News Column

City attorney: Tourism loan OK

July 11, 2014

By Peter Roper, The Pueblo Chieftain, Colo.

July 11--City Council can make a $14.5 million loan from the city's half-cent sales tax fund to add an exhibition hall to the Pueblo Convention Center, according to a review of city ordinances by City Attorney Dan Kogovsek.

That's a turnabout for Kogovsek, who advised council in early June that only city voters could decide whether the expansion project met the definition of creating "primary jobs" -- jobs that make products or services that are largely sold beyond Pueblo.

The loan request, from the Pueblo Urban Renewal Authority, has been divisive because it would save PURA about $12 million in interest payments on the project, but a majority of council has insisted half-cent tax money can only be spent on recruiting new primary jobs.

Councilman Steve Nawrocki wants the city to make the loan and, in June, he formally asked Kogovsek to review a 2012 city ordinance Nawrocki believed gave council the authority to define primary jobs as needed -- without referring the

question to voters.

Kogovsek's answer was sent to council in a memo Thursday. It rejects the 2012 ordinance but says that a 2010 ordinance gives council authority to make the exhibition hall loan -- by passing an ordinance that says the jobs involved are primary jobs.

"I'm pleased that our attorney's review confirms what I believed was the case," Nawrocki said.

"I certainly want council to reconsider the loan."

The loan proposal has divided council for nearly 10 months. The city, PURA and the Historic Arkansas Riverwalk of Pueblo Foundation are all partners in a state-approved Regional Tourism Act grant that lets Pueblo keep a slice of state sales tax for the next 50 years.

Original estimates are that could amount to $40 million or more over that time period. But that money is intended to help pay for a list of improvements around HARP, and the exhibition hall is the first. The contract with the state says that project must be underway by 2017.

When the state awarded Pueblo the RTA grant, the plan envisioned more traditional methods to finance the Riverwalk expansion. Last fall, PURA and Greater Pueblo Chamber of Commerce officials asked council for a loan from the half-cent fund for economic development. Five members of council said no in June.

Councilman Chris Nicoll also supports the loan request, saying it's wasteful to make PURA pay another $12 million in interest when the loan could be repaid to the city in 10 years with state sales tax revenues.

"The RTA project is a real economic opportunity we can't afford to pass up," Nicoll said.

Council President Sandy Daff said Kogovsek's memo didn't change her view that council would be rewriting the definition of primary jobs for the sake of the exhibition hall loan.

"Voters have traditionally insisted that primary jobs mean a new employer bringing jobs to the city," she said. "Just because council can rewrite that definition, doesn't mean it should."


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Source: Pueblo Chieftain (CO)

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