RANGELY | The Rangely Development Agency (RDA) is moving forward with an ambitious plan to diversify the local economy while supporting the needs of CNCC. The proposal for the multi-faceted development includes providing tax incentives to a potential developer. However, the proposal must first be approved by the local special tax districts, something that not all of the districts are prepared to do.
The plan came to life after the RDA heard the suggestions made by Better City, a company hired last summer to study the community and provide ideas for economic growth.
The current goal is to attract an investor for Rangely to erect a new development consisting of student housing for CNCC students, a grocery store, some type of recreation such as bowling, an arcade or a skating rink and potentially a fast service restaurant. According to Rangely Town Manager Peter Brixius, the project’s estimated cost is $4.3 million. However, that is a rough estimate which will be updated as plans move forward and more information becomes available.
The project is dependent on Rangely’s ability to entice a developer to the area. The RDA, which is spearheading the project in conjunction with the Town of Rangely, is preparing a proposal which utilizes enticements such as tax increment financing to encourage interest.
Before the plan can be presented to potential developers it must first be approved by the RDA board, which consists of members representing each of the special tax districts. Should the RDA choose to use the tax increment financing plan, it would allow the RDA to offer a potential developer a guaranteed return on investment in the early years of the new development. The funds for the return would be attained from the increase in tax revenue created by the new development, instead of those funds flowing to the special districts. The amount of money given back to the developer and the length of time over which that money would be given will be determined during the negotiation process. However, Kelby Bosshardt of Better City stated that anywhere between 10-15 percent would be reasonable and that the amount could be adjusted depending on the success of the venture, giving the developer less if the development proves financially strong.
Another piece of the negotiation that Bosshardt thinks will be important for Rangely is requiring that the developer keep their finances open and transparent to protect the community from fraud. Not all of the special districts represented on the RDA board are prepared to approve the tax increment financing plan. The Rio Blanco Water Conservancy District voted unanimously to refuse their support of the program. Director Alden VandenBrink stated the board is deeply concerned about the implications of allowing government subsidized businesses to operate in direct competition with other established businesses in town. They are also apprehensive about the choice of businesses the plan seeks to bring to town.
“The board felt that, yes, we need a grocery story, but the other things don’t really fit Rangely,” VandenBrink said, pointing out that bowling alleys and skating rinks in the region have all gone out of business in the last decade or so. Another concern cited is that the housing for CNCC students is not actually set aside exclusively for student use. Should the economy boom again and put housing in high demand, CNCC could still be left without necessary accommodations.
Brixius, who believes that the project is essential to growth, said, “We are asking a developer to come to Rangely and build a retail/housing development that would theoretically provide a 15 percent return on investment. The project itself will generate new tax dollars which are above those tax d0llars currently generated by the property.”
“According to the Pro-Forma (a method used for predicting investment results), all taxing entities are shown to see an increase in their returns the first year and a portion of the new tax dollars are to return to the developer who has risked $4 million in order to support the development.”
The next phase of the project requires that all the taxing districts be on board. “We want all taxing entities to join the RDA and support the plan. So far we have substantial support from key districts, but there is much more work to be do. There are concerns that the districts’ income will be affected and I think that most districts understand now that this is not the case,” Brixius said. The town also plans to continue developing their relationship with the college to develop clear objectives. If the special tax districts do choose to come on board Brixius says the town will move to secure a location for the development. “This step, along with support from the taxing entities and the college happening together, allows us to move forward in soliciting a developer.”
The Better City project identified this type of project as fundamental to satisfying community needs that must be met before local growth can occur. Several of Better City’s suggestions centered around the expansion of programs at CNCC. However, the college has currently reached its limits in student housing and is unable to grow without additional housing. Additionally, residents and local business owners expressed a need to see improved access to groceries and recreation in order to attract and keep new residents and businesses.
The RDA met today at 7:30 a.m. at the Rangely Town Hall for further discussion of the project.