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.
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.
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 even inflation 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’s most 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.
If I understand this correctly, the proposed DDA would be like the property taxes paid by people on my street being dedicated only to public improvements on that street. This would be nuts. Boulder has widespread needs throughout the city, some of which are mentioned in this article. Sequestering the tax revenue from downtown from the general funds would let the rest of city rot. Where do these ideas come from?
Respectfully, Mike, youre misunderstanding how DDA’s and Tax Increment Financing work. For such a long piece, I would encourage you to better understand the tool before writing about it. We offer free classes and education for this very purpose. http://Www.downtowncoloradoinc.org
Respectfully, Bill, why don’t you point out, in pithy and succinct language, the faults in Dr. Mills’ piece? I suspect that you don’t because it is easier to say it is faulty rather than find an actual fault.
Bill, if this is how the Director of Operations for Downtown Colorado addresses serious concerns about pending legislation, it’s difficult to believe that Downtown Colorado is an organization that deserves a seat at any table.
Lisa, DCI has helped communities throughout Colorado understand URAs, DDAs, BIDs, and other financing mechanisms for development. We are a non-partisan, non-profit organization founded to help communities and stakeholders understand, manage, and implement these tools. We have several case studies of communities implementing districts, the community questions they’re trying to resolve, what has worked for them, and what hasn’t worked. I think it’s entirely appropriate to steer interested stakeholders to utilize a 44 year old organization’s resources to make better informed decisions on pending legislation, helping with this topic is literally what we were founded for.
Bill – The fact that Downtown Colorado is focused on economic development in DOWNTOWNS seems like an inherent bias. Boulder has many other important deferred needs and urgent priorities besides downtown, and if all future sales tax revenue increase from downtown development stays in the closed loop of downtown, then that is a serious blow to the rest of the city. I guess that would be a real boon to the plans for a new tech ecosystem centered on Pearl Street, though. How seriously not interesting that would be. Left to its own devices, the City of Boulder would cluelessly squeeze out every sign of grassroots local color and character while they simultaneously work to manufacture a faux “funky” vibe (This is a real thing). The powers that be won’t rest until all remaining Boulder culture is reduced to a hollow husk.
Oh my gosh! This is incredibly disconcerting. I know the Downtown area is a crucial part of why people come to Boulder, but it is not the ONLY part of Boulder that is crucial, special and important. I have lived here all of my life (moved here in 1972; I am 59). Open Space is an even more important asset to Boulder than the Downtown area I would say and it’s despicable that Boulder residents wouldn’t be able to vote on this. How is this possible and who is putting forth this ridiculous plan? It’s a terrible idea and I can’t believe it’s even a proposal. Thank you for informing us about it. I had no idea and I will watch this closely. There are so many more issues with Downtown than just the empty office space. I don’t go down there very often anymore and there was a time I could not imagine NOT going downtown. Thank you for listening.
Well written and illustrates the dilemma: reroute tax revenues to a new entity disregarding prior voter consent or limit flexibility of tax revenues as is (with economic growth hampered).
Question: What are the legal repercussions of violating prior voter consent? Can’t City of Boulder be held responsible for upholding prior tax commitments?
I appreciate Mr Mills bringing this issue to our attention and I agree that this whole process is too hurried.
Somebody correct me if I am wrong but my understanding is that there are two property taxing districts currently in place downtown. One is CAGID, which would be absorbed by the DDA. CAGID is the mechanism that funded the building of parking garages. Its monies currently also fund the Eco Pass program.
The other taxing district is the BID, which funds the Downtown Boulder Partnership, which oversees general upkeep and promotion of the downtown. I haven’t seen mention of the future of the BID in any of the DDA materials. Downtown also receives revenues from parking. In 2025 that amount was $6.2M. So one can see that downtown already receives money to operate and that the DDA just adds another level of bureaucracy.
Both Tebo Properties and Reynolds own numerous properties downtown, giving them an outsize influence on a vote.
I’m still waiting for the city to refund the four million to the UHGID property owners from the parking lot they sold the moxy hotel.
Instead I gather they spent 100K on painting crosswalks, Something the university art school and students would have done for free.
It’s become very common for council and others seeking power to feel they have ownership rights over other people’s assets.
It’s very easy to waste other people’s money with the attitude ” I know best and I’m in chatge”.
It’s we the people, not I’m in power.
That would be a dictatorship.
Great article. But city staff is totally onboard with this, and our newly reelected city council members always happily defer to staff. Would be great if boulder progressives could support future candidates who are willing and able to think for themselves instead of automatically voting to consolidate power and control in city government.
What is your opinion on the proposed Metropolitan district, the Pearl Arts District?