Guest commentary: Willits tax proposal stinks for Basalt

On Tuesday, the Basalt Town Council will make its final vote on the proposed 91,000-square-foot expansion at Willits Town Center. The vote also will include a public-improvement fee, which proposes a dedication of sales tax to the developer for the expansion. Both proposals are complete sell-outs of Basalt and its residents.

The Willits developer is Mariner Real Estate Management, based in Kansas. It has requested approval to build 91,000 more square feet of commercial and residential space at Willits, increasing the development to 591,000 square feet. Since receiving approval in 2001, it has built about 325,000 square feet, which means it still has another 175,000 square feet to build under its current entitlement.

Mariner acquired Willits during the recession at a deep discount when it went on a spending spree for distressed properties. It acquired about $1.5 billion in real estate, much of which was purchased on credit, in 33 states, often paying pennies on the dollar for the assets, according to a Jan. 16, 2015, article in the Kansas City Business Journal.

The developer says the only way it can afford to build the new 91,000 square feet is if Basalt gives up half of the projected sales tax revenue the new space will generate. At first reading, the Basalt Town Council voted 4-2 in favor of the developer, with Mayor Jacque Whitsitt and Gary Tannenbaum casting the two “no” votes. The rest of the council should follow their lead, because the real beneficiary here is the Kansas developer.

This project will increase traffic, result in little additional revenue to Basalt and provide preciously little affordable housing. Based on Eagle County’s calculation that 2.8 employees are needed to fill every 1,000 square feet of commercial space, the 421,583 square feet of commercial space at Willits calls for 1,180 new employees. At 1.5 workers per home, the midvalley needs 787 new homes just to house the Willits workers. The 2001 Willits approval only required 60 affordable homes for new workers and the proposed expansion adds only 18 more for 78 total. That only meets 10 percent of the demand, a problem we all recognize.

The town hired a consultant from Minnesota to look at the sales tax giveaway, called a PIF in our acronym-slaphappy society. A PIF, or public-improvement fee, is a gimmick where the developer ends up with the sales tax the town should collect. In Colorado, towns get almost all their revenue from sales tax, which is why we see runaway retail development springing up all over the state in places like Willits. By annexing Willits nearly 20 years ago, Basalt forged a link to Highway 82 so it could approve City Market and Whole Foods and collect sales tax revenue. Basalt gets very little property tax revenue, so sales tax revenue is driving its development decisions. Cart before horse, anyone?

Basalt gets 3 percent of the first $45 million of retail sales at Willits, about what Willits merchants are now generating, but will only get 1.5 percent on sales over $45 million for the next 15 years, or until the developer receives $5 million, if Basalt approves the public-improvement fee. I hope Basalt didn’t pay much to the Minnesota public-improvement fee consultant, because he did little more than say, “If you subtract $45 million from the gross sales, and multiply what’s left by 1.5 percent, that’s what the developer gets.” The consultant did not inform us how much the Willits commercial space would continue to hollow out existing Basalt businesses or whether this would start a public-improvement fee war so every town has to grant a public-improvement fee for every new development or what the average wage would be in a development like this or what impacts the new development would have on our schools or roads or how much the new infrastructure would even cost the Kansas developer.

The public-improvement fee is worth $10 million to the developer, who can cash this check immediately by simply flipping Willits to the next buyer. $10 million is worth a lot more today than if it trickles in over the next 15 years, especially if you live in Kansas and don’t know where Willits is.

The developer is asking for 91,000 new square feet to get out of a pesky requirement to provide alleys and to decide whether to sell or rent the minimal affordable housing it has to provide. Fortunately, the Town Council decided to hold the line on limiting a new sign on Highway 82 advertising Willits to 180 square feet, down from the 270 square feet the developer wants. Thanks, Basalt; we’re glad you’re looking out for us.

This deal is so bad for Basalt that the out-of-town developer must simply think we’re rubes out here in the Colorado mountains. The Willits development does everything Basalt objected to when it just opposed the Tree Farm development application — it increases traffic, continues mega-sprawl in the midvalley and falls way short on our biggest need, affordable housing. Turn this application down, Basalt Town Council. The public it waited out the interminable Tree Farm hearings weighed in 5-1 against it when it finally got a chance to speak. How do you think it’ll vote for you in the next election?

Lauren Cornish, Joe Edwards, Chris Lane and Katie Schwoerer live in the Basalt area.