Boulder's Diagonal Plaza shopping center, which has long struggled to attract and maintain retail tenants, could be a major beneficiary of a new development incentive program.
The 24-acre shopping center at 28th Street and Iris Avenue — home to a half-vacant indoor mall flanked by a shuttered Walmart Neighborhood Market, a vacant Sports Authority, a Department of Motor Vehicles location, a 24 Hour Fitness gym, and several other shops and restaurants — falls within an area of the city nominated to become an "opportunity zone" by the Colorado Office of Economic and Development and International Trade. If established, this program would be the first of its kind for the city.
The opportunity zone program, established as part of the Tax Cuts and Jobs Act of 2017, aims to spur business investment by reducing or eliminating certain tax obligations in select U.S. Census Bureau-designated tracts.
Areas selected for the program must not exceed certain household income thresholds as measured against other local neighborhoods. They must also provide ample opportunity for development or redevelopment projects.
The Diagonal Plaza shopping center fits the bill, local economic development leaders involved in the nomination process say.
"There have been a number of efforts to re-envision that site over the years," Boulder Chamber president John Tayer said.
Despite those efforts, the property continues to languish.
"We thought carefully about what types of properties would benefit from the (opportunity zone) designation and help us drive redevelopment," Tayer said. " ... We look at (the Diagonal Plaza) site as a great opportunity to address a full spectrum of workforce housing, as well as business and retail."
Boulder Economic Council director Clif Harald agreed.
The program "is designed to create tax benefits and incentives to (encourage) strategic investments in these zones," he said, and Diagonal Plaza, built in 1965 and expanded in 1995, is "well-positioned for new development or redevelopment."
The shopping center — which county records show is owned by five separate companies — is in the corner of a census tract that includes a swath of north and eastern portions of the city from the intersection of Arapahoe Avenue and 28th Street to the corner of Independence and Airport roads.
Boulder resident Jorge Ivan said Tuesday on his way into the DMV that the center could use a redo.
"It seems like kind of a waste of so much space right now," he said.
Jeff Kraft, director of business funding and incentives for OEDIT, said the state made a significant effort "to talk to locals and get local input" to nominate opportunity zones which have viable redevelopment "projects that might just need some help getting started."
While Boulder has existing programs aimed at bolstering local business — the Downtown Boulder Business Improvement District, for example — the federally administered opportunity zone tax incentive program would be the first of its kind in the city, according to OEDIT business funding and incentives deputy director Sonya Guram.
The state has nominated 126 potential opportunity zone sites — including two in Longmont and one in Lafayette — to be reviewed and certified over the next 30 days by officials with the U.S. Treasury.
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