DENVER — Northern Colorado officials walked into the Colorado Economic Development Commission meeting on Thursday feeling like the conditions they faced for accepting millions of dollar in state tax incentives to help fund four tourism projects were deal-breakers.
They walked away not only with the full $86.1 million they were requesting approved by the EDC, but also assurances from the commissioners that final conditions could still be hashed out over the coming weeks before the funding agreement is signed.
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Go NoCO, a nonprofit created by government entities and private businesses in Northern Colorado, applied for the funding made available through the Regional Tourism Act of 2009, which allows the rebating of state sales-tax revenue that new, out-of-state visitors would generate in a predetermined zone.
Developers estimate that the four Northern Colorado projects — the PeliGrande Resort and Conference Center in Windsor, The Indoor Waterpark Resort of the Rockies and the U.S. Whitewater Adventure Park in Loveland, and the Stanley Hotel Auditorium and Film Center in Estes Park — will cost $334 million to develop. Go NoCO applied for the RTA funding to try and help developers shrink an $80.7 million funding gap.
The $86.1 million in incentives approved by the EDC Thursday will be paid out over 30 years to help pay back the bonds used to finance the projects. In current dollars, Go NoCO board chairman Patrick Brady said, that will cover a little more than $20 million of the funding gap, with Go NoCO officials hopeful that they’ll also be able to secure further incentives from local jurisdictions.
The four Northern Colorado projects, all slated to open by 2018, wouldn’t have been able to move forward without the state funding, Brady said. But while EDC officials were unanimous in their support for granting the incentives, it appeared for awhile Thursday that the EDC and Go NoCO might be too far from agreement on conditions tied to the funding.
Fiona Arnold, executive director of the Colorado Office of Economic Development and International Trade, sent out a letter on Dec. 4 outlining staff’s recommended conditions, or “guardrails,” for approval. Go NoCO officials and officials representing some of the projects, however, felt caught off guard by some of the conditions, which they felt were too specific and could jeopardize the feasibility of the projects.
An example Brady explained to the EDC Thursday was the requirement that the PeliGrande Resort include construction of the nautical-themed Boathouse restaurant. PeliGrande developer Martin Lind has a letter of intent from Boathouse officials aiming to open the restaurant at the site. But Brady said that if Go NoCO signed such an agreement with the state and then the Boathouse deal didn’t come to fruition for some reason, state funding for the PeliGrande could be nullified. It’s fair, Brady said, for the EDC to require a signature restaurant for the project, but just not so narrowly as to name a specific one in the funding conditions.
Other conditions worrisome to Go NoCO officials included things such as room-by-room square-footage requirements, even though the projects were largely proposed to the EDC based on concept plans.
“The guardrails should be more general,” Brady said.
John Cullen, owner of the Stanley Hotel, said many of the usage requirements dictated in the conditions wouldn’t work for his project. But he was confident after the EDC’s funding approval Thursday that the issues could be worked out, noting Arnold’s past experience as general counsel for hotel operator Vail Associates.
“She will understand the hotel issues as well as anybody in Colorado,” Cullen said.
Initially Thursday, EDC commissioners considered whether they should delay a vote on funding approval until they could negotiate the conditions with Go NoCO. But with the RTA expiring at the end of this year, there was a sense of urgency to make the funding award before Dec. 31. The EDC sent all non-EDC employees out of the room at one point Thursday so that they could go into executive session and discuss their options. When they resumed the EDC meeting, the commissioners were in agreement that details of the conditions could still be tweaked after the award amount was approved and after Dec. 31.
“This is a living document,” EDC chairman Dick Monfort said in reassuring Go NoCO officials. “We’re not trying to make you unsuccessful. But we’ve got to make sure the projects come in as you’ve described them.”
Windsor director of economic development Stacy Johnson said she was pleased with Thursday’s outcome.
“We wanted a little bit of flexibility but within the guidelines of the EDC,” Johnson said. “I’m optimistic we’ll be able to work some stuff out (with the conditions). This was the final hurdle.”
In addition to the Go NoCO request, the EDC also approved $121.4 million in RTA incentives for an $856 million renovation of the area around the National Western Stock Show complex in Denver to turn it into a year-round learning center and tourist attraction that will tap into Colorado State University’s agriculture and equine programs.