Our Downtown Cores are losing: Here's a Tool to Help Turn it Around

TL;DR

• Downtown Boulder and the Hill are struggling: property tax revenue down 9% since 2019 (while the rest of the city grew 10%), sales tax down 10%, office vacancy near 30% and not bouncing back like other cities.

• Council votes August 6 on whether to send a Downtown Development Authority (DDA) to the ballot. If referred, it goes to a November 2026 vote of qualified electors within the district (Downtown, Civic Area, University Hill) — not a citywide vote.

• A DDA is a dedicated financing tool, not a new layer of bureaucracy; it can't use eminent domain, doesn't require a blight finding, and doesn't automatically take over parking garages. It funds itself via a mill levy (revenue-neutral for most CAGID properties) and Tax Increment Financing (TIF) on future growth; only existing revenue to the city, county, schools, and library is untouched.

• The honest trade-off: sales tax TIF does reach into voter-dedicated transportation, open space, and parks revenue, not just the General Fund; that's a real critique, not a misconception. But the timing critique (that a Sundance bounce-back would get swept into the DDA) doesn't hold up once you look at the actual approval timeline, Q1 2027 earliest, meaning the base year falls in the window that captures the Sundance bump for the General Fund, not the DDA.

• Where I stand: I support referring it to the ballot in August and hope district voters approve it in November; the risk of a real trade-off is smaller than the risk of six more years of decline.

• Delaying costs real money: roughly $140K in year one alone, growing to $500K–$1.5M a decade in as the financing structure compounds.

Sorry for what seems like another newsletter on the heels of my Wildfire

newsletter a few weeks ago. Given that Council will be discussing and deciding whether to put the Downtown Development Authority (DDA) measure on the ballot on August 6th, I thought it was important to break it down and give you my thoughts prior to the meeting in less than 2 weeks.

My Full Analysis Below

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Dear Friend and Neighbors.

You’ve probably seen the letters “DDA” popping up in the local news, in council chambers, and maybe even in your own neighborhood conversations. And if you’re anything like the people I’ve been talking with, your first reaction was probably something like: “Great, another bureaucratic thing. What does it mean for me?”

That’s a fair question, and I want to give you a direct answer. Because this particular thing, the Downtown Development Authority, is actually one of the most significant long-term economic decisions for Boulder in decades. Council expects to vote on whether to refer it to the ballot on August 6, and if referred, it goes to qualified electors within the proposed district this November.



Let me break it down.

The Numbers Nobody Wants to Talk About

Before we talk about the DDA, we need to talk honestly about downtown Boulder.

The numbers are sobering. Since 2019, inflation-adjusted property tax revenue from the downtown district has fallen 9%, while the city’s General Fund property tax revenue overall has grown roughly 10% over that same period. Property values downtown have dropped nearly 20% in real terms. Sales tax revenue from downtown is down 10%, lagging the rest of the city. The office vacancy rate has climbed from about 8% before the pandemic to nearly 30% today, almost four times higher, and hasn’t rebounded like many other communities around the state and across the country.

Walk down Pearl Street and you can see it. Empty storefronts. “For Lease” signs that have been up for a few years. Restaurants and shops that struggled through the pandemic and never fully came back.

This isn’t just an aesthetic problem. Downtown Boulder and University Hill are supposed to power our local economy and drive revenue for the city, the economic core that funds parks, public safety, transportation, and community services. Right now, they’re not keeping pace, and the gap between downtown and the rest of the city is widening.

The market alone is not going to fix this. I’ve said that ever since I got on council. Boulder’s downtown doesn’t face the same competitive dynamics as Denver’s LoDo. Our Pearl Street rents are above what small businesses can sustain in a hybrid-work world. The structural shift is real, and it requires a structural response.

That’s where the DDA comes in.

DDA 101: What It Actually Is

A Downtown Development Authority is a public entity authorized under Colorado law to help halt deterioration, encourage reinvestment and support the long-term vitality of a community's central business district. If Boulder forms one, it would join Fort Collins, Denver, Longmont, Colorado Springs, Littleton, Englewood, Greeley, Castle Rock, Loveland, and Lafayette, among other Colorado communities that already use this tool successfully.

Think of it less like a new layer of government and more like a dedicated investment tool with a focused mandate. Instead of competing with other citywide priorities through the City's annual budget process, the DDA has a dedicated financing structure focused on investments within downtown and University Hill. The idea is to create a feedback loop in which public investment encourages private investment, generating additional economic activity that can support future improvements benefiting workers, businesses, and the community as a whole.

If approved by qualified electors in November, the proposed DDA would cover Downtown Boulder, the Civic Area, and University Hill. It would be governed by a board of directors appointed by City Council. (Under Colorado law, board members must be residents, property owners or business owners within the district, with a majority required to live in or own property within the district.) Council also would approve the DDA's annual budget and operating plan, the district's guiding Plan of Development, and any intergovernmental agreements. The city continues to hold all its existing zoning and land-use authority. The DDA doesn’t change what can be built where; it changes how redevelopment gets financed.

The draft Plan of Development lays out five priority areas for investment: catalyzing redevelopment at underused sites, strengthening commercial corridors and small businesses, supporting housing and mixed-use development (including converting vacant office space to housing), improving public spaces like Pearl Street Mall and the Civic Area, and improving connections between downtown, the Hill, and the Civic Area.

It would operate for an initial 30 years, and fund itself primarily through two tools:

1. A mill levy (a property tax). For most downtown property owners within the existing Central Area General Improvement District (CAGID), the current 3.674-mill CAGID levy would transfer to the DDA rather than adding a new tax, making the change revenue-neutral for those properties. Properties within the University Hill General Improvement District (UHGID) would continue paying their existing district levy, which would increase from 1.727 mills to 3.674 mills if the DDA is approved. A small portion of the proposed DDA located outside both CAGID and UHGID would also pay a new 3.674-mill DDA levy.

2. Tax Increment Financing (TIF), which I’ll explain in plain English below because it’s often misunderstood, and because there’s an important distinction between how it applies to property tax versus sales tax.

The DDA cannot use eminent domain. It doesn’t require a “blight” finding. No parking garages or other public assets automatically transfer to it, any future asset transfer would require a separate, future Council vote, not something decided in the August referral.

TIF Explained Without the Jargon

TIF (Tax Increment Financing) sounds complicated, but the concept is simple, and it works a little differently for property tax versus sales tax.

If a DDA is formed, current property and sales tax collections in the district establish the “base.” All existing taxing entities, the city, the school district, Boulder County, the Library District, continue to receive revenue generated from that base. Nothing is taken away from them. The DDA captures only the tax increment, the new revenue generated above that base, and reinvests it within the district.

Property tax: the increment only comes from new construction and renovation, not from plain market appreciation. If a building is redeveloped or substantially improved, the added value above the base flows to the DDA; if property values simply rise with the broader market, that growth continues flowing to the city, county, schools, and library as it does today. The Boulder County Assessor determines that split property by property; based on other Colorado DDAs’ experience, staff expects it to land close to 50/50 between new growth and market appreciation.

Sales tax: Here I want to be straight with you, because it’s the one place a serious critique of this proposal is right. The sales tax TIF does apply to the city’s local sales tax revenue generated within the proposed DDA boundaries, including the portions of sales tax that voters specifically dedicated to transportation, open space, and parks, not just the General Fund. Those dedicated funds would keep whatever they generate in the base year; only future growth above that base would flow to the DDA. I checked this directly with the City Attorney’s Office, and this is confirmed, consistent with how DDA sales tax TIF works under Colorado law. If you’ve heard a critic say this, they’re right, and I’d rather tell you that plainly than pretend otherwise.

Here’s the part that cuts the other way, though, the base-year timing. A real concern raised about this proposal is that the base year would get set in a down 2026, right before we hopefully see economic growth from things like the Sundance Film Festival’s arrival, meaning that bounce-back would flow to the DDA rather than the General Fund. The facts, and the timing, actually work out differently than that critique assumes. The DDA doesn’t become operational the moment voters approve it in November, Council still has to appoint a board, approve the Plan of Development, and negotiate an IGA with the new board, a process staff estimates won’t finish before Q1 2027 at the earliest. The sales tax base year is set as the 12 months immediately before that Plan of Development approval, not 2026. Since Sundance is expected to land within that same window, the sales tax bump from Sundance would actually be captured inside the base year, meaning it stays with the General Fund and other taxing entities, not the DDA. (Property tax’s base year is fixed at 2026 regardless, since that’s the last full assessed-value year, that part doesn’t shift.)

So: on sales tax scope, the critics have a real point, and I’m not going to spin it. On base-year timing, the critics’ specific worry about the Sundance bump doesn’t hold up once you look at the actual approval timeline. Both of those are worth knowing, and I’d rather give you the accurate version of each than only tell you the one that makes the DDA look good.

A concrete example of what reinvestment could look like: the Civic Area Phase II redesign, Boulder’s central park and public space project, is budgeted at roughly $18-20 million in the current Capital Improvement Program, funded through the citywide Community, Culture, Resilience & Safety (CCRS) sales tax that voters renewed in 2021. That’s a citywide fund competing against every other community priority. If a DDA had existed over a decade ago and captured downtown’s growth increment, a project like that could have been funded from money generated by downtown, freeing up that CCRS capacity for something like a South Boulder rec center or a public safety facility instead. That’s the trade-off in a nutshell: reinvest downtown’s own growth in itself, or keep asking the whole city’s tax base to carry it.

The Misconceptions I Keep Hearing

Let me address some of what I’ve been hearing directly.

“This is just a backdoor tax increase.”

For the vast majority of property owners currently within the CAGID footprint (the downtown parking district), the DDA mill levy would replace the existing CAGID levy rather than adding a new one, resulting in no net new property tax burden for those properties. Properties within the University Hill General Improvement District (UHGID) would see a modest increase in their existing district mill levy, and a small portion of properties within the proposed DDA but outside both CAGID and UHGID would be subject to a new 3.674-mill DDA levy if approved by qualified electors within the proposed boundary. The City has also created a Tax Impact Calculator so property owners can determine whether they are within the proposed DDA boundary and understand how the proposal would affect their property. It’s not a backdoor tax increase if the people and businesses within the DDA are voting to tax themselves.

“The DDA won’t touch our transportation, open space, and parks taxes, those are protected.”

This one isn’t quite right, and I addressed it directly above: sales tax TIF does apply to those voter-dedicated funds, not just the General Fund. Dedicated programs keep their base-year amount; growth above that flows to the DDA. That’s a real trade-off, not a misconception to wave away. This could be mitigated if the Intergovernmental Agreement specifies any form of revenue sharing between the DDA and the City on the increment gained. But that IGA can’t be negotiated until there is a vote to create the DDA.

“It’s undemocratic for only ~2500 people to vote on the DDA, why not the whole city?”

This is established by Colorado law. Only qualified electors within the proposed DDA boundary are eligible to vote. Only those within the geographic boundary of the DDA get to vote on it. That’s the same as how our other Improvement districts work and were established decades ago. Some have also raised concerns that property owners with multiple legal entities could have more than one vote. Colorado law defines who qualifies as an elector, and separate legal entities that independently qualify under the statute may each cast a ballot through an authorized representative. The City’s consultants have said that there has been little to no evidence of LLC’s abusing the law to gain a voting advantage within DDA’s across the Front Range.

“The DDA will drain money from schools and county services.”

For property tax, which is how BVSD, the County, and the Library District are primarily funded, this misunderstands how TIF works. Those entities keep all their existing base revenue and only forgo the increment from new investment/renovation, not from market appreciation. As staff and our consultants point out, we will not see any increment without a DDA in place to catalize investment in our downtown cores. Staff has also had initial outreach conversations with all three entities to introduce the proposal; formal negotiation on revenue-sharing terms (via IGA) hasn’t started yet and won’t until after voter approval and DDA board formation. That’s real, honest progress, outreach done, formal terms still ahead.

“This locks up tax dollars for 70 years.”

The initial DDA term is 30 years, not 70. Extensions require separate future statutory approvals decades from now, not automatic or guaranteed today.

“The DDA board won’t be accountable to the public.”

City Council appoints the entire board, approves the budget, and approves the Plan of Development, the document that defines what the DDA is actually allowed to invest in. Council can require public hearings. The DDA operates under Colorado’s Open Meetings Law. This is a public entity, not a private one.

“The DDA will give away our parking garages to developers.”

No asset transfer happens automatically, and none is being decided as part of the August referral. Any future transfer of CAGID or UHGID parking assets to the DDA would require its own, separate City Council approval.

“This is too complicated, let’s just wait and see.”

Downtown’s decline has been accelerating for six years. Every year we don’t have a coordinated investment strategy is another year the vacancy rate stays near 30%. The DDA is the vehicle that makes sustained, coordinated investment possible. Delaying by just one year costs roughly $140,000 of revenue for the DDA in year one alone. Remember this is a compounding financing structure. Waiting a year now means year 10 would have been year 11. The amount of revenue for the DDA from year 10 to year 11 could be as low as $500,000 to over $1.5 million. That’s real money that a delay would cost us when the DDA matures and produces real resources for large projects. Waiting isn’t neutral; it’s a choice to let the slide continue.

A Note on Consistency

I want to say something that might be a little uncomfortable.

I’ve heard a lot of people, some of them colleagues, some community members I respect, say they want a vibrant downtown. They want thriving local businesses. They want a walkable, economically alive Pearl Street and University Hill. They want the revenues that come from a healthy commercial core to fund parks, transit, affordable housing, and community programs.

And then many of those same people hesitate when we propose a tool that would actually coordinate and fund the investment to make that happen.

I understand the hesitation. Nobody loves a new acronym, and “special district” doesn’t exactly inspire confidence. The details matter, including the ones I just walked through above, some of which cut in the DDA’s favor and some of which don’t, and the guardrails should be scrutinized carefully. That’s healthy, and it’s what the public process is for.

But at some point, we have to be honest with ourselves: you cannot consistently say you want a stronger downtown and oppose every policy, ordinance, and investment tool that would create it.

Boulder is a community that talks a lot about the kind of city we want to be. The DDA is a test of whether we’re willing to do the actual work to become it.

Where I Stand

So let me be direct instead of leaving you to infer it: I support referring the DDA to the ballot on August 6, and if it gets there, I hope folks within the district boundary vote for it in November.

I’m not pretending this is risk-free. I told you plainly above where the real trade-off is: the proposed sales tax TIF does reach into voter-dedicated transportation, open space, and parks revenue, not just the General Fund. That’s a real trade-off, and anyone who tells you otherwise isn’t being straight with you. I’d rather you hear that from me than discover it later and wonder what else got glossed over.

But weigh that trade-off against what happens if we do nothing. Downtown’s property tax revenue is already down 9% while the rest of the city grew 10%. Sales tax is down 10%. Office vacancy is near 30% and, unlike comparable communities across the state and country, isn’t bouncing back. That’s not an abstraction; it’s fewer dollars for parks, public safety, transit, and every other service that depends on a downtown that pulls its weight. It’s small businesses on Pearl Street watching rents outlast them. It’s workers whose jobs depend on foot traffic that isn’t coming back on its own. A stronger, more vibrant Downtown and The Hill will more than cover the initial costs to those city funds through enhanced sales and property taxes across the city.

Waiting isn’t the neutral choice. It’s a choice to let that slide continue, and it has a price tag: delaying by just one year costs roughly $140,000 in year one alone, growing to $500,000–$1.5 million a decade in, compounding the longer we delay. The market isn’t going to fix this by itself; I’ve said that since the day I got on council, and six years of decline have only proven it.

So yes, there’s a real trade-off here, and I’ve told you honestly what it is. But the risk of doing nothing, to our workers, our small businesses, and the community services all of us rely on, is bigger than the risk of doing something imperfect but structurally sound. That’s why I’m supporting this, and why I’m asking you to look at it seriously rather than reflexively.

What Happens Next

Here’s where things stand:

• August 6: City Council is expected to vote on whether to refer DDA formation to the ballot. This vote does not create a DDA, it decides whether voters get to.

• November 2026: If referred, the DDA formation goes to a TABOR election. Only qualified electors within the proposed DDA boundaries, residents, property owners, and qualified business tenants, are eligible to vote.

• Q1 2027 (earliest): If approved, Council appoints the board, and the Board and Council work through the Plan of Development and IGA before the DDA becomes operational.

I'll continue sharing updates as the proposal evolves and future implementation details are developed, if the DDA is approved. If you live in, own property or operate a business within the proposed district, Downtown, Civic Area, or University Hill, you’ll be a voter on this. I want you to be informed.

Learn More / City Resources

If you want to go deeper than a newsletter can, the city has put together good primary-source material. I’d rather you read the source than take my word for it:

• DDA Formation Project page — the full project overview, timeline, draft Plan of Development, complete FAQ list, and the Tax Impact Calculator to check whether your property or address is inside the proposed boundary and estimate your tax change.

• “Understanding Downtown Development Authorities (DDAs)” — a plain-language city explainer on what a DDA is and how the formation process works.

• Be Heard Boulder — the city’s public engagement platform, where you can ask questions, leave comments, and see what other residents are saying about the DDA and other active projects.

If you have questions, misconceptions you’d like me to address, or specific concerns about the DDA, reach out directly. This is exactly the kind of policy decision that benefits from community engagement, not just Council chambers.

If you found this helpful, I'd appreciate you forwarding it to friends and neighbors. The more people understand the full picture, the better decisions we'll all make together.

As always, thank you for being engaged, asking hard questions, and caring deeply about Boulder’s future.

Matt Benjamin

Boulder City Council