The Colorado Springs City Council approved a new urban renewal district at the south end of downtown Tuesday, without the delay or community investment some neighbors had sought.

The urban renewal district sits at the intersection of Moreno and Cascade avenues. Norwood Development Group and the Sage Hospitality Group plan to build the seven-story boutique Catbird Hotel on the north side of Moreno, followed by at least 70 units of attainable on the south side of the street.

The City Council approved the urban renewal district 7-2, with opposition by Dave Donelson and Kimberly Gold. The vote was also over the opposition of dozens of Mill Street neighborhood residents who wanted to delay the vote until the developers set a precedent for the city by signing 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.

“It didn’t seem like we, as neighbors, had a seat at the table where decisions were being made. Many of my neighbors fear being priced or pushed out, and I can’t stand for that,” longtime Mill Street resident Frozie Abbott said.

The housing portion of the district crosses into the Mill Street neighborhood. Neighbors who spoke Tuesday were less concerned about the housing than the hotel, which could raise home prices around it and contribute to the area’s gentrification.

The Catbird Hotel, designed after the one in Denver’s River North Art District, would be seven stories and around 180 rooms. The hotel would be focused on providing extended stays to people in town for weeks or months at a time.

The second phase of development in the district would bring between 70 and 110 units of attainable housing. Jariah Walker, executive director of the Colorado Springs Urban Renewal Authority, said that designation meant they would cost below the market rate for similar apartments.

Being declared an urban renewal district will allow the hotel and the housing to receive more than $10 million in tax-increment financing, meaning the sales and property taxes generated in the district will be kept there and spent directly on the development.

Kevin Dexter owns Shuga’s Restaurant, located a block south of the proposed urban renewal area on Cascade. Dexter said that any major modification or expansion the restaurant made was required to listen to public comments. He said there should not be a lower bar for a hotel that might receive millions of dollars in tax support.

“That’s not a burden, in my opinion. That’s a responsible civic process and what it means to build something that belongs in a neighborhood instead of being imposed on one,” Dexter said.

Walker said the tax funding was spread out over 25 years and would be used to reimburse the developer after public improvements were made. Walker said the tax-increment financing had to stay within the boundary of the district and could not be used on other neighborhood improvements.

‘Inconsistent communication’ between Norwood and neighbors

Katie Miller, president of the Mill Street Neighborhood Association, outlined previous discussions with Norwood, arguably Colorado Springs’ largest real estate company. Miller said that the developer flatly rejected a community benefit agreement last May but was interested in a broader partnership. She said that neighbors developed a plan and continued meeting with Norwood until the end of September, when Norwood stopped meeting with them.

Miller said the neighborhood wanted to try again for a community benefit agreement in order to secure official commitments from Norwood that the work at Moreno and Cascade would not come at the expense of the neighborhood’s affordability.

“Informal partnerships with zero accountability and inconsistent communication do not produce the results Mill Street is looking for,” Miller said.

Norwood developer Jeff Finn agreed on the timeline of when those discussions started and broke down. Finn said that Norwood had worked on other affordable or attainable housing projects without having to sign a community benefit agreement. Finn said the neighborhood association was not “investable” and was asking for things outside of what Norwood could provide or what was directly tied to the block.

“I am absolutely willing to have conversations about partnership and advancing principles of things I can help with,” Finn said. “I’m not in the position to fix people’s homes or homes they are renters of.”

Finn also claimed that lines had been blurred between the Mill Street Neighborhood Association, the Mill Street coalition that worked on the potential agreement and city-wide housing proponents.

Public comments Tuesday included a large portion from opponents who did not live in the Mill Street neighborhood. Multiple religious leaders spoke on behalf of Colorado Springs Faith Table, which has increasingly been outspoken on housing issues in the city. Other residents lived near Union Printers Home and were involved in an effort to secure a community benefit agreement on that redevelopment.

Councilmember Nancy Henjum voted in favor of a motion to table the decision for a month, before ultimately approving the project. Henjum said that Colorado Springs seemed unlikely to join other cities in making community agreements an official part of the development process.

“I’m going to stick with reality and where we are now, because the CBA is not something that is realistic at this point in time,” Henjum said.

Finn said that Norwood might still meet with Mill Street neighbors if they were serious about community benefits that weren’t tied to whether the urban renewal district was approved.

In the hallway after the vote, Councilmember Roland Rainey told Miller that he would help make sure that a new meeting takes place. Miller agreed, but later said she didn’t expect a meeting to change much at this point.

“We are seeing how you play the game. It simply doesn’t allow for these changes to happen if they don’t allow the rich to continue to get richer,” Miller said.