Also for the two areas combined, $19 million in tax increment financing has been dedicated to approved projects within the URAs, and $34 million in tax increment has been generated by URA projects.
Most of money in these numbers comes from the North College URA, established well before the Midtown URA in 2011, though the figures generated by the North College area could be indicative of what may be ahead for Midtown.
The revitalization of Midtown Fort Collins has been identified as one of the key priorities for the city, and projects like the Mason Corridor and the rehabilitation of the Foothills Mall are big steps toward meeting goals for the area.
Right now, the city is working on creating a Midtown Plan, which will provide the “urban design vision” to guide redevelopment in the future. One of the biggest goals is to transform Midtown from an “autocentric” corridor, where most people travel by car, to a transit-oriented corridor that encourages walking, cycling and the use of the MAX Bus Rapid Transit system.
Plans are also pending for a vastly redeveloped Foothills Mall. The mall’s new owners are hoping to spend $100 million making over the run-down retail center.
These projects alone, though, won’t bring Midtown back to life. The Midtown Urban Renewal Area, which stretches along College Avenue between Prospect Road and just a couple of blocks south of Harmony Road, needs more than just a new mall and a handy bus service, although these projects are considered catalysts by many.
The creation of the Urban Renewal Area by the city was part of the attempt to encourage redevelopment. Projects located within the area are eligible for tax increment financing, one of the most widely used and successful economic development tools available, according to Megan Bolin, redevelopment specialist with the city’s Economic Health Office.
The idea behind a TIF is that redeveloped properties will eventually mean higher property values that, in turn, mean higher property taxes flowing into city coffers.
A URA can be broken down into districts that can be activated separately to take advantage of the 25-year time limit imposed on URAs by state law. Once activated, any tax revenue collected because of improvements made to the property goes to the TIF authority — the City of Fort Collins in this case — and is used to pay project costs associated with the redevelopment.
The base tax revenue level, stemming from that tax that was collected before the TIF district was activated, is still collected by various taxing entities, including schools and counties.
Once the 25-year period is up, the new tax revenue from the improved property is distributed to all taxing entities.
Developers can also borrow against the amount of money their project is anticipated to bring to the city. One example of this is the Summit student housing project, formerly called The Commons, under construction now.
Summit, the first project in the newly created Urban Renewal Area in Midtown Fort Collins, is expected to generate $8 million in tax increment financing over the next 25 years, according to the city’s estimates.
To help finance its project, developer Capstone Development Corp. received a $5 million loan from the URA Board against the $8 million in anticipated TIF dollars.
Summit is located with the South Prospect TIF district, the first district to be activated. The district surrounding the Foothills Mall at the intersection of Foothills Parkway and College Avenue is the next district set to be activated.
Also within the South Prospect TIF district is a building that formerly housed Chuck-E-Cheese and is owned by Fort Collins real estate developer Les Kaplan. Kaplan has made parking lot and façade improvements to that property, Bolin said. Kaplan has also been working on the redevelopment of a former Maytag building at 1801 S. College.
Elsewhere in the URA, small improvements are being made. Several car dealerships have undergone renovations, Bolin said, and a shopping center known as Thunderbird Plaza saw façade improvement with the location of JoAnn Fabric, a new anchor for the center.
Another high-profile property located within Midtown is the former Toys R Us building, at Bockman Drive and College. There is a multi-property covenant on the building that restricts it use to retail, unless other property owners, such as JC Penney, agree to a different use, Bolin said.
This restriction makes it difficult to find another user for the 45,500-square-foot building, Bolin said. In 2010, Ice Energy Systems of Windsor was considering the location for an expansion of its operations, but would have required the property to be converted from retail to light-industrial use.
In addition to the URA, the Midtown area is seen as “ideal” for the creation of a Business Improvement District, Bolin said, something that city staff will likely pursue in the coming year.
BIDs are special district financing tools that establish a defined area within which property owners pay an additional tax or special assessment in order to fund enhanced services and improvements within the district’s boundaries.
The funding generated by a BID is intended to enhance, not replace, existing municipal services, Bolin said.
Legislation is necessary for the creation of BIDs, but some community support has already surfaced, Bolin said. The South Fort Collins Business Association has expressed interest in pursuing such a district.
“It could be a great mechanism to supplement public and private investment to improve and maintain Midtown in the long term,” Bolin said.