Rocky Mountain News

City retools Gates plan
Developer concedes wages, tax revenue before council vote

By Daniel J. Chacón
January 5, 2006

The city of Denver will keep more money and a developer is promising to pay construction workers prevailing wages under a revamped $85 million public financing plan to prepare the former Gates Rubber Co. site for redevelopment.

Joint committees of the Denver City Council on Wednesday learned of the changes to the original proposed agreement with the developer, Cherokee Denver LLC.

The standing-room-only meeting was the third to discuss a plan to use so-called tax increment financing to transform the environmentally contaminated site into a pedestrian-friendly redevelopment.

Councilwoman Kathleen MacKenzie said the proposal has been improved but she remains concerned about the level of public input should the project change.

"I would like to see City Council, as the people's proxy in managing tax dollars, have a role in approving major modifications to the 'vision' after the tax subsidy is approved," said MacKenzie, whose district includes the old rubber factory.

Under the agreement, the city would spend $177 million total over 25 years - $85 million in principal and the rest in interest. The developer would raise an additional $41 million through taxes on future residents and merchants of the site to cover its share of the work, which includes environmental remediation, demolishing existing buildings and improving infrastructure.

For the first 10 years, the city wouldn't keep any taxes generated by the redevelopment. But it would get about $1.8 million annually - $325,000 more than the original proposal - for the next 15 years before collecting all taxes on the project.

Ferd Belz, president of Cherokee Denver, also pledged under the new agreement to pay construction workers wages comparable to the private sector. In December, Belz said he intended to comply with the city's prevailing wage law but shied away from making a commitment.

The project, south of Interstate 25 between Broadway and Santa Fe Drive, is expected to create thousands of temporary construction jobs. But only about 12 percent of those jobs will get prevailing wages.

"The payment of the prevailing wage is only for the publicly financed infrastructure," said John Huggins, Denver's economic development director.

Still, it's a critical first step, said Robin Kniech, a researcher for the Front Range Economic Strategy Center, part of a broad coalition working for "responsible development" at the Cherokee site.

"We still would like to see health care with those wages that they talked about, and it's also critical that we do something to promote family supporting jobs for the permanent workers," she said.

Huggins said the current proposal appears poised for approval.

"I think we've built a lot of support among council by meeting their specific requests and providing . . . very detailed information," he said.

chacond@RockyMountainNews.com or 303-892-5099

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