City Council poised to raid half- cent sales tax fund Dec. 8 On Monday, Dec. 8, Pueblo City Council is poised to make a highly controversial move by attempting to pass an ordinance which would usurp the will and wishes of the voters, and allow $14.4 million in taxpayer-funded “primary jobs” money to be loaned – or gifted – for Phase 1 of the RTA (Regional Tourism Authority) project: more commonly known as the convention center expansion. Crafted by pro-RTA Councilman, Dennis Flores, within weeks of his Oct. 6 Council appointment, this ordinance – if passed – would allow City Council to dip into the $50 million pot of half-cent sales tax revenue, which voters voted multuple times would be used for primary job creation, only. After allowing limited public opinion at the Dec. 8 meeting, Council will vote yea or nay on the ordinance, making this a critical meeting for residents to attend. The concern of local opponents is not the convention center expansion, itself – but in using this particular money. In light of Pueblo’s unemployment rate, and the loss of yet another employer (Davis Wire) this month, critics feel that this money needs to be spent as it was intended: on bringing well-paying jobs to our community. Civic activist Ted Freeman argues that the basic definition for primary job based on the 2010 citizen-voted ordinance is “a full-time position in the private sector, which provides goods and/or services to be distributed outside of Pueblo.” “But this newly proposed ordinance will add a new definition to what ‘primary job’ means,” he said. “City Council is now wanting to expand this definition, by adding: ‘employment resulting from a regional tourism project, approved by the Colorado Economic Development Commission, which qualifies for state sales tax increment revenue.” “It’s a deliberate attempt to qualify the convention center expansion project for a taxpayer-funded loan,” he continued, “using money designated for primary job creation in Pueblo.” Freeman says that a major flaw in what City Council is attempting to do is that an ordinance passed by City Council cannot usurp the will of the people. “Thus,” he said, “the RTA project does not qualify for a loan using the half-cent sales tax fund, because the passage of Monday night’s ordinance can have no bearing. Only the people can change or add to a definition of primary job.” PURA executive director, John Batey, has publicly stated that he would like to see the city pass the loan deal before the end of the year – which could very well happen on Dec. 8 if citizens don’t take immediate action to intervene. What IS the RTA? The 2009 Colorado Regional Tourism Act (RTA) established a program that allows local governments to apply to the Economic Development Commission for a rebate against future state sales tax to use for a large-scale project. In order to qualify, a community must demonstrate that its project is “extraordinary and unique” enough to bring a substantial increase in out-of-state tourists, resulting in a significant portion of sales tax revenue through the visitors’ transactions. In addition, the local government must provide economic data that demonstrates that in the absence of this state sales tax increment revenue, the project cannot be done within the foreseeable future. In 2011, leaders from Pueblo Urban Renewal Authority (PURA), PEDCo, Pueblo Convention Center, Greater Pueblo Chamber of Commerce and HARP joined together and applied for Colorado RTA to expand the convention center – with the slated PBR (Professional Bull Riders) University put forth as the extraordinary and unique component. Having moved its headquarters to Pueblo in 2007, PBR had no space to potentially train riders, judges or other event staff – and thus Phase 1 of the convention center expansion will include an 18,000 square-foot building to be used for training sessions. Many critics wonder why fairgrounds space currently used for rodeos, or the State Fair Events Center, couldn’t have been rented for these purposes. They are also skeptical of the 30,000 out-of-state tourists this facility is purported to draw. ”The City of Pueblo and Urban Renewal Authority of Pueblo together with our funding partners, request consideration as a qualified applicant for its proposed Regional Tourism Project called the Professional Bull Riders (PBR) University and Heritage of Heroes Project.” - RTA grant application Stating that the convention center expansion would be done with their funding partners, the RTA grant was awarded in May 2012. And now, 2-1/2 years later, it appears that the purported “funding partners” may wind up being the Pueblo taxpayers, who, as of Nov. 2005, shot down for the third time using taxpayer money to expand our convention center. Adjacent to the new PBR-U space – also in Phase 1 construction – will be an additional 41,000 square feet of convention center space, which the local RTA group claims will bring an additional 45,000 out-of-state tourists per year to Pueblo. But as this group lobbies City Council for $14.4 million, the three entities who stand to profit most from Phase I construction – Global Spectrum, PBR and the Marriott – are not investing a cent in the project, according to local watchdogs. Global Spectrum, in particular, is of high concern to many critics, since they have already shown a losing track record in Pueblo. A Philadelphia-based corporation that manages public event venues worldwide, the group was brought in by the city to manage Pueblo Convention Center and Memorial Hall, and would also manage the expanded convention center space. A local financial expert analyzed the convention center profits and losses over the past several years, and found that they have lost an average of roughly $473,000 per year: money which he says is already being subsidized by the taxpayers. When questioned at the Nov. 24 Council meeting on how Memorial Hall was doing this year, City Finance Director, Deborah Morton, confessed: “They are tracking at a loss this year…the shows just haven’t brought in the revenue that they have budgeted.” With the Memorial Hall losses added, opponents express fear and distrust over how successfully Global Spectrum would be in managing another high-dollar taxpayer-funded investment. One even states, “If City Council and the taxpayers are going to be a bank, we need to be asking banker’s questions – starting with ‘Where’s the collateral?” At the June 9, 2014 Council meeting, all members but Steve Nawrocki and Chris Nicoll voted no to loaning primary jobs money for the RTA project. But now, the face of Council has changed, with a seeming majority leaning toward loaning or gifting (“investing”) the money for this expansion. If they do, it will likely set a precedent in which the group can come back asking for more money if the project is running over budget, and/or when more money is needed for the subsequent phases. Councilwoman Ami Nawrocki, a vocal opponent against using primary jobs money for the RTA project, said that at least some of Council agrees that the voters should have a say in appropriating the half-cent sales money for anything other than primary job creation. “I asked the RTA group no less than three times if they would like a measure added to the 2014 ballot to let the voters decide on this taxpayer loan,” she said, “and they declined.” “I believe it’s because they know that the people of Pueblo would not support using $14.4 million to expand the convention center,” she continued, “while there are overwhelming infrastructure needs on every street in every neighborhood, and our public safety remains underfunded.” She stated that this issue underscores the difference between those trying to fight this loan, and proposed ordinance writer, Councilman Dennis Flores. “He wants Council to take unilateral action and decide for themselves how to use the money,” she said. “He wants to donate $14.4 million in tax dollars to expand the convention center while the rest of the city burns.” “The City doesn’t even have the money to fix crumbling roads or demolish condemned houses, and they want to build the Taj Mahol downtown?”, she asked. Former Councilman Chris Kaufman was on the steering committee for Pueblo’s RTA project and one of Council’s top cheerleaders - until after the RTA grant was awarded, and he saw that the project wasn’t what they had gone in representing. He had much to say about the RTA in Part II of our October interview, noting that citizens need to rise against this. “Streets continue to fail,” he added, “Parks and parkways lose irrigation; I-25 remains Pueblos most blighted and most identifiable signature! - all while sitting on top of $50 million in the half-cent fund.” Kaufman said that Council had already voted no three times on this issue, and correctly predicted that it would come up again after his vacant seat was filled. “So now if we have Council members who want to loan, gift or grant this group $14.4 million for the convention center expansion, and we’re going to use this taxpayer money,” he said, “how stupid would it be for a Council, who has been told twice before via election, don’t do it?” Both Ted Freeman and Ami Nawrocki stated that the Pueblo Chieftain has been pushing for a convention center expansion since at least 1986, with an editorial claiming that such an expansion would drive tourism. Because the Chieftain publishers are decades-long proponents of this expansion, this could explain why residents have heard no real opposition through our local media. Freeman and Nawrocki said that all professional examinations of convention centers say that they do not boost tourism, citing the book, Convention Center Follies. Written by one of America’s leading urban development experts, Johns Hopkins and Harvard-trained Dr. Heywood T. Sanders, the volume “exposes the forces behind convention center development and the revolution in local government finance” – and how “proponents of these projects always promise new jobs, new private development, and new tax revenues”: the same promises now being given to Pueblo. Why the big hurry to push this taxpayer-funded loan or gift (under the guise of “investment”) through right away? RTA proponents hint that the clock is running, with deadlines soon approaching. However, Jeff Kraft, Director of Business Funding and Incentives with the Colorado Office of Economic Development and International Trade, said that the Pueblo RTA group will only need to secure finances or begin construction within five years of the award date – which would place the deadline at May 17, 2017: plenty of time to put this issue on the on the 2015 ballot, and let the voters decide. If the issue were placed on next year’s ballot, perhaps voters could be given alternate selections on use of this $14.4 million: Road repairs. Better schools. A big boost to public safety. “The voters have defeated the expansion to the convention center twice and have taxed themselves with the half-cent sales tax fund for primary job creation,” said Freeman. “Now, it seems the City Council doesn’t care what the people want; they will just do what they want.” “When Council votes Monday night on the ordinance to allow this loan,” he continued, “they should remember that the people, their constituents, voted not to expand the convention center.” Will emails to all of council demanding a citizen vote on the matter, as well as public testimony at the Dec. 8 meeting, make a difference? “I hope that council would always consider public testimony,” said Ami Nawrocki. “I guess we’ll see.” Citizens who want to give their input are encouraged to be in Council chambers by 6 pm Monday evening, as a full house is expected.
Posted on: Thu, 04 Dec 2014 12:03:57 +0000
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