Liz Copan/Summit Daily News archive
The Dillon Town Council approved the second reading of an ordinance Tuesday, Nov. 21, related to a public finance agreement that aims to fund infrastructure for a proposed redevelopment of the town core.
Despite a few residents and Mayor Carolyn Skowyra voicing concerns, the council voted 5-1 to approve the ordinance that grants tax credits to the metro district established to help fund the proposed development.
Developer Jake Porritt, of JGJP Dillon LLC, has proposed redeveloping the town core with branded residences overlooking the waterfront, housing and retail sites in the town core and workforce housing in the town’s commercial district.
Earlier in the year, Porritt had presented a more elaborate vision centered around a 4- or 5-star hotel on the waterfront. But he scaled that proposal back after receiving feedback from the town and residents.
The town council approved the public finance agreement, 5-2, earlier this month, with Skowyra and council member Kyle Hendricks in dissent. In February, the council split along the same lines during a vote that approved a service plan that allowed the developer to create metropolitan districts to help fund the proposed redevelopment.
With the public financing agreement secured, lawyers representing Porritt told council members Tuesday that an application for the first phase of development could be submitted to the town for review as soon as next month.
While Skowyra raised concern about moving forward with a public finance agreement without having an application for the proposed redevelopment, other council members said the agreement and the related ordinance were necessary first steps.
“I don’t feel comfortable, and I can’t vote in favor if we don’t know what we’re getting,” Skowyra said. “We’re approving a financial scheme for something that is a concept that I don’t have a copy of.”
But council member Dana Christiansen noted that the proposed projects must still go through the town’s planning and zoning process as normal, so he doesn’t see the public finance agreement as a “green light” for the proposed redevelopment.
“Well at the end of the day, we have the final approval or disapproval of any specific project,” Christiansen said. “This is where we get to exercise our control over the size and scope of this whole thing.”
Skowyra responded by raising concern that the town could be “backed into a corner” if it decides the redevelopment it wants is smaller in scale than what the developer wants and the financial parameters laid out in the public finance agreement.
Council member Tony Scalise asked if delaying a vote on the ordinance until the town receives formal development plans would impact the developer.
Caroline Kwak, a lawyer representing Porritt, said that delaying a vote on an ordinance would also delay the developer submitting formal plans, since the developer needs the public finance agreement approved to outline the parameters of what is possible.
“We’re not talking about vacant pieces of land here,” Kwak said. “There are parcels that have to be purchased. There are contingencies that have to go with that and a lot of those can’t be determined without understanding what parameters of the public finance agreement are available to construct certain things.”
A metro district is a quasi-governmental unit that can be formed under Colorado law. These districts have similarities to school, fire and water districts and allow developers who establish them to access certain financial tools to help fund the public infrastructure needed to support a project.
Developers establish metro districts in order to issue tax-exempt bonds, which are paid off over time with revenues generated by metro district property taxes and fees, according to a memo written by Dillon town staff. Metro districts cannot fund private components of a development.
Under the terms of the public finance agreement, the town would grant credits that essentially allow the developer to collect half of the town’s 2% sales tax, half the 6% lodging tax and half the 5% short-term rental tax generated by properties in the metro districts. The ordinance approved Tuesday granted these credits.
The public finance agreement would also rebate back to the developer half the 2% county sales tax generated by properties in the districts, according to the staff memo. Those revenues would reportedly be spent on public improvements or infrastructure related to the project.
The town would also receive a $700,000 lump-sum payment from JGJP Dillon LLC that is intended to compensate the town for the expected loss of base sales tax and excise tax revenues during the construction period of the project, according to the memo. That $700,000 may be used by the town for any municipal purpose, the memo states.
The public finance agreement does not grant any approvals to the proposed projects and any proposed development will have to go through the town’s usual planning process, according to the memo.
The town earlier this month also approved a redevelopment and reimbursement agreement that would grant the developer 100% of the property tax increment attributable to properties included in the metro district until 2037.
