Liz Copan/Summit Daily News archive
The Dillon Town Council approved a public finance agreement Tuesday, Nov. 8, that will help fund public infrastructure associated with developer Jake Porritt’s proposal to redevelop the town core.
The council split 5-2, with Mayor Carolyn Skowyra and council member Kyle Hendricks opposed to the resolution approving the public finance agreement. Porritt told the council that, with the public finance agreement approved, he could bring forward a formal project proposal through the town’s planning process as soon as next month.
“All (the public finance agreement) is — is it is creating the availability of a new bucket of funds to accomplish the town’s stated goals,” Porritt said. “If you don’t like the projects that are presented you just simply say no, and then nothing will happen.”
Porritt proposed a redevelopment concept last month that includes branded residences overlooking the Dillon Reservoir waterfront, housing and retail sites in the town core, and workforce housing in the town’s commercial district.
Porritt had originally pitched a 4- or 5-star hotel and indoor amphitheater on the waterfront but scaled the project back in response to feedback from the Town Council and residents. Any project he brings forward must still go through the town’s usual planning process.
Porritt first approached the town last year after his company, JGJP Dillon LLC, purchased the debt on the now-bankrupt Uptown 240 property, according to a staff memo included in Town Council’s agenda packet. He soon expressed a desire to participate in the redevelopment of other properties in town.
In February, the Town Council voted 5-2 to establish a service plan to begin the process of establishing metropolitan districts to help fund the redevelopment Porritt has called Triveni Square.
A metro district is a quasi-governmental unit that can be formed under Colorado state 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 the staff memo. Metro districts cannot fund private components of a development.
Dillon Town Attorney Nick Cotton-Baez noted that the metro districts will hold the bonds, not the town.
“One of the biggest advantages to the town is I’m the one who has to stand behind those bonds. So the city and the town are not having to put their credit against the repayment of those bonds,” Porritt said. “Its my credit.”
Through the metro districts, Porritt proposed the public finance agreement that the Town Council approved Tuesday. Under the terms of the 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. It would also rebate back to the developer half the 2% county sales tax generated by properties in the districts, according to the staff memo. Funds raised through these measures can only go toward public infrastructure, not the private components of the development.
These tax credits would not last forever, and when they expire the town would get 100% of the tax revenues from the properties in the metro districts, Cotton-Baez noted. Under the terms of the agreement, the credits would expire upon $68 million having been remitted to the developer through the metro districts, the date the costs and bonds have been paid off or 40 years from the issuance of the bonds, whichever is earlier, he said.
Porritt, through the agreement, has promised to pay the town $700,000 at the time the bonds are issued. Cotton-Baez noted that those funds are meant to compensate the town for the loss of base sales tax and excise tax revenues during the period of construction. He said those funds are coming directly from Porritt and can be spent on any municipal purpose, including balancing the budget.
The public finance agreement also includes a workforce housing provision requiring the town and developer to engage in good faith negotiations within 120 days of the effective date of the agreement, Cotton-Baez said. Porritt has proposed workforce housing at the Dillon Ridge Shopping Center site where the Skyline Cinema 8 theater now stands, but he has yet to close on the purchase of the property.
Porritt said his concept aims to reflect the town’s master plan for the town core, though Skowyra pushed back on the idea that it complies with the master plan. She said she feels that the public finance agreement could leave the town “backed into a corner” with little choice but to move forward with the proposed redevelopment.
Skowyra added that she could not vote to approve the public finance agreement because there are not yet formal plans for the town to review related to what is being proposed, only concepts.
“I cannot vote on this tonight. I can’t vote in favor of (the public finance agreement) because I think it belongs attached very strictly to a project,” Skowyra said. “It’s too ambiguous for me right now to say ‘yes, I’m signing up for this financing agreement,’ when I don’t know what we’re getting.”
But Council member Renee Imamura said she doesn’t see a downside to approving the public finance agreement because it doesn’t grant Porritt permission to move forward with his concept.
“When I got on Council, everybody wants redevelopment, but we haven’t had anybody come forward with interest like (Porritt has) in the town, so I’m trying to be open-minded,” Imamura said. “When I look at this public finance agreement, I don’t think it hurts the town one bit because you still have to go through planning and zoning, you still have to get your application going. But you are still going to be purchasing property, so you are going to have that expense.”
Imamura said Dillon “has so much potential” and she believes that with an interested developer like Porritt, the town core could end up with more shops and density. The public finance agreement just shows that the town is willing to work with the developer on public infrastructure, she said.
Council member Tony Scalise agreed, saying he hopes that the working with a developer such as Porritt might help attract a local coffee shop to the town core or a local gift shop where he could buy a gift for his wife, instead of having to go to Frisco or Breckenridge.
“I don’t think the development in the downtown core is going to be overwhelmingly gargantuan,” Scalise said. “We’re simply going to create housing. We’re going to create small retail restaurants and businesses that the town can enjoy.”
But Hendricks, who voted against the public finance agreement, said he hasn’t talked to anyone locally in Dillon or Summit County who supports Porritt’s proposals. By the projects Porritt has discussed are not what Dillon needs and by approving the public finance agreement, the Council is not listening to the voters, he said.
“It’s harder and harder for me to understand this council’s reasoning for going forward on this project,” Hendrick said.
Council member Dana Christiansen disagreed with Hendricks that the public is largely opposed to the proposed redevelopment plans.
“We must run in different circles because most of the people I talk to are for reasonable development,” Christiansen said. “They want to see restaurants and coffee shops in downtown Dillon. They understand that this is what it is going to take to make it happen.”
Council member John Woods noted that the owners of the Best Western are ready to retire and sell their business after running it for decades. The town can’t do anything about business owners retiring and selling their business, so whether they sell to Porritt or another developer down the road, change is coming to Dillon, Woods said.
“Something is going to happen whether it’s this developer or the next guy who wants to buy that magnificent piece of property,” Woods said. “Something is going to happen. If the town would understand that something is going to happen, that’s where we take over. To me, the public finance agreement is our responsible action to plan for infrastructure when that does happen.”
Council also voted 5-2, also with Skowyra and Hendricks dissenting, on the first reading of an ordinance related to the tax credits Porritt would receive as part of the public finance agreement.
The public finance agreement is just one of the initial steps related to the proposed redevelopment and there are many more steps before construction could start on a project, said Town Manager Nathan Johnson in a phone interview Wednesday.
Johnson said any project proposed as part of the project must either comply with existing zoning or go through the planned unit development process.
“This really puts the ball back in the developer’s court,” he said, “to create projects that fit with the code or that can stand up to public criticism, planning and zoning criticism and town council criticism.”