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Outside counsel outlines DDA, BID and URA powers and limits for Thornton
Summary
Carolyn White, a land‑use and public‑finance attorney, presented downtown development authorities, business improvement districts and urban renewal authorities and explained how tax increment financing, board composition changes under House Bill 1348 (2015) and IRS bonding rules affect what cities can fund.
Carolyn White, a shareholder at Brownstein Heit Barber Schreck, told the Thornton City Council the city can use downtown development authorities (DDAs), business improvement districts (BIDs) and its existing urban renewal authority (URA) to close the gap between private development economics and community priorities.
White said the “purpose of urban renewal is to eliminate slum and blight,” and that URAs are distinct from DDAs and BIDs in statutory purpose, boundary rules and revenue procedures. She warned that since House Bill 1348 took effect cities must negotiate with other taxing entities before capturing property‑tax increment for new URA plan areas adopted or amended after Jan. 1, 2016.
Why it matters: The tools Ms. White described authorize different types of spending, governance and revenue generation. Choosing one mechanism over another affects who must approve projects, whether residents inside a boundary vote, how long tax increment can be captured and whether a city must negotiate with the county, school district or special districts to receive shared increment.
White traced key distinctions: a DDA is meant to support redevelopment in a central business district and can levy a city mill levy (up to five mills) restricted to the DDA’s purposes after a TABOR election limited to voters inside the DDA boundary; a BID focuses on economic development and events and is formed by petition of business/property owners; an URA’s statutory purpose is to remedy blight and historically relies on tax increment financing (TIF). She noted that TIF can include property, sales, use and lodging taxes but that capturing property‑tax increment for a URA typically requires intergovernmental agreements with other taxing bodies under post‑2015 law.
White also cautioned that bond financing often imposes IRS limits: “If you are going to issue tax‑exempt municipal bonds, then it has to meet the IRS regulation requirement for what constitutes valid tax exemptions,” which can be a narrower set of eligible expenditures than the statute allows. She gave an Arvada example in which TIF reimbursements helped fund elevator cores and structured parking to enable a developer to deliver a five‑story residential building before light rail existed.
Council members asked about board composition, timing of financial analysis and whether a DDA can be designated for a not‑yet‑developed downtown. White said council makes the legislative decision about what constitutes a central business district and that some communities have formed DDAs on the basis of a planned future downtown.
Ending: Staff said this briefing was intended to support Thornton’s strategic planning work on “vibrant and purposeful development” and that staff will return with tailored options, goals and finance recommendations after further analysis.
