The Old Colorado City Downtown Development Authority has been around for less than two years but it might already be on its last legs.

The Colorado Springs City Council will vote at its Aug. 25 meeting on whether to dissolve the authority. The resolution would overturn the city-appointed board before city staff approves the development plan that would let the authority begin spending on improvements for the Colorado Avenue corridor.

The decision could have come even faster, as the dissolution was on the council’s agenda July 14 with less than a week’s notice given to the development authority. The council ended up voting 5-4 to delay the decision until August, in large part because of the uncertainty on both sides of the debate.

“It’s still hanging over our heads. It’s just a little bit higher up than it was,” said Allison Daniell, vice chair of the Downtown Development Authority board.

Downtown Colorado Springs has been overseen by a DDA since 2006 to support programs and financial investment in the city center. The authority for Old Colorado City is much newer, having been passed in November 2024. The election that created the authority did not, however, approve the additional mill levies that were meant as the primary source of revenue for improvements.

The fact that the authority hasn’t been able to do much for Old Colorado City is part of the argument for and against keeping it around. The vote to dissolve the authority would have to take place before it has established any debt or the city has approved a development plan for the authority to invest in improvements along Colorado Avenue.

Daniell and other board members say the authority is the best path for stability and improvements that expand beyond the current blocks at the heart of Old Colorado City.

City Councilmember Brandy Williams, who represents Old Colorado City in District 3, said she was not convinced that the authority was the best tool for supporting the area. Williams said that dissolving the authority would let the city revisit the conversation and that option would disappear once the DDA was more established.

“This was supposed to be going two years ago. So if it’s been two years and the traction and inertia has not been caught, it begs the question of what is it doing?” Williams said.

The boundaries of the development authority mainly follow Colorado Avenue from the Interstate 25 overpass to the beginning of Manitou Springs’ city limits. The area includes the historic core of Old Colorado City as well as hundreds of businesses and homes along the street.

Ryan Lloyd, the founder of Colorado Springs-based Echo Architecture, got involved with the push to create the authority after purchasing the oldest standing building in Colorado Springs. Now known as the Sluice, the building at 2752 Colorado Ave. was built in 1859 and was the longtime home of an Army Surplus store.

Lloyd said that while working on the renovations, he became interested in expanding the benefits of Old Colorado City further along the street. Lloyd also cited the turnover issues that limited long-term improvements for the area.

“Somebody will get excited in a volunteer position and really pour their heart into it for a couple of years and then get burned out and leave. That cycle just continues over and over again. It’s really hard to get momentum and make real change that way,” Lloyd said.

For several years, organizers have discussed creating a business improvement district as the way to do more for Old Colorado City. By the summer of 2024, the focus shifted to a DDA. One of the main reasons cited was that a business district was more limited to commercial properties. A downtown authority could raise more funding by levying residential properties and collecting sales tax revenue from visitors.

The blocks that are usually considered “Old Colorado City” are covered by a Special Improvement and Maintenance District through Colorado Springs. The district receives funding for smaller projects like landscaping, snow removal and light maintenance in the main blocks.

Judith Kasten has been running Kasten Accounting of Old Colorado City for decades, owns several other office spaces within the building, and has served on the Special Improvement board on and off for decades.

Her heavy involvement meant Kasten was surprised that she hadn’t heard about the proposal to create the DDA until the last minute. Kasten did not receive a ballot for the 2024 election that established the authority. The same was true for several other business owners.

“I can’t say that I want it to encompass everything. But what I really don’t like is the way they went about creating the DDA, with this supposed vote of the people,” Kasten said.

Out of nearly 1,000 businesses and residents that are within the boundaries of the authority, fewer than 180 cast a vote in the 2024 election.

Lloyd and Daniell both said the election process had some issues. Lloyd largely blamed the rushed timeline, from the City Council vote at the end of August to the election in early November, which made it hard to get the word out to businesses and explain the four questions on the ballot.

Anybody who was registered to vote in the proposed boundaries or owned property within the boundaries was eligible to vote in that election.

Business owners needed to fill out a ‘Designation of Elector’ form to say who was voting on behalf of the company, which added a layer of complication. Another turnout issue may have been that the ballots did not come from the state or El Paso County. The election was overseen by the Spencer Fane law office and asked for ballots to be returned to Denver.

The City Council did vote 8-1 in July to remove 17 properties that were incorrectly included as part of the authority. The properties in question were located outside of the boundaries of Colorado Springs, in unincorporated El Paso County.

“That is totally, totally loss of due diligence. You mean to tell me that everyone who saw that, who voted on it, who reviewed it, didn’t realize that 17 properties were not part of the city?” said Councilmember Roland Rainey, who voted against the removals.

Rainey also questioned why Colorado Springs needed to take the unusual step of running two downtown development authorities at the same time. No other city in Colorado had DDAs covering two separate sections of the city.

Lloyd said the properties were manually listed by the organizers of the authority based on county assessor data. When the assessor’s office notified Spencer Fane and the DDA about the issue, they passed it along to the city planning department to let them know.

As for the benefit of having two authorities, Lloyd and Daniell said that it was historically justified. Colorado Springs and Old Colorado City were originally established as two separate towns and their core blocks still have very different designs and core goals.

“I hear that and think, aren’t we so special? We’re unique and let’s go with it,” Daniell said.

The City Council has the ability to dissolve the DDA as long as it doesn’t have outstanding debts or financial obligations. The authority does not have debts from the mill levies because they weren’t approved in the last election. Other sources of revenue, such as the tax-increment financing that was approved, cannot be spent until there is an approved plan of development.

The tax-increment financing piece became another issue for the authority in recent weeks. El Paso County had begun collecting the tax revenue that falls under TIF in 2025 and asked the DDA board earlier this year how they’d like to receive it. The question surprised the board and the city, since the financing should not have been collected without a development plan.

El Paso County Treasurer Chuck Broerman said the roughly $100,000 collected for the authority would be refunded to the other governments that overlap with the DDA during the monthly disbursement in August.

The questions about the financing added to the concerns Williams had about the authority. Another issue she discovered was that it was unclear how the authority could go back to voters to ask for the mill levies a second time. Williams said she received conflicting information about whether the authority’s board could propose that or if it would need council approval.

“Whenever you start trying to check on something with the DDA, there are more questions than answers,” Williams said.