code definition of an affordable housing project.

Those guidelines state that to be considered an affordable housing project, at least 10 percent of a residential development must be affordable for individuals and families making 80 percent or less of the area median income. In 2011, that figure, as determined by the U.S. Department of Housing and Urban Development, was approximately $76,700 for a family of four.

Projects that wish to receive TIF dollars could be required to make 10 percent of their units affordable to those residents who make between 40 and 60 percent of the area median income, Bolin said.

Other aspects of the revised rules have been well-received by the business community, such as a requirement that would mandate an independent financial analysis of a project attempting to locate within a URA.

An independent analysis would not allow for TIF dollars to be used for projects that have the financial feasibility to proceed without TIF assistance, according to city documents.

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Molly Armbrister covers real estate, banking and health care for the Northern Colorado Business Report. She can be reached at 970-232-3139, marmbrister@ncbr.com or twitter.com/MArmbristerNCBR

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