Opinion: The Downtown Development Authority is even worse than I thought

I got some very interesting feedback on my most recent column on the Downtown Development Authority. Here’s a summary of some of what came up for me in reading the input. For your information, nothing is set in stone yet; the Boulder City Council could still come to its senses, and fix Ordinance 8763 passed July 23 on first reading.

If the council passes Ordinance 8763 as is, creating the structure for DDA, the decisions to implement it and to divert incremental increases in sales and property taxes are voted on solely by downtown business folks. These decisions are submitted only to the “qualified electors as defined in the Act (CRS 31-25-8).” These are property owners, lessees, etc., in the DDA area, including Downtown and the Hill. We citizens get no say.

The way 8763 is written, the DDA can divert incremental tax revenues (generated within the district) that we Boulder citizens dedicated by our vote for Open Space, Parks and Recreation, Culture and Safety, Arts, and Transportation. Apparently, our votes to create these dedicated taxes didn’t count.

Ordinance 8763 also claims that this can be done “without regard to any expenditure, revenue-raising, or other limitation including those contained in Article X, Section 20 of the Colorado Constitution.” (This is TABOR, for those unfamiliar with it.) And it goes on to claim to be able to escape from any other law that might limit “the authority’s or city’s revenues.” Are they really asserting that the DDA can raise taxes unilaterally? Crazy!

This claim to be exempt from the Colorado Constitution’s provisions makes a mockery of TABOR’s actual language: “Other limits on district revenue, spending, and debt may be weakened only by future voter approval.” (In TABOR, “district” includes governmental entities like cities, counties, etc.)

This mess is even worse than it appears, because the tax increments on these sales taxes are calculated against the nominal amount collected in the base year, presumably 2026, which is not then adjusted for inflation. So, for example, if inflation persists at the current U.S. rate of 3.5%, after 10 years, the dollar would be worth only about 70% of its initial value. Thus, the actual value of the base year sales taxes that would continue to go to the city’s General Fund or to dedicated funds like Open Space or Transportation would have dropped by about 30%.

In other words, even without making any improvements at all in the business health of the DDA area, and so assuming the real value of the sales taxes collected stays constant, the real value of the tax increments to the DDA would keep increasing, but what was left for the rest of us would keep decreasing! The DDA folks could sit around and drink beer, and this would just happen.

Of course, this would substantially weaken the city’s financial situation. But I have not seen this even mentioned, much less quantified. And, consistent with this, any incremental increase in downtown sales tax revenues from Sundance Film Festival would go to the DDA folks, assuming the DDA is created and plans approved before the coming Festival, which is doable … yet more beer.

The whole DDA idea is even more infuriating, because, as I pointed out in my earlier column, there’s nothing that the DDA could do that the city council cannot already do on its own. The DDA area is mostly built out, as city staff agrees. So, the issue is not creating more development but doing a better job with what is there.

On that topic, I spent time wandering around the Mall this last weekend with some visiting friends. I can see why things aren’t working, at least in part. There are hardly any shops left that sell stuff that I would find useful. And there are many fewer places where I would want to go to just buy coffee or have lunch during a busy day. And there’s inadequate street-level parking. So, it’s far less attractive to me than it was many years ago. But I still like the Farmers Market.

Creating an entity like the DDA run by the same folks who have turned the area into what it is now just doesn’t make any sense to me, irrespective of the bizarre revenue maneuvers I laid out above. Far better would be to gather a task force of people who are willing to work to change the attitudes and behaviors of those who control the property, but within the realistic limits I discuss above.


Council should remember the saying about doing the same thing over and over again and expecting a different result…

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