—>ACTION ALERTS<—

More reaction to Boulder City Council’s ‘Area III’ proposal. Read Plan-Boulder County’s response here

11/17/24

11/12/24

Boulder Action wants to alert you to the latest misguided development idea from Boulder City Council.

Mark Wallach, who in our view does all the heavy lifting and analysis on Council, posted the following Hotline message 11/11/24 on Area III development. The only problem is that it will require billions of tax dollars to do this.

Read Mark's sensible analysis below. Also find ways to respond to City Council and others at the bottom as Boulder Action encourages you to let Council know what a failure of representative government and of their leadership this move represents. 

[BoulderCouncilHotline] Area III Development Wallach, Mark 11/11/24, 1:46 PM (43 minutes ago) to HOTLINE, Council There are numerous questions regarding the Urban Services Study (the “USS”) with respect to Area III annexation. I fear that we are moving forward with an idea that appears to be superficially attractive without any real comprehension of the costs involved. So here are some of those questions: 

 1) The original staff memo on this subject identifies onsite capital expenditures as ranging from $135-$160MM and suggests that this amount could be covered by future development interests (what are they?; they appear to be undefined) and real estate taxes. Two points here: As the expenses must precede the recovery of those expenses, this is money out of pocket until such time as recovery occurs. Where will this money come from? And, as Boulder receives approximately 14% of property tax revenue, this would require construction of homes with an assessed valuation of $1.07BN to recover capital improvements of $150MM. If we anticipate recovery over 10 years, we will be subsidizing the debt for an extended period of time and require the construction of homes with an assessed valuation of $100MM. Exactly how is this going to work? 

 2) The assumption that we can absorb up to $980MM of offsite construction costs over a 20-year period seems to be untethered to reality. That would constitute an expenditure of $49M each year for 20 years. If we had such funds would we really use it for this purpose as opposed to replacing the South Boulder Rec Center, enhancing our social service programs and undergrounding our utility lines in order to enhance our fire resilience? Where is this money – even at the lower levels of the other scenarios – coming from? Staff states that “initial conceptual calculations estimate on-going maintenance and operations costs borne by the city could potentially be covered by municipal revenues.” Really? Please share the basis for this assumption.

 3) The staff memo throws cold water on the concept of repurposing part of the City-owned property currently designated to be used as parkland for housing. In the absence of doing so, what mechanisms will be used to create middle-income and affordable housing on the balance of Area III or will the Area III property essentially be an oasis of market-rate rental properties? 

 4) What will be the cost of providing additional rights of way to expand Route 36? How many properties may face condemnation proceedings in order to achieve such expansion? 

 5) All 4 scenarios place great stress on the use of US-36, and some will require that “the City of Boulder will need to partner with CDOT and RTD to…accommodate additional trips in alignment with the City’s transportation policies and goals.” Best of luck with that. 

 6) The table on Page 10 of the staff memo identifies 3 categories of expenses: on-site improvements, off-site improvements and Urban Park development expenses. Adding these 3 expenses together, the cost of this project ranges from $653MM to $1.411BN dollars. This is clearly insane; at the lowest level this is the approximate cost of 10 CU South projects. The table used to suggest that, in fact, the financial impact of this project will be far less than anticipated s incomprehensible to me and requires much more clarification. (also note that this table states that it does not include capital expenditures; what??) 

 7) The USS prepared by the City’s consultant estimates that development of Area III could add 10-16% to Boulder’s daily water requirements, require substantial infrastructure improvements to our water system and in the event of “moderate to severe future climate scenarios, the inclusion of any of the Planning Reserve scenarios results in increased frequency of anticipated water use restrictions…including indoor water use restrictions…Is there anyone who does not believe in at least a moderate future climate scenario? 

 8) The cost estimate for wastewater system improvements ranges from $40MM to $180MM. That is some range. These estimates apply to all 4 scenarios discussed by the consultant. That is the closest we can come to a cost estimate? 

 9) The consultant study estimates that Boulder will take in between $831MM-$1.63BN in sales taxes over a 20-year build-out of the reserve. What is not at all clear is how this will offset the costs of construction, which I assume will have to be incurred prior to the construction of any homes. And, as noted earlier, Boulder receives only a portion of every dollar collected in sales taxes. The City receives 3.86% of the 9.05% of the total sales tax or 43%. The City must therefore generate $1.9BN in sales tax to collect $831MM. And that is for the lowest cost scenario. Again, buena suerte. There is, of course, much more, but I am hoping to keep this a bit shorter than The Lord of the Rings. The essential conclusion I draw is that this is an incredibly expensive capital project, where I do not understand the sources of funding that will be used to construct it. In addition, given the costs involved and the reluctance to convert any portion of the parkland into middle-income and affordable housing, I greatly question the ability to generate such housing from the 300 acres that are privately owned. I do not see the benefits of devoting such enormous sums of money towards creating a largely market-rate housing project, at least at this time. Boulder is not short of market-rate housing; if that is what we are going to get, these capital expenditure funds are better spent elsewhere. And if there is a strategy by which the bulk of the units in the Area III Planning Reserve will actually become middle-income or affordable housing, I would very much like to hear it. 

Best, Mark