FAQ’s
WHAT IS URBAN RENEWAL?
Urban renewal in Colorado is a process for revitalizing and rehabilitating distressed properties, slums, and blight. Although the purpose of urban renewal is to prevent and remediate blight, urban renewal often has other positive effects, including job creation and economic development.
To engage in urban renewal, a municipality conducts a conditions survey to determine if the elements of blight as defined by Colorado statute exist within the municipality. If the elements of blight do exist, the municipality may establish an Urban Renewal Authority, which is a governmental entity that works hand in hand with local developers to prevent and remediate blight. The Urban Renewal Authority may use a variety of tools defined by Colorado statute to implement urban renewal. One of those tools is tax increment financing (TIF).
WHAT IS TIF?
Tax increment financing (TIF) is a method of financing urban renewal projects that takes advantage of incremental revenues generated from municipal sales, property, use, and/or lodging tax and county property tax. TIF is not a tax deferral but is used to incentivize development that will prevent or remediate blight.
When an Urban Renewal Authority adopts an urban renewal plan, the tax base for the urban renewal area is established. Taxing bodies that receive tax revenues in the urban renewal area, such as school districts, fire districts, the city, and the county, continue to receive that base amount (plus biennial reassessment increases) for the duration of the TIF period, up to a maximum of 25 years. If any of those tax revenues increase above the base during that 25-year period, the taxing authorities may agree to share that increase with the urban renewal authority, which uses the funds to incentivize and finance urban renewal projects in partnership with local developers that remediate blight. At the end of the 25-year period, TIF expires, and the taxing bodies who were sharing the increases in revenues receive all of the tax revenues.
TIF is a tool with the power to create win-win scenarios for municipalities, property owners, and all other taxing bodies. Urban Renewal Authorities have a revenue source to invest in catalyzing private sector investment; and property values within the urban renewal plan area increase for the benefit of all taxing bodies over time.
WHAT IS AN URBAN RENEWAL PROJECT?
An urban renewal project consists of any activity or undertaking that furthers the goals of the Urban Renewal Plan and remediates and prevents blighted conditions. Urban Renewal Projects can include construction of capital improvements, such as roads, streets, water, sewer and trails, or the establishment of grant programs for business expansion activities such as facade improvement, patio and outdoor expansion, equipment upgrades, and similar investments that will catalyze and grow existing businesses.
I AM A PROPERTY OWNER WITHIN A PROPOSED URBAN RENEWAL AREA. WILL MY PROPERTY TAXES INCREASE?
Urban Renewal Authorities do not have the power to levy a new tax or to increase existing tax rates. Rather, urban renewal activity typically increases the value of property within an urban renewal area. The value, multiplied by the mill levy rate, determines how much taxes are paid. So if the property’s value increases, yes, individual property owners might pay more taxes over time. As a general rule, with the exception of recessions, property values increase over time anyway; what urban renewal activity does is accelerate the rate of that property value increase.
WHAT IS “UNINCORPORATED TERRITORY”?
All land in Colorado is located within a county, but not all land in Colorado is located in a municipality such as a city or town. Unincorporated territory is land that is located in a county but not within the boundaries of a municipality. Unincorporated territory that meets certain criteria may at some point be annexed into a municipality.
IF UNINCORPORATED TERRITORY IN MOFFAT COUNTY IS INCLUDED IN AN URBAN RENEWAL PLAN ADMINISTERED BY THE CRAIG URBAN RENEWAL AUTHORITY, IS IT AUTOMATICALLY ANNEXED INTO THE CITY OF CRAIG?
No, including unincorporated territory in an urban renewal plan does not have the effect of annexing such unincorporated territory into a municipality such as a city or town. Property owners in unincorporated territory in Moffat County will not be annexed into the City of Craig as the result of the approval of an urban renewal plan; they can only be annexed if they petition for annexation.
WHAT IS EMINENT DOMAIN? CAN THE CRAIG URBAN RENEWAL AUTHORITY EXERCISE EMINENT DOMAIN?
Eminent domain refers to the power of government to take private property and convert it to public use. Some urban renewal authorities have the power of eminent domain, but only when eminent domain is authorized as part of an approved urban renewal plan. The urban renewal plans currently proposed by the Craig Urban Renewal Authority do not authorize the use of eminent domain. This means that the Craig Urban Renewal Authority cannot exercise eminent domain, so property within urban renewal plan areas is not subject to being taken by the Craig Urban Renewal Authority.
