Construction Watch

Hundreds of Millions Later, Regional Tourism Act Unlikely to Be Renewed

Seven years after Colorado’s General Assembly passed the Regional Tourism Act (RTA), allowing the state to award sales-tax revenue to developers constructing large tourist attractions, the funding mechanism appears unlikely to be renewed.

In a recent feature story about the Stanley Hotel, Westword explored some of the hotel’s headaches as it works to secure state RTA money. Along with three other projects that won an RTA bid under the “Go Northern Colorado” application, the Stanley is unlikely to receive any money until next year.

The Go NoCO projects are hardly the only developments to have experienced problems. Nearly every project awarded money through the RTA program has been subject to delays, squabbles and uncertainty.

The most contentious project has been the Gaylord Rockies Hotel, a 1,500-room hotel and conference center in Aurora that has already been through three separate lawsuits, a switch in developers and bitter fights with hoteliers in metro Denver that accuse the Gaylord of receiving an unfair competitive advantage through its state financing. The Gaylord’s $81 million in RTA financing is even less than what Colorado Springs received — $120 million — for its "City for Champions" project, a mixed proposal that includes an Olympic Museum, an Air Force Academy visitors' center and additions to a sports center. That project has also fallen behind schedule, with organizers acknowledging that the Olympic Museum will not be completed in time for its anticipated February 2018 opening.

The other two projects awarded RTA money are the “Heritage of Heroes” proposal from Pueblo – a $14.8 million tax incentive to construct attractions around that city’s riverwalk – and the National Western Complex in Denver, which won the third and final round of applications (along with Go NoCo) in October 2015 for $121 million in funding from the state.

While these projects are – at least for now — moving forward, all of the RTA money has been awarded, and it is unlikely that the program will be extended or renewed. Given the large sums of tax revenue and the red tape involved in the projects’ financing, there have already been efforts to scale back the program: In 2012, Governor Hickenlooper vetoed its expansion, and in 2014, Hickenlooper signed a revision that kept the RTA’s final applicants from receiving more than 50 percent of their budget from the state.

Don Marostica, who headed the state’s Department of Economic Development and International Trade and was one of the RTA’s principal supporters on the House Republican side in 2009, says that the RTA made sense when it was introduced but doesn’t fit the economic conditions we see today.

In 2009, the state was still dealing with the effects of recession, "so Colorado needed something to spark itself and [the RTA] looked like a great way to do that,” says Marostica. “We spent a lot of time trying to figure out how to bring new business to the state.”

Originally, this included discussions of using RTA money to finance a NASCAR track, Marostica says — "but some folks thought that was going to pull away from other attractions.... So everyone is trying to figure out ways to take care of their own businesses, and they don’t like competition."

This gets to a fundamental problem with the RTA: Municipalities and businesses in Colorado are inherently looking out for their own financial well-being, not the general economy of the state. That’s one reason that there’s been such outcry about the Gaylord Rockies Hotel. Because the development is far away from downtown Denver or Aurora’s shopping district, some (including Marostica) believe it will actually isolate tourists from those other attractions.

Yet Marostica also believes that the RTA won't be renewed for a more simple reason: The economy is doing better.

"Now times have changed and things are little bit better, and it's a lot of money when you start looking at these projects," Marostica says. In order to renew it, “I think you'd have to have really tough economic times like we had in 2008 and 2009, where the state is in dire need and the public was willing to say, 'We'll give up those taxes because we want jobs.'”

Jeff Kraft, with the state's Office of Economic Development and International Trade, confirms that the RTA will likely be sunsetted. "The RTA in general has not gotten a lot of support from the legislature or the governor's office to renew the program," he says. "At this point, I'm anticipating that the program will end with the existing projects."

At the same time, Kraft promises that the state will see those projects through. "There are great projects that have been approved, and we're going to do everything we can to support those projects coming to fruition."

Whether there will be even more delays or controversies with the approved projects, however, is anyone's guess.
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Chris Walker is a freelancer and former staff writer at Westword. Before moving to the Mile High City he spent two years bicycling across Eurasia, during which he wrote feature stories for VICE, NPR, Forbes, and The Atlantic. Read more of Chris's feature work and view his portfolio here.
Contact: Chris Walker