Urban Renewal Facts & Questions

The following information is courtesy of Paul C. Benedetti, Esq. unless otherwise noted.

What is the purpose of urban redevelopment or renewal in Fort Lupton?

Communities large and small have areas and infrastructure that are deteriorated and in need of improvement, but the costs to correct identified problems are too high for the private sector to correct without corresponding public investment. The Colorado legislature has provided a tool for use by the city and private enterprise, working together, to stimulate redevelopment of areas in the city in need of investment through a redevelopment plan for specific areas of the city. The urban renewal law is found in the Colorado Revised Statutes at Sections 31-25-101 through 116.

What is a conditions survey and why is it necessary?

A survey of an area that is under consideration for an urban renewal plan is necessary to determine if conditions listed in the urban renewal law are present so a redevelopment plan can be presented to the City Council. The conditions survey consists of observations of the condition of streets, sidewalks, the exterior of structures, and other data from public records to determine if at least four of the conditions that constitute “blight” under the urban renewal law exist in the area.

What is “blight” and how is it related to redevelopment?

Blight as defined in the urban renewal law includes environmental contamination, inadequate or defective utilities, deteriorated structures, defective street layout, unusual topography, deteriorated, and conditions that endanger life or property by fire or other causes such as flooding. To qualify for a corrective plan under the law, at least four factors must be present in an area. Most areas designated as blighted contain well maintained properties that are not themselves blighted, but will benefit from improved conditions if a redevelopment plan is adopted by the City Council.

Will my property lose value because of a blight designation?

No. There is no evidence that property values decline because of inclusion in a blighted area. The value of property that is improved by new construction or rehabilitation rises in value. Properties that are not rehabilitated generally remain unaffected or experience an increase in value because of improvements to nearby properties or because public improvements have added a general benefit to the area.

Will a redevelopment plan impose new taxes or assessments on my property?

No new taxes or assessments are imposed by adoption of an urban renewal plan. Property tax rates are governed by the same laws and rules regarding assessment and tax rates as apply to all property. New construction on specific sites will result in increased valuation as in any similar situation.

Will my property be taken by eminent domain?

No. The City Council is on record and the plan, if adopted, will specifically prohibit the use of eminent domain by FLURA as part of the plan.

What is tax increment financing?

Tax increment financing (or TIF) provides for payment of eligible costs of improvements in the plan area to lower the cost of redevelopment and stimulate private investment in the area. After the plan is approved, the revenue produced by the total assessed value of taxable property in the plan area (the base value) is distributed to all taxing bodies as are all other tax revenues. The base value is increased every other year when a general reassessment of all taxable property takes placed. For a period not to exceed 25 years, the revenue (TIF revenue) produced by the increase in value due to new construction is paid to FLURA and used to help pay for eligible costs. The law requires FLURA to cooperate with private owners to redevelop property in the plan area. This usually takes the form of an agreement between FLURA and an owner who constructs and pays for such items as public utilities, streets, sidewalks, drainage facilities, and other costs required to make redevelopment possible. The owner is reimbursed for a fixed amount of such costs from the TIF revenue produced by new development in the area. The legislature has allocated TIF revenue for the purpose of financing redevelopment in the plan area.

Please visit the following link to view a chart that shows how TIF works:

TIF Chart (PDF) (courtesy of Paul C. Benedetti)

Does TIF financing take money away from counties, schools, and other taxing bodies?

No, because the taxing bodies continue to receive the revenue they would have received without the redevelopment plan plus any generally occurring increases from semi-annual reassessments of property, no revenue the taxing bodies would have received is lost. It is only the increased revenue from redevelopment that is used to pay eligible project costs. But for the new construction financed the TIF revenue would not exist. If the county, school district, or other taxing body shows that the project improvements will increase service costs or require additional equipment or other facilities, the law states that such costs may be reimbursed from TIF revenue.