City considering $68K funding request for downtown renovation

City Commissioners will conduct a public hearing on a request for $68,560 of downtown tax increment financing funds during their Jan. 3 meeting.

Metropolitan LLC, the company that owns the Metropolitan building at 313-315 Central Ave., is requesting the funds for installation of a fire suppression system.

Staff is recommending denial of the request since the applicant is required to install the system as part of the building renovation and believes it’s more appropriate to use private rather than public funding, according to the staff report.

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The Downtown Development Partnership voted Nov. 30 to recommend approval of the full amount and during the meeting discussed the need for fire suppression in the downtown, especially after the 2009 Rocky Mountain Building fire, and since the Metropolitan building is midblock, it would mitigate damage to the entire block if there were ever a fire.

The DDP members said there were extraordinary circumstances to justify the City Commission approving the full amount, which exceeds the $25,000 limit for life-safety projects in the TIF programs that were adopted by commissioners in 2021.

The building owner, Keith Cron, has been updating the building for several years, including renovating the space at 313 Central for Mountain Wave Distillery.

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According to city officials, the building currently meets code, but the renovation is triggering the need for the installation of the fire suppression system.

In 2020, Cron requested $132,392 to reconstruct the public sidewalk and vault along Central, as well as for fire suppression and ADA compliance.

Commissioners approved $25,440 since at the time fire suppression and ADA weren’t eligible for TIF funding at the time.

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In 2021, commissioners approved new TIF building programs, which created funding mechanisms for life-safety code requirements such as fire suppression and ADA, but limited those to $25,000 per project.

The estimated cost for the entirety of the remodel and façade work for both 313 and 315 Central Avenue is about $1,702,120, according to the city staff report.

TIF districts and funds are governed by state law and must be in compliance with the local jurisdiction’s urban renewal plan also.

Years ago, commissioners adopted their own criteria for evaluating TIF funding requests.

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The applicant feels their request complies with state law, but staff key issue is with the criterion for special or unique opportunities, which considers the extent to which the development “represents a unique opportunity, meets a special need, or addresses specific district or community goals.”

When the new TIF building programs were added in 2021, there was an option for commissioners to approve requests that don’t comply with program eligibility requirements.

That provision states, “notwithstanding anything herein to the contrary, the city commission reserves the right and discretion, upon the demonstration of extraordinary circumstances, to approve grants in excess of the above referenced aggregate limits.”

But despite the DDP recommendation, city staff doesn’t view the application as a special or unique opportunity or that extraordinary circumstances support the request for funding.

“In this instance, the need to install a fire alarm and sprinkler system is a code requirement that is automatically triggered with the renovation project. This is not the type of request that was envisioned when the life-safety code compliance program was originally developed. Instead, the program was developed to address existing buildings that did not comply with current code requirements,” according to the city staff report.

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The adopted life safety program includes an eligibility requirement that states a project is defined “as the remedial actions with respect to existing life safety code violations per building on commercial properties located within the district.”

Since renovations or new construction requires compliance with current code, staff said this particular project doesn’t meet that requirement.

Staff said that in creating the new programs, the thought for commissioners awarding funds over project limits would be for “larger catalyst project that would have large economic development benefits to the downtown as a whole,” and that this project doesn’t meet that threshold.

Staff discussed the request with legal counsel and determined it is eligible for TIF funding under state law and in conformance with the Downtown Urban Renewal Plan, but that legal counsel shares staff’s concern for the precedent that would be set for awarding TIF building funds for a project that would normally be privately financed.