Littleton Council approves First Street Farms deal after contentious debate over $5.5 million incentives

The Littleton City Council on Thursday approved Resolution 45, authorizing a public–private partnership with the Gustavo Group to build First Street Farms — a mixed hospitality and public‑space development on the River Park site — in a 4‑3 vote after hours of public comment and detailed questioning from council members.

City staff said the project combines a full‑service restaurant, an event venue and more than four acres of publicly programmed open space including a turf field and trail connections. To close an estimated $28 million development cost, staff presented a financing package that includes up to $5.5 million in city support: a $2 million performance loan restricted to public‑facing infrastructure, approximately $3 million in sales‑tax shareback over the first five years, and fee waivers. City consultants projected the city would begin to receive net positive sales‑tax revenue around year six and estimated a nominal net fiscal benefit of $21.5 million over 30 years (about $7.8 million in present value at a 5% discount rate).

"This is a chance we don't get often," project lead Peter Newland told council during the presentation, saying the incentive "just barely" brings the project to a five‑year payback and promising a long‑term, community‑oriented operation. Rachel King, Littleton's economic development director, told council the application met the city's incentive policy and aligned with multiple adopted plans for the South Platte corridor and downtown vitality.

Public comments were sharply divided. Dozens of residents, restaurant owners and local business leaders testified for and against the incentive package. Supporters — including local restaurateurs and the Littleton Business Chamber — argued the project would draw visitors, support nearby businesses and create a year‑round community hub. "This project represents a thoughtful investment in our community," said Cal Mihrab of the business chamber. Opponents called for restraint in using limited public funds, questioned long‑term returns and warned the city could be left repaying debt if the venture underperformed. "Is this a risky financial gamble teetering on collapse without preemptive bailout money from the city?" asked Billy Gooch during public comment.

Council discussion focused on contract mechanics, mitigation of city risk and the agreement's precise economics. The city attorney and staff explained that the $2 million is structured as a milestone‑based performance loan (draws at 50%, 75% and 100% completion) and that the license granting public access to the turf field, trails and certain park amenities is tied to repayment of the loan; if the loan is repaid early the city’s use rights change per the agreement. Staff also confirmed the $2 million would be funded from the city's Capital Projects Fund (funded primarily by building‑use taxes), not the voter‑approved capital sales tax fund.

Several council members raised technical questions about discount rates and whether the $5.5 million figure quoted in the packet reflected nominal dollars or present‑value calculations; staff and consultants acknowledged variations by discounting and timing can change the nominal-to-present‑value comparison and that the $5.5M number is the commonly stated nominal cap for incentives. The city attorney also confirmed the agreement requires documentation for each loan drawdown to mitigate misuse of funds.

During the meeting council approved a staff‑sponsored amendment to the agreement to list the project counterparty as First Street Farms LLC (the operating/property entity) rather than Gustavo Group LLC. The amendment passed 6–1; the main motion (as amended) then passed on a roll call the clerk recorded as four in favor and three opposed (Mayor Schlachter, Councilmember Stillwell and Councilmember Reichert voting no). The council did not change other material incentives in the agreement.

Opponents warned the package diverts scarce capital projects funds that might otherwise pay for streets, public‑safety infrastructure or housing programs. Supporters said the project is consistent with the city's long‑range plans and would generate new economic activity, visitor lodging and downtown traffic. Staff emphasized the community‑use measures secured in the agreement — a minimum number of free city and nonprofit event uses and field uses per year during the incentive period — and said the loan proceeds are restricted to the public‑facing improvements in the agreement.

What happens next: the approval authorizes the mayor to execute the amended partnership agreement; project construction timing, contractor selection and building permits will proceed according to standard land‑use and permitting processes. The council adjourned the special meeting at 9:36 p.m.