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Analysis: Taller buildings in downtown Colorado Springs would bring a sizable economic impact

Posted at 6:03 PM, May 28, 2024

COLORADO SPRINGS, Colo. — As debate continues on whether to limit building heights in downtown Colorado Springs, economists predict such large-scale projects would bring significant economic benefits to the region and downtown corridor.

WATCH: New limit proposed to limit the height of buildings built downtown

At the center of the controversy is a proposed 36-story high-rise apartment building in an area of downtown that currently has no zoning height limits. It would be the tallest building in the region by far, sitting on the cross streets of Costilla Street and Sawatch Street just east of the U.S. Olympic and Paralympic Museum.

Opponents fear the tower would ruin the mountain views, which, they argue, are a prime factor for living in Colorado Springs.

WATCH: Petition to vote for Colorado Springs downtown building height limit

Regardless, such a massive construction project would generate thousands of jobs and hundreds of millions of dollars, according to economic analyses.

“The totality of the impact from a jobs perspective was 3,760 additional jobs, which is quite big,” said Tatiana Bailey, a Colorado Springs-based economist and founder of Data-Driven Economic Strategies. “And it tells you something about the size and scope of this project.”

Bailey created the original economic impact analysis for the proposed high rise back in 2021. She said some details of the project may have changed in the years since, but the numbers are likely in the same ballpark.

According to Bailey, these analyses are often done to help quantify the number of new jobs, associated labor income, and overall impact to the economy. It’s usually measured as a contribution to the gross metropolitan product, which is basically the GDP, but for a city.

She also analyzed the tax implications since a project of this scope would bring in sales tax and use tax on construction and materials as well as the taxes that would theoretically be generated by additional people moving downtown.

Bailey projected the associated labor income would be $206 million with an associated value add of $323 million towards the regional gross metropolitan product.

“And remember, this is mixed-use. There's retail space, other commercial space, and then, of course, the residential,” she said. “That impact is larger for the construction years because think about how many people you need and how many materials you need in order to get this project completed.”

Bailey and her team also analyzed the project for a few years after construction was completed, with about 10 years forecast in all. They found the downtown high rise would produce about 550 ongoing jobs annually with $18 million in associated labor income and about $90 million in contribution towards gross metropolitan product.

As for the tax impact over the 10 years, she found the one apartment tower would create about $65 million for county, special districts, city, state, and federal taxes.

Bailey also noted the need for more housing in a high-growth region such as the Pikes Peak area. A tall high rise would create more density, which would make downtown Colorado Springs more efficient with its space, she said.

“If you're looking at it from a strictly economic and financial perspective, yeah, of course, it does make sense,” said Bailey. “Who's going to say 3800 jobs is insignificant?”

But she recognized the growing pushback against such a drastic change to the skyline as well. A large skyscraper would be constructed to lure people in, but at the same time, many people move to Colorado Springs for the mountain views, said Bailey.

Bill Craighead is another economist in Colorado Springs and Director of the UCCS Economic Forum. He noted that higher-density downtowns can help lessen traffic and congestion as well.

“If you have people working downtown who are living downtown, that's fewer cars coming in from Briargate or Banning Lewis, which is not only good for the people who aren't commuting, but for the people who are commuting, it's a little bit less congestion,” said Craighead.

He added that a positive quality of life factor for Colorado Springs is the shorter commute times compared to other larger cities and that the challenge will be keeping it that way as the city continues to grow. Building up instead of sprawling out and increasing the density downtown could be one way to do that, he said.

Jariah Walker is the executive director of the Colorado Springs Urban Renewal Authority, which is an entity that is charged with curing blight, going into areas with a lack of investment, and analyzing economic ripple effects for projects in terms of factors like new jobs.

Walker said he thinks it’s a “high likelihood” the project will move forward and that it would be a benefit to the urban downtown core.

“We have small businesses all in our downtown core, they're not chains. And they need more people living here, shopping, getting their haircuts, you know, et cetera. Whatever services they want to use,” said Walker. “This is going to bring a lot more density that frankly, we need, and we've been pitching for years now.”

GROWING CAMPAIGN AGAINST THE TOWER

While economists and urban planners might be gung-ho about the 36-story apartment complex, or at least in terms of the economic benefits, there is a growing movement against the project altogether.

Bill Wysong and his Westside Watch group are often outspoken against growth in Colorado Springs. They often focus on the fire dangers of new developments after the Waldo Canyon Fire, but Wysong said this specific campaign is admittedly about protecting the area’s views and “character,” as he put it.

They created an online petition on change.org with about 5,000 signatures called “Save Our Skies,” seeking to nip the project in the bud. Their goal is to have the people of Colorado Springs vote on whether to enact height limits in the city.

“The key issue is we're not against building. It's what is being built,” said Wysong. “From the economic viewpoint, maybe you build differently. Instead of going straight up, it's wider. So it's squattier, but you make it look really nice and it fits in with the background, instead of this big tall spire.”

City Councilman Dave Donelson wasn’t as kind in his description of the proposed project, calling it a “big middle finger” in the city’s skyline.

Councilman Donelson held a city council work session in December where city officials made a presentation about the history of downtown Colorado Springs and its height limits, or lack thereof.

Donelson said his constituents had no idea there weren’t height limits in the city and is now pushing for the issue to be put to a vote on the November ballot.

“Most citizens want to have height limits to maintain the character and unique appeal of Colorado Springs,” he said. “Should we grow so high that we begin to resemble Denver? Should we grow so high that we begin to block out Pikes Peak? I think there is a point that's too high. And I think the fair thing to do is let the citizens weigh in on that.”

Donelson said there’s another session scheduled in June to further discuss this project. In order to get on the November ballot, he said it would require five councilors to vote during the work session to bring the subject into a regular session. At that point, they could vote to have it appear on the November ballot, and “it wouldn't cost the city a dime” he said.

When asked about the economic benefits of the project, Donelson said the economy wouldn’t go into a tailspin without a four-hundred-foot building downtown.

He pointed to cities like Boulder, Fort Collins, Santa Fe, Washington DC, and Paris as evidence that height limits work elsewhere in cities that are “doing quite well,” Donelson said.

Donelson also suggested it was the developers themselves who would push the positive economic impacts of a high rise in order to get it built.

In a recent press conference, News5 asked Mayor Yemi Mobolade if he supported the project or if it should go to a vote of the people.

“It's less about the height and more of my desire to just see more investments in the City of Colorado Springs,” said the mayor. “And I do believe this project potentially has the impact of that. But at the end of the day, we got here by process of the people, and any change needs to be a process of the people.”

Email Senior Reporter Brett Forrest at brett.forrest@koaa.com. Follow @brettforrestTVon X and Brett Forrest News on Facebook.
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