It's time for this biweekly meeting of the Finance and Business Committee of Denver City Council.

Join us for the Finance and Business Committee starting now.

Good morning, everyone.

Um, welcome to Finance and Business Committee.

My name is Serena Gonzalez Gutierrez, and today is Tuesday, October 28th.

Um, so we have a pretty packed day, which is why we're starting a little bit earlier than normal at 10 a.m.

Uh so we'll go ahead and start with uh council introductions.

Um, like I said, I'm Sedana Gonzalez Cuquitas.

I'm one of your council members at large and chair of the committee.

And I'll go ahead and start over here to my right.

Good morning.

Stacey Gilmore, district eleven.

Good morning, Darrell Watson, fine district nine.

Good morning, Diana Romero Campbell, Southeast Denver, District 4.

And just double checking if we have anybody joining us virtually.

No, okay.

All right, well, we may have um some stragglers since we started a little bit early.

Um with that said, uh, we have quite a few things on our agenda today.

Um, we'll be starting, we have a lots of action items, but we're gonna start off with excise and license on their presentation, and just remind folks that we do this will require uh 15 minutes of public comment.

So after we get the presentation, we'll go into public comment and then we'll go into council member questions.

So, with that said, if the the team here um could uh introduce yourselves and go ahead and proceed with your presentation.

Introductions and then I'll kick us off.

Um, I'm Erica Rogers, I'm the deputy executive director for excising licenses.

I'm Kelly Abrams Rivers, I'm a policy analyst with X License Licenses.

I'm Abby Soysa and I'm a senior policy analyst with excise and licenses.

And I'm Genevieve St.

Ledger, a city attorney.

Um, and I won't uh belabor the point, but we're here to talk about a short bill that we hope will help us have a big impact on our residential rental license program.

This license program is a fairly new program that Councilwoman Gilmore sponsored a few years ago, and we're really proud of the progress that we've made so far.

We have um more licensees in the regulatory fold than we expected at this point, and we're really proud um of the voluntary compliance among our uh rental community.

So today we're here to talk about our next phase of enforcement and how this change to the DRMC will help our efforts.

I'll kick it over to Kelly to get us um started.

We'll go through some background and data.

We'll talk about our dual enforcement model with DDPHE.

Abby will present the issue and our ordinance proposal, and we'll end with next steps and questions.

What is a residential rental property?

Uh, a residential rental property is any building structure or accessory dwelling unit that is rented or offered for rent as a residence for 30 days or more at a time.

Any property owner who receives any type of benefit from a tenant is considered to be a renting and must be licensed.

Accessory dwelling units and basement apartments with a separate entrance, kitchen, and full bathroom are required to obtain a license.

Property owners who live in the unit and rent space to a roommate are not required to obtain a license.

There was a phased approach for the licensure requirement.

And as of January 1st, 2024, all residential rental properties are required to be licensed.

The program is only about two years old.

Short-term rentals are for 29 days or fewer and are covered under a separate licensing program.

This is a quick overview of the residential rental ordinance history.

In April of 2021, Denver City Council passed the initial residential rental licensing ordinance.

Our first applications were received in March of 2022.

In December of 2022, Denver City Council passed an ordinance with clarifying amendments and the requirement to post the license number on the advertisements.

In January 2023, all residential rental units with two or more, all residential rentals with two or more units were required to be licensed.

In January of 2024, all residential rental properties were required to be licensed.

Our first batch of about 2,800 renewals will come due in 2026.

Residential rental licensing data.

As of October 20th, 2025, there are 27,712 active residential rental licenses, plus 157 licenses still pending approval.

That covers about 203,000 individual units.

About 23,000 of those individual units report being income restricted.

9,000 units report as being 88 accessible, and about 89% report as having smoke-free policy in the lease.

Most units are single dwelling units, and most properties are single-family homes or townhomes.

This data comes from the questions we ask on the license application.

All right.

So the city employs a dual enforcement model for residential rentals.

The Department of Public Health and Environment oversees enforcement of Denver's housing code, which contains minimum standards for health and safety in dwelling units.

When DDPHE takes enforcement action on any of these violations, they are authorized by Chapter 24, which is the Health and Sanitation Code, to issue fines of up to $5,000 per violation of the housing code.

On the other side of this dual enforcement model, the Department of Excise and Licenses is charged with enforcing the residential rental licensing code.

That lives in Article 8 of Chapter 27.

Residential rental licensing code violations include failure to obtain a residential rental license, failure to display the valid license number on the advertisement, failure to provide important safety features like a smoke alarm, carbon monoxide monitor, and fire extinguisher, and failure to maintain appliances in good working condition, as well as failure to provide a written lease to tenants, as well as the required notice of tenant rights and resources.

Excision licenses is currently limited to issuing fines of up to $999 for violations of the residential rental licensing code.

And that's because there's no fine amount specified in this code, and so we use the default fine structure laid out in chapter two of the municipal code.

The current fine structure required by chapter two is a first citation, which is subject to a fine of 150 dollars, a second citation subject to a fine of $500, and the third citation is subject to a maximum fine of $999.

Since the licensure requirement became effective in 2023, we have been in phase one of our enforcement approach, which is focusing on bringing residential rentals into compliance with the requirement to get a license.

As of October 20th of this year, we have issued a total of 3,258 warnings and administrative citations to unlicensed residential rental properties.

This includes 2,737 notices of violation, which means we send them a warning letter notifying the operator of the requirement and letting them know how to get a license.

Since February of 2023, we have issued 431 first citations, 66 second citations, which come with a fine of 500, and just 24 third citations, which come with a maximum fine of 999.

So less than one percent of operators who received a warning ultimately ended up at that third citation.

And to put all of this into context, we have 27,712 licenses currently, which means only about 11% of those applications were driven by a notice of violation or citation.

So now that we've made significant progress on bringing unlicensed residential rentals into compliance with the licensure requirement, we can start to turn our attention a little bit more to the tenant protection provisions of the residential rental code.

Of course, we would continue to enforce the licensure requirement, and as we move into phase two, we'll coordinate our enforcement efforts with DDPHE's enforcement of the housing code.

The issue and why we're here today is that the maximum fine of $999 that excision licenses can issue for violations of the residential rental code is not aligned with the maximum fine of $5,000 that DDPHE can issue for violations of the housing code.

This is a problem for a couple of reasons.

First, a situation may include both health and licensing violations, and there is some overlap between the two in both codes.

And depending on the specifics of the violations and which department is writing the citation, there may be very different fines for similar violations.

And so that can create a perception of inconsistency if similar issues carry very different fines.

And then, second, for some operators, that maximum fine of $999 is not enough to incentivize compliance.

Some operators may choose to pay the fine rather than correct the issues at hand, particularly when those issues are costly to correct.

Fine alignment between both agencies is necessary to incentivize compliance with all of Denver's critical tenant protections.

So our proposal is to amend Chapter 27 Article 8 to add a new section specifying that any violations of the residential rental code are subject to a civil penalty of up to $5,000.

This will align the maximum fine amounts across excising licenses and DDPAG's processes.

It will allow us to work together to write size fine amounts for health and licensing violations, and we believe it will incentivize compliance.

Ultimately, what we want is compliance with all of the important protections in the residential rental licensing code.

We don't want to have to use this large fine.

We would much rather see operators of residential rentals come into compliance because at the end of the day, that's what's best for the tenants who live there.

And the longer it takes operators to fix these issues, the longer tenants are left in an unsafe or unhealthy rental.

So we hope that the potential for a $5,000 fine is enough to get operators to fix these issues right away.

So how would this work in practice?

Typically, in the event a violation is discovered, usually through our complaint process, we would start with a warning followed by increasing fines with each subsequent citation.

We would only employ the maximum fine amount in situations where there have been multiple previous citations with no attempt to come into compliance, and in situations where there are particularly egregious or large-scale violations at play.

But it will help to have the maximum $5,000 fine as an option when needed.

So here's our ordinance language.

It's pretty short.

It just adds a new section to Article 8 of chapter 27 to specify that violations of this article are subject to a penalty of not more than $5,000 per violation per day.

These violations are considered property violations for which the city may assess a lien against the property.

And citations are cumulative in nature, meaning that if a person receives a $150 fine followed by a $500 fine, they owe a total of $650.

And the bill allows anyone who wishes to dispute a violation to file an appeal.

So looking at our next steps, if the ordinance is approved, we would communicate this change to licensees through our various communication channels, including our licensee bulletin, and remind them about all the information and tools that are available to them on our website to make sure that they are in compliance with the law.

We would implement the increased fine amount as part of our scaled enforcement approach.

And then as a note, we are required by the residential rental code to provide an annual program update to council by July 1st of each year, and so you can expect to see that sometime in June.

But as always, let us know if you would like more information about the program between now and then.

And that concludes our presentation.

Great.

Thank you so much.

I want to start off by welcoming Councilman Hines, Council President Sandoval, and then I believe also Councilman Cashman is on joining us online.

Thank you for the presentation.

Just to remind folks, we will now go into our 15 minutes of public comment on this matter.

All speakers will have two minutes and should begin the remarks by telling council their names and who you are representing.

If you have signed up to answer questions only, state your name and note that you're available for questions of council.

Do we have a timer?

Do it, yeah.

Okay.

And then let me pull up the list here.

I think we have a couple people that are providing public comment virtually.

And so I think maybe we'll start with those folks.

Actually, I'm just gonna go in the order that I have here, if that's okay.

Um, so I'm gonna call out the names and we're going to be going, um, kind of going between for against and neutral.

So we'll start off with Olivia Sanders, followed by Joseph Aurora.

I don't know if we have Olivia.

Yes, hi.

Good morning.

Uh, my name is Olivia Sanders.

I am a community organizer with the East Colfax Community Collective or EC3.

Uh, we are a local grassroots nonprofit that builds community power to fight displacement in the East Colfax corridor.

And I'm here today to speak in support of this bill.

Uh, to better hold landlords accountable and improve overall housing conditions in our community.

This stronger alignment between DDPHE and excise and licenses is a necessity.

Uh, in our neighborhood, we work with many households who have warranty of habitability violations and licensure violations, and increasing these fines will create a higher incentive for landlords to come into compliance with the licensure standards.

Um, thank you for your time and your consideration on passing this bill.

Great.

Thank you so much, Olivia.

Um, next we'll have Joseph Aurora.

Everyone, uh I'm uh owner of a rental property here in Denver and grew up here in the local area.

I appreciate the nuances shared during the meeting today around the maximum fine and penalty timelines, and that there will be a warning given to uh members uh landlords beforehand.

Um my only ask to consider is that if there are landlords who own less than let's say five or ten units, maybe the maximum penalty shouldn't be up to five thousand dollars a day, as that might obliterate some of their businesses.

So I think this might be at $5,000 a day targeted to larger owners who have dozens and thousands of units.

That's just something to consider.

Uh, otherwise I like the program and I'm in support.

Great.

Thanks.

Thank you.

Thank you.

Uh next we have Amy.

Um, and I apologize if I mispronounce your name Cesario, and then Ray for Nicholas.

Amy is virtual, or I'm sorry, let me back up.

Carson Bryant and then Amy Cesario.

And I have Carson virtually.

So we will go to Amy.

Thank you, Chair and Committee members.

My name is Amy Cesario, and I serve as the government affairs chair for the Denver Metro Association of Realtors.

DMAR represents roughly 6,000 members across the metro area, many of whom are either small mom and pop housing providers or managers who work with them.

DMAR just learned about this proposal this week.

Generally, we encouraged robust stakeholders' engagement on this issue.

To ensure mom and pop housing providers are informed of major policy changes, including clear criteria for violations, timelines for enforcement, and ensuring communications and education that outpace fines so that the city doesn't have to trigger the five thousand dollar day per fine per day fine.

The proposed ordinance appears to be well-intentioned, but the potential impacts on small landlords could be serious.

Many of these mom and pop housing providers have just one to five properties.

They're not corporate investors, they rely on these properties for income, just as anyone else, or it could help pay for their children's education.

As five thousand dollars per that, sorry, a five thousand dollar per day fine is not something most of these owners can absorb.

We respectfully asked that before implementing something this drastic excise and license and the city make the criteria and process very clear and help perform education.

We urge the city to ensure proactive outreach and education on this measure.

Clear communication on objective criteria and fair enforcement, with hopefully an understanding that a five thousand dollar per day fine is an absolute last resort.

DMARS stands ready to be a partner and serve as a resource to help educate our members and ensure compliance.

Thank you for the opportunity to share our perspective.

Thank you so much.

I'll just um make a note that we're having some issues with the timer not showing up, so um, I will I can give you like a 10-second warning um if that's helpful, but you did that perfectly right under the the time frame.

So you're great.

Um next up we have uh Rafer, Rafer, Nichols.

I don't have a comment anymore.

Thanks.

Okay, and next we have Ada Altman virtually.

Hi, yes.

Um, good morning, everybody.

Uh, my name is Ada Altman.

I'm the director of the Denver Metro Tenants Union.

Um, here to support this proposal.

Um the current fine structure available to licensing is not to scale with the amount of rental income generated by uh corporate slumlords.

Uh $999 is the cost of doing business.

Additionally, these landlords cost our city a great deal in resources, um, especially on the public health enforcement side, dozens of in-person public health investigator visits to these sites, discussions and internal meetings.

Um, in coras, I've seen some of these properties generate hundreds of pages of emails and documents, so this will also help our city recover the costs of of the these slumlords exact on uh Denver and Denver taxpayers.

Um, also just note that it's important that it's important to note that this is not necessarily a silver bullet.

We actually have to use these fines uh at larger um at larger complexes like the Felix Apartments.

Uh single monthly junk fee more uh would more than cover this fine if it was issued if if it was issued once a month at $5,000 a month.

Um, we need to have a sense of what a balance sheet looks like for out of state corporate investors.

Um, and as some sort of frame of reference.

Um, so this is an important step, it's an important tool.

Um, we're very much in support of this, and we want to see it used again in a targeted way with regard to out-of-state uh slumlords, especially large complexes that have the greatest cost to tenants, the surrounding neighborhoods, and to the city.

Um, and we want to see uh the fine used with a sense of scale, um, because again, if it was issued just once a month, um, uh a single arguably illegal junk fee would more than cover the cost.

Um landlords can inflate um certain fees like common area maintenance, um, because they're so opaque to cover the costs.

Um, so we just also need to not see this as a silver bullet.

But I'm sorry, Ada, you're at time.

Sorry, I didn't give you a 10 second warning.

Yes, thank you so much.

Um, and then last I have uh Andrew Hammerick.

I don't know if I see you.

Oh, there you are.

Perfect timing.

You're up for public comment.

Oh, I'm sorry.

Right there at the microphone, sir.

So um, just for a rundown for you, we do have two minutes um for your public comment.

Uh, and you're the last one on our list, unless there's anyone else that did not sign up and would like to speak.

Oh, if there's time, yeah.

Thank you.

Sorry, we had to look at my behind.

Good morning.

I'm Andrew Hamrick.

I'm general counsel of the apartment association of Metro Denver.

That's a trade organization that represents suppliers to the housing industry and uh owners and operators of rental properties.

Within the county of Denver, our members represent 1,074 member communities, which is uh 128,331 residential units.

We're in a position in the current market where rents today are lower than they were three years ago.

That astonishing feat is a result of increased units in the county and throughout the metro area.

Over the last four years, approximately 20,000 units have been brought to market.

That trend is slowing, and applications for new permits are down.

That's important.

This policy of a five-fold increases in fines is problematic because it discourages institutional and small investor investment in rental housing.

The only way you get that type of market is if people are willing to risk the capital, about $360,000 per unit to invest in Denver housing.

The biggest problem with this increase is not just the five-fold increase in fine, but the fact that the fine is computed on a daily basis.

That means a problem that takes two weeks to correct is a $70,000 potential fine.

A problem that takes a month to correct is a hundred and fifty thousand dollar fine.

Very relevantly, because the eviction process in Denver is about four and a half months.

The cost to correct the cost of a four and a half month correction is six hundred and seventy-five thousand dollars.

In all matters of fining, there has to be proportionality in the fine to the offense.

In other words, the punishment needs to fit the crime.

And thank you so much.

Um, that's your time.

All right, we have one other person, and just real quick, is there anyone else that would like to provide public comment on this before we end here?

Oh, yeah.

Thank you.

If you could please state your name and you have two minutes for public comment.

Good morning.

My name is Jordan Cotler.

I'm a housing attorney in the Denver County Court Clinic Supervisor at the Colorado Poverty Law Project, and we represent tenants and in it uh through legal representation, education, and advocacy.

Simply put, the current fine schedule for violating the residential rental licensing rules is not enough to deter bad actors, especially large corporate landlords who make millions of dollars in profits each year.

The first violation of the rental licensing rules is a fine of just $150,000.

Uh, actually it's the second, right?

Because it's after the the uh warning, uh, less than what many landlords charge for late fees in a given month.

The maximum penalty after three violations is just $999.

Importantly, if a building with multiple units does not have a rental license, this only counts as one violation, no matter how many units are in the building.

Therefore, the owner of a building with hundreds of rental units has very little incentive to comply with the rental licensing requirements because the maximum fine is such a negligible, negligible amount of the overall revenue.

The fine schedule should be increased not only to bring itself into compliance with DDPHE, but also to deter noncompliance.

Additionally, a landlord's failure to comply with the rental licensing requirements cost the city time and resources.

Finally, having stronger enforcement mechanisms for the rental licensing program will aid the city's efforts to address code compliance issues and habitability concerns upstream before a property becomes so uninhabitable that it is condemned and tenants are displaced.

Thank you for your time today.

Thank you very much.

All right, it looks uh like we don't have anyone else um that would like to speak on this matter.

Um with that said, we will go into council member questions, and I have starting us off in the queue, I have uh councilman Heinz.

Oh, thank you, committee chair.

Um tell me a little bit more about your thought process with warnings and fines.

Um, while there is the mechanism to go from a warning to a fine to a higher fine to a higher fine.

Um tell me, in effect, how um exciting licenses and currently called um uh thinks about the the fine, you know, applying fines.

Uh sure and implementation, right?

The idea is that um our goal is compliance, right?

These are folks' homes, this is where they live, and so um we are seeking for the landlords to come into compliance on their own.

Um, as we saw in phase one, 90% of folks out there did that on their own without even a warning.

And so the idea is that to get that to get to that final 10%, right?

That last reach, um, we do issue a warning first because um we do know there are a lot of small operators and they may not know, right?

There's a lot of there's a lot going on in the news, there's a lot of information out there to keep track of, and so if they only have one or two properties, um they may have missed the update.

And so we always start with that warning to indicate, hey, this is a requirement, um, are you aware of it?

And here's some time to correct, right?

We do give them a timeline to correct.

We only then issue that first fine after that timeline has passed with no action.

Um, right, there are different scenarios, of course, but in the in the case of licensure, the easiest way to come into compliance was to submit an application or to schedule that inspection.

There was a time where inspection uh housing inspectors were a bit busy, and so um if they had that inspection scheduled, we considered that a nice a significant step toward compliance.

Um, and that is our goal, right?

The goal is compliance, um, and that's sort of our mindset with this as well.

We think that, you know, obviously we will keep track of the data and see how that bears out.

But our hope is that if you don't have a smoke detector or a fire extinguisher or a carbon monoxide detector, um, if we send you a notice that says, hey, that's a requirement and it needs to be done.

Most folks will go out, spend the 10 bucks, get the smoke detector, install it, and be done, right?

And then they can send us a picture and it'll all be taken care of.

And that is that is in compliance for the landlord, it's also creating a safer home for the tenant.

So that's sort of our thought process.

So I I think in just in the uh map and math, the analysis was that 90% of uh of people uh who were renting properties in Denver submitted the rental registry application, and uh and we're just fine.

And then 90% of the people who were issued warnings of the you know, entities were issued warrant warnings also came into compliance.

So, so really we're looking at the 10% of the 10% that um that receive a warning.

Is that a fair math is not my forte?

So uh, but yes, that's about right on I think slide uh what slide is this um seven, maybe.

Um yeah, those are the exact numbers.

Um, so yeah, yeah.

Um the I it would be interesting um between now and uh when it comes to the floor, assuming the committee believes it's worth going to the floor uh to see the average amount of time between the warning and the fine issued for those uh who um who receive uh the first hundred and fifty dollar fine.

The thought process is I wonder how much time you know people are given to cure so that um we are either a kind city or a punitive city, and uh so that's that's the thought process.

Sure.

I will say um all of the citation uh citations and NOVs issued to date have been um only for that violation of needing a license, right?

That was phase one, that was our main priority.

Um so uh I think there was a standard timeline, we can definitely get that to you.

I do want to say as we move into the second phase, it will sort of depend on the type of violation, of course.

Um for example, like the smoke detector, carbon monoxide, fire extinguisher, those are easy to cure, those are quick, so the timeline would likely be shorter than something more comprehensive, right?

And so um I, you know, I think we do take those factors into account.

We also try to treat similarly situated operators similarly.

And so I think you know, we can have more information about that out to you as well.

Yeah, well, I recognize the public comment that was made.

Um, it has been my experience that I'm frustrated with how lenient the city has been in the past with you know snow shoveling and uh and other things, so um uh so I I imagine that um that this will be a similar value statement from the city where we um give people the full benefit of the doubt of the doubt before um uh before issuing fines.

That said, as a former resident of 1644 Pennsylvania, um uh not when CBZ owned it, um, you know, we can't have uh people renting in situations like that where we have actors who are not um not good neighbors and not good um property owners in Denver.

So um the last thing um one of the uh testimony was talking about if there is a red a building that hasn't been registered in the rental registry, uh the fine is per building as opposed to per unit.

Um, do you have thoughts about that or does it address that?

That's that's an interesting comment.

We might tap in our council here because it is the way we define how folks get the license is per residential rental property, which has a definition.

So I don't know, Genevieve, do you want to expand?

Yes, it would be um one violation per property.

As of what the approved, if you yeah, so if the property is one large apartment unit, they only need one residential license, they don't need individual licenses for each unit, so we would only have one violation there.

So 1644 Pennsylvania had something like 40 units, um, so the maximum fine would be a thousand dollars per day, so a thousand dollars divided by 40 would be the essential.

I mean, you know, it somehow the fine structure um is more punitive, the small property owners as opposed to you know, like Aviva or you know, some massive property that has hundreds of units that is also not giving basic habitability.

Okay, thank you.

Thank you, committee chair.

Thank you.

Councilwoman Gilmore.

Thank you, madam chair.

Sounds like that's a policy direction you could work on to do that.

Yeah, that um thank you so much for the work on this.

Um, and you know, thinking about back when we passed it in April of 2021, it was five years of work and stakeholder work prior because um it was sort of a hot potato.

No agency wanted to take it on initially, and it's complex, it's complicated.

Um, and so you know, in the interest of um, what are some of those real examples of the sorts of properties I'm thinking of one right out in Mont Bello, um that you know was cause for place network investigations by the city, um, and you know, elicited um law enforcement response, um, but a lot of the things that were going on um could have probably been fixed through environmental design by property managers, and we spend a lot of money in the city doing the job for property managers versus having them do what they're lawfully required to by our code.

And so, could you just kind of high level?

I know you're giving the examples of like a fire extinguisher, not maybe being in, but um, I would imagine that there's much more egregious examples that you've seen that this um increase in fine would help alleviate more quickly.

Sure.

Um, I'll mention the sort of complex, nuanced one, um, and that's sort of the uh appliances and their working condition.

This is something that both DDPAG and XIS have authority in the code to enforce against, depending on the circumstances.

Um, and so it creates a scenario where if DDPHE has the authority to enforce in that particular case based on the details, they can issue much higher fines than we can if we are called in when that issue is more uh on the licensing side and less on the health side.

And so um that inconsistency rate is an area where uh depending on the type of appliance or depending on the impact on the tenant, um, that tenant may see um they may see compliance from their landlord because DDPHE's been out there, but they may not see compliance from their landlord if we are able to go out, um, and that creates again that perception of inconsistency and um depending on the facts of the situation, it could create opportunities for inconsistency that we want to avoid.

Great.

I appreciate that um wholeheartedly and and you know, one of the things that when we started talking about this maybe a year or over, about how could we um enforce uh the ordinance more holistically, and I have to really call out Ida for her advocacy and her um work.

Um I know when I first talked with her, she was like, why didn't you make this rental license tougher?

Why didn't you make it, you know, with more teeth?

And um I think we've seen today many of the reasons why we had to start slower in this policy as to um, you know, there's always going to be that pass on to the tenants um from the property owner.

That's just capitalism.

We can't do anything about that.

Um, but at the end of the day, the cost to business is not my biggest concern.

It's the cost to our families and to the folks who are living in a multifamily apartment complex in our neighborhoods that people are able to crawl underneath their units and live underneath the floorboards, and people are scared, and it's an out of state um property owner, and they're just gonna pay the 999 over and over and over, which is hurting the stability of children and our families in our neighborhoods, and um that is super important, and with all the pressures on families right now, um, having safe sustainable uh housing that meets our codes is super important, and so whole wholeheartedly um in support of this, and just glad that we were able to get here, and at some point it wouldn't be bad to talk about a per unit scenario.

It was just um I think people's heads would have exploded if we tried to talk about a per unit versus a per parcel um sort of concept, but um you know, more to work on that.

So thank you.

Thank you, Madam Chair.

Thank you, councilwoman.

Um I'll just remind uh council members that we do have um some additional items that we have to get through.

Um so I'll go next to Council Pro Tem Romero Campbell, followed by Councilman Watson.

Um thank you, madam chair.

Uh I think actually I think my my questions have been answered through the two previous.

Um I just wanted to thank you for the briefing um that we had and answering multiple questions then and really clarifying, I think um the unit to the um to the building, and then also how do we hold accountable some of the bad actors that are out there?

Um I think the majority and you know, everybody else is the majority are are good actors, and I think really I think doing the right thing and and keeping um nice homes or keeping homes for people to be able to live in.

Um but there are a few that I think have really taken advantage of our system and some of our rental um some of the folks that are renting.

So um thank you.

Thank you, Madam Chair.

Thank you, Councilman Watson.

Thank you, Madam Chair.

Um, I'll be pretty quick.

I wanted to say um to um to the team, um uh Erica, um, Abby, um, Kelly uh specifically uh for work that you all have done, not simply on this, but really um the ways in which you have through your office provided uh safety for communities that we live in.

I know my office has collaborated with you all on two separate uh changes within the ordinance from scrap metal to um housing uh habitability.

Um, and so the thoughtfulness in your process, the level of education and outreach that you provide before implementing changes that can impact uh residents and businesses is greatly appreciated.

And so my one question is on the education piece on this.

I knew for housing habitability, we had um I think what six months or it was a whole education ramp up, and then we had uh task force discussions.

Can you share a little bit about as this goes through the process as this is improving?

Um, what are the education steps before lines?

And this becomes a reality to national.

Thank you for your question.

Yeah, we would do a lot of outreach through our existing channels, our residential rental bulletin.

Um, we would also have direct contact with the licensees since it impacts um the legal parameters of their license.

Um so some of those would be getting that message uh twice.

Um that rental registry or sorry, residential rental program bulletin, uh, also has a lot of subscribers who are tenants in the community and other housing um providers or advocates, um, in one way or another.

And so we would do probably some information sessions about the change.

We would probably put out some of those bulletins.

Um, we would likely add those again always to our website, um, but we're also here um if anyone has questions.

And again, right, the first step is going to look exactly the same.

You are going to receive a notice of violation if you are in violation and we hear about it.

Um, you would only get to that higher level of fines if you have been repeatedly contacted at least four times previously, and you have not come into compliance with the requirement, or if you've not contacted us to show a significant step toward compliance.

If the math bears out the same way it did um in our first round of enforcement, that means that only 24 operators out of 27,712 licensees would reach that level.

So, of course, we'll be back in June to report on the data, but that's the trend we anticipate.

Thank you so much, Eric, and thank you, Councilmember Gilmore, for the good work.

And I uh as well, um, always for your advocacy and um being a uh source of knowledge for us in this work that you thank you, madam chair.

Thank you so much, Councilman Watson.

I have um uh making sure there's no other members in the queue.

And I know councilman Cashman um let me know that he did not have any questions.

Um I do have one question um that councilwoman Torres, I think had had it previously asked, and she had asked if I would um inquire about this.

Um, the question is, how does the department handle instances of retaliation, especially if the voters approve the renaming to licenses and consumer protection?

Does Denver have uh robust protection measures, and how does a resident uh resident currently report something like this?

Yeah, great question.

Um, there's two um sort of notes I want to make here.

The first is that um, yes, that name changes on the ballot next week, don't forget.

Um, and we have a consumer complaint portal and a tenant complaint portal.

Um, both of those are a great entry point into the city and our department's assistance.

Um, we have a tenant-specific one that lists um a drop-down of options uh that you can report whether that's lack of a license or a safety issue.

Um, it could be that you never received that required paperwork that landlords are supposed to share.

Um, all of those complaints are available for you to submit.

You can um do that anonymously, or you can share your information if you'd like to be updated.

Um, however, we also receive them through our main consumer protection complaint portal.

Now, if you are experiencing retaliation, um, that falls under the purview of HRCP in our DRMC.

And so that's an area where our um portal would lead you to connect with folks over at HRCP.

I know that program is currently a little bit in flux, and so we look forward to um the updated process that they'll be following, but that channel is there, and those cases will be directly referred there if there's a discrimination component.

Great.

Thank you so much, and thank you for all of the work that you are doing.

Um, I was really excited to see that this was coming um through committee.

Um, and do want to thank every all the council members who have worked on the policies to help uh build a really robust system.

Um, with that said, I will take a motion, uh motion by councilman Heinz, seconded by councilwoman Gilmore.

Um, is there any need for a um recorded vote?

Or is everyone good with this moving on to the full council?

Alright, I'm seeing head notes.

So this will move on to the full council.

Thank you so much for being here.

We'll take a minute to transition to our next item, which I will introduce.

We've got there's a there's a lot on here.

We have our, it's our general improvement districts, our business improvement districts, and our tourism improvement districts, also known as if folks that are tuning in, you're gonna hear a lot of acronyms, because it will take a lot for everybody to say these every time, but we have our GIDs, which is our general improvement districts, bids, our business improvement districts, and our TIDS, which is our tourism improvement districts.

And so we'll be um joined at the table from our city staff who will be doing the presentation.

And we'll give you just a minute to get settled.

That was quick.

Um, I know one show.

One man show for our like a billion things here.

If you can introduce yourselves, that's introduce yourself and go ahead with your presentation, and I will be keeping a cue for council members for questions.

Of course.

And before we get going, um, council members, we're looking at these uh taking action on these as a block.

If there is anyone, any of the voting members that feel that they don't want to do that or they want to parse them out.

I need to know that um as soon as possible so that we can um do that when we get to that point.

So take it away.

Excellent.

Uh good morning, members of city council.

My name is Dennis Wujenick.

I'm an analyst on the capital planning and programming team here in the Department of Finance.

Uh I am here today to present the 2026 plans and budgets for the various GIDs, general improvement districts, VIDs, business improvement districts, and the TID, tourism improvement district here in the city and county of Denver.

Um, before I get started, I do just want to mention um, you know, because of such a busy committee schedule today.

Um, I am trying to uh go through this very quickly.

And so if there are um you know questions from you or or other members of council where they would like to go into things in a little more detail, we are offering briefings, so I'm happy to schedule that um with myself and um members of you know representatives from the districts, if you would like.

Yeah, um and so yeah, just um, I just want to you know reiterate that.

Happy to go into more detail at a separate uh time if you'd like, but I'm ultimately gonna try and summarize all this information together uh quickly, and so um, yeah, just they just want to reiterate that.

So anyway, jumping into it.

So uh here's the agenda.

So I will start off uh just very high level going over the requested council actions, um, and then I will do a sort of high-level overview of uh the districts, what they do, how they're organized, things like that, uh, before uh doing a quick summary of my annual review process, and then from there I will dig into the budgets a little bit more, comparing um the initial 2025 budgets that were submitted this time last year, the updated 25 budget 2025 budgets that were submitted um earlier this year, and then the 2026 projected budget.

So uh, and then we'll finish with a QA.

Uh so like I said, uh, here are the requested council actions.

So um we're here to approve annual work plans and budgets for each of the 12 BIDs, and so that's Council Bill 25, 1588 through 1599.

Um, we're also here to approve the annual work plans and budgets for each of the five GIDs.

I apologize, I forgot to update that.

Um, and that's council bill 25, 1600 through 1604, and then approving the annual work plan and budget for the tourism improvement district, and that's 25-1605.

So uh going on to the kind of you know, description of the different types of districts and what they do, I do want to reiterate that um the business improvement districts and the general improvement districts are um sort of created and uh um the governed, I guess, by state statute.

Uh so that that is just something I kind of want to reiterate.

Going into this is that uh state laws oftentimes would sort of um set the rules for the creation of these and things like that.

Now, the tourism improvement district is something that was created by Denver Charter.

So um the budget process and my review is very similar for each of these entities, but I again just want to highlight sort of the the differences and sort of where the uh the rules and uh laws related to these entities come from.

So uh going over the different districts.

I I do have metro districts on here, but that's not a uh you know, what we're focusing on today.

So I'm gonna skip over that column.

But so um just to refresh our memory, the general improvement districts, the GIDs there, those uh the primary purpose of those entities are to uh focus on public infrastructure and maintenance.

Now they can do other things, um, but that is their primary focus.

And then uh, and those are eligible for commercial or residential uh and residential properties.

So um uh uh the that's um the focus is more you know general and broad across a variety of uh services and uh things that they can provide to their community.

The GIDs are governed uh by city council as the board of directors, so you may recall when when these items come to the uh council floor, you will sort of you know gavel out as city council and gavelin is the board of directors, um and so that is a slight uh you know difference to the GIDs to the other districts.

Uh with that being said, they do have a district advisory board, which is made up of residents, business owners, um, business operators, uh, you know, uh people in the district, so that handle a lot of the day-to-day decision making, as long as as well as the full-time staff.

Um but uh just yeah, just want to read that's sort of a difference with the GIDs.

Uh the BIDs, those are you know business improvement districts focusing on commercial properties.

So the the primary focus of those uh entities are um academic development and marketing, but they they can do other things as well.

Um but uh yeah, the the primary focus is sort of that economic development and creating a sort of a uh a district wide identity um in addressing the the problems of the the businesses are in uh experiencing in that area.

They do have a board of directors uh that does not comprise city council.

Um so that's also made up of you know business owners uh uh in the area, um, and so those they handle a lot of day to day operations along to the full-time staff.

Now, the T ID that is a uh a sort of unique entity that uh they've they focus on tourism improvements and services, usually you know, marketing and encouraging uh tourism and and group uh group visits to the city uh working uh very closely with visit Denver, as everyone here is aware.

So um, and they their their primary uh their primary revenue source, and I'll get into this a little bit later, is uh is a fee on uh hotels with for 50 or more units.

So here's just a map of the GIDs in the city.

Um this is slightly outdated, and I'll get to that in the next slide.

Um, but just wanted to give you just a general uh sense of where the districts are.

Uh and and so this is just more of an informational slide that I won't spend too much time on.

Uh with that being said, uh, we do have the ballpark Denver GID, which is new, um, and so I've identified that in this slide here.

Uh and so that was approved by the voters in late 2024, and uh 2025 has been their first year of operations.

We do also have the Broadway Denver GID, which uh came to council earlier this year, and so that is on the ballot in November right now, and so um by this time next year we may have another district to add to this list.

Then here's a map of the different BIDs across the city again.

This is mostly just informational just to give you a sense of where they are, won't spend too much time going over this.

And so pivoting over to my annual review process.

So uh in the summer, late summer, I send a uh I send out letters to the different uh districts requesting a variety of financial and informational items, and so that's the budget and work plans for the upcoming year, um uh estimated year end financials for the current year, um, the status of any of their debts uh or or or plans for debt, uh, as well as their uh results and any audits if they qualified for audits.

And then lastly, I'll ask for just the other additional information about the board of directors, any other meaningful changes to their their operating plans for the year and other um you know major events that are worth highlighting.

Um so those are due to the city on September 30th, so um, you know, not not a lot of time to review and turn everything around, but uh that's that's sort of the process here.

And so what I do is I collect all those budgets and work plans, review them, identify um material changes to the budgets in 2025, and in the case of this year 2025, as well as projecting out um the budgets for 2026.

I will also review audits for the previous um closed fiscal year, so in this case it would be 2024, and um you know review their debts and try and summarize all that for you as well as their primary revenue sources and things like that, which I'll get to in a few more slides.

And then lastly, you know, here we are with City Council where you uh have the opportunity to vote on the budgets and plans, which is required by state statute for the BIDs and then required um in the creation ordinances for the GIDs and TID.

So getting into the actual budget review, and again, I'm gonna try and go rapid fire.

Um, if you do have questions?

Let me know.

Um, and again, we can set up briefings if we want to go into things in more detail.

Alrighty, so um here, just to kind of, you know uh make make sense of this table.

In the first column there, I well, I have the name of the GID, and then I have the 2025 approved revenues, so that's what was approved at this time last year, with a percentage from the change of the previous year in 2024, and then I have the 2025 updated revenues, which is the percent change from that first column to the second one.

So um so the that second column there is what we are currently reviewing.

And then I kind of have a similar pattern for the expenditures further right on the slide.

So starting off with Ballpark Denver GID.

They as I mentioned earlier, 2025 was their first year.

And so the initial budget that was submitted to the city was in their creation ordinance in 2024.

And so that's where the 1.3 million numbers we see there.

It's not unusual for a new district to take a little bit of time to identify their actuals upon creation as they get their staff in order and everything like that.

So it's very common for districts to kind of have some changes in their first year in particular.

With that being said, the main driver of their updated revenues is actually the fact that they received rollover funds from the local maintenance districts that were dissolved as after the creation of the district.

So as you may recall, when we create new districts and their local maintenance districts in overlapping areas, we will uh frequently dissolve those local maintenance districts in the new district that's being created, whether it's a GID in this case, will um will absorb those revenue, those funds as a one-time source, and then they will take on the responsibilities of maintaining a lot of those elements.

So that's that's the main driver of that big change you see there in the 2025 revenues.

And then 2026 revenues are the 2025 expenditures are driven uh primarily just by them addressing some administrative costs and and you know delivering on some of the maintenance needs uh from those uh increased revenues.

So uh fundamentally they're the the revenues haven't changed too much besides the inclusion of those local maintenance district funds, which weren't in their initial budget.

Moving on to uh 14th Street GID, um there uh you can see here a zero percent change from what they submitted last year in terms of their revenues, so no material revenue changes of note.

Um, and then for their expenditures, you can see about a 10% increase from what they initially projected, and that's uh ultimately just due to some periodic maintenance costs that were higher than expected.

Um this kind of cut this comes back down again in 2026, which I'll get to in a later slide.

Uh so for Gateway Village, uh you can see that their uh revenues increased by about 40,000.

That's primarily driven by uh just investment earnings coming in a little bit higher than they projected, so um their their main revenue sources didn't uh showed no real material changes.

So um ultimately again that's just driven by investment earnings being a little bit higher than projected, but no no uh um nothing to really flag beyond that.

Uh in terms of their expenditures, um those came down a bit, and this is this is something that's sort of uh uh um this kind of happened before.

Ultimately, they have a um they they have plans to a uh to for a large capital outlay, and ultimately they budgeted for that in the previous year, but it didn't happen in 2025.

And so you can see um you'll see in 2026 that they've kind of shifted a lot of those funds uh over towards the 2026 budget.

Uh they do have cash balances to support these projects, so um no real major concerns with their budget, but ultimately they they budgeted for a large project that just didn't happen, and that's why you can see that big decrease from what they initially had to what they're submitting now.

Uh the Rhino GID, um ultimately their revenues kind of stayed relatively stable, so um, quite honestly, I don't have uh any material changes to go over in terms of the 2025 revenues.

Um, in terms of their expenditures, uh, there were some anticipated infrastructure and placemaking expenditures, um, you know, like Brighton Boulevard maintenance and some third uh some 35th Street um planning elements.

So uh so those didn't happen in 2025, and you'll see on the next slide for 2026 that a lot of that stuff is being budgeted for in 2026.

Um excellent.

Uh so um moving on.

Then we have Sun Valley GID.

Uh ultimately their uh their their revenues um are on track for uh what they were projecting, no real material changes to their budget, um, and uh I have uh no no uh significant highlights to uh um address at this time regarding their budget.

So looking ahead to 2026.

Um so uh ballpark Denver GID for they are they are projecting five mils for their revenue sources.

Um and you can see that's their projected revenues are just under 1.4 million, and again, that decrease is driven almost exclusively by that drop-off from the local maintenance district revenues.

So um no real material changes in terms of their um sort of uh you know planned revenues, but um just a fall-off of that one-time uh surplus from the local maintenance districts, and then their expenditures um are driven, the increase in expenditures driven primarily by just slightly higher administrative costs and then uh delivery on some maintenance, yeah, delivering on some operating and maintenance expenses.

Um again, they have uh fund balances to uh support uh support those expenditures.

Uh okay, so 14th Street.

So 14th Street revenues do not come from mills, like a lot of the other districts.

They have some capital charges and maintenance charges, which have a sort of more complicated uh calculation to them, which is hard to summarize in the setting.

Um but uh ultimately that's gonna generate um combined about 535,000 dollars of their revenue.

Um you can see their total projected revenues are not changing too much from last year.

Uh so um their their plan projects and and uh uh planned expenditures are not varying too much from year to year.

And then uh you can see there the the increase in the expenditures is driven again, primarily like I said, by that large capital project that didn't happen in 2025, that they're now shifting that budget forward to 2026.

So again, it's just budgets at this point, but uh yeah, that's that's the main driver of that uh big increase you see right there.

Then for Rhino GID, they are projecting uh four mils, uh, with which will generate about um 1.8 million.

Um, and that is uh um the the that slight decrease is just driven by um like slightly lower uh estimates just across the board and their main revenue sources, uh no significant material changes there, but just uh same um uh ultimately just more more conservative estimates for the revenues going forward.

I mean, potentially um, you know, potentially uh uh you know decreasing economic environment potentially.

So uh and then their uh their expenditures are increasing again.

There were some capital projects that uh you know were initially kind of planned for in 2025 that didn't happen, so they're budgeting for that in 2026, and they're also budgeting for a large transfer to a capital reserve.

Um and so those are the main drivers of the increase going into 2026.

Uh also just uh just to reiterate, um, I do also review the debt for some of these entities, and so um just want to clarify that they they're budgeting for their debt expenditures and they're making their payments, and ultimately no concerns for me regarding the debt payments being made for for the items uh for the entities that have debt identified on these tables.

Then lastly, for Sun Valley uh GID, they are projecting six mills for their uh for their property taxes.

Um, it's a very uh you know small district with not a lot of development at this point.

Um, and so uh you know relatively small revenues, and they're just budgeting for uh you know incremental increases across the board with no real uh significant changes in any particular category.

And there's my uh GID summary.

So moving on to the BIDs.

Okay, so um for Bluebird, again, we're going back to 2025.

So this is just comparing what was submitted last year with what was submitted now.

So for Bluebird, you can see their uh revenues are increasing about 3.5%, so from what they projected, so no real material changes there of note.

Uh and their expenditures are going up by about from what they budgeted by about 36%, and that's mostly in the uh area of business support and uh events expenditures, um, and so those are just projected to be higher than they initially budgeted for in 2025.

Uh with that being said, they do have fund balances to support those increased expenditures, so no like major concerns from that perspective, but as you can see, they are spent out spending their revenues a little bit, but again, they they have cash on hand to support it.

The Cherry Creek North BID, you can see uh revenues projected to decrease by 0.2%, so no real material changes there, and the same uh case can be said in the expenditures category.

They're kind of sticking with what they sort of had planned for 2025 and no um no material changes to highlight this point.

You know, the Cherry Creek sub-area, they are projecting slightly increased revenues, um, and that's uh um ultimately that's not driven by anything out of the ordinary, it's just it seems to be coming in higher than they initially projected.

Um, and so uh that's that's the main driver there.

And then their expenditures, you can see that increased by quite a bit.

Uh they did um have some uh um they did have some operation and maintenance costs that came in higher than expected, um but they also do have fund balances to support those.

Uh as you'll see in the 2026 budget that comes back down again.

So it's um ultimately just some kind of one-time things that that popped up.

Um but they did have reserves on hand to support it.

And then the Colfax BID, um, you can see uh the revenues decreasing by 0.8% and their expenditures decreasing by 0.5%.

Again, no real material changes there, just things coming in slightly lower than what they were expecting.

Um, and uh, and they they do have fund balances to support the the the projected um expenditures above revenues uh for 2025.

And then Coolfax Mayfair, um, kind of a similar story, revenues decreasing by about two percent, but no real kind of material changes there, just things come in a little bit lower than what they projected, and then their expenditures increasing ever so slightly.

Um, but that uh again, they have fund balances to support it, and um nothing really out of the ordinary driving that, just things being a little bit more expensive than they budgeted.

And uh okay, so moving on to downtown Denver BID.

Um, you can see uh no real material changes in their expenditures or revenues, so nothing uh at this moment to specifically highlight.

Um everything's kind of right in line with what they submitted last year, uh, and was approved by council, so um, yeah, no no no material changes to highlight uh for federal uh boulevard BID, they um they the the main driver of that decrease is just the project the property taxes are just coming a little bit lower than they initially budget for as well.

Um and their expenditures have increased, and that's um mostly due to some placemaking and planning uh like administrative costs, uh things like that.

Um also they do have fund balances to support those additional expenditures.

So, you know, obviously it's not um you know, with some of these districts, not um always ideal to be dipping into fund balances, but they're that is why uh there are some um you know taper required reserves and things like that, and just um other reserves that these districts like to plan for in their budgets, so um no they they do have uh funds to support those activities as well.

Uh okay.

Um see five points, right?

Yeah, thank you.

Um so for five points, um, you can see their revenues increase by about 53 percent, and that's driven primarily by um they the the received some grant funds.

Um and you can see also their expenditures have increased as well, sort of in response.

And with those expenditures, they are uh they're mostly driven by um the new event activation concepts, uh funding events that activate the Welton corridor with some live music and other events like that.

And so um again, they received additional grant funds, and so that's a big driver of the increased expenditures, uh, but they also do have fund balances to support those activities as well.

Um, and then old South Gaylord, um you can see uh revenues increased by just under three percent, um so no no real material changes uh from a revenue perspective, and then their expenditures increased by about 13 percent.

Um, and uh that's mostly driven uh I mean overall it's uh just an increase of you know nine thousand dollars, and that's driven mostly by some website development and some other administrative kind of marketing costs.

And then um for uh for the uh Rhino BID, um you can see uh revenues about one percent low, no real material changes there, and their uh expenditures have decreased um by 33%.

And again, that's um that's just uh uh the you know they they were also kind of planning for some larger projects that didn't happen, and they're setting it aside some reserves for for future projects.

So it's a lot of that um additional uh revenue is just being set aside for for future years, as you'll see um in their 2026 budget.

Uh Santa Fe, um their revenues came in about three percent a little higher than they projected, no real material changes there, just things coming in a little bit higher than they projected.

Uh, and the same can be said for their expenditures.

Um the the increased expenditures are mostly in uh marketing and some event uh uh event-related activities.

And then the West Colfax BID, um, their revenues came in about 30% lower than they initially projected.

Um, they did have some, they sort of planned grant funds and sort of business support funds coming in that didn't come in as high as they initially budgeted for, and you can see from their expenditures that they sort of decreased their expenditures to sort of align with that.

Um and and the the decreased expenditures have kind of come in the area of business support.

So um, you know, kind of a sort of like for like decrease, if you will.

So moving on to their 2026 budgets.

Um we uh starting with Bluebird, they're projecting about 10 mils for the year, so that's no change from the previous year.

Um the revenues are about you know 0.5% lower than previously expected, so no real material changes on the revenue side of things.

Um, and their expenditures are projected to come down a bit.

Uh, and that's they're mostly gonna be decreased, uh, and uh in areas of um less planned sort of business support in the area compared to the amended budget that was just submitted.

So the main driver for that is just decreased.

Uh yeah, decreased business support, but ultimately coming in line closer to their their projected revenues.

And they do have they do have uh you know uh sufficient fund balance to support those activities.

Um the Cherry Creek North uh BID, they their revenues come from a 1% lodging fee, which is only about 157, or sorry, 570,000 of their uh budget.

And the primary the primary revenue source for them is Mills, which is they're projecting about 17.536 mills for the year, which will, and they're projecting a total revenue of about 11.3 million.

No real material changes there, just the expecting higher property tax revenue and some sponsorship funds coming in as well.

And then and the expenditure side of things, they are increasing expenditures.

The increasing expenditures due mostly to some planned major projects for 2026, like a parking and sort of wayfinding signed project that they have planned.

So that's that's the main driver of those increases.

Again, all these entities are budgeting for their debt payments, and uh those are those are built into their budget, so uh no no major concerns there.

Uh okay, so Cherry Creek North sub-area, they their mill is very kind of specific that the mills themselves, the ad velarum taxes cannot exceed 15,000.

So they kind of have to dial in the very specific number.

It's like I I actually don't have the note with me, but it's it's it's less than one mil.

Um so uh but yeah, the total revenue they can generate is only 15,000, and then they have some smaller uh revenue sources that can sometimes supplement that.

Um yeah, and and their decrease, uh, the decrease in expenditures, like I said earlier.

They kind of had those one-time charge, those one-time maintenance costs that came up the previous year, and so this is things kind of coming back down to normal in response to that.

Uh for Colfax, uh, they are projecting 10.61 mils for the year, so that's a slight increase from the previous year.

Uh and um, you know, the but their total revenues they're projecting a slight decrease uh in that ultimately they're just some kind of supplemental fees and charges that come into the the district that on their projecting kind of fall off that were um not there the pre that were there the previous year, and then uh their expenditures are changing almost uh there's almost zero change in their planned expenditures.

Uh they do have fund balances to support the the expenditures um the difference I should say in the planned 2026 budget, so no no major concerns from that, but again, you know, a little bit of a trend of um uh you know expenditures slightly uh exceeding uh revenues in some of these areas, and then um and then the cool facts may fare BID, they also um charge assessments based on uh lot size, both uh uh just total lot size and above grade and below grade, so you can kind of see sort of how those are uh uh the numbers that go into that there, and the total um budget for 2026, the revenues are expected to increase by about five percent.

Um they they do have like investment earnings and other revenue sources, and so that's why there's some variations there uh overall, but no no real significant material changes when reviewing their budget, and then the expenditures are expected to increase um that's driven mostly by administrative marketing costs, but uh, you know, relatively small amount um uh uh at that 7.8%.

Okay, um yeah, so uh downtown Denver, they uh the downtown Denver BID also has um an assessment sort of based on building size, land size, and sort of geographic geographic location within the district.

They can have different zones and things like that.

Um, and so uh with that being said, those revenues are pretty stable, and the big decrease here in both the revenues and expenditures are driven by the fall off of the 16th Street Mall project and some of the the funds that were coming into the district and out of the district um during that project.

So they they received some external funds, um, but now and spent that on the project, and since that project is now uh winding down, those those revenues and expenditures are both falling off the budget.

And the uh federal boulevard BID, they um are projecting 8.5 mils, which is a slight increase.

Um they are authorized to go up to 10 mils, so they're kind of they're they're sort of below their maximum amount, but it is going up a bit.

Um, and uh with that being said, the uh revenues um are also projected to go up a bit.

They do have other revenue sources that you know are in the budgets, but um the the property taxes are a primary driver of that.

Um let's see here, and then yeah, their expenditures are decreasing.

Um and the the areas where they are decreasing expenditures is mostly due in planned business support and administrative costs.

Uh okay, so uh five points, they're projecting 10 mils, uh, which is no change from the previous year.

Uh their revenues are expected to decrease due to uh, like I mentioned before, they received a grant um for 2025, and so uh that those were sort of like one-time funds.

They do have other grant revenue, but not as significant uh as as 2025, and so that's the main driver of the decrease there.

And then the expenditures are decreasing just to sort of align um with the with the loss of the grant funds.

Um the uh uh they're the decreases are spread relatively evenly across you know administrative maintenance and you know marketing economic development.

So they do have sufficient fund balances to support their activities.

So um some of it rolls over from the previous year, so um no real major concerns with uh their budget while reviewing.

And then old South Gala, they're projecting just over four mils, uh no change to the previous year.

Um the total uh the total revenues are decreasing just because they actually sold a piece of uh snow removal uh uh machine uh vehicle um the previous year, and so that was sort of just a one-time uh um increase in the previous year's budget, and so things are just kind of going back to normal based on their historically typical revenue sources, and their expenditures are decreasing in unison with revenues just to ensure you know that the balanced budget there.

Um, and the most most of the savings are coming in the area of like website development costs and some landscaping other maintenance costs.

Uh Rhino BID, they are projecting four mils, which is uh zero change from the previous year.

Um their total revenues are decreasing.

Um they're they're projecting decreased sort of total property tax and specific ownership taxes.

So they there are you know a few different sort of revenue sources going in there.

Um but um those are the main drivers of that.

And then their expenditures uh are going up ever so slightly, and like I remember, like I mentioned in the previous slide for the 2025 budget, they had some projects that were planned in 2025 that didn't happen, so they're rolling over a lot of those excess funds into 2026.

And so that's supporting a lot of their activities, that's that's supporting the additional activities in 206.

Um, and ultimately they're still maintaining the balanced budget.

Uh Santa Fe, uh there are no material changes really in their budget, just they're they're just projecting slightly decreased um uh revenues and expenditures just across the board.

Um but yeah, no significant single line items driving that decrease.

Uh and then you can see there that they do have a assessment uh unlike some of the other districts based on street frontage and then just building size.

And then lastly, uh we have West Colfax.

Um, they also sort of have an assessment based on square footage.

Um that's going up just ever so slightly.

Uh but with that being said, they have um they they are projecting slightly decreased other revenue sources like fees for services, uh things like that, but no uh significant single line item change uh in their revenues and their expenditures are projected to go up because of just some planned uh increased business support marketing and events like that.

Um they also do have fund balances, uh cash balances from previous years too to support those activities.

And with that, there's my there's the completion of the BID summary, and I'll just uh pivot over to the tourism improvement district uh to 2026 annual plan.

And so just a quick refresher uh on all this.

They uh that the TID was created in 2017.

Um they imposed that 1% uh tax on the purchase of lodging at all hotels with 50 or more rooms uh in the city and county of Denver, and it should, and those funds should be used uh for the following in order of priority.

And so they do support those funds, those revenues do support a 3.5 annual uh payment towards the certificate of participation for the Calorio Convention Center.

Um, and then in addition to that, they uh then take 10% of their revenues, and those go toward uh those are then allocated towards future capital improvement projects at the capital uh at the Caloral Convention Center.

And then lastly, sort of the remaining funds are used by uh you know visit Denver for uh you know marketing um uh and and can uh uh yeah revenues for convention and leisure visitor marketing.

And so here you can um oh right, one more thing.

So uh there was like there was the IGA back in 2017 that sort of created the district, and then this is just a slide that sort of breaks down the current board directors that was uh listed in the annual plan.

And so moving on to the actual budget.

Uh for 2025, um they the they are making their uh certificate of certificate of participation obligations to the city.

Um in addition to that, they uh that sort of 10% of revenue uh then um allocate uh came out to about 1.1 million of for uh capital improvements at the convention center, and then the additional funds um went towards uh which is about um which is about uh uh 3.5 million of um I've had more info on the next slide, I apologize.

Uh but it that that goes towards the various campaigns, including regional uh leisure marketing, client concessions and incentives, holiday advertising and online travel agency uh cooperative.

And just one of the one of the kind of interesting data points I took from their annual plan, and there's a lot of good info in there.

Um, but in 2025, visited Denver helped book 19 different groups and and 2008, nearly 219,000 room nights worth uh 358 million in future economic impact.

Um, but yeah, a lot of good information in their annual plan that I recommend checking out.

And so then looking ahead to 2025, um, okay, yeah.

So uh looking at 2025, again, their revenues come from that 1% tax on the hotels of 50 units or more.

Um, they're projecting a uh slight increase from their updated budget uh of that.

So that's a one percent increase from their amended budget, and uh um and and their expenditures are projected to just decrease ever so slightly from the amended budget uh for 2025.

Uh with that being said, the uh the COP and the 10% capital improvement obligations are being planned for and met in the 2026 budget, and they're projecting about 6.7 million.

I was trying to do the math in my head earlier that I was struggling with, but um yes, they're projecting 6.7 million to go towards some of these tourism and marketing um uh events with visit Denver for 2026, and so uh just in final thought uh just just a uh kind of final reminder.

Um, we're here today at uh Finbiz.

Um mayor council is coming up for these items on November 4th.

November 10th, we have the city council first readings for the B ID and the T ID.

Uh and then on November 17th, we have the second readings for those items, but then we also in the evening have the uh the the the reading for the resolutions for the GIDs and the public hearings.

Um, and so that's the sort of the schedule we have coming up here in a few weeks.

Um, and again, just to reiterate, I what you went through a lot of this info very quickly.

Uh happy to sit down with your anyone here or your colleagues who aren't able to attend today to you know set up briefings and go over anything in more detail if you'd like.

And with that, I can pivot over to a QA.

Great.

Um, that was amazing.

Uh yeah, that was a lot.

Um maybe a second job, it could be like an auctioneer.

Um, how long did that go?

I actually I meant to set up my stopwatch, but I forgot to do that.

You're okay.

We I think we have about 15 minutes for questions because we do have one more item um on the agenda.

So I'll start off with actually Council President Sandoval followed by Councilman Heights.

Thank you.

Um thank you so much for that.

For the increase in admin costs when you are going through those.

Remind me, is that built into the ordinance, the admin fee, or can the admin fees fluctuate?

Um so when when I'm speaking to administrative costs, I'm usually talking about the the administration of the district itself, so that might be full-time staff salaries.

Yeah, no, I'm I'm thinking of because in other ordinances like the um special sales tax district and special like so for Denver how the food crookes, we have an admin fee in that, built in that ordinance, and it can only go up to a certain percent.

Is that how this is structured?

No, no, it's it's ultimately because these are ultimate kind of freestanding government entities, and so they have their own the revenue sources have to support their operations, and so it's all it's the same for like Denver preschool program.

It's the same, so it's a whole nonprofit organization, but in the ordinance, it clearly defines how much can be spent on an administration.

Yeah, okay, gotcha.

In this case, that that does not exist.

It's um so it can fluctuate depending on the year.

Yep.

Okay, and then it would be up to the discretion of the board member, the boards to figure out what the admin fee would be.

Correct, yeah.

Okay.

So then, okay, and then for the federal bid, it went down, it decreased.

Is that correct?

Um going into 2026.

Yeah.

Let me just uh, yeah, they're they're they're projecting they were projecting lower administrative costs for 2026.

And do I have um is is Norman here?

Yeah, let's say we have folks here.

If you can just introduce yourself.

I'm Dana Shaw.

Yeah, and um I I manage that bid with uh Ann.

Could you measure?

So um, just I'm gonna compete.

So you all just did rebranding now.

I'd like to be doing a lot of stuff that is too.

We've got a website up this year.

We uh um we did an entire sort of uh streetscape planning effort.

We spent a lot on um, you know, planning separate, even from, you know, sort of operations.

I was wondering how the we did two events that were brand new events.

Yeah, you have to allow the council president to ask a question before you answer.

So I'm just wondering how the admin costs went down.

How I know you all are doing all this work.

You have less to work with in 2026, according to his projections, yeah.

So yeah, so I mean, with with with federal couple of things.

One is they've elected over the last uh three years to collect less than the 10 mils that they can.

So that's not helping their overall uh picture.

Yeah, um, but that's sort of the negotiation what people are willing to do on the board.

Um, you know, I came on about that time frame ago and um three years with and we're just trying to get up and running and you know, operational and functioning a bit as we can.

Um, and so we've been working intensively.

Okay, and this year in particular.

I know we have another briefing, um, I'll take it offline.

I'll have my staff recheck to you, like get back.

I'm just concerned your projections and all the work that's going, feels like there's going to be a collision.

But hopefully we won't have to use okay.

Okay.

Anything else, Council President?

No, okay, this is not um councilman Hines, followed by Councilman Watson.

Thank you, committee chair.

I don't know how you vent space and time to come up with as much information.

With additional context off the top of your head in a short period of time.

So uh kudos to you for that.

Um it's interesting, uh, you know, just as you were providing the contract context, it's interesting how the different improvement districts chose to fund themselves.

I mean, seems like Mills is kind of a dominant theme, but there are lots of other themes out there as well.

And um, and it's also interesting over the six years for me to compare, you know, I've represented Cherry Creek in the first term, represented downtown this term, uh, the the business improvement districts, and it's interesting to see how the uh Cherry Creek bids budget is now the same as the downtown Denver uh bids budget, considering that you know uh Cherry Creek represents 16 blocks and downtown represents 120 blocks.

Um but that's just you know, it's just the nature of how uh the improvement districts have decided to fund themselves.

What um what's have we had improvement districts change their funding mechanism, or is that just something that hasn't happened before?

Um yeah, I just briefly looking over here the city attorney's office who's uh been around a little bit longer than I have.

It doesn't that sound like that has happened previously where they change.

Um I'm happy to call Brad Neeman from the city attorney's office to provide a little bit more historical context.

Thank you for the question, uh councilman uh Brad Neeman to the attorney's office.

Um to my knowledge, no, but that is certainly um possible, but it's those those funding mechanisms are usually detailed in the creation ordinances, so it would require a uh an amendment to the creation ordinance, um, and it would also depend also if there's bonds outstanding from a particular district, because the funding source would have probably been pledged for the repayment of those bonds.

So there may be some additional um nuances that would have to be discussed on a on an individual basis.

So they couldn't just recreate themselves like a Phoenix and I like how the camera just flapped to me right as I was oh my goodness, flip the table.

Um anyway, the uh uh they would have to.

I mean, it's obviously a complex enough conversation that we haven't had it before.

I don't, in my experience, no, that doesn't mean it can't happen, but I don't I don't believe it's happened thus far.

Okay, thank you.

Thank you.

Uh, Richard.

Thank you, Councilman Watson, followed by Council Pro Temer, Miracamble.

Thank you, committee chair and Dennis.

Um, you're amazing.

Uh I appreciate a briefings, and I appreciate your um understanding of this very complex um district process.

Uh it's not a competition, but fine, this one has the best bids and jids.

So I just want to I'm not competing with y'all.

I'm just simply I'm just simply saying, uh, but I have one question, and I know we'll have opportunity on the floor for each of the bid JIDs to speak.

This is not gonna be the opportunity today, but for the ballpark JID, one of my newest JITs that came through.

There is a revolving um loan that they um uh um received, um, and it's a revolving loan that it helps all new JIDs bids as they're being created.

It is a fund that they um a a a debt that they have that obviously is causing some impacts on their ability to just simply use the mail for the work for their charter.

Do you and I was looking around the room, I was trying to see if anyone was here to speak to the um the process of how do we spread that expense impact, um, especially for our new JID that's being created really with a third of the entities are service providers.

Um the city is not investing a ton into uh ballpark.

This JID is doing all of that service, all of that maintenance, and now they have on top of that an additional loan.

What's that process for uh scaling that so that the harm to their ability to execute on what their board and their charter has them doing in support of the work that the city wants them to do?

How do they spread that out and where is that shown within this process?

How do we describe the expenses that they occur based on the work they did with the city and then they had to pay for their own election?

Um okay.

Uh, I know it's a lot.

Yeah, so let's see.

Um, remind me if there are parts of the question I missed, but um speaking to the first part is as far as spreading out the payments go, the you know, the this revolving loan fund uh you know has been in existence for several years now.

Um, and uh uh, you know, there is sort of a sort of default terms that are set up for the program.

With that being said, there are opportunities to discuss um sort of you know, potentially restructuring the the the timeline of repayment.

So those are those are conversations that can certainly be had.

Um, and so uh I don't think you have Brad.

Yeah, but just making sure I'm not saying anything I'm not saying, yeah, yeah.

Um so that that is I think that was one part of your question.

Is that so there are questions and also a statement?

I think it is important, especially for a new JID that's taking on that massive responsibility that we have a proactive process to make sure we're spreading out their debt, especially debt incurred by their relationship with the city and their ability to actually start.

And when you look at a JID that had to actually pay for their own election as well, that is um making it very difficult for them to be successful in a space where the city is not investing a lot of funds.

Yeah, and and and that is a great point.

Um, you know, fundamentally the, and just speaking to the program on a whole, you know, the they are it's an is an interest-free loan.

Um, and so that that's one way the city tries to help it out, but also, you know, they're also there are ultimate risks posed by uh taking on these loans.

Cause if they if um if the district fails to form, um then you know then then the the loan can be uh you know the loan is still out there if the district is not pass the election, so you know that there are in the hope ultimately that this program funds itself by you know being a revolving loan fund, um and so that that's just how it was set up historically.

But yeah, I mean you do you do make good points.

Um, yeah, and I would say Brad and team, let's just make sure we we have a before it comes to the floor, I just need a better understanding of how we can spread that that debt.

I'm not gonna take too much more time here because they're but on the floor we'll have more time, but it is impactful, Brad.

I know it's revolving.

All the other JID bids need to be able to use it.

However, there has to be a process to make sure we don't kill um JIDs um as they're trying to do the work that the city is is collaborating with that to do.

And council member, I was just gonna add Brad Neeman, City Attorney's Office.

I was gonna add as well that that um that loan is memorialized via an IGA between the city and the GID, those entered into earlier this year.

Um I understand there was some discussion going on between finance and the GID about possibly extending out and if that is agreed upon um to extend out the the payments, so it's not all due in one year, or or whatever the business terms may be, that would just be memorialized via an amendment to that edge.

Perfect.

Okay, all right.

Thank you so much.

Thank you.

Thank you so much.

Uh council pro camera, Mario Campbell.

Um thank you, madam chair.

Uh thank you for the presentation.

Um I had a real quick question in the JIDs and the bids on the column for the 2024 audit.

Um, some are have an NA not applicable.

Um, and some audits had occurred.

Can you just describe a little bit more of like what is that schedule?

Because I also looked at the annual review process and it says that they would have an annual.

Yeah, great.

Maybe you could just pick up.

No, Tully, great question.

I didn't spend much time.

I didn't spend any time going over that really in my presentation, but ultimately uh only only districts that uh have revenues or expenditures exceeding 750,000 are required to have an audit.

And so um all the other districts could have applied to have that um waived, and and so well to me, the NA's are the situations where they had them waived.

Um and the the affirmatives I had on that slide were for the districts that had to have audits and and had successful audits.

So the threshold is 750.

Yes, and and and again, just these it's regarding the actuals of in this case 2024.

So the 2025 numbers that are on this slides might not be representative of the previous year actuals.

Okay, and then otherwise they do have to do an annual audit.

Correct, yeah.

Okay, all right, thank you.

That's my question.

Thank you, Madame.

Thank you.

All right, seeing uh no other questions from council members, and I didn't see anything from Councilman Cashman.

Um, I believe we're looking at this as a block, and so I need a motion.

Councilman Watson, you finally got it.

I got one.

Um, councilman Watson uh uh makes a motion, second uh by councilman Heinz.

Um, is there any need for a roll call vote on this?

Seeing shaking heads no, um so we are good with this going forward.

Hit full council on the projected timeline.

Thank you.

Thank you all, appreciate it.

That's awesome, buddy.

Oh, you're doing it.

That was great.

That was great.

Thank you.

Okay, there's a good question.

Yeah, of course.

PowerPoint, I think we can just use that just a moment when you're ready.

Sure.

All right.

I'm gonna ask folks if you're leaving.

That's fine.

You can stay.

Just giving us a few minutes so we don't have all the background movies.

Yeah, come on, you're not getting all that.

Okay, so okay.

I always pay more questions.

All right, okay.

On for our next presentation, an action item.

Um we have folks joining us on the D D D D D D A, yes.

How many D's?

Yeah, it's a lot of D's.

Um, all right.

If you'll want to introduce yourselves and proceed with the presentation, I'll be taking uh a list of council members that may have questions, and we'll do the get to those at the end.

Thank you very much.

Good to see you all again.

Uh Bill Mosier, uh, with the mayor's office, chief projects office, and uh consultant to the mayor's office.

Good morning, Donna Wilder, Department of Finance.

So we're here to uh discuss the Denver Pavilions project, and um I think all of you have seen some form of this, but I'll go through this uh briefly so that you can ask any questions that you might have.

Uh as you all know, uh through city council going through an economic study and the econom and the plan of development for the BID.

Um for the BID.

I've heard too many VIDs for the uh DDA, and so uh we're about a year into this process with the expanded DDA and um have gone through a variety of uh projects with you all.

So we're going to have our 11th project that we're putting forth for you today.

Uh just a reminder on the financing.

Uh this the DDA was created back in 2008 for the uh Denver Union Station project uh was then uh the DDA was expanded to include Upper Downtown about a year ago, and the monies that uh are funded through the DDA are specifically spent on those projects within the specified boundary uh and are for certain purposes that meet the plan of development that you all adopted.

Uh there will be an attempt uh here in the next 30 days to do our initial financing uh that will provide the funds available to the downtown projects that we've approved so far.

You've seen this slide before, but our priority has been upper downtown, most specifically 16th Street, also specifically vacant and underutilized buildings and specifically historic buildings, and then a real focus on activating, excuse me, activating uh ground floor uses uh in downtown so that it's uh a little bit more vibrant, safe and active than it has been in the past.

This is the boundary uh that has uh that is included in the DDA.

Uh you can see here from the 11 projects that we've approved to date, uh, a very significant uh focus on 16th Street properties.

We are bringing pavilions to you after a series of processes.

The last step is to go to city council.

Any project with an expenditure over $500,000 out of the DDA funds has to be approved by City Council.

So this is uh the acquisition of Denver Pavilions.

Uh previously, in the red, uh we've talked with you about uh the purchase of the two Brookfield uh parking lots that are adjacent to pavilions on the back end on 15th Street.

Uh interestingly enough, as we discussed, two thirds of the parking revenue for the pavilions garage is actually owned by the parking lot operator in red, and so one of the attempts from this effort is to unify these two blocks so that there's one ownership and redevelopment can occur over the full two blocks.

Pavilions is noted here in yellow, approximately 350,000 square feet, about uh a little over, about 25 tenants, a little bit over 60,000 square feet is occupied to date.

Um, and there's about a thousand parking spaces, 200 in the red lots and 800 underground and two levels on uh underneath pavilions.

The conditions that we've been dealing with is obviously one low occupancy uh at pavilions.

They were really impacted by two major events.

One is COVID, which substantially impacted the uh workforce in Upper Downtown.

I would say we've lost easily half of our workforce in the Upper Downtown area, which is severely impacted the marketplace for pavilions.

Uh, and then the 16th Street construction further exacerbated the impact.

Uh so those were the two main issues that have certainly uh impacted pavilions.

Um there's really three key markets for pavilions.

Number one, and the reason it's frankly still there and operating is the visitor market.

The convention centers two blocks away.

We have about 8,000 parking or 8,000 hotel rooms within walking distance of pavilions.

That visitor market is really what's kept pavilions afloat, and you can tell from the tenants that are there that most of them survive based on the visitor market.

The uh employee market, as I mentioned, uh we've got about 40% vacancy in the nearby area, and it's impacted even further by work from home.

Um, so there's just not been the uh the office occupancy to drive employee uh demand.

And then lastly, just a general lack of housing in the upper downtown area.

So we've relied primarily on the metro and greater Denver market, uh not so much on the nearby uh residential market.

So the DDA is very focused, particularly in the uh use of vacant office buildings to see residential conversion, and our goal is to bring in 4,000 new housing units into the immediate upper downtown area to help support uh our retail.

Uh this project was financed for about 140 million dollars in 2016.

It's now um there is a loan uh of about 85 million dollars that's currently on it.

Uh the lender has not received payment since the summer.

The all the equity uh participants are out of the transaction, so there's no money being paid to any of the equity interests.

And so we've dealt with for the for a good part of six months as a DDA, just the threat of a lender takeover, what the optics are for that to happen on 16th Street, along with what's happened to the office buildings, and the uncertainty of having a bank own the property for a period of uh time.

So the proposal is an acquisition price of $37 million, which is a little over 40 percent of the loan value.

So the bank is also taking a hit as well as the investors.

We're asking for city council approval up to 45 million dollars.

We've looked at about 11 million dollars of deferred maintenance or capital improvements that uh could potentially be done on the property.

We've also looked at if we filled about 20,000 square feet of space, not filled pavilions, but just occupy 20,000 feet.

That might cost around $6 million in TIs.

So combined with cash flow, we think this additional $8 million gives the DDA the wherewithal to manage this property over the next few years.

Our intention is to sell this property as soon as possible, but we also have uh at the request of the DDA board looked at what might be a midterm hold in case we have to hold it to make sure we have the asset, the funds available to manage the property.

Um steps are key.

Uh, and as I mentioned, our goal will be to sell uh all these properties uh within a very short period of time.

I'm sort of saying 12 to 18 months.

But our goal is to uh close the properties by December 19th of this year.

So we would own uh the two blocks, the DDA would be the owner, not the city.

Uh we would uh certainly retain some new leasing uh capability from a retail standpoint, particularly if we can fill approximately 20,000 feet just to keep it up to where it's been.

Uh we would draft uh RFP solicitations for uh community input on what the future of pavilions could be and the development of those lots could be.

And we're really focused on trying to get two or three different alternatives that could make a difference for pavilions going forward.

So the goal would be uh to generate two or three different visions for what pavilions could be.

We're not trying to pick one.

We're just trying to stimulate people's thinking and uh and then put those out to the development community within the next year uh to try and get interest in buying hopefully all three properties at the same time and developing the full two blocks, but at the very least, having different owners for the different properties.

And the goal would be uh particularly the Brookfield lots can be office, they can be residential, they can be hotel, they're before zoning, so there's lots of potential, and we think by tying these all together and controlling the revenue from the parking garage that we can make the two lots more available for development than they have been in the past.

And the hope would be to recoup our investment in these properties and perhaps even more.

Uh, this really summarizes the next steps uh to retain a leasing team to help us uh move this forward and to imagine alternative redevelopment strategies, keep the momentum of 16th Street going, uh, look at any critical maintenance, including garage repairs that we need, and to execute any tenant renewals to keep uh the uses we want to stay there.

We'll look at a holistic parking management plan since we'll own all of the thousand spaces.

Uh and the key is to re-envision pavilions through a variety of uh public processes to really understand what the potential is and then look at what the two residential lots can be.

We have met the plan of development evaluation criteria as check marked here for four pavilions, and so we we evaluate all of our applications against the plan of development that you all adopted.

So the next steps are uh petition for inclusion of pavilions into the district, uh, and to enter into an intergovernmental or what's now be called I think being called a project funding agreement uh that will also have attached to it the purchase and sale agreement between the DDA and the property owners uh for up to 45 million dollars.

Um between the 37 million and the 45 million, we would need DDA approval to spend that money.

Anything over 45 million, we would have to come back to city council for approval.

So these are generally the next steps uh going forward is to have pavilions petition for inclusion, which will come to you in the coming weeks.

Uh then we will have the ordinances uh for both Brookfield and the pavilions lots with a closing at the end of December, middle of December.

So with that, I'd be happy to answer any uh any questions.

All right, great, thank you so much.

Um first up, I have Councilman Heinz.

Thank you, Committee Chair.

Thank you for the uh continued presentations.

Um, I uh I see that you know the vision of 16th Street back when it was 16th Street Mall was to have bookends, um, you know, transit book ends one, the union station, um, back in 1982.

There's union station on one end, civic center station on the other, uh, both major RTD uh stops.

The union station uh redevelopment is successful in part because of the visionaries who redeveloped Union Station.

Um it was always a little weird to me to have Market Street Station and Union Station just a couple blocks from one another, and um both of them um you know have so many um uh train and well uh bus stops at Market Street City, American Street Station didn't have a train stop, but uh just that they were just a couple blocks from one another and both uh major RTD stops kind of made sense to really focus on union station.

So uh but civic center station being on the uh other side of a major arterial uh makes it more difficult for it to be the bookend of the other side.

So the pavilions really has the opportunity to be that bookend, and so I want to thank you for your um uh your vision to um to put the Brookfield lots and uh uh the pavilions together because that's been really complicating um some of the the developer interest or nonprofit interest, you know, um just because of that that difficulty in sticking the two together.

So thank you so much for uh for figuring that out.

Do you think that there um uh have you seen or do you intend to see additional interest now that we've kind of solved that that issue, the commingling of the two, you know, the Brookfield lots and pavilions.

Yes, uh I I've received quite a bit of interest in what what is happening here.

I think uh obviously we need to get it closed.

We're not putting the cart before the horse here and wanting to make sure we get through city council first before we uh start to look at what our long-range planning would be and sort of envision what those properties are, but it's really a shame when you look over the last 20 years and not have had those two Brookfield lots be redeveloped, particularly during the 2010s when downtown Denver was doing great and should have been developed, and whether they were in housing or hotel or office, they could have been redeveloped.

So we're hopeful that that's that's what the future is.

And to your uh comment, Councilman, I think that we kind of look at uh pavilions similar to Denver Union Station as an anchor for that upper end of downtown, and combined with civic center park investment and combined with hopeful investment uh of some building conversions along 16th Street, particularly in the Broadway area.

Perhaps we can create a little bit more uh dense activity and and people uh at the Broadway 16th intersection.

Yeah, thank you.

And um, yeah, I mean, a bunch of those buildings in Upper Downtown were built in the oil boom in the 80s and early to mid-80s, and um they have deferred maintenance that the owners have deferred, and so um you know the office vacancy and that deferred maintenance, it has made more of a conundrum.

Um, so again, I put but I agree with you.

I think um revitalizing pavilions will um in turn have an impact on the entire upper downtown area.

So this is I think this is um pivotal uh important investment that DDA can um can undertake.

So thanks.

The um last time we had this conversation.

Uh someone asked about an appraisal.

Um is that part of the process before closing?

Oh, and I agree.

We should definitely buy it before we sell it.

So thank you for putting the cart behind the horse.

Yeah, we definitely want to buy it before we sell it.

We do not have an appraisal, partially because we ended up buying this at uh essentially a book value that the bank had carried.

Uh, and it's it's so significantly much lower than its value in 2016.

Um, most of the conversations that we had during this time, there was there was there's no comps for this kind of project, and it was felt that it was such a low price that it was justified by that.

That people were petting you down, we stole it, yeah.

Well, just agreement from the bank to just sell it versus go into a into a foreclosure process.

Okay, and um, and then I sure hope that you keep us in the loop as you um as you receive interest.

Um you definitely will be in the loop, and in fact, you particularly will be in the loop being the councilman for the district, but we intend to work closely with CPD and the downtown Denver Partnership and the and certainly the DDA board is focused on having uh similar to Denver Union Station some community thought on what pavilions can best be as a response to those three markets that I mentioned, which is visitors, employees, and residents.

Thank you.

Thank you, committee chair.

Great, thank you.

Councilman Watson.

Uh thank you, committee chair.

Um, two quick questions.

First, the eighty-five million dollar loan taken out by um GARP properties.

How does that um are they is the bank just simply assuming that difference between uh 45, which would be our closing for them?

What's what's happening with that?

So we're we're purchasing it from the ownership group for 37 million.

The bank will receive that 37 million, and they will forego the difference between 85 million and 37 million as a loss to the bank, and the equity interest between the 85 million and the 140 million will also be a loss, unfortunately.

Okay, okay.

Um the other part, um, I I think the uh the closing of Glenarm, the temporary non-closing of Winkou does provide clarity on that.

Um bookend, uh I think activating those spaces around these two large um these two large entities.

I think is going to be extremely helpful for making sure if people are pedestrian safety um play all the things that we're trying to do.

Um, can you describe because this is not like a union station where there is a clear um plan through DDA for the full development behind and around it?

Can you describe what that community process will look like as far as input as far as what and how I mean I know it's still we still we got to close this for this to happen, but what are your thoughts on community feedback input on who, what, where, why, where do we get we our hope is to retain uh some design services as well as retail and development services.

Um I've actually approached the urban land institute about putting a panel together that would come in and evaluate what our alternatives are.

I think we'll take a variety of approaches because we don't need a plan.

We just need thoughts and community feedback so that when a developer or developers come into this property, we can tell them the kinds of things that we're interested in and the kinds of things we're not interested in, give some guidance.

We also want to do a full evaluation of the property.

Um we're we're underway with due diligence right now, but for instance, energize Denver compliance is always a red flag, whether it's correct or not correct.

So we want to go through those sorts of processes.

So we really want to understand working with CPD and others, what are the city requirements, what the community objectives are, how uh how we want to see these properties best developed to serve downtown.

And who will continue to management of the site during this process?

I mean, this won't be instantaneous at open sold.

Well, once we close, the DDA will will have the ownership, and so we'll have to take over the operations and management of it.

We do have intention of retaining the existing on-site staff that know the facility, know the heating and cooling facilities, the elevators, the escalators, et cetera.

And so the intent would be to keep them on board and uh and have them be the maintenance side of it, and then we'll bring in some retail and some visioning uh expertise and uh hopefully within a year put this out to the marketplace.

Perfect.

Thank you so much, Bill.

You better go on that.

Thank you, committee chair.

Thank you.

Uh Council Pro Temer Mara Campbell.

Thank you, committee chair.

Um, and thank you both for the briefing beforehand um and answering a lot of questions.

I know, just to reiterate again, I think, and it was said in our in our last meeting, that these are not general fund dollars, that these are not dollars that can be used for another purpose, or you know, we're in we're in budget conversations right now.

So just to remember that those are separate buckets of funding.

Can you talk a little bit more?

And I thought it was really interesting, and you um had touched on it with councilman Watson, the idea of like knowing what we what we I say we, but knowing what you want, and then having proposals out to bring in the right partner um to manage that.

Can you just speak a little bit more?

Yes, the reason to thank you.

I think the the reason I'm uh keep mentioning, and I think the DDA board has kept mentioning that we don't need to have a plan that we dictate, but we ought to envision what is capable because we've never tied these properties together.

And I'll give you an example to be really simple about it.

We we might have a group that we say we want pavilions to be pavilions, and we want these two lots to be two different developments.

What does that look like?

What could that potentially be?

Show us how tall it could be.

We've got sunlight on them all issues, we've got a variety of things we need to address.

The other approach would be to say if this is a hotel and a residential project that's developed on 15th Street.

What if they connected at the second or third level into pavilions and you actually had walkways, or you actually had meeting space for the hotel that's maybe the third floor of pavilions, or the hotel could have a restaurant on the third floor of pavilions that wouldn't be so much a pavilion restaurant so much as it would be open to the public, but be a hotel restaurant.

So how could we connect pavilions to the properties directly, whether it's just walkways or whether it's actual uses?

So that's an example of two different approaches, and I think we owe it to the development community to sort of lay out how those might look and what we think of them so that when they come in, it's not that they're blind, making proposals that they don't know what the community thinks.

So that's that's an example of how I think about it.

Yeah, it does.

Thank you.

Um, and then I think um in the conversation again in that briefing.

Um, one thing that really struck me, and you had covered it in the slide as well, but maybe just talk about not to sit on this property for a long period of time, being able to move it forward.

Can you talk about that timeline a little bit more?

As the as I mentioned, the timeline, my uh I and I think the DDA board goal would be to um sell this property as soon as possible.

Uh and we're not looking to fix it, we're not looking to lease it up.

We're not looking to be a redeveloper.

We're looking at putting all of this together um and resetting a basis for it, getting the bank out and starting fresh.

And so that's our goal.

I would hope that we could, and but we're also understanding that if the if we have a recession interest rates go up, something happens that we don't know about, we need to have the ability to hang around for a couple of years.

And so we've looked at it both ways.

The goal would be to, I think by early summer have an RFP out to the development community and hopefully start to see the responses.

But if it's if there's if that's slow, or if there are outside impacts that impact us, we're prepared to manage it for a few years.

Great.

Thank you.

Thank you.

I appreciate that.

Um thank you, Madam Chair.

Thank you.

Um not seeing anyone else, uh, Councilman Heights.

Just and crucially, based on if we then resell it, then all those funds would go back to the DDA for reinvestment again.

Yes, they would go back.

And I should mention, and I didn't mention this, but just to be clear, one of the things we are looking at with pavilions itself, uh, would be the DDA imposing a payment in lieu of taxes on the property so that the property does not go off the tax rolls, and those tenants would pay taxes, property taxes, sales taxes, et cetera, just like any other tenant on 16th Street, so that we don't have an unfair advantage for people who are leasing in pavilions over those on the street.

So, just to be clear about that.

Great, thank you so much.

Um, thank you again for all of the work, Council President.

Did you have anything you wanted to add here?

Okay, all right.

Council President dreams about it.

I know, I was going to say, I know she's very, very involved.

Um, but thank you again for taking the time and offering the briefings to council members.

Really appreciate that.

Um with that said, I will need a motion.

I'll do it.

Okay, Councilman Heinz seconded by Council Pro Tem Romero Campbell.

Um with that said, do we need a roll call vote?

No roll call vote needed.

Um, thank you all.

This will go to the full council.

Um, with that said, we have zero items on consent today, believe it or not, uh, because we had everything else on action.

So, um, thank you so much.

We are adjourned.