State Treasurer Walker Stapleton and Sen. Lucia Guzman’s hearts are in the right place in questioning how a large state subsidy was granted to the Gaylord Rockies Hotel and Conference Center in Aurora. Whether their intervention can produce results at this late date, however, is doubtful.
The real action is in the courts. The Colorado Court of Appeals will likely rule within the next few months on whether the subsidy was properly awarded after a district court dismissed the claims of a coalition of 11 hotels from Denver and Colorado Springs that challenged the decision.
But the odd couple of Stapleton and Guzman, who hail from different parties and contrasting philosophies, have raised highly relevant questions regarding how the Colorado Economic Development Commission (EDC) saw fit to award the Gaylord project $81.4 million in state tax-increment financing in 2012 and then stand by the award after the original developer pulled out and a new one came on board.
Stapleton sent a series of pointed questions regarding the subsidy to the executive director of the Colorado Office of Economic Development and International Trade in a letter last month, nal. Meanwhile, Guzman, who heads the Legislative Audit Committee, has asked the state auditor to conduct an audit of the Colorado Office of Economic Development and International Trade, which oversees the EDC.
Guzman points out that there is reason to doubt whether the subsidy is needed, based upon the developer’s own financial documents. If that is the case, the subsidy would be in violation of the Regional Tourism Act (RTA), which specifies that eligible projects are those that would not be built “but for” the subsidy.
Naturally, the hotel coalition makes this argument as well in its legal briefs. Its major argument, however, : The original developer pulled out of the project less than two weeks after the subsidy was granted, and a new developer — RIDA Development Co. — was not secured until one full year later. Moreover, another entirely new player, Marriott International, was tapped at that time to operate the complex.
At that point, the state’s EDC should have required a new application for the RTA subsidy. Instead, it pretended that nothing material had changed, when nearly everything was different.
We hope the appeals court notices as well.
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