Mike Mills: Boulder’s proposed DDA would divert open space funds to downtown — without your vote

This commentary is by Mike Mills, a member of Boulder’s Transportation Advisory Board, Community Cycles Advocacy Committee and Boulder Progressives Executive Board. He is writing in his personal capacity. 

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On Aug. 6, Boulder’s City Council is scheduled to vote on whether to approve a ballot measure to create a new Downtown Development Authority, or DDA, an initiative that could define the city’s priorities for the next 30 to 70 years. But very few Boulder residents would be allowed to cast a ballot. Under state law, the electorate is limited to property owners, commercial lessees, and residents within the proposed district boundary, estimated at fewer than 2,500 people. One person who owns multiple LLCs could cast multiple votes, even if they live out of state or even outside the country.

If approved, the new DDA would capture future growth in downtown sales and property taxes for decades, redirecting revenue that voters have repeatedly approved by referendum to fund transportation, open space, parks, schools, libraries and the general fund for the city and county. That is a significant commitment to make on a rushed timeline, with foundational questions still unanswered.

Downtown Boulder is suffering from an economic downturn. Office vacancy remains high. Small businesses are hurting. When people were working downtown, restaurants and shops were busy. Covid brought a sharp drop in revenues from which downtown has not fully recovered.

A DDA would divert significant revenues to invest in downtown. That sounds promising. But if high office vacancy is the root cause of downtown’s struggles, what mechanism does the DDA have to address it? Storefront grants, streetscape improvements and programming can make downtown more pleasant. They cannot fill empty office floors. Yet occupied offices are what drive the foot traffic that downtown retailers depend on.

The city already has authority to do everything a DDA could do: invest in downtown streetscapes, support businesses, partner on redevelopment and manage parking. The difference is that the city can make those investments with democratic accountability to all residents and adjust its priorities as circumstances change. A DDA instead locks in a 30-year commitment to a single geography, governed by a board required by law to have a downtown stakeholder majority. After those initial 30 years, it can be extended twice, for up to 70 years total.

Councilmembers Mark Wallach and Ryan Schuchard wrote in April that 15 city buildings are in critical condition and that tax measures to address $400 million in unfunded capital needs may be necessary to keep recreation centers open and fire stations functional. The city’s Fund Our Future survey, presented to council on June 25, ranked wildfire response and wildfire preparedness as the second- and third-highest priorities among 25 city services. Business incentives ranked 23rd. A major wildfire could leave the city needing every resource available to respond and rebuild. New restrictions on future tax revenues would make matters worse.

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The DDA would capture all downtown sales tax revenues above a 2026 base year, which would be established during today’s downturn, before the Sundance Film Festival arrives and drives significant new revenue. The base is fixed in nominal dollars, so eveninflation alone would send additional revenue to the DDA regardless of its performance. Over time, inflation alone means that by the end of a 30-year term, more downtown sales tax growth would flow to the DDA than to the city, even if the DDA adds no economic value.

Much of Boulder’s sales tax revenue was raised through ballot measures approved by all of Boulder’s voters and dedicated to specific purposes: transportation, open space, parks. According to the staff packet, the DDA would capture growth across the full city sales tax rate, redirecting future revenue intended for those purposes without a citywide vote. Boulder voters have historically defended open space funding fiercely.

The DDA would also replace the General Improvement Districts established in the 1970s that have funded employee EcoPasses using parking revenue. Those EcoPasses keep thousands of downtown and University Hill workers out of their cars and out of already limited parking spaces. But the DDA includes no commitment to continue EcoPass funding, potentially ending a program central to Boulder’s transportation goals.

In fact, the city would transfer ownership of downtown parking garage structures, a University Hill parking lot, and the land beneath them, to the DDA. Those properties represent some of the city’smost valuable public real estate, yet the transfer comes with no mechanism requiring those assets to serve broader public goals. This represents a largely irreversible loss of public flexibility. The DDA is explicitly given the right to sell these properties to private developers, with the city receiving no compensation.

According to city staff, the DDA would divert between $35 million and $103 million from BVSD, between $23 million and $66 million from Boulder County, and between $4.6 million and $13 million from the library district over 30 years. None of those entities participated in designing this proposal or agreed to its terms. These figures assume a 50% split of property tax increment between the DDA and existing taxing entities — a split that depends on intergovernmental agreements that cannot be negotiated until after the DDA is created. Absent those agreements, state law gives the DDA the full increment.

This DDA proposal threatens funding for open space, wildfire management, rec centers, transportation, schools and libraries. Council should not rush to approve a 30-year diversion of public revenue when fewer than 2,500 people would receive a ballot while 98% of Boulder residents would not.

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