Check out market updates

Loveland council, LURA approve master finance agreement for Centerra South

LOVELAND — The Loveland City Council and the Loveland Urban Renewal Authority commission both approved a master finance agreement for the new Centerra South urban renewal development in east Loveland.

In a marathon pair of meetings Tuesday night, LURA voted 9-4 to approve both the eighth amendment to the Centerra MFA and a new MFA for Centerra South. Commissioners Jacki Marsh, Jon Mallo, Jody Shadduck-McNally and Steve Johnson voted against.

At the City Council, which also needed to approve the MFA for it to move forward, members voted 7-2 on motions to approve the finance agreement, and 8-1 on a motion to approve an agreement that would restrict surface rights to drill for oil and gas from the Centerra South property. Mayor Marsh voted against all the motions.

The finance agreement sets out how the city will finance $147.5 million in public improvements — or 14% — that will go into the $1.04 billion development, with the developer responsible for $892.5 million of the project cost.

The council and LURA previously approved the urban renewal plan; Tuesday the debate focused on the financing agreement that would undergird the development. It depends in part on tax increment financing in which increases in property taxes that result from the development are used to fund public improvements within the development.

The finance agreement commits property tax increases from what the city and the Thompson School District would otherwise collect; a sales tax of 1.75% (the city would retain 1.25% of its total 3%); a 1.5% lodging tax add-on; and metropolitan district fees. 

Unlike previous meetings, the MFA drew few public comments although a few individuals who had commented previously returned to the lectern to voice their disagreement or agreement.

Developer McWhinney Real Estate Services Inc. did say that it will be meeting this week with the Loveland Housing Authority to draft a letter of intent to develop an affordable housing component. Concern had been raised earlier about whether affordable housing, as opposed to workforce housing or attainable housing, would be included in the plan.

City staffers noted that the Loveland Fire and Rescue Authority, which wasn’t specifically outlined in previous presentations, will receive about $1.5 million in fee revenue from the development and also will receive incremental increases in city funding, as would other departments that draw from the city general fund.

The MFA includes a provision requiring the developer to participate in upgrades to Larimer County Road 20E when it comes up for improvements, and it will reimburse the city for its costs paid to consultants in designing the URA and MFA.

No waivers of building permit nor capital expansion fees are included in the agreement. CEFs will total an estimated $13 million in the first phase, McWhinney representatives said.

Marsh, who has opposed the development from the beginning, said she saw “extreme favoritism toward one developer.” She said no meetings between the city manager and the developer of property to the west of Centerra South were held, but the city manager had 90 meetings with Centerra developers. 

Former legislator and county commissioner Steve Johnson outlined his opposition, including disagreement with what has been termed the “but-for” argument, which says that if the project were not built as proposed that the city, schools and county would not receive any benefit. He argued that “it’s not accurate to say there would be no development and no tax revenue if this doesn’t happen. There would be some development” on that site, he said.

Council member Andrea Samson perhaps summed up the sentiments of the proponents with her statement that since she’s been on the council she’s heard resident requests for multiple amenities. Centerra South is “an opportunity to fulfill a lot of the city’s desires in one area. It’s an opportunity to be visionary and see the potential,” she said. The developer “gets nothing until it does something,” she said.

Source: BizWest