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Town voters will decide Big Box regs

On Tuesday, April 6, town voters will be asked to vote on Referendum A, deciding whether or not to repeal a section in the town’s Land Use and Development Code (LUDC) that regulates large format retail (Big Box) development.

Language of the referendum states:

“Shall the Town of Pagosa Springs repeal the large retail development permit requirements, as contained in Section 2.4.5 of the Town of Pagosa Springs Land Use And Development Code and the Large Retail Development Permits section of the Land Use and Development Code’s User Manual?

“(A ‘yes’ vote will eliminate specific procedures that apply only to development of large retail developments. A ‘no’ vote will continue the existing specific procedures.)”

Thus, a “no” vote retains section 2.4.5 of the LUDC, a section of the code pertaining to regulations on Big Box development, while a “yes” vote would approve an action taken by the Pagosa Springs Town Council last summer which repealed that section of the LUDC.

The regulations in section 2.4.5 were partially the result of findings from a 2005 Big Box Task Force and integrated into the LUDC the next year. Those regulations remained in place when council approved a revised LUDC in early 2009.

However, responding to economic conditions last year that appeared to grow bleaker by the month, council voted to repeal the regulations, hoping that scrapping the regulations would create an environment friendly to Big Box developers. Prior to repealing the regulations, Town Manager David Mitchem reported that a Big Box developer had expressed interest in bringing a large format retail store to Pagosa Springs, but had balked at some of the requirements stipulated in the LUDC.

At that time, Mitchem told council, “The town has received an inquiry from a representative of a large retailer. They have an interest in the community, but let me make it clear that they have not committed to come,” Mitchem said. However, Mitchem added that with the Big Box regulations in place, the town was “not going to be considered.”

“I believe we should respond effectively to that large format retailer that wants us in the competition for the next store,” Mitchem said. Hence the call to repeal the Big Box regulations.

It was then that Mitchem drafted an ordinance to repeal section 2.4.5 of the LUDC.

“This is not a business friendly community,” council member Darrell Cotton said in support of the ordinance last summer. “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.”

During an August presentation to council, Mitchem asserted a large-format retailer would bring as many as 200 jobs to the Pagosa Springs area and that the town and county could each grab an additional $2 million in sales tax revenue.

Mitchem 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 would have been boosted by an additional $2,205, 368.

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.

Unconvinced that an estimated economic benefit would outweigh potential harm to the community, a group of residents, led by local attorney Matt Roane, circulated a petition late last year to take the matter of Big Box regulations to the voters. Council approved the referendum in January, suspending the repeal of section 2.4.5 of the LUDC and allowing the matter to be decided by town voters.

Supporters of a “yes” vote maintain that, if Pagosa Springs is to grow, it needs to jettison codes and regulations that are too restrictive on development, citing section 2.4.5 as a prime example of codes that are unnecessarily restrictive.

“I’m not a proponent of Wal-Mart, per se,” said Cotton, “but I am an opponent of putting regulations on business — I think it’s antibusiness.”

Roane’s standpoint is the exact opposite. “I’m not anti-Big Box, I’m against throwing out the regulations,” he said. “I just think we need a little say so as far as what comes in and what does not. As opposed to proponents (of a ‘yes’ vote), who just want to open the doors and look at it after the fact, I just want a job application — if they want to come in, make them fill out a job application. Let’s make those decisions before the fact.”

Roane pointed to regulations in section 2.4.5 that would require developers to complete environmental and financial impact studies prior to a formal application process, as well as assurances of what happens to the building should the business fail with the structure sitting empty.

“We need to know what happens to that building a few years down the road, if things don’t go well. We need to know the town isn’t stuck with a boarded-up, 100,000 square-foot rat factory.”

However, it is just those kinds of regulations that Cotton says are too onerous, too expensive and time-consuming to developers and, essentially, creating a negative impact on potential economic development in the area.

“It’s not that we won’t have other regulations in place as far as architectural and for traffic impact,” Cotton said. “But asking a (Big Box) developer to complete an environmental impact study or economic impact study is just silly.”

“It comes down to a pro-business environment,” Cotton said. “If I look at a town for development and see there’s over-restrictive regulations in place, I’m going to take my money somewhere else.”

Roane disagrees, saying he feels that the regulations actually benefit the town economically by insuring Big Box development does not occur at the expense of existing local businesses or the unique nature of Pagosa Country.

“The regulations are there to look out for our self-interest,” Roane said, “and if we throw out the regulations, we give up all our control to the developers, who have their self-interest.”

Town voters will make the decision to either retain or repeal existing Big Box regulations in section 2.4.5 of the LUDC on Tuesday, April 6 at Town Hall. Voters need to be registered town voters in order to vote on the referendum.

jim@pagosasun.com