A single opposing vote last Thursday by Pagosa Springs Town Council member Shari Pierce was not enough to prevent council from scrapping the portion of the Land Use and Development Code (LUDC) that regulates the construction of large-format retail development — so-called Big Box development.
Although residents in attendance at the meeting were unanimously opposed to council redacting the Big Box regulations (section 2.4.5 of the LUDC), with many pleading with council to put the matter before the voters, council appeared (with the exception of Pierce) oblivious to the appeals of the audience and determined to repeal the code.
An often contentious dialogue ensued, pitting audience members against most of the council. That discussion followed a brief presentation by Town Manager David Mitchem who referred to a 2005 Economic Planning Systems (EPS) study commissioned by the town and Archuleta County. In that study, it was claimed that total retail leakage (sales conducted out of county) for the area was 47-percent or $2,940,491 in potential sales tax revenues (sales tax revenues for the county in 2008 amounted to $3,315,873). Assuming that a large-format retailer would capture 75-percent of that leakage, sales tax revenues in 2008 could have been boosted by an additional $2,205,368.
“These are not my numbers,” Mitchem said. “They come from the economic development consultant you hired in 2002.”
Dollar figures aside, Mitchem said that the increase of over 200 jobs for the area resulting from a large-format retailer was the most important figure indicated in the study.
“I believe that repealing this section of the code gives an opportunity to compete for these jobs,” Mitchem said. “In fact, this code is so restrictive that you couldn’t build the uptown City Market with this code.”
A closer look at the study cited by Mitchem could lead to a completely different conclusion, however. Presenting to council in May, 2005, EPS representatives Dan Guimond and Andy Knudtsen said that, while a big box retailer would capture the greatest tax revenue and would help curb leakage, it would come at too high a price. In fact, in the same study, EPS said a big box retailer would severely damage the local retail environment and would negatively alter the socioeconomic fabric of the community.
Furthermore, EPS concluded in the 2005 study that one method of maintaining the town’s character would be to enact a permanent ordinance limiting the square footage of a retail store at 55,000 square feet. As such, they suggested that stores between 25,000 and 55,000 square feet require an economic impact report — a finding that led directly to the development of section 2.4.5 in the LUDC.
Despite apparent contradictions inherent in the study used to provide rationale for repealing the code, Mitchem continued his presentation by illustrating how portions of LUDC 2.4.5 were covered in other sections of the LUDC (or in the LUDC User’s Manual), conveying the point that the town retained ample control over large-format retail development. “(The code) impacts on the town’s ability to be competitive,” he said. “We’re competing with other communities for retail dollars.”
However, Pierce was not convinced that repealing 2.4.5 of the LUDC was the correct course in entertaining the development of large-format retailers. “What I’m not OK with is repealing this,” she said. “We didn’t accept the User’s Manual. Let’s not throw it out, let’s modify it.”
It was that sentiment also expressed by residents speaking before council. Matt Roane pointed out to council that, “Your code says you have to have a variance for buildings over 100,000 square feet.”
Roane reminded council that variances stipulated in section 2.4.11 of the LUDC (which addresses development over 100,000 square feet) refer directly to section 2.4.5 of the LUDC, saying, “If you get rid of 2.4.5, you gut the variance ... let’s clean up those details. Don’t vote on this today.”
Local business owner Robin Carpenter likewise asked council to take the issue to the voters, saying, “You also need to let the business owners in town who live in the county vote on this. I cannot compete with a Wal-Mart, a Kmart. I can’t even get supplies at a cost to compete. If you repeal this, I may have to move.”
Another local business owner, Bruce Hoch, took issue with Mitchem’s contention regarding the sales tax revenue, saying, “I just want you to know that you’re not going to get all that tax money back, because you’re going to give half of it back.”
Hoch was referring to previous and current economic development proposals before council that rebate as much as 50-percent of sales taxes.
Concerned with the potential impact of a big box, both on local merchants and on the local landscape, Hoch said, “please consider how you are going to protect us when that building is boarded up.”
Pauline Benetti, a member of the past Big Box Task Force asked council, “What has changed since the work of the task force? Well, one thing that has changed,” she continued, “is the economic situation. This big box will be built after this economic downturn is over. Do not vote on this now and you take it to the people.”
“I’m here representing 17 business people from Pagosa Country Center,” said Morgan Murri, prior to reading a letter that was unequivocally in opposition to the repeal of the code, apparently contradicting Mitchem’s earlier statement that, “This code is so restrictive that you couldn’t build the uptown City Market with this code.”
With several others speaking before council, all in opposition to the repeal of the code, Mayor Ross Aragon decided to shut down public comment (which was often raucous and heated at times), opening up discussion among council members.
Despite numerous business owners in attendance at the meeting, council member Stan Holt said, “I have my constituency tell me they’re in support of this, but they’re not here today. They’re out working, making a living.”
Earlier in the meeting, Holt tried to assure the crowd that council would not be granting developers carte blanche, saying, “We still have the power to negate anything a developer wants to put on the ground. We have our standard in Pagosa and we’re not going to allow them to come in here and build what they want.”
Referring to the charge that a big box would change the character of Pagosa Springs, council member Don Volger said, “I’ve talked to (former Pagosa Springs Town Manager) Jay Harrington, who is the town manager of Cortez. Well, they (Cortez) have one (a large-format retail store) and it didn’t change the character of their town, I’m in support of it.”
“It’s not going to hurt anything,” added council member Darrell Cotton, “I don’t agree that a large-format retailer is necessarily negative. Wal-Mart doesn’t cause growth, growth causes Wal-Mart.”
Despite Pierce’s earlier call to revisit and revise the code rather than scrapping the section outright, no motion was made to table the ordinance in favor of reworking the code. And although council member Mark Weiler had previously expressed support for Pierce’s desire to have council consider and approve the LUDC’s User Manual (where Mitchem had identified several code redundancies), council did not appear willing to entertain further reconsideration of the 2.4.5 section.
“This is not a business friendly community,” Cotton said just prior to the vote. “All this is doing is allowing a business to come look at us. It’s just silly to put these kinds of controls on development.”
With a motion by council member Jerry Jackson to approve the second reading of the ordinance to repeal section 2.4.5 of the LUDC, and a second by Volger, council repealed the code’s section with a 5-1 vote.
The repeal of the Big Box code leaves several questions open: Is a large-format retailer looking to develop in Pagosa Springs? Although Mitchem has indicated that a big box developer has expressed interest in the area, he has yet to say who that developer is or who they represent. And, if a large-format retailer indeed develops in Pagosa Springs, what regulations remain? While Mitchem indicated that several portions of 2.4.5 are addressed elsewhere in the LUDC, many portions of the code remain unresolved, potentially open to a developer’s own discretion.
Finally, despite tough economic times, how receptive are area residents to the introduction of a big box store to the area?
That question may be answered next April, when three seats, currently held by council members who voted for the repeal of big box regulations, come up for reelection.
Council convenes again at 5 p.m. on Tuesday, Sept. 1, at Town Hall.