More city funding for a commercial urban renewal project may be in the near future for the Gold Hill Mesa development on Colorado Springs’ west side.

Gold Hill Mesa, which spans more than 200 acres southeast of U.S. 24 and 21st Street, was previously home to a gold and silver milling operation. In 2004, the Colorado Springs City Council declared the property an urban renewal site. 

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The area’s soils are contaminated from milling operations decades ago, but mitigation efforts allowed it to become home to 627 residences built on about 100 acres of the development. In June 2015, the council carved off a 70-acre portion of the site to create a second Gold Hill Mesa urban renewal zone for commercial uses.

The designation allows increased property and sales tax revenues generated by new development on the site to be appropriated for public improvements within the urban renewal areas. Using tax revenue, a funding mechanism known as tax increment financing, is meant to encourage developers to invest in the area and replace blighted conditions with new residential and commercial uses.

During a work session Monday, the Colorado Springs City Council generally supported a request to designate about 106 acres of the Gold Hill Mesa property as a commercial urban renewal zone. The designation would allow property owners to finance about $37 million in environmental remediation, road, utility and other improvements they and Colorado Springs Urban Renewal Authority Executive Director Jariah Walker said are needed to integrate commercial development.

The move would stimulate the addition of stores, restaurants, a hotel and other commercial uses on about 40 to 50 “usable” acres of that land, they said Monday.

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If the council on Oct. 24 votes to approve the new commercial urban renewal plan for the area, it would replace the previous plan put in place in 2015. The new plan would go into effect immediately and the contract would span a period of 25 years, through 2048.

The project has generated “extraordinary” costs to mitigate the site and prepare it for construction, and the COVID-19 pandemic and a poor bond market have also hampered project efforts, Walker and Stephanie Edwards, executive vice president of property owner Gold Hill Neighborhood LLC, said this week.

The commercial area is where the former mill was located on the property, Edwards told the council Monday.

“Gold Hill Mesa is operating on the very thinnest margin as it is, even after we pay just standard development costs just to get to ground zero, before we have the overlay of the environmental (cleanup), which is a very key factor in the extraordinary costs and the effort that we have to make,” she said. 

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Public financial support for the project through tax increment financing is “crucial” to ensuring its viability, Edwards said.

Gold Hill Mesa is requesting the city designate 100% of the city’s 2% sales tax and future property tax revenues over 25 years to fund improvements at the site. 

If the council agrees, the city expects to appropriate about $1.9 million in future property tax revenues and about $11.6 million in future sales tax revenues over 25 years to help finance commercial development on the site, Walker said.

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After the 25-year period ends in 2048, the city would receive about $115,600 annually in future property tax revenues in Gold Hill Mesa’s commercial area, a financial presentation shows.

The City Council will consider the request and is expected to formally vote on it during the regular meeting Oct. 24. 

Residents will have an opportunity to provide comment on the proposal.

City Council agendas are available online at coloradosprings.legistar.com/Calendar.aspx.

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