The Denver City Council Finance and Governance Committee advanced a capital investment plan on Tuesday that would infuse $170 million into the coronavirus-addled economy with the goal of creating jobs and boosting consumer spending in the region.
The city is attempting to close a $190 million budget gap in 2021 and hopes investing in capital improvements will offset the pandemic's major reductions to sales-tax and lodgers-tax revenues. The latter, paid by visitors staying in hotels, are expected to plummet 66% in 2020 compared with 2019. Sales-tax revenues are projected to drop 11.6% due to the hard hit to retail and food services.
“Now more than ever, people in our community need access to (good-paying) jobs," Mayor Michael Hancock said in a statement, "so we’re deploying the same job-creating tools used to bring us out of past recessions by accelerating the Elevate Denver Bond Program to help rebuild our local economy, get people back to work and make neighborhood improvements sooner."
Studies have shown that every $1 million the city pumps into capital improvements generates $2 million in economic output.
"Our last General Obligation bond, the Better Denver Bond Program, pulled us out of the Great Recession, and we’re poised for the same strong recovery with Elevate Denver,” Hancock said.
The Elevate Denver Bond Program is a 10-year, $937 million bond that was approved by voters in 2017. The goal of the program, which includes more than 500 projects, is to “enhance” the city by providing “critical” public improvements across Denver’s 78 neighborhoods.
If the plan, which is backed by the finance department, is OK'd by the full council next month, the debt issuance would be the city’s fourth and its largest yet for city-led projects, with nearly three-fourths directed toward construction projects citywide, according to the finance department. With the first three issuances, Elevate Denver has drawn down 40% of the nearly billion-dollar program, with more than a hundred projects underway in either design or construction.
The bond program is estimated to create and support more than 1,800 jobs, according to Brendan Hanlon, the city’s chief financial officer. Over the next three years, the fourth issuance of Elevate Denver and the city’s Capital Improvement Program, will invest a combined $478 million into neighborhood improvements.
The plan would also allow the city to secure a lower interest rate on outstanding bonds the city issued in 2010, which is estimated to save the city $57 million, the finance department calculates.
The full Denver City Council will take a final vote on the plan Nov. 2.