$180 million Former CUHSC project probably won’t go forward without a Walmart Says Developer

From a recent front page of the Denver Post:

Proposed Denver Walmart underscores company’s polarizing effect

Image Source: pumaworldhq.blogspot.com

Neighbors and community activists are against the project for many reasons – a major one being WalMart’s labor practices:

“Wal-Mart reports that its average hourly wage for full-time associates is $13.24 in Colorado. A Denver worker needs to earn $23.79 an hour to support a family of four.”

Other say the neighbor concers are mis-placed snobbery.

The developer says, Its WalMart or nothing: “Fuqua says the $180 million project probably won’t go forward without a Walmart” – Pretty much what you’d expect the developer to say, but here’s why he’s saying it:

TIF – Tax Increment Financing

The redevelopment of the 28 acre former CU Health Sciences campus will require huge up-front investment in infrastructure throughout.  In large projects like this, developers (Fuqua in this case) don’t have the money to pay for these infrastructure costs, so they, in partnership with the local governing entity (City of Denver) form a special taxing district, which has the power to impose additional taxes on property owners and business activity at the project.  These taxes are often in the form of sales tax or special property tax assessment.  This district then raises the money for the infrastructure cost, by issuing bonds to investors, with the promise to pay back the bonds and interest out of the tax proceeds over time form the project.  Investor readily buy these bonds as the payments are all but guaranteed by the taxing power of the govorning entity.

What does this mean for you?  – Ultimately, if you own property, buy goods or do business at the project, you will have a slightly higher tax burden from the incremental tax. What you get in return is the new development and the associated economic activity that it generates.

There are opponents of TIF who say it amounts to no more than corporate welfare, and there are proponents that say without TIF new development would not occur and areas would remain blighted.

TIF is a common practice these days and is used frequently to enable new developemnt in Denver.  Here are a number of instances when special taxing districts have been formed in past years in and around the Denver Metro Area:  TIF Projects

Other TIF funded profects:

Stapleton (Incidentially – property taxes are higher in Stapleton that throughout other areas in Denver because of the TIF)

New Super Target – Tamarac Square

Belmar

One other Blogger’s take on the WalMart debate:

Feeling Ambivalent About Wal-Mart