Pueblo Urban Renewal Authority asks city to consider using Main Street garage to satisfy $14.4M RTA loan

Pueblo Urban Renewal Authority (PURA) representatives told the City Council Executive Committee on Sept. 25 they are asking the city to consider accepting the Main Street parking garage as satisfaction of a $14.4 million loan PURA received to support RTA‑eligible projects, including expansion work at the convention center and other downtown investments.

Cherish Deague, speaking for PURA, said the state sales‑tax increment from the RTA grant “is eligible to pay for interest only on those loans. It is not eligible to pay the principal.” She said the original local contribution consisted of two parts — $2.2 million and $12.2 million, totaling $14.4 million — with the smaller amount treated as a non‑interest promissory match for HARP improvements and the larger amount bearing interest and secured by a deed of trust on the convention center building.

PURA staff said the Main Street garage was built with TIF, New Markets Tax Credits and other public financing, is now free and clear of those credits, and based on internal estimates and an older appraisal PURA believes the garage could satisfy the full $14.4 million obligation. PURA requested council consider transferring ownership of the garage to the city “in satisfaction of this debt” and noted there are existing leases that generate roughly $86,000 a year (approximately $32,000 in general leases and $54,000 tied to an AT&T parking arrangement), a 60/40 split of lease revenue and operating costs between PURA and the city, and potential additional revenue from antenna leases.

Chris DeLuca, a PURA board member, said the board’s aim is to “clean up the wrongs that were done years ago,” and framed the request as a way to resolve an obligation PURA believes it cannot repay in cash. DeLuca added that transferring a municipal asset to satisfy the loan could free RTA funds now used for interest payments (PURA reported $1.7 million in interest collected to date and said annual interest runs about $366,000 at 3%) for other eligible projects, including remaining RTA‑eligible items such as the aquatic center.

Council members asked for more information before any decision. Questions included: the timing and content of a current appraisal of the garage, annual revenues the garage could produce under different leasing or paid‑parking scenarios, the mechanics for transferring an asset into the city’s half‑cent sales‑tax fund and whether a transfer would actually reimburse that fund in cash or only change accounting for city assets. Councilors noted the deed of trust on the convention center was the original security, that the city has received interest payments to date, and that any transfer or foreclosure remedy would require legal review and clear repayment accounting to the half‑cent fund (the dedicated local sales‑tax fund used for economic development projects).

City staff and council suggested next steps: obtain an updated appraisal and revenue projections for the Main Street parking garage, provide documentation of existing leases and the deed of trust securing the loans, and convene a closed session with the city attorney to review legal remedies and negotiation options. A council member suggested executive session to get legal advice and to determine whether there were any irregularities in the original arrangement; staff said finance can supply invoices and a record of interest payments. No transfer, sale, forgiveness or binding decision was made at the meeting; the committee directed staff to gather the requested financial, appraisal and legal materials for future council consideration.

PURA’s request raised competing policy questions that committee members flagged at the meeting: whether the city should accept an asset in lieu of cash to restore the half‑cent sales‑tax fund, whether the fund’s original voters would be made whole under such a transaction, and whether alternative remedies (foreclosure on the deed of trust securing the loan, structured repayments from garage revenue, or negotiated settlement) could better protect taxpayer interests. Committee members asked PURA and staff to return with valuation, lease revenue analysis and legal options before any recommendation to accept an asset in satisfaction of the loan.