Mary Sprunger-Froese was driven out of the Lowell neighborhood near downtown Colorado Springs when it was redeveloped through an urban renewal plan in the late 1990s. She is now fighting to make sure history doesn’t repeat itself in the Mill Street neighborhood.

The Colorado Springs City Council is expected to vote Tuesday on an urban renewal plan at Moreno and Cascade avenues. Norwood Development and the Sage Hospitality groups are proposing to build the Catbird Hotel on the north side of the intersection and dozens of attainable housing units on the south end, which crosses into the boundaries of the Mill Street Neighborhood Association at the edge of downtown.

In the 20-plus years Sprunger-Froese has lived in the Mill Street neighborhood, redevelopment has eaten into the area like holes in Swiss cheese, she said. Many homes have turned into Airbnbs or other rentals. She rattled off a list of neighbors who were priced out of their homes.

“That’s what upscale development does. It takes lower-valued land and makes it much higher valued, which affects all the people who are living there because it had been more affordable. Then it becomes less affordable,” Sprunger-Froese said.

The neighborhood association will ask the council to delay approving the urban renewal plan until the developers sign a community benefit agreement. Versions of the agreement, which would guarantee developer support for low-income affordable housing in the neighborhood, are used in other cities but Mill Street’s proposal would set a precedent in Colorado Springs.

The initial proposal that Norwood submitted to the Colorado Springs Urban Renewal Authority in September 2024 included only the hotel, which would mirror the boutique Catbird Hotel that opened in Denver’s River North neighborhood in 2021. The proposed hotel is seven stories tall, with around 180 rooms and a rooftop event space. The developers said the Catbird would cater to extended stays with a guest house and rooms that can be checked out for months at a time. 

Mill Street neighbors, including Sprunger-Froese and Max Kronstadt, began meeting with Norwood shortly after the initial announcement to voice their concerns. According to Sprunger-Froese, the developers did not want a formal benefits agreement but were open to making changes to gain neighbors’ approval. 

The neighbors worked on multiple rounds of proposals and came up with three main priorities for an agreement. They wanted to see more affordable housing in the neighborhood with a path to homeownership, protections for existing residents against being priced out or having their homes torn down, and a formal role for the neighborhood association in future decisions. 

Kronstadt said they stopped hearing from Norwood last fall, around the time a new proposal was submitted for the district. In the new proposal, a second phase of development covered the five parcels owned by Norwood on the south side of Moreno. Those properties would be turned into at least 70 units of affordable housing. 

“Norwood is no longer working with us, in partnership with us, and we don’t see Mill Street leadership being part of the decisions made around that piece of land. They’ve also been using the word attainable, so we don’t feel there’s much in the way of guarantees for long-term affordability,” Kronstadt said. 

Norwood spokesperson Tracy Doherty told The Gazette that all questions about the project would likely be answered during the presentation at Tuesday’s council meeting. 

The neighbors pursued a similar community benefit agreement around the 2022 closure of the Martin Drake Power Plant when it appeared that the nearby railroad tracks would be realigned, potentially tearing down 16 homes. Neither of those developments came to pass. 

Jariah Walker, executive director of the Urban Renewal Authority, said having the housing added to the district showed that Norwood was already making concessions to the neighborhood. 

“From my perspective, they got what they wanted. Essentially, what they wanted is what’s in the neighborhood to be as affordable as possible. And we’ve created a mechanism to do that,” Walker said. 

Attainable housing is not as well-defined as affordable housing. Generally, attainable projects are priced so that residents making the median income for the area or slightly below do not have to pay more than 30% of their salary on housing. 

The City Council approval for the urban renewal district would provide the project with just over $10 million in tax increment financing (TIF), where the future property and sales tax revenues are kept within the project for development work instead of going to the city or other public entities. 

Walker said the urban renewal agreement places a cap on how much of the collected tax goes into the hotel. Any revenue above that could be used to help cover some of the housing costs and move it closer to affordability. 

“We need the hotel to incentivize making the other side of the street affordable. If we’re doing the hotel component first, great. Then hopefully that’s super successful because the TIF that rolls off of that is going to roll across the street as well,” Walker said. 

Walker also said approving the urban renewal would lock in the hotel and attainable housing as the two permitted uses in the district. Changing either part to a different type of development would need approval from the City Council, Urban Renewal Authority and every other group that signed off on the tax financing plan. 

The implied protection for affordable homes was not enough of a guarantee for Sprunger-Froese and other neighbors, especially given the public taxes that would support the district. She hoped that the City Council would put off approving the project until a community benefit agreement was in place.

“It would mean that neighbors could live in happy coexistence with new development, instead of assuming that’s going to be a fight or a win-lose situation. This would be a win-win situation. That’s what we are going for,” Sprunger-Froese said.