Chapter 9 - § 9.1 • URBAN RENEWAL AUTHORITIES
| Jurisdiction | Colorado |
• C.R.S. §§ 31-25-101 to 31-25-116
Urban renewal authorities (URAs) are bodies corporate and politic created by Colorado's Urban Renewal Law, organized by a city council or town board, and authorized to exercise special powers to promote the redevelopment of blighted areas in Colorado municipalities. Colorado's Urban Renewal Law has been substantially amended in recent years. Recent changes clarified financing uncertainty created by the legislature in 2015.1 Readers should consult the most current version of the Colorado Revised Statutes to ensure an accurate understanding of all provisions. The district court in Jefferson County ruled in 2017 that a municipality may not adopt charter provisions that interfere with or materially impede provisions of the Colorado Urban Renewal Law.2
§ 9.1.1—Organization
• C.R.S. §§ 31-25-104 and 31-25-115
The procedural requirements for organizing a URA are detailed in C.R.S. § 31-25-104. At least 25 registered electors of a municipality must file a petition with the city clerk describing the need for a URA. The city council then holds a hearing to determine the need for the URA. The statute requires that a public notice of the hearing identifying the time, place, and purpose of the hearing be published in a newspaper of general circulation at least 10 days before the hearing.3 Before approving the establishment of the URA, the city council must make several findings, including that at least one or more slum or blighted areas exist within the municipality, and that the development or redevelopment of the area is necessary in the interest of the public health, safety, morals, or welfare of the residents of the municipality.4
If the council decides to establish a URA, it may designate itself as the authority when the URA is formed.5 Commencing on January 1, 2016, HB 15-1348 mandates that if the council designates itself as the authority, one additional commissioner each may be appointed by the county commissioners, special districts, and from the school district boards of education that levy taxes within the "boundaries of the urban renewal authority area."6 The statute also permits appointment of a separate board of commissioners consisting of an odd number of individuals from a minimum of five to a maximum of 13. One commissioner each may be appointed by the county commissioners, from special districts, and from the relevant school district boards of education. In this case, the mayor, with concurrence of the municipal council, appoints the balance of the commissioners. The commissioners must file a certificate regarding the organization of the URA with the Colorado Department of Local Affairs to complete the formation process. The URA is authorized to operate within the boundaries of the municipality,7 except that, with the cooperation and approval of a county, unincorporated areas adjacent to an urban renewal area in a municipality may be made part of an urban renewal plan.8 If the city council denies the petition to organize a URA, it must wait at least six months to consider a subsequent petition.9
Governance of an existing URA may be transferred to the city council only by majority vote at a regular general election. The city council may abolish a URA if adequate arrangements have been made for payment of any outstanding indebtedness and other obligations of the URA.10
§ 9.1.2—Nature
By statute, a URA is a body corporate and politic11 and has been classified by the appellate courts as an independent single-purpose agency.12 Although the Colorado Sunshine Act applies to urban renewal authorities, Article X, § 20 of the Colorado Constitution (the Taxpayer's Bill of Rights, or TABOR) does not.13
§ 9.1.3—Blight
• C.R.S. §§ 31-25-102 to 31-25-104, and 31-25-107
URAs are created to prevent and eliminate conditions of slum and blight in Colorado municipalities.14 Few if any urban renewal projects in Colorado include conditions that qualify as a slum area under the statute.15 Rather, the establishment of URAs and urban renewal plans are commonly based on the definition of "blighted area" in C.R.S. § 31-25-103(2). A blighted area means an area that, in its present condition and use, contains at least four of the following factors:
(a) Slum, deteriorated, or deteriorating structures;
(b) Predominance of defective or inadequate street layout;
(c) Faulty lot layout in relation to size, adequacy, accessibility, or usefulness;
(d) Unsanitary or unsafe conditions;
(e) Deterioration of site or other improvements;
(f) Unusual topography or inadequate public improvements or utilities;
(g) Defective or unusual conditions of title rendering the title nonmarketable;
(h) The existence of conditions that endanger life or property by fire or other causes;
(i) Buildings that are unsafe or unhealthy for persons to live or work in because of building code violations, dilapidation, deterioration, defective design, physical construction, or faulty or inadequate facilities;
(j) Environmental contamination of buildings or property; [and/or]
(k.5) The existence of health, safety, or welfare factors requiring high levels of municipal services or substantial physical underutilization or vacancy of sites, buildings, or other improvements.16
Importantly, when it added factor (k.5) in 2005, the Colorado General Assembly deleted a previous factor that read "inadequate public improvements or facilities" and combined it with "unusual topography." Thus, the absence of public improvements or facilities alone may not constitute a factor that can contribute to a finding of blight. No court has ruled on whether use of the disjunctive "or" makes unusual topography and inadequate public improvements separate factors. However, a condition present in the area may satisfy as many of the above factors as apply to the condition.17 If there is no objection by a property owner and any tenants in the area to be designated, only one of the factors (a) through (k.5) is necessary to qualify.18
Once a finding of blight has been made, and the property has been acquired by a URA and redeveloped pursuant to an adopted urban renewal plan, the URA may not rely on the original finding of blight to acquire the (redeveloped) property a second time. A new determination of blight will be required.19
§ 9.1.4—Agricultural Lands
• C.R.S. §§ 31-25-102, 31-25-103, 31-25-107
Urban renewal areas may not include any land that has been classified as agricultural by a county assessor for property tax collection purposes at any time during the five-year period prior to adoption of or any modification of an urban renewal plan,20 unless one of the following exceptions applies.21
• The agricultural land is designated as a brownfield site by the U.S. Environmental Protection Agency;
• At least one-half of the urban renewal area consists of parcels of land characterized by a predominance of either permanent structures or above-ground or at-grade infrastructure and at least two-thirds of the perimeter of the urban renewal area is contiguous with parcels of land characterized by a predominance of either permanent structures or above-ground or at-grade infrastructure;
• The agricultural land is an enclave within the municipality and the entire perimeter of the enclave has been contiguous with land characterized by a predominance of either permanent structures or above-ground or at-grade infrastructure for at least three years;
• Each public body that levies property taxes in the urban renewal area agrees in writing;
• The agricultural land was included in an approved urban renewal plan prior to June 1, 2010; or
• The agricultural land is contiguous with an urban renewal area in existence as of June 1, 2010, and both areas are owned by the same person; and both areas are to be developed solely for the purpose of creating primary manufacturing jobs and related ancillary supporting jobs.
§ 9.1.5—Purposes and Powers
• C.R.S. §§ 31-25-105 and -116
A URA is given broad powers to carry out its statutory mandate.22 Included are the powers to enter into contracts, borrow funds, and acquire property voluntarily or, provided special findings and requirements are met, by eminent domain, among others. C.R.S. §§ 31-25-116 and 24-46-303(6) also authorize urban renewal authorities to act as a financing entity under the Colorado Regional Tourism Act.
§ 9.1.6—Urban Renewal Plans; Urban Renewal Areas; Eminent Domain Provisions
• C.R.S. §§ 31-25-103, 31-25-105, 31-25-105.5, 31-25-105.7, and 31-25-107
A URA exercises its powers by planning and carrying out urban renewal plans in urban renewal areas. Before an urban renewal plan for an urban renewal area can be approved, the city council must find the area to be a slum area or a blighted area (or both) as defined in the statute.23 "Slum areas" are defined as areas containing a predominance of dilapidated buildings. "Blighted areas" are defined more broadly. The definition of blight encompasses not only properties so dilapidated as to justify condemnation as nuisances, but also envisions the prevention of deterioration.24 When determining whether slum or blight conditions are present, the area as a whole should be considered, even if the area includes properties or buildings to be acquired by the URA by eminent domain that are not themselves slum or blighted.25 In a controversial 2005 ruling, the U.S. Supreme Court upheld the use of urban renewal powers for acquisition and subsequent transfer to a private party for redevelopment, even when individual properties to be acquired do not meet the definition of "blight."26 However, an urban renewal plan must include undertakings and activities in an urban renewal area for the elimination and prevention of the emergence or spread of slum or blight.27
The statute permits flexible urban renewal plans that can be tailored to fit the needs of individual urban renewal areas. The plan must be sufficiently complete to indicate those redevelopment...
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