Downtown Development Authority (DDA) Formation Project

Under Colorado law, a DDA is a public entity created to support the long-term vitality of a central business district. It is a financing and implementation tool that can help plan, fund and carry out improvements over time. A draft Plan of Development is part of that process and outlines the priorities and framework that would guide the DDA if approved.

A DDA is created through both City Council action and voter approval within the proposed district boundaries. Eligible voters may include property owners, residents and qualified lessees or tenants. If established, the DDA would be governed by a board of directors appointed by City Council, with a majority of members required to live or own property within the district.

A DDA’s ability to support transformational projects comes from its long-term financing tools. Under Colorado law, a DDA may use tax increment financing (TIF), levy up to five mills with voter approval, and issue debt, including bonds. TIF allows a portion of future growth in property and sales tax revenue generated within the district to be reinvested locally. These tools can help drive redevelopment and economic growth in a central business district.

The DDA would operate under a Plan of Development, which establishes the district’s priorities, eligible investments, financing approach, and overall direction.

A DDA does not replace the city’s land use, zoning or core municipal responsibilities. Instead, it provides a dedicated structure for coordinating investment and implementing district improvements at a scale the current model was not designed to support.

A DDA invests in projects and programs that support economic vitality, improve public spaces, and enhance the community experience within a district. DDAs often partner on redevelopment and infrastructure projects that help revitalize underutilized properties, attract investment, and support long-term district improvements.

This can include:

• Catalyzing redevelopment and adaptive reuse of underutilized and vacant properties
• Attracting new housing, hospitality, employment, and neighborhood-serving uses
• Supporting local businesses, reducing vacancies, and strengthening commercial corridors
• Funding mobility, access, and parking improvements
• Investing in public spaces and multimodal connections that support economic vitality

The proposed DDA financing approach is designed to provide both near-term stability and long-term reinvestment capacity. If approved by voters, the DDA could use a combination of tax increment financing (TIF), a voter-approved mill levy, district revenues, and other funding sources to support improvements and investments over time.

TIF would serve as one of the DDA’s primary funding tools. By capturing a portion of future growth in property and sales tax revenues generated within the district and reinvesting those funds locally, the DDA could help fund public improvements, support redevelopment, and leverage future revenues for larger capital projects.

A mill levy would provide a more stable annual funding source, particularly in the early years while TIF revenues are still building. The proposed mill levy is structured to replace the existing CAGID and UHGID mill levies, resulting in no net new property tax burden for CAGID property owners and a projected modest increase for UHGID property owners. Use the calculator tool above to determine you’re within the proposed DDA boundary and estimate any potential tax changes.

Additional funding sources could also support the DDA’s work. If governance of General Improvement District (GID) assets transitions to the DDA, this may include parking system revenues, which would continue to support parking operations, maintenance and reinvestment. Grants, partnerships and other earned revenues could also help fund district improvements and initiatives over time.

Tax Increment Financing (TIF) captures only the incremental growth in tax revenue above the base value at the time the district is formed. The base — and its natural appreciation — continues to flow to all existing taxing entities. The DDA captures only the increment generated by new investment and redevelopment it helps catalyze.

The city, BVSD, Boulder County, the Library District, and others continue to receive revenue from the existing base. What they forgo is a share of the increment from new growth — growth that, without the DDA, may not materialize at all.

The proposed DDA does not “deny” future growth to the General Fund in its entirety. Under a tax increment financing (TIF) structure, only the incremental increase in sales tax generated within the district above a defined base year is allocated to the DDA for reinvestment in the district. The City’s General Fund continues to receive its share of sales tax revenue from the base level of activity, as well as a portion of ongoing growth depending on the final financing structure and any revenue-sharing provisions adopted. The policy rationale for TIF is that reinvesting a portion of new, district-generated growth back into that same area can help strengthen long-term economic performance, which in turn supports overall citywide revenues, including the General Fund. The City is also evaluating potential revenue-sharing mechanisms to ensure that General Fund priorities continue to be supported.

Transferring CAGID and UHGID parking assets to the DDA would be a transfer between public entities — not to private developers. Ownership, capital reserves, and policy control remain public. Any changes to parking rates, asset disposition, or major policy shifts require City Council approval.

Historically, CAGID has helped fund the EcoPass Program. Staff is committed to ensuring this and other transportation programs would be protected and explicitly addressed in the Intergovernmental Agreement (IGA), either by following the assets to the DDA or through an identified alternative funding mechanism.

More broadly, the IGA is the appropriate place to set clear parameters on transportation-related programs, parking policies, and other ongoing obligations. A draft IGA framework will be brought forward for Council and public review, and no asset transfer will occur until those terms are finalized and approved by Council.

Because the DDA does not yet exist at the time of the vote, the board cannot be appointed and the Intergovernmental Agreement (IGA) cannot be fully finalized until after formation. To address this sequencing, a draft IGA framework will be brought forward for public review before the vote occurs. Council will retain final approval authority over all IGA terms — including asset transfers, revenue sharing, and operational responsibilities — and many key parameters, particularly those related to revenue sharing and transportation and parking, will be set explicitly in that document.

The formation of a DDA would go before eligible voters within the proposed district, including residents, property owners and qualified business tenants.

For non-profit organizations that own or operate property within the proposed DDA boundary, the eligible voter is a designated representative of the organization authorized to act on its behalf. Similar to LLCs and corporations, a non-profit entity receives one vote regardless of how many properties it owns or operates within the district. The organization should designate a single qualified elector to request and cast a ballot on its behalf.

Colorado statute dictates that those eligible to vote on the formation of a DDA are limited to property owners, residents, and qualified business owners (including tenants/lessees) within the proposed district boundaries. This is the same model used by every DDA in Colorado. The rationale is that those within the boundary are the ones subject to the mill levy and most directly affected by district governance.

The DDA would be governed by an independent board of directors appointed by City Council and made up of representatives from within the proposed district. The board would provide oversight and guide implementation of the DDA’s priorities, investments and operations.

City Council would retain appointment authority, approve the Plan of Development and any intergovernmental agreements, and hold at least one seat on the board to help ensure continued alignment with broader city goals and priorities. This structure is intended to balance district-focused leadership with ongoing city oversight and accountability.

The City Council has not yet established appointment criteria. State statute requires that the DDA board must have no fewer than 5 and no more than 11 members and a majority of board members reside in or own property within the district, and at least one member must also serve on City Council. If the DDA is formed, Council will establish an appointment process and consider qualifications that provide balanced representation and expertise needed to carry out the district's responsibilities. The intention is for the board to include diverse constituents from each geographic hub within the district — residents, small and local business owners, and property owners — to ensure all voices and perspectives are represented.

Boulder’s existing commercial districts — CAGID and UHGID — were established more than 50 years ago to support shared parking, infrastructure and maintenance within the city’s central commercial areas. While these districts have successfully fulfilled their original purpose, the needs and conditions of Downtown and University Hill have evolved significantly over time.

Today, Boulder’s central business districts face a range of economic and operational challenges, including changing retail and office market conditions, aging infrastructure, increasing expectations for public spaces and maintenance, and the need for more coordinated long-term investment and district stewardship.

As mentioned above, Downtown Boulder and University Hill have experienced real economic decline over the past six years, resulting in measurable erosion when accounting for inflation. These trends have made Downtown a net drag on the General Fund rather than a contributor to it.

In response, the city has been evaluating a DDA as a tool to provide more flexible financing, coordinated governance, and long-term investment capacity to support reinvestment, revitalization and implementation of community priorities.

Investing in transformative projects, programs, and infrastructure enables greater attraction of visitors, locals, and businesses into the district boundaries, thereby benefitting sales tax increases and potentially mitigating some concern over vacancies. These investments also have the potential to raise surrounding property tax value, benefitting property owners and other taxing entities within the district.

All of the strategies in the draft Plan of Development aim to foster a thriving economy and vibrant district. Implementing these strategies can allow for those within the district and surrounding areas to benefit beyond increased property valuation – benefits that would not be possible without funding and support from the DDA.

To help guide this effort from the beginning, the city convened a community-based Planning Group as part of the DDA exploration process. The group includes community members representing different parts of the proposed district and provides ongoing input on governance, funding, boundaries and long-term priorities.

Over the past year, the city and Planning Group have worked with stakeholders to refine potential district boundaries and develop a draft Plan of Development that would guide future investments, projects and strategies. The process is now entering its next phase, focused on legal formation steps and City Council review.

If there is broad community support, the formation of a DDA would ultimately go before eligible voters within the proposed district, including residents, property owners and qualified business tenants. If approved, City Council would certify the election results, appoint the initial DDA Board, and authorize the establishment of governance documents and bylaws. The Board would then finalize and adopt the Plan of Development and begin implementation consistent with the approved funding tools.

If established, Boulder would join many Colorado communities — including Fort Collins, Denver and Longmont — that use Downtown Development Authorities to support long-term investment and downtown vitality.

The organizational structure is still being evaluated. Staff anticipates a phased transition following formation, during which city staff, a consultant, and the DDA Board would determine which responsibilities remain with the city and which transfer to the DDA. Staffing needs have not yet been finalized and will depend on the approved scope of responsibilities and available revenues.