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Long meeting, two big decisions faced Tuesday by Colorado Springs City Council

Tax incentives approved for sporting goods store

COLORADO SPRINGS, Colo. - In a five-hour meeting Tuesday, the Colorado Springs City Council took action on two big agenda items regarding a prospective retailer and the proposed new visitors center at the Air Force Academy.

After a 90-minute discussion, the council voted to approve several ordinances to allow the annexation of academy property near the north gate where the center and associated commercial development would be built.

However, the council delayed a vote on hearings that would provide evidence for and against annexation.  The hearings are required before any annexation plan can proceed.

The council will hold the hearings during its next regular meeting on March 12.

The projected cost of the project is $200 million, with the Air Force providing $8 million, including the value of the land to be annexed, and the rest to be paid by developers, investors and future tax revenue.

The strongest council opposition came from members Bill Murray and Yolanda Avila, who said they support the visitors center but not the associated development -- which would include two Hilton hotels, shops, restaurants, office space and a new trailhead for the popular Santa Fe Trail nearby.

Some environmentalists, such as the Sierra Club, also oppose the plan on the grounds that it may cause environmental harm to the nearby Monument Creek watershed.

Council President Richard Skorman urged the council to support annexation because the Air Force Academy is as much an iconic attraction as Pikes Peak or Garden of the Gods.

Some council members also questioned designating the property to be annexed as urban renewal, even though it's not as blighted as other urban renewal properties.

While the property technically meets the requirements for urban renewal, Skorman said, other council members said the designation "isn't in the spirit" of how urban renewal should be used.

Developers told the council they hope to start construction on the project in June.  The project also faces a Dec. 31 deadline of losing state tourism funding if progress isn't made on construction.

The council ended Tuesday's meeting by quickly approving, in a 7-2 vote, tax incentives for Scheels, a North Dakota-based sporting goods retailer that has 27 stores and would be the second in Colorado.

Scheels, which planned to build a store elsewhere in Colorado if the council denied the tax incentives, is considered an attraction in and of itself, similar to the reputation of Bass Pro Shops.

Skorman said Scheels will receive a 25-year tax break totaling $16 million, and the city hopes to collect $55 million in new sales tax revenue from the store over the same period.  

The city offered Scheels more than it traditionally offers prospective incoming businesses, Skorman said, because of the retailer's reputation and its average employee salary of $46,000.

The new store will be built in a vacant lot near the intersection of Interquest Parkway and Federal Drive, just east of Interstate 25.

Scheels plans to invest $84 million in the store, hire 400 workers and have annual sales of $60 million.  Skorman said nearly half of the retailer's customers will come from outside the Colorado Springs area.

Some council members said the city gave up too much in the deal, and gave Scheels an unfair competitive advantage over existing retailers.

Councilman David Geislinger said he hopes to see a better process for negotiating tax incentives with prospective incoming businesses in the future.

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