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Show: Grassroots Radio

Guest: Ryan Fraiser

Date: 6/29/2011

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Topics: Stock Show, tax incentives, tax increment financing

The Aurora mayoral candidate, Ryan Frazier. Welcome to the show, Ryan.

Hey, guys, thanks for having me.

Not a problem. Thank you for joining us today, and thanks for taking time out of your schedule to be on the air. So let’s get right to it, Ryan. You ran for CD7, and now you’re running for mayor of Aurora, so what is your platform for you candidacy?

I appreciate that. You know, we did run for Congress last year, and unfortunately, we came up short. It was a hard-fought race for Congress. We had a great message, but it just wasn’t enough in a very tough district – the seventh Congressional district. That said, you know, we still made a lot of friends and supports around the district – for that matter, around Colorado and around the country, and for that we will always be thankful. After a lot of consideration, I felt that I still had the fire in the belly to continue to serve, and to be a voice – not just for Aurora, but for all of Colorado. And so I threw my hat in the ring to be the next mayor of Aurora. Our current mayor, Ed Tauer, is term-limited this year, and we’re going to have new leadership at the helm of the city of Aurora, and I’m excited about the opportunity to help take Aurora to that next level as an economic engine for all of Colorado. Aurora is positioned for tremendous job creation in the private section, and I want to be a part of making sure that Aurora takes advantage of that by providing an environment that is conducive to investment and jobs right here in Aurora, Colorado. And so, I’m motivated to get out there and take the forth the idea that I think makes sense, and that I picked up from listening to people all over this great city, and to do my part – not only to be the next mayor of Aurora – but again, to be a strong voice for Colorado.

Well, Ryan, we had a caller on the line in the last segment, and – who was from Aurora, and we had asked her the question, “Is the government – the city government of Aurora – fiscally sound – “ or – I can’t remember –

Have they been living within their means?

“Have they been living within their means,” and they – the response that they go was, “Absolutely not, they just keep taxing and taxing and taxing.” So, how do you plan to change that?

Well, you know, I have to differ a little bit. You know, after I served five years in the United States military, I went to work in the private sector, working for Racion [unsure of spelling] and subsequently, Avaya. And I was elected to the Aurora city council as an at-large member to represent the entire city of Aurora eight years ago. And I can tell you – the [inaudible] Council, with very few exceptions, we’ve been cutting the budget. We’ve cut literally tens of millions of dollars out of our budget in some years. This year alone, we are expected between four and six million dollars out of our budget. Now that pales in comparison to what the city and county of Denver is dealing with – they even have a budget deficit of over 100 million dollars. But we have made, I think, the possible steps to balance our budget, and to live within our means. It doesn’t mean we can’t do more, and I’m certainly of the belief that we have to continue to be more fiscally responsible in the city of Aurora and to manage the taxpayers’ dollars prudently. Last year, I led an effort to increase the transparency of the city of Aurora’s finances, and thank God I was able to get the council to buy off on it. And so now, any person that wants, any citizen of Aurora, any citizen of Colorado, any person in USA – can go online to the city of Aurora’s website, and they can pull up our financials to see exactly how the city of Aurora government is spending their tax dollars. I think that’s an important towards transparency and increasing accountability of the people’s government. And so, certainly guys, I know we could do more. I’ll be an advocate for that, but I think we have done a lot. I will also say, in the past several years, we’ve cut over 250 jobs, and no one likes to lay people off, but we’ve made those tough decision. We’ve cut over 250 jobs from the city of Aurora’s payroll in order to make sure that we live within our means in Aurora. So, compared to Denver, compared to our cities here, other major cities here in Colorado, I think Aurora has been fiscally prudent, but that doesn’t mean we can’t be better.

Well – and this is Jason Ryan – it’s good to talk to you again. You know, it’s very timely that you happen to scheduled to talk to us this week, because Aurora has had obviously some very big news in the last couple days, with the possibility of Gaylord opening a huge property and the National Western Stock Show possibility of moving there. What, as far as, when it comes to tax incentives – what – if you’re going to be the mayor, you’re going to have something to do with these tax incentives going forward.

Right.

What are you looking at?

Well, you know, I think – the reality in today’s world is the tax incentives are part of the conversation that we have in the city to try and attract major investments. This situation with Gaylord is no different. There was pretty much unanimous support amongst city councilmembers that we wanted to have this level of project – not just in Aurora, but in the region. The Gaylord Hotel folks are looking at investing upwards of $824 million into the Aurora area – but, for that matter, the Rocky Mountain region, with its brand new hotel. There’s only four other – four others like it in the entire country – the Grand – the Gaylord Opry in Nashville, Gaylord National in DC, the Gaylord Texan in Dallas, and the Gaylord Palms in Florida. And so this will be their fifth one. They’re estimated to bring in about 3,200 full-time jobs, and have an economic impact of over $284 million annually on the local economy, and because of those reasons, you know, I was able to get behind an incentive package that ensured that we weren’t giving them any current tax dollars, but we said to them that, “We will provide you a package that says, ‘We will incentivize the project such that any new taxes that are generated from your property, we will allow some of those taxes to be used to help finance the project to make it a go, and to make it happen for Colorado.’” Obviously, in an ideal world, guys, I would not like to see any sort of tax incentives that are not pretty much tax cuts or tax breaks, in the sense that, we basically cut taxes. But the reality is is that in today’s environment, cities all across the U.S. are using what’s called tax increment financing TIFs as a tool to incentivize major developments and projects in and around cities. And so if I’m elected next – the next mayor of Aurora, I certainly will ensure that we have the full set of tools at our disposal to try to bring those levels of projects to our – to our community.

Yeah, and I got to admit, we’ve actually had quite a few examples that we’ve actually brought up just right here on our show of – where TIFs have gone bad – just at Level and Centera [unsure of spelling] project

Yeah, that didn’t work out so well for the city of Loveland. They are – they’ve got a $1.3-million budget deficit, and if they – and, you know, one thing about that project is, the people – the developers, really didn’t need the help, and they could have done without it, and the city of Loveland is now in a budget deficit, which is pretty much equal to the TIFs that they gave Centera. And then the developers actually filed Chapter 13 when they couldn’t get the terms they wanted on the refinance for the mortgages and all that wonderful stuff. And also, the customers that go to do business at Centera actually pay an extra fee that – fee or tax – call it whatever you want.

Yeah, it’s probably a regional tax.

Well, it is. It’s a fear tax, and that goes to help finance the development actually, so you’re actually – It’s just one on top of another. So those TIFs that I’ve seen as specifically – don’t always –

And the biggest thing I –

Work out so well.

And the biggest thing is if we can encourage – obviously, we’re not just radio talk show hosts, we happen to be leaders of Liberty Movement here in Colorado. If you do win for mayor, I would sincerely hope you budget appropriately, not counting on those TIFs, because it sounds like Loveland didn’t.

Well, they didn’t, but they also didn’t realize what they were getting into. I mean, you’ve got – you’ve really – it’s a sophisticated way to finance, let’s be real. And it – you know, you – what you’re doing is basically mortgaging future tax receipts, and you’re losing tax revenue to the city as a result, so then you have to find a way to make it up somewhere else, and that is a vicious, vicious, circle. So I would really recommend looking at that hard. And I would also –

I appreciate that. You know, I think, I think, you know, certainly we have to look at the tools that are available to us and make sure we’re being as responsible stewards of the taxpayers’ dollars. And you know, I’d like to think that we did that – we had a very, very thorough analysis provided by what I believe to be one of the best finance directors in the country. In fact, we just lost them to Long Beach – he had to move out there for his wife’s health reasons – but he’s probably one of the most fiscally conservative finance directors you will ever find in any civic city government anywhere in the U.S. And based on their analysis of the project, it was estimated that, even after the TIF incentive went into place, it’s projected that there would still be a net to the city of Aurora in the – to the tune of about $1-and-a-half million per year, even after the incentive that the city council approved. And so, you know, guys, I agree with you. We can’t just go willy-nilly about with these things, but this was a question, quite frankly, for the council – you know, do we want to make this project happen for the region or not? And it was one of those things where we looked at the trade off, and we said, “The economic impact that is projected, that has been given to us by the analysis – not just from Gaylord but by our own independent analysis – projects that – we’re talking about an economic impact of this project to the tune of $284 million per year, with 3,200 full-time jobs. It was something that the council did the trade off and said, “Look, we think we can support this, because it’s good for Aurora, and it’s good for Colorado.” But certainly guys, I will tell you, it’s not something I take lightly, and something that we just want to go using everywhere.

Well, yeah, and, you know, philosophically, Ryan, I got to tell you, I’m fundamentally opposed to TIFs in any and all circumstances, and just simply because I have seen what they do, and they don’t – rarely work out. They try to use them to subsidize green energy, they try to use them to subsidize pretty much anything. I understand that you’re trying to use them as an economic development tool to bring business into Aurora. And I understand – I do understand that. But I just think that when you’re mortgaging future tax receipts, and you’re using them as an incentive to bring in business, I mean, yeah, I’m from Wyoming; they don’t have income tax. They’ve got the lowest tax structure in the world, and you know, business loves to go there, because they sit down with the, you know, Economic Development Corporation, and say, “Okay, what are we going to do about the income tax?” “Well, we don’t have one.”

Right.

“Oh, great,” you know. And so, you might want to consider making the playing field level for everyone, instead of these kinds of subsidies. I don’t know.

It is tough, because obviously we’re fundamentally opposed to picking winners and losers.

Sure. Sure.

I can see this. I’m actually – and, to be honest, we need to do more research on it. It’s been only a – kind of a new phenomenon, and now –

Yeah.

And it is interesting, though, let me ask a quick opinion of yours because there’s a lot of criticism of Denver for kind of rolling over on this. And strangely, I actually heard it on other talk shows today, saying, “How weird is it for the current mayor and the new mayor-elect to be completely rolling over and saying, ‘Hey, this is great, Aurora. How can you cut us in?’”

Well, you know, I don’t think they’re really rolling over, and I will say that, I think they’ve looked at it, and they said, the Western Stock Show leaders basically came to them and said, “Look, we’re not competitive with other stock shows around the country, around the North American region – in Calgary, for instance. We don’t have the types of facilities and spaces and things that they have – parking, you know. And we got to upgrade. We got to be able to expand our ability to compete in this market sector.” And so, when you look at where they’re currently located, they said, “Well, we don’t really – we can’t really do that. We can’t really expand it and improve what we have, because we don’t have the space.” And so they looked around; they found a location that just happened to be in Aurora. And they said, “Well, we can here.” And it’s right next to Denver. It’s right next to DIA, and as far as I’m concerned, you know, this is a regional project. This isn’t – Aurora’s not going to see any significant tax revenue associated with the Western Stock Show, as a city government. It just is not a big tax generator for any city, even Denver. And so, what this is, it’s a feature of the region that attracts a lot of folks, and is a great thing and has a proud tradition, and I think we can uphold that, and in fact, we can make it ever better. This doesn’t have to be about Denver versus Aurora. I think it needs to be about Colorado. At the end of the day, we don’t know borders. When I go to the store, I shop wherever I can get the best price. Most people do as well. I try to stay in Aurora as much as I can, but the reality is, we’re always crossing borders for one reason or another, and so – of city, that is. And so, you know, I just think it’s a great project for the region. The Western Stock Show leaders said that they wanted to make this move for reasons to be able to compete and have a first-class stock show, and we’re hoping that the leaders in Denver will see fit to work with Aurora to try to find a win-win situation for everybody.

Well, Ryan, real quick. That bodes a question: what kind of relationship does the city of Aurora have with the city of Denver? I mean, is it a synergy, is it an adversarial relationship. I mean – what kind – I have no idea, so I’m asking that question.

Well, you know, when the mayor Ed Tauer was elected back in 2003, I was elected at-large to represent the entire city as well. And [unsure] at the time was elected earlier, that May in 2003. And the whole tune and relationship between Denver and Aurora began to change. It was much more cooperative and, you know, “We can work together” type of spirit. And ever since then, we’ve tried to maintain that, and I think the city council, and certainly, if I’m elected the next mayor of Aurora this November – we’re going to seek to work with our other local jurisdictions. I mean, we all got to live in Colorado together, and this is not about Denver versus Aurora. It’s about our people, and as far as I’m concerned, that’s what we got to do, is do what’s best for our people, and ensure that we have a good relationship with Denver and Littleton and Centennial. So as of right now, [unsure], our relationship is positive, and we hope to continue to build on that in Aurora. Aurora’s a growing city. Aurora’s the third-largest city in Colorado. It’s 160 square files. It’s larger than Pittsburgh. It’s larger than Tampa, Florida or Buffalo, New York, and literally half the city is undeveloped. We have about 325,000 people, and we have a lot of room for growth out here in Aurora. And so, as I said before, I believe Aurora can be an economic engine for all of Colorado, and that will make a positive impact on everyone. And so I want to be a part of that, guys, and you know, my campaign for mayor is strongly underway. I want to encourage your listeners out there who want to know more about me and our campaign to go to ryanfrazierforaurora.com, and they can sign up for email updates and other information about where we stand on various different issues. At the end of the day, guys, you know, I apply the 80-20 rule: sometimes we’re going to disagree, but if we can agree 80 percent of the time, you’re my friend. And, you know, I think that’s what we got to look forward to as we try to provide responsible, efficient, and accountable government for the people of all of Colorado.