News Column

Reviving the RTA loan request

June 13, 2014

By Peter Roper, The Pueblo Chieftain, Colo.



June 13--City Councilman Steve Nawrocki is trying -- gently -- to breath life back into the question of whether the city can loan Pueblo Urban Renewal Authority$14.5 million to build an exhibition hall onto the Pueblo Convention Center.

Five council members rejected that idea last Monday, saying the city's half-cent tax fund for job recruitment can only be spent on new jobs and new employers, not an exhibition hall intended to boost tourism.

Nawrocki, who voted for the loan along with Councilman Chris Nicoll, is pinning his effort on an ordinance council adopted in August 2012 that gave it the authority to alter the terms and conditions under which half-cent money can be spent.

"At the time, (then-City Manager) Jerry Pacheco was encouraging council to consider spending half-cent money to create a Downtown business center and council liked that idea," he said Thursday.

That ordinance said council has "sole discretion" to decide whether half-cent money can be spent for land acquisition, building infrastructure, and professional services "to establish and facilitate" the creation of primary jobs.

Ironically, Nawrocki was absent from the council meeting where the ordinance was unanimously approved.

At Monday's council meeting, City Attorney Dan Kogovsek said only voters could change the purpose of the half-cent tax and spend it on an exhibition hall and tourism.

Kogovsek wasn't the city's lawyer when the 2012 ordinance was passed and Nawrocki is asking him to review it and report to council on whether it does permit the PURA loan.

Councilman Chris Kaufman acknowledged that in 2012, council was looking at attracting new employers Downtown. Supporters of the exhibition hall loan have questioned why Kaufman supported the 2012 ordinance giving council more discretion and leeway in using half-cent revenue, but doesn't support the current request.

"The difference is that even when we were talking about a Downtown business park, the goal was to put new primary jobs there," Kaufman said Thursday. "We've never broadened the use of the half-cent tax to include tourism."

Nawrocki sent a letter to Kogovsek this week asking for his analysis of several questions, including the 2012 ordinance or whether the city could simply spend half-cent money to build the exhibition center on its own, without loaning it to PURA for that purpose.

The exhibition hall project is closely tied to a state-approved Regional Tourism Act grant that lets Pueblo keep a slice of state sales tax revenue for 50 years on the condition that it build a series of improvements Downtown that begin with the exhibition hall but also include features like an aquatic park.

The dispute isn't just a legal question. If PURA has to issue $12 million in bonds to pay for the hall, as council encouraged it to do Monday night, the final cost will be about double that because of interest on the bonds.

Getting a loan from the half-cent fund, on the other hand, would not have any interest cost to PURA. That loan could supposedly be repaid in 10 years from the state sales tax revenues being awarded to Pueblo.

"I'm still hopeful council will reconsider this," Nawrocki said Thursday.

That may be a hard sell.

Ami Nawrocki was one of the five council members who voted against the loan this week, along with Kaufman, Sandy Daff, Ed Brown and Eva Montoya.

Reviewing the issue this week, Ami Nawrocki said that even the 2012 ordinance reinforces that half-cent revenue can only be spent for the purpose of attracting primary jobs.

Yes, council can use it to build buildings and pay for other costs, but only if creating primary jobs are the purpose she said.

"That connectivity is always there," she said.

proper@chieftain.com

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(c)2014 The Pueblo Chieftain (Pueblo, Colo.)

Visit The Pueblo Chieftain (Pueblo, Colo.) at www.chieftain.com

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Source: Pueblo Chieftain (CO)


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