How Urban Renewal Works

The Need for Urban Renewal Authorities

The redevelopment of urban areas is very expensive and hard to accomplish. These older developed sites are difficult to assemble as the land has been subdivided over and over into a myriad of sites, often without the necessary infrastructure, access or improvements. Likewise, these sites are often burdened with contamination from years of neglect or by prior uses. It is far easier and less expensive for a developer to build on undeveloped land at the fringe of a city, and contribute to urban sprawl, than to tackle the issues surrounding urban infill sites.

Because of these development hardships, local governments must get involved if they want to see these depressed areas of their community redeveloped. Therefore, in 1981 the people of Arvada voted for, and the City Council approved, the creation of the Arvada Urban Renewal Authority.

Urban Renewal Development Tools

The State of Colorado provides urban renewal authorities with two unique and significant tools.

The first is the ability to assemble land and to offer to the development community a contiguous piece of property for redevelopment. Most inner city redevelopment projects need selective property acquisition to happen. Without the ability to assemble land in inner city areas, revitalization of deteriorated urban areas would not happen, nor would any transit related developments be built around new transit stations. The cost of redevelopment far exceeds the ability of the developer to make the deal work; as a result, their project is developed elsewhere.

Second, urban renewal allows Tax Increment Financing (TIF), which is a vehicle where sales and property taxes may be leveraged to help finance such projects as infrastructure, environmental clean up, or provide the public improvements necessary for the development to occur.

Here's how TIF works. When a redevelopment district is being planned, the authority analyzes how much additional property and/or sales taxes should be generated once it is developed. That "tax increment" then can be used by the authority either to finance the issuance of bonds or to reimburse developers for a portion of their project financing. In either case, the new tax revenue that is created must be used for improvements that have a public benefit and that support the redevelopment effort, such as site clearance, streets, utilities, parks, the removal of hazardous materials or conditions, or site acquisition.

All the revenue generated by the redevelopment within an urban renewal district reverts to the normal taxing entities when the urban renewal district sunsets at the close of 25 years. Thus, the neighborhood benefits from the creation of revitalized, productive properties and the taxing entities, as well as the entire community, enjoy new, permanent sources of revenue that wouldn't have existed if the authority had not implemented the approved pan and enabled the redevelopment to happen.

Without the use of these tools, the city will continue to sprawl further into the country, and the inner urban areas will deteriorate because of the inability to make redevelopment happen.

Redevelopment Process

AURA's redevelopment efforts are targeted for areas experiencing economic difficulties, such as the vacant mental health campus located at the former Ridge Home site. In recent years this area attracted vandals and became overgrown with weeds. Other areas include tired or dated retail centers in need of economic stimulation in order to better serve the community, attract complimentary businesses to the centers and draw more customers to existing stores and businesses.

The recommendation that AURA evaluate such areas for possible urban renewal benefits often comes from a variety of sources, including the Mayor and City Council, the city's Community Development Department, private developers and/or citizens.

When an area is proposed for redevelopment, AURA coordinates with the Community Development Department to gather information through a public input process and conducts a study to determine if the area exhibits conditions of blight, based on a set of criteria spelled out in state law. That study, and a detailed urban renewal plan that provides a framework for undertaking redevelopment of the blighted area, are presented to the Planning Commission and City Council, which makes the final decision on whether to proceed or not. Public input is sought continually throughout the process.

AURA itself does not actually conduct the redevelopment activities. Instead, the authority works to find the right private developer for a specific project, either by issuing a formal request for proposals or by providing assistance to an existing owner or developer who wants to redevelop a site. AURA brings all the necessary parties to the table to ensure that each project gets done in a way that meets the objectives of the urban renewal plan and wins neighborhood and community support.