August 17, 2008 10:58 AM UTC

A tax by any other name still costs you

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• by: NEWSMAN

Colorado Springs GAZETTE  By Pam Zubeck

  It walks like a tax and quacks like a tax, but it’s called a public improvement fee – a new way developers get into the pockets of citizens to pay for roads, utilities and other big-ticket construction.  

 The public improvement fee, or PIF, is collected on retail sales under an agreement between the landlord and tenant. PIFs are not subject to tax limitation laws because they result from private agreements.

  Although PIFs have been used elsewhere, such as Park Meadows Mall in Douglas County, they’re fairly unusual in Colorado Springs. The Broadmoor imposed one to help pay for a recent renovation that included new roads, medians, landscaping and a parking garage.

  Another PIF is being collected at a King Soopers at Woodmen Road and Rangewood Drive where 0.5 of a percent is assessed on everything you buy, including food and even the sales taxes on your purchases.

  This fee, collected since the store opened nine years ago, was imposed by the developer, Regency Centers of Jacksonville, Fla., to pay $2.5 million for a retaining wall and a sound barrier, and other more minor projects.

  Trail Daugherty, King Soopers’ spokesman, said about half that has been collected so far, so it likely will be in place another nine years.

  At every checkout stand is a sign saying the charge is in place to fund a “public improvement corporation established by the city of Colorado Springs.”

  Problem is, the city doesn’t know anything about it.

  “We have no record of a public improvement corporation,” city spokesman Tim Burke said after talking with budget and planning officials.

  He then checked with the City Attorney’s Office, which said even though the city didn’t establish such a corporation, the city doesn’t want to spend resources to correct a statement that someone else wrote.

  Daugherty said the wording on the signs was provided by the city several years ago after shoppers complained about the extra charge. But he’s willing to change it if it’s not correct.

  In any event, Regency isn’t the only one who wants to cash in on PIFs. Ralph Braden with Nor’wood Development Group showed up at Monday’s City Council briefing on PIFs to promote their use around the city.

 He said developers want to impose PIFs to pay debt issued by developercreated special districts to provide “more expensive” infrastructure to attract “better quality retailers.” Braden said only large projects would use them, so there wouldn’t be a proliferation of PIFs.

  The council washed its hands of the whole business.

  Noting a PIF is an agreement between the landowner and the tenant, Mayor Lionel Rivera said, “Why would we get involved in that? It seems to me the city would want to steer clear of that.”

  That means developers were essentially given free rein to PIF the public, if you will.

  Councilwoman Jan Martin is worried. While the PIF is itemized on receipts, she fears consumers will think of it as a city sales tax and be reluctant to approve future tax hikes.

  Not necessarily. Though workers at the King Soopers store in question said customers complain about the PIF sometimes, many don’t care.

  Asked what she thought of the extra charge, one shopper said, “Unfortunately, I’m too uninformed to know.”

  So, maybe it’s no big deal. But for those who don’t like a “PIF in a poke,” there’s one thing they can do if they want to avoid paying the charge: Don’t shop in the places that charge it.

http://www.gazette.com/common/…