State's Implementation of Tourism Act Produces Frustration
by Kati O'Hare
Feb 22, 2012 | 1424 views | 0 0 comments | 6 6 recommendations | email to a friend | print
Montrose County and Others to Argue Their Cases to Win Approval of Their Projects

MONTROSE – Frustration is mounting across the state as a regional tourism bill continues to be “misinterpreted” by state agencies, causing delays in the initiation of the act that was approved three years ago to create jobs and increase the state's revenue, according to applicants responding to the program.

In the summer of 2009, former Gov. Bill Ritter approved the Colorado Regional Tourism Act, a program aimed at growing the state's tax revenue by creating regional tourism authorities and supporting those authorities' projects through tax increment financing.

In August 2009, members of the Montrose Citizens for Funding Our Future picked apart the tourism act and surveyed a six-county region to determine which local governments wanted to join it in an application, MC4FF member Richard Harding said in an interview this week.

In the end, the proposed authority – dubbed Great Colorado Adventures – was comprised of Montrose County, the City of Montrose and towns of Olathe, Naturita and Nucla, and proposed a $1.4 billion plan to revitalize the area and make it the Western Slope hub for tourism.

The application was one of six received by the state by the June 2011 deadline.

However, Great Colorado Adventures' application was much different from the others in that it proposed a long-term regional tourism plan consisting of 141 projects to be built out in nine phases over a 30-year period, with each phase generating revenue to bring funding to the next phase.

“We took a regional approach,” Harding said. “We took that act literally and included everyone we could in the project.”

Other applicants submitted one-project applications, such as a 1,500-room hotel and conference center proposed by the City of Aurora, and a prehistoric archaeological museum and sports complex proposed by Douglas County.

Great Colorado Adventures was concerned when it first got feedback on its application from the Colorado Office of Economic Development and International Trade, the agency tasked with awarding grants to the authorities.

Harding said that Great Colorado Adventures had been putting its application together based on the 2009 act, but OEDIT released guidelines in November 2010 that were not consistent with the act.

“We were the only proposal in the spirit of the original legislation,” Montrose County Commissioner David White said. “[OEDIT]’s interpretation of the legislation is what has everyone confused.”

Not only did OEDIT tell MC4FF that it did not conform with the office's guidelines and ask Great Colorado Adventures to retract its application, reports from the state's third-party analyst stated that all six applicants were not in compliance, Harding said.

For District 58 Rep. Don Coram, it's not the applicants who are at fault, but rather it's OEDIT that needs to follow legislation.

“In my opinion, the report from the third-party analyst needs to be shredded,” Coram said.

As part of the application, each applicant had to pay for the third party to analyze the economic impact and additional revenues each plan would expect to bring. Montrose County and the city shared that approximate $23,000 cost.

Coram said that the analyst reported that Great Colorado Adventures' plan would generate 12 tourists a day for 30 years.

“How do they come up with a figure like that?” Coram asked. “More come here by taking a wrong turn on Highway 50. More would come if only one of those 141 projects happened – if none of those projects happened.”

Great Colorado Adventures' application, which can be viewed at www.montroseedc.org, projects that a $1.4 billion investment over a 30- to 40-year period has the potential to increase state sales tax revenues by $98 to $226 million from new tourist-based economic activity, create up to 16,300 new jobs, generate $13.4 billion in new economic output, and provide a return on investment of 143 to 458 percent, not to mention the additional revenues and jobs created in the local construction industry. That projection was produced by Great Colorado Adventures’ own third party analyst.

“The state seems to have lost the focus that the act requires the applicants to increase state sales tax revenues in the area of their project in order to be able to receive any funding back from the state,” Harding said. “If we don't make it happen, the state is out absolutely nothing.”

The act sets a baseline sales tax collection figure for an approved authority based on the previous year's tax collections. Each applicant could specify its preferred method for figuring funding, but, generally, the funds that could be available to each authority would be those tax collections from that area that are above the set baseline.

Great Colorado Adventures' responded to the analyst's report, writing a letter to OEDIT stating that MC4FF believes the office has misinterpreted the legislation and that it will not withdraw its application, but rather, make its case in front of the Economic Development Commission in April, along with the other applicants.

Coram said he wants to see OEDIT do the analysis again – out of its own budget – and this time, do it right.

“I think the legislation is very clear,” he said. “It's a simple matter of OEDIT following what was set by statute. We shouldn't have to run legislation to force a state office to follow legislation.”

In the past few weeks, legislators introduced two bills intended to clarify the act.

Senate Bill 124 would eliminate the cap on how many tourism authorities can be created each year, while another bill, which was killed on Feb. 17, would have required applicants prove revenue increases would come from out-of-state visitors.

Coram said he worked hard to get the later bill killed because there is no sound way to decipher exactly who – in-state or out-of-state visitors – contribute sales tax revenues.

How OEDIT will address these concerns is unclear, but the six applicants have indicated that they will make their case in front of the commission during a public hearing on April 10 in Denver.

“If five of the six applicants are saying the same thing – maybe something is wrong,” Coram said.

kohare@watchnewspapers.com

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