August 27, 2008 - If southwest downtown's redevelopment goes forward, it will be on a much smaller scale and only after sitting on the drawing board for years.

A plan calling for a 225-room hotel and arts district to remain centerpieces of the area's makeover, but which also axes a developer's office building and slashes the size of a parking garage, was approved unanimously Tuesday by the Colorado Springs City Council.

The council's vote came nearly seven years to the day after it declared about 100 acres, southwest of Colorado and Cascade avenues and a small portion north of Colorado, as an urban renewal site. The council's goal was to transform the light industrial area into new housing, restaurants, stores, offices and the like -- expanding downtown's reach, giving more people a reason to shop and visit the area and adding to its standing as a vital retail, cultural, employment and government hub.

Since that time, however, southwest downtown's redevelopment has fizzled. A convention center sought by developers to anchor redevelopment efforts flopped a few years ago. More recently, concerns over an environmentally contaminated parcel delayed the hotel's construction and a sour economy prompted developers to stay on the sidelines.

Now, city staffers, private developers and the Colorado Springs Urban Renewal Authority, which oversees city redevelopment projects, have come up with a new plan they expect will jump-start southwest downtown. The revised plan includes a new financing strategy designed to provide incentives to developers and reduce costs for the Urban Renewal Authority.

"We've shrunk the project," said Clay Benson, the Urban Renewal Authority's vice chairman. "That makes it a more manageable piece to build in this economy."

Still, the revised redevelopment plan and timelines in the document amount to goals that aren't legally binding. Redevelopment contracts that spell out responsibilities of the Urban Renewal Authority, city government and private developers still must be hammered out, possibly within the next three months, said Chuck Miller, a retired city planning official who serves as an authority consultant.

Highlights of the redevelopment plan:

--Construction by Dec. 31, 2011, of a 225-room hotel and meeting facilities, southeast of Colorado Avenue and Cimino Drive, by Missouri hotel developer John Q. Hammons. Hammons has developed hundreds of hotels across the country and is building one on the Springs' far north side. He couldn't be reached for comment Tuesday, but his representatives said earlier this year they remain interested in southwest downtown.

--Construction by Dec. 31, 2011, of a 200-car, $3.2 million parking garage, also southeast of Colorado Avenue and Cimino Drive, to be paid for by the city's parking system, which operates with parking fees and not city taxes. The garage would be designed to expand to 600 spaces. Of the initial 200 spaces, 160 would be leased to Hammons' hotel. An original plan called for a 600-car garage that would have been funded by the Urban Renewal Authority. If the parking system uses cash on hand to build the garage instead of borrowing money, it might force the delay of public improvements along downtown streets that were being funded with parking revenue.

--Construction by Dec. 31, 2011, of 26 housing units by Springs developer Chuck Murphy and partner Stephen Mullens, a local attorney. The pair also would develop 37,000 square feet of commercial space and 20,000 square feet of warehouse and storage space by Dec. 31, 2010. Their project would form an arts district, where artists could live, work and sell their goods.

--Remodeling of the former Colorado Springs Utilities gas department operations building, southwest of Colorado Avenue and Cimino Drive, into offices for several U.S. Olympic Committee national governing bodies. The building's remodeling already was approved as part of a deal among the city, USOC and a private developer earlier this year.

--A $1.5 million cleanup of the Hammons hotel site, which is contaminated by coal tar material left over from a coal gasification plant that operated on the property decades ago. .

--The sale of two parcels, including the Hammons' hotel site, from the city to the Urban Renewal Authority at a cost equal to the $1.5 million cleanup and the cost of razing a second former Springs Utilities building in the area. The authority would resell the hotel site to Hammons at a price to be determined.

--The issuance of $7.3 million in bonds by the Urban Renewal Authority, which, among other expenses, would pay for the $1.5 million hotel site cleanup, as well as $1.3 million worth of street, utility and other public improvements in the area. About $200,000 of the money would be used to help Murphy and Mullens pay for the $500,000 cost of buying a piece of property for their project. Another $1.8 million would be set aside in reserve, and possibly used to help build a pedestrian bridge that would extend over a series of railroad tracks and connect the west side of southwest downtown to a transit center envisioned by the Springs' transit officials.

--The decision by Springs real estate giants Classic Cos. and Nor'wood Development Group, developers of the proposed Palmer Village residential and commercial project in southwest downtown, to withdraw their plans to build a 100,000-squarefoot office building and 100 housing units. Ron Butlin, an executive with Classic, said the slumping economy and the high cost of construction have forced the two companies to shelve their plans for now.

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Contact the writer: 636-0228 or [email protected]

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