Matters Memo

City of Boulder City Council Agenda Item Meeting Date: May 28, 2026 Agenda Title Downtown Development Authority (DDA) Formation Analysis and Recommendations

Staff Contact   

Nuria Rivera-Vandermyde, City Manager Mark Woulf, Assistant City Manager Reegan Brown, Economic Development Strategy Manager, City Manager’s Office

Executive Summary The purpose of this item is to provide City Council with an updated and more comprehensive analysis of the proposed formation of a DDA, including a first draft Plan of Development (Attachment A) and refined staff recommendations related to funding strategy, governance, the future of the city’s General Improvement Districts (GIDs), and next steps toward potential implementation. This memo builds on the March 12, 2026 council discussion, where staff introduced the DDA as a potential long-term governance and financing tool to support coordinated reinvestment in Boulder’s central business district. At that time, staff outlined the role of tax increment financing (TIF), presented preliminary analysis, and identified key policy considerations related to funding structure, governance, and impacts to existing GIDs. Council provided general direction to continue refining these concepts, with particular interest in governance structure, financial capacity, and implications for current district assets and taxpayers.

Since that discussion, staff has completed additional legal and financial analysis, prepared a draft Plan of Development, refined proposed DDA boundaries (Attachment B), and further evaluated how GID assets and responsibilities could transition if a DDA is approved by qualified electors. The analysis presented in this memo is intended to help council evaluate whether a DDA would provide the governance structure and financial capacity needed to implement long-term reinvestment priorities identified in prior plans and community engagement efforts. Since September 2025, staff has conducted sustained engagement with property owners, business owners, community organizations, institutional partners, and other stakeholders within the proposed district area. This work has included monthly meetings with Planning and Technical Working Groups, targeted stakeholder outreach, public information sessions, and coordination with Community Connectors in Residence (CCin-R), the Downtown Boulder Partnership, the Boulder Chamber, and other community partners. Feedback received through this process informed refinement of district boundaries, governance concepts, funding strategies, and the draft Plan of Development. The memo focuses on a central policy question: whether Boulder’s current governance and funding structure is sufficient to deliver the scale and pace of reinvestment needed to respond to changing economic conditions, aging infrastructure, and evolving expectations for Boulder’s central business district. Staff evaluated two primary funding scenarios. Both scenarios include property tax TIF, sales tax TIF, and a voter-approved mill levy. The primary distinction between the scenarios is whether parking revenues and assets are incorporated into the DDA structure. Based on this analysis, staff recommends a funding and governance structure that includes property tax TIF, sales tax TIF, a voter-approved mill levy structured to replace existing GID mill levies, and partial or full incorporation of parking system revenues and assets through a phased transition process. This approach provides substantially greater implementation capacity, stronger long-term redevelopment leverage, and a more diversified funding structure capable of supporting coordinated district-wide reinvestment over time. Attachment C provides additional details about the projected DDA financials based on the Plan of Development and proposed financial structure. Council feedback at this stage will inform final direction, development of intergovernmental agreements, and potential ballot measures for the November 2026 election.

Questions for Council 1. Does council have feedback on the draft Plan of Development? 2. Does council support the staff recommendation for the DDA financial structure, including next steps related to transition and governance items? 3. Does council support staff drafting and bringing forward for consideration ballot measures for the 2026 November election related to the DDA?

Alignment with City Plans and City Council History Sustainability, Equity and Resilience (SER) Framework and Citywide Strategic Plan Alignment Forming a DDA advances the SER Framework and the 2024–2026 Citywide Strategic Plan by creating a dedicated, long-term funding and governance tool to support the economic vitality, infrastructure, and adaptability of the city’s central business area. SER Framework Goal Area The DDA supports the SER Framework by helping align long term investment with Boulder’s values of environmental sustainability, social equity, economic vitality, and responsible governance. The draft Plan of Development emphasizes public spaces that are welcoming and accessible, transportation improvements that make it easier and safer to move between destinations, support for local and small businesses, and reinvestment in existing infrastructure. Citywide Strategic Plan The DDA advances the Citywide Strategic Plan by supporting a more livable, accessible, connected, environmentally sustainable, and economically vital city. The proposed authority would create a mechanism to fund and coordinate improvements that support high quality public spaces, multimodal transportation, commercial district vitality, housing supportive infrastructure, and reinvestment in existing developed areas.

Alignment with Additional City Plans The DDA formation effort is also consistent with the goals and implementation strategies identified in the following adopted plans and studies: • • • • • •

Sustainability, Equity, and Resilience Framework Boulder Citywide Strategic Plan (2024-2026) Boulder Valley Comprehensive Plan (including the 2026 update) Boulder Improvement District Analysis (2025) Downtown Boulder Vision Plan (2023) City of Boulder Transportation Master Plan (2019)

• • • • • • • • •

City of Boulder Racial Equity Plan (2021) Boulder Parks & Recreation Master Plan (2022) Civic Area Master Plan (2015) Civic Area Phase II (2026) Downtown Urban Design Guidelines (updated 2016) Downtown Boulder Retail/Vibrancy Study (2018) Core Arterial Network University Hill Alley Enhancement Plan (2018) ULI TAP Final Report (2023)

City Council History City Council has received several updates on the DDA formation analysis over the past year, including discussion of the 2025 Improvement District Analysis, economic development financing tools, and the potential role of a DDA in supporting long term reinvestment in Boulder’s central business district. On March 12, 2026, staff presented council with an update on the DDA formation analysis and initial recommendations. The memo outlined the purpose of a DDA, why we are exploring this tool for Boulder’s downtown area, the relationship between a DDA and TIF, preliminary Plan of Development themes, potential funding strategies, governance options, and implications for the city’s existing GIDs. Council was not asked to approve a final structure at that time. Instead, staff sought direction on whether to continue refining a coordinated funding strategy, a standalone governance model, and potential approaches to GID asset ownership and transition. Council generally supported continued analysis of the DDA as a long-term governance and financing tool, with particular interest in understanding governance structures, implications for existing GID assets and taxpayers, and the structure of any future revenue sharing agreements. Since that meeting, staff has focused on responding to those areas of interest by advancing the draft Plan of Development, more thoroughly evaluating options for GID transition, and continuing financial and legal analysis. This update is intended to bring council back from initial policy direction to a more complete set of recommendations before potential consideration of ballot referral actions.

Analysis The city’s existing commercial districts, specifically CAGID and UHGID, were established more than 50 years ago to support shared parking, infrastructure, and maintenance within Boulder’s central commercial areas. While those districts have successfully fulfilled their original purpose, the economic and physical context of downtown and University Hill has changed significantly over time.

Over the past several years, the city has experienced increasing economic and operational challenges within its central business district, including changing retail dynamics, office market conditions, aging infrastructure, growing expectations for public space and maintenance, and the need for more coordinated long-term investment and district stewardship. In response, staff has been evaluating a DDA as a tool to provide more effective governance and financing to support reinvestment, revitalization, and implementation of long-standing community priorities. To guide this work, the city convened a community-rooted Planning Group representing downtown, University Hill, property owners, businesses, and community partners. The group has provided ongoing input related to governance, funding, district boundaries, and Plan of Development priorities while emphasizing the importance of building from prior plans and community engagement rather than creating an entirely new vision for Boulder’s core. The work informed the draft Plan of Development, which organizes existing community priorities into a coordinated reinvestment framework. The primary challenge facing Boulder’s core is not a lack of ideas or direction, but a gap in implementation capacity. While the city and its partners have successfully delivered important projects over time, the current governance and funding structure does not provide the sustained, scalable, and coordinated approach needed to address aging infrastructure, evolving market conditions, and increasing expectations for the public realm. A key consideration shaping this analysis is the built-out nature of Boulder’s central business district. While TIF can provide a meaningful long-term reinvestment tool, the district’s relative maturity constrains the pace at which new taxable growth — and therefore new TIF revenue — can reasonably be expected to materialize, particularly during the DDA’s early years. Accordingly, the central policy question evaluated through this analysis is not whether Boulder has identified reinvestment priorities for its core districts, but rather what governance and funding structure provides sufficient long-term implementation capacity to advance those priorities at a meaningful scale. As a result, staff evaluated not only the DDA’s potential revenue streams, but also how differing governance structures would affect the authority’s implementation capacity, redevelopment leverage, and long-term financial flexibility. Under one approach, the DDA would function primarily as a traditional TIF and mill levy entity focused on district improvements and economic vitality initiatives. Under a second approach, the DDA would also assume authority over certain GID parking assets and related infrastructure through a phased transition process, allowing the DDA to integrate redevelopment,

parking, mobility, and public investment strategies into a more coordinated district-wide framework. This distinction is central to staff’s recommendation and informs the range of investment and implementation strategies reflected in the draft Plan of Development. Draft Plan of Development As required and defined in state statute, the Plan of Development is the guiding policy document for the DDA. The Plan provides a menu of options for investment that the DDA may consider over its initial 30-year life. The Plan can also be amended as the central business district evolves. The attached (Attachment A) first draft Plan of Development establishes a coordinated policy and investment framework for reinvestment across Boulder’s core, including Downtown, University Hill, the Civic Area, and the corridors that connect them. The Plan translates long-standing community priorities into implementation strategies focused on redevelopment, commercial vitality, public realm improvements, multimodal connectivity, mixed-use activity, and long-term district stewardship. The scale and complexity of projects the DDA could undertake would vary depending on the authority’s governance and funding structure. Specific projects, partnerships, and implementation priorities would ultimately be determined through future annual work plans, budgets, board decisions, and City Council oversight processes. The Plan is not considered final until a DDA Board and City Council approves it after a DDA is created. i.

Catalyze Redevelopment at Strategic Sites

The DDA could support feasibility analysis, pre-development coordination, participation agreements tied to future increment generation, and targeted redevelopment partnerships intended to improve redevelopment readiness over time. Potential opportunities include sites associated with the 14th Street lot, East Bookend-related redevelopment, adaptive reuse efforts, publicly controlled parking-adjacent sites, and other underutilized commercial properties where coordinated infrastructure, parking, or public-private partnership strategies may improve redevelopment feasibility. ii.

Strengthen Commercial Corridors & Support Business Investment

The DDA could support programs intended to strengthen commercial vitality, reduce vacancy, and improve business conditions throughout the district. Potential investments could include storefront improvement grants, facade upgrades, tenant improvement assistance, temporary activation of vacant spaces, multilingual business support

services, targeted technical assistance for small and independent businesses, coordinated streetscape improvements, district branding and activation strategies, adaptive reuse partnerships, and commercial revitalization initiatives aligned with broader economic development objectives. iii.

Grow Mixed-Use Development and Amenities Throughout the Core

The Plan of Development prioritizes a broader mix of uses and amenities intended to strengthen year-round activity, economic resilience, and district livability. Potential investments and partnerships could support additional housing, neighborhood-serving retail, childcare, hospitality, grocery access, entertainment, and other district-serving uses intended to strengthen the long-term vitality and economic resilience of Boulder’s central business district. iv.

Partner with the City on Signature Public Spaces

The DDA could serve as an implementation and funding partner on public realm improvements and civic investments throughout the district. Potential investments may include landscaping and greening projects, lighting improvements, alley activation efforts, public art, seasonal programming, seating and shade enhancements, targeted maintenance improvements, Pearl Street Mall reinvestment, Civic Area improvements, coordinated streetscape enhancements, creek-adjacent public realm investments, and district-wide placemaking initiatives intended to strengthen Boulder’s identity, visitor experience, and economic competitiveness over time. v.

Invest in a Connected, Accessible District

Improving connectivity, accessibility, and multimodal movement throughout the district is a central focus of the Plan of Development. Potential investments may include pedestrian and bicycle improvements, wayfinding enhancements, lighting and safety upgrades, mobility coordination efforts, parking management strategies, corridor improvements, and multimodal infrastructure investments intended to strengthen connectivity between Downtown, University Hill, the Civic Area, and surrounding neighborhoods. Financial Framework and Key Assumptions The financial analysis evaluates the relationship between the DDA’s projected revenue structure and its long-term implementation capacity. Because Boulder’s central business district is largely built out, TIF revenues are projected to accumulate gradually over time rather than generating substantial revenues immediately upon formation. As a result, the analysis focuses not only on the magnitude of projected revenues, but also

on how differing governance and funding structures influence the DDA’s ability to deliver projects, leverage redevelopment partnerships, and sustain long-term reinvestment activity. A few factors emerge as critical to bridging the gap between the DDA’s early revenue constraints and its implementation goals: establishing an adequate mill levy to support operations, ensuring flexibility over TIF revenue collections during the DDA’s early years, and incorporating strategic control of GID-held assets in a manner that enables the DDA to use those assets as tools for achieving Plan of Development goals. The analysis that follows is intended to help council understand the proposed funding approach to the DDA, the pace at which projects could realistically be delivered, and the limitations associated with the DDA’s early-year revenue picture. Key Assumptions: i. Base Year TIF The analysis assumes final formation of the DDA and adoption of the Plan of Development would occur in spring 2027. Under that assumption, the applicable base period for TIF purposes would generally reflect tax collections and assessed values from the preceding twelve-month period, inclusive of portions of 2026 and early 2027. A base year for tax collections within the DDA is typically established for both property taxes (based upon the assessor’s last property valuation certification year) and sales tax (based upon sales tax collections in the twelve-month period immediately preceding approval of the DDA’s Plan of Development). For example, if the Plan of Development were approved in April 2027, the property tax base year would be 2026 and the sales tax base period would be April 2026 through March 2027. Future growth above those established base year revenues would be available for tax increment financing purposes. ii. Property Tax TIF Availability PUMA created financial projections and determined approximately 50% of future increases in property value are assumed to be attributable to new investment and available to the DDA, while the remaining 50% reflects natural appreciation and continues to flow to existing taxing entities. This reflects both the built-out nature of the district and anticipated revenue sharing agreements. iii. Sales Tax TIF Structure Sales tax TIF is based on growth within the proposed DDA boundary and only impacts the City of Boulder’s portion of sales tax revenues above the base year. A potential revenue sharing option with the city is also being explored that balances DDA flexibility and mitigating city impact in the long-term. iv. Growth Assumption

Property and sales tax revenues are assumed to grow at approximately 1% annually, reflecting a realistic, but cautious growth projection based on recent trends in the proposed DDA boundary. v. Mill Levy A mill levy is necessary to provide a stable annual revenue source and while resulting in no net new property tax burden for CAGID property owners and a modest increase for UHGID property owners (projected at 3.674 mills, replacing the existing GID mill levies). vi. Bonding The DDA’s bonding capacity will be shaped by the scale and reliability of its revenue streams over time. With the TIF revenues growing incrementally, the DDA’s capacity to issue bonds will develop over time rather than being available from the outset.

DDA Revenue Analysis The most important thing to understand about TIF as a funding mechanism is that it is not immediately available at scale. TIF revenues are generated only from growth above the base year, and in a largely built-out district like Boulder’s core, that growth accumulates gradually over time. The following projections illustrate the pace at which property and sales tax increment revenues are anticipated to mature under the evaluated growth scenarios. While TIF becomes a substantial long-term reinvestment tool over the life of the DDA, early-year revenues remain comparatively modest relative to the scale of investment envisioned in the draft Plan of Development. Aggregate TIF Projections — 1% Growth Scenario Period Year 1

Real Property Tax $144,000

Personal Property Tax $5,400

Sales Tax TIF $147,000

Total Annual TIF $296,400

Year 5

$745,000

$28,000

$755,000

$1,528,000

Year 10

$1,510,000

$57,000

$1,450,000

$3,017,000

Year 20

$3,180,000

$120,000

$2,790,000

$6,090,000

Year 30

$5,020,000

$190,000

$4,410,000

$9,620,000

Total — 30 Years

$74,000,000

$2,800,000

$66,000,000

$142,800,000

Source: PUMA Preliminary Projections, March 2026.

Over 30 years, the cumulative TIF projection reaches nearly $143 million — a substantial pool of reinvestment capital that justifies the DDA structure. But the path to that long-term capacity runs through an early period of constrained revenue, and how the DDA is structured to manage that constraint will determine whether it becomes an effective implementation tool for redevelopment and other larger initiatives within the Plan of Development. The mill levy addresses part of this early-year gap. At the CAGID rate (3.674 mills) applied across the full DDA study area, the mill levy generates approximately $1.8 million annually from the outset — a stable, predictable base that can support DDA operations, programming, and early implementation without dependence on TIF growth. However, Colorado DDAs cannot pledge mill levy revenue for bonds, therefore, the mill levy only supports pay-as-you-go expenditures for operations. The DDA Projected Revenue and Implementation Capacity (Attachment C) provides an illustrative six-year implementation framework intended to demonstrate how the proposed DDA revenue structure could translate into operational capacity, district programming, redevelopment support, and long-term reinvestment activity over time. While all expenditures would ultimately be subject to future board-approved budgets, intergovernmental agreements, and annual work planning processes, the framework helps illustrate the scale and pacing of activities the proposed funding structure could realistically support during the DDA’s formative years. The framework demonstrates that the proposed mill levy would function primarily as the DDA’s stable operational funding source during the authority’s early years, supporting organizational capacity, district programming, supplemental maintenance, business assistance programs, and ongoing implementation activities aligned with the draft Plan of Development. TIF revenues, by comparison, are shown supporting progressively larger redevelopment, capital investment, and public-private partnership activities as increment revenues mature over time. Under the more conservative, 1% growth scenario for sales tax TIF, implementation activities remain more targeted and incremental, while the most recent city projected growth (based on the March CU revenue model) sales tax TIF scenario expands the DDA’s ability to participate in larger district-wide reinvestment initiatives. The framework also illustrates the operational scale of the existing parking system and the role parking assets could play within the broader DDA structure. Parking-related revenues associated with CAGID and UHGID are projected to generate approximately $44 million over the first six years and remain dedicated primarily to parking operations, maintenance, and lifecycle reinvestment needs. However, the analysis also demonstrates that parking assets may periodically generate additional implementation flexibility beyond core operational needs, creating opportunities for parking-related

redevelopment coordination, access improvements, mobility investments, and strategic repositioning of underutilized facilities over time. DDA Projected Revenue Sources (2027-2032) – Not Including GID Assets

Revenue source Mill levy (3.674 mills)

2027 $1.8M

2028 $1.9M

2029 $1.9M

2030 $2.0M

2031 $2.0M

2032 $2.1M

Total $11.7M

Property & personal property tax TIF (1% growth)

$149K

$301K

$454K

$612K

$768K

$928K

$3.2M

Sales tax TIF — low range (1% Growth Model)

$165K

$332K

$501K

$671K

$843K

$1.0M

$3.5M

Sales tax TIF — high range (based on March CU Model)

$539K

$1.2M

$1.7M

$2.2M

$2.7M

$3.1M

$11.5M

Total TIF — low range

$314K

$633K

$955K

$1.3M

$1.6M

$1.9M

$6.7M

Total TIF — high range

$688K

$1.5M

$2.2M

$2.8M

$3.5M

$4.0M

$14.7M

Total DDA revenue — low range (mill levy + TIF at 1% growth)

$2.1M

$2.5M

$2.9M

$3.3M

$3.6M

$4.0M

$18.4M

Total DDA revenue — high range (mill levy + TIF at city projections)

$2.5M

$3.4M

$4.0M

$4.8M

$5.4M

$6.1M

$26.4M

Within the first several years of operation, the DDA could realistically support a combination of redevelopment feasibility efforts, targeted public realm improvements, business assistance programs, activation and maintenance initiatives, and coinvestment partnerships with the city and private property owners. Potential activities could include storefront improvement grants, tenant improvement assistance, vacancy activation programs, pre-development studies on priority redevelopment sites, lighting and wayfinding improvements, alley activation projects, seasonal programming, public art, enhanced maintenance efforts, and supplemental funding contributions tied to cityled capital projects within the district. The analysis also demonstrates that TIF participation agreements may provide an important redevelopment tool even during the DDA’s early years. These agreements

allow the DDA to commit a portion of future tax increment generated by a project back toward that project as an incentive, improving project feasibility and supporting redevelopment activity without requiring the DDA to accumulate substantial revenues in advance. Parking & Asset Integration The GID off-street parking system currently operates as a structurally balanced, selfsupporting enterprise. Revenues — primarily from parking fees, supplemented by commercial leases and maintenance agreements — are sufficient to cover operating expenses, routine maintenance, and capital needs, including accumulating reserves for larger future capital investments. This financial stability is relevant to the integration question in an important way: the DDA is not being asked to absorb a financially distressed asset or to subsidize parking operations from district revenues. The parking system can sustain itself. What DDA governance adds is a strategic reorientation — ensuring that decisions about these assets are made in service of the district's broader reinvestment goals rather than in isolation from them. The question of whether to incorporate GID-held assets — including parking facilities in the Downtown Core and University Hill — into the DDA structure is best understood not as a question about revenue, but as a question about strategic control. Parking revenues generated by CAGID and UHGID off-street parking facilities must continue to support the operations, maintenance, and capital reinvestment needs of the parking system itself. The parking system is designed to be self-sustaining, and that principle carries forward under DDA governance. The discussion with the Planning Group has centered around the premise that a DDA with authority over the GID's real estate portfolio gains a set of tools for achieving Plan of Development goals that would not be available to a DDA operating without those assets. How those assets are managed, positioned, and over time potentially repositioned will have direct consequences for the district's economic development trajectory regardless of whether a DDA exists. The question is whether those consequential decisions are made by an entity whose mandate is district-wide reinvestment, or by entities whose original mandate was parking provision alone. GID Assets as Redevelopment Levers A DDA with authority over the GID asset portfolio can deploy those assets as active tools for achieving the Plan of Development. Specifically, DDA control enables the following supportive additional functions beyond those outlined above:

•

Structure redevelopment incentives around shared off-street parking supply. Redevelopment feasibility across the district is frequently constrained by the cost of providing structured parking as part of new mixed-use development. A DDA with control over shared parking facilities can negotiate arrangements with developers that reduce or offset project-level parking requirements — improving the economics of priority development sites without requiring the DDA to commit TIF or mill levy revenues.

•

Use parking assets to catalyze redevelopment on adjacent opportunity sites. Several of the priority redevelopment sites identified in the Plan of Development — including the 14th Street Lot on University Hill and the Civic Area and East Bookend sites — are directly adjacent to or functionally linked to GID-controlled parking facilities. DDA control over those facilities enables coordinated decision-making about parking supply, access, and potential joint development that would be difficult to achieve through separate management structures.

•

Evaluate and execute strategic repositioning of aging facilities. Several of the district's parking structures were built decades ago and will require substantial capital reinvestment over the DDA's planning horizon. Each reinvestment decision point is also a repositioning opportunity. DDA authority over these assets allows the board to evaluate whether a given facility is best maintained as parking, partially converted, redeveloped through a joint-venture partnership, or sold in a manner that advances Plan of Development goals — with proceeds and terms structured to support district reinvestment priorities.

•

Partnership with city on off-street parking supply, pricing, and access with district economic development goals. Parking availability, pricing strategy, and wayfinding directly influence where people spend time and money and how development feasibility on adjacent sites pencils out. Managing these variables as part of a broader district strategy — rather than as a standalone operational function — enables the DDA to use parking policy as an active tool for commercial vitality and development incentivization.

Governance and Intergovernmental Framework Establishment of a DDA would require a governance and operational framework that clearly defines how revenues, assets, responsibilities, and decision-making authority are coordinated between the city and the DDA over time. While the DDA would operate as a separate legal authority under state statute, the city would retain an ongoing

oversight and coordination role through annual budget approval, intergovernmental agreements, board appointments, and long-term implementation coordination. Staff anticipates that formation of the DDA would require one or more intergovernmental agreements between the city, the DDA, and other affected taxing entities. These agreements would establish the framework for revenue coordination, financial oversight, governance, operational responsibilities, parking and asset management, and long-term implementation of the Plan of Development. Because of the scale and complexity of the proposed transition, staff anticipates a phased implementation approach intended to maintain operational continuity, financial stability, and clear delineation of responsibilities during the DDA’s initial years. i. Revenue Sharing & Sales and Use Tax TIF Considerations A central policy consideration associated with DDA formation is how sales and use tax increment revenues would be coordinated between the city and the DDA over time. While property tax increment provides an important long-term funding source, sales and use tax increment is expected to represent the DDA’s most flexible and scalable earlyyear revenue stream and therefore plays a significant role in determining the authority’s near-term implementation capacity. Under Colorado statute, sales and use tax increment generated above the established base year within the DDA boundary may be retained by the authority to support implementation of the Plan of Development. Staff analysis evaluated two primary sales tax growth scenarios to better understand the range of potential outcomes and the implications for future revenue-sharing discussions. The first scenario applies the city’s current sales tax growth projections to the proposed DDA area. Under this scenario, annual sales and use tax TIF revenues are projected to grow from approximately $539,000 in 2027 to approximately $3.1 million annually by 2032, generating roughly $11.5 million cumulatively during the first six years of operations. The second scenario is based on PUMA’s original annual growth projection of 1% for the DDA. The annual sales tax TIF revenues grow from approximately $165,000 in 2027 to approximately $1.0 million annually by 2032, generating approximately $3.5 million cumulatively over the same period. This range illustrates both the long-term potential of sales tax increment as a reinvestment tool and the uncertainty associated with forecasting future growth within a mature and evolving commercial district. Importantly, the city’s broader sales tax projections are generated at a citywide level and are not currently disaggregated by geographic sales tax areas or district-specific

economic conditions. While the proposed DDA boundary generated roughly 9.3% of total city sales and use tax generation between 2019 - 2024, historical performance within the downtown area has not always mirrored broader citywide trends. During the COVID-19 pandemic and subsequent recovery period, the downtown commercial core generally experienced greater economic disruption and slower recovery than several other areas of the city, reflecting the district’s concentration of office, retail, restaurant, and visitor-oriented activity. As a result, staff believes it is important to approach longrange sales tax projections with appropriate caution and to recognize that future district performance may differ from broader citywide assumptions. Because of this uncertainty, staff is evaluating multiple approaches to future revenue coordination between the city and the DDA. One approach would prioritize allowing the DDA to retain a larger share of sales tax increment revenues during its initial years of operation in order to maximize implementation flexibility, strengthen early organizational capacity, and support the authority’s ability to undertake catalytic investments and establish bonding capacity. This approach would provide the DDA greater near-term financial flexibility and may improve its ability to accelerate redevelopment partnerships, public realm investments, and district-wide revitalization efforts during the period when TIF growth is still maturing. An alternative approach would establish earlier or more structured revenue-sharing provisions with the city. This approach would provide the city greater long-term fiscal flexibility and predictability by allowing a portion of future sales tax growth within the district to continue supporting broader municipal service obligations and citywide financial priorities. However, earlier revenue sharing could also constrain the DDA’s early implementation capacity and reduce its ability to leverage sales tax increment revenues into larger capital or redevelopment investments during its formative years. At this stage, staff does not recommend establishing a final revenue-sharing formula prior to additional financial analysis and intergovernmental negotiations. Instead, staff recommends the development of a draft intergovernmental framework that evaluates multiple revenue-sharing structures and their respective fiscal implications for both the city and the DDA. Staff anticipates returning to council in August with a more refined draft intergovernmental framework and preliminary revenue-sharing concepts for consideration alongside potential ballot referral actions. Final revenue-sharing terms would be established through subsequent intergovernmental agreements negotiated between the city and the DDA following formation approval and are not established through DDA formation alone. ii. Parking & Asset Coordination

The intergovernmental framework would also address transition of GID assets and operational responsibilities. Given the complexity of these transitions, staff anticipates a phased implementation period intended to maintain continuity of operations, financial stability, and clarity regarding ongoing responsibilities between the city and the DDA. Parking functions not only as an operational system, but also as a strategic mobility and economic development asset. As such, future agreements would likely clarify responsibilities related to off-street parking management, rate setting, revenue allocation, capital reinvestment, maintenance standards, and long-term mobility coordination. Staff anticipates that parking revenues generated by existing GID facilities would continue to support parking system operations and reinvestment needs, while allowing the DDA to integrate parking and redevelopment strategies into a more coordinated district-wide framework. At the same time, incorporation of GID assets into the DDA framework raises important long-term governance and operational considerations that would require careful evaluation through future intergovernmental agreements. Unlike a DDA, which is authorized for a finite statutory duration, the existing GID structures function on an ongoing basis and were originally established specifically to own, operate, and maintain district parking infrastructure in perpetuity. As a result, any future transition framework would need to address long-term stewardship responsibilities, asset lifecycle obligations, and continuity of parking system operations beyond the DDA’s statutory time horizon. While integrating parking assets into the DDA structure may provide stronger alignment between parking management, redevelopment, and economic vitality goals, staff recognizes the importance of maintaining long-term public accountability and ensuring that parking system decisions continue to support broader community access, mobility, and fiscal sustainability objectives over time. iii. Governance & Oversight The governance framework would also establish processes related to annual budgeting, financial reporting, transparency measures, amendment procedures, and long-term coordination between the city and the DDA. Although the DDA would operate independently under state statute, the authority’s annual budget would remain subject to City Council review and approval, providing an ongoing mechanism for financial oversight and evaluation of district performance over time. As currently contemplated, the Planning Group would serve in an advisory capacity in recommending candidates for the initial DDA Board, with formal appointments made by City Council. State statute requires a majority of board members to be property owners,

residents, business owners, or business operators within the district, and also requires appointment of one City Council member to the Board. This approach is intended to ensure representation of district stakeholders while maintaining council authority over final appointments and broader policy oversight. Staff anticipates continuing refinement of the governance and intergovernmental framework throughout summer 2026, with additional analysis and draft agreement concepts returning to council in August alongside potential ballot referral considerations. While the DDA would operate as a separate legal authority under state statute, the city would retain several important oversight and coordination responsibilities. The following matrix summarizes the anticipated division of responsibilities between City Council and the DDA Board under the proposed framework. iv. Governance & Accountability Matrix Topic

Board appointments

Annual budget approval Plan of Development implementation Revenue-sharing agreements Capital project prioritization

City Council Final approval authority with City Council representation on board Approves annual budget Policy coordination Negotiates and approves Coordination role

DDA Board

Advisory recommendations

Prepares proposed budget Day-to-day implementation Negotiates and approves Primary implementation role

Anticipated Fiscal and Workplan Impacts Formation of a DDA would have a direct, near-term fiscal impact on city sales and use tax revenues. The DDA captures growth in sales tax above the base year across the full city sales and use tax rate of 3.86%, which flows across all sales-tax-supported funds — the General Fund, Open Space, Transportation, Parks and Recreation, Arts, Culture, and Heritage, and Community, Culture, Resilience, and Safety in proportion to their respective rates. In Year 1, the sales tax TIF impact ranges from approximately $165,000 (conservative 1% growth scenario) to $539,000 (city projection growth

scenario) across all funds. By Year 6, that annual impact grows to between $1.0 million and $3.1 million, with a six-year cumulative range of approximately $3.5 million to $11.5 million (see Attachment C for full projections by fund). The General Fund, which receives approximately 44% of total city sales tax revenue, would bear the largest proportional share of that impact — roughly $73,000 to $239,000 in Year 1, growing to $451,000 to $1.4 million annually by Year 6. This variability is consequential for budget planning across sales-tax-supported funds and will need to be reflected in annual budget forecasts beginning with the 2027 budget, if the DDA is advanced and approved. Property tax TIF represents a comparatively modest city-specific impact: the City of Boulder receives approximately 20% of eligible property tax TIF mills, with the majority stemming from BVSD, Boulder County, and the Library District. The city's share of annual property TIF grows from approximately $30,000 in Year 1 to $185,000 by Year 6 — a smaller but cumulative reduction in property tax growth that would otherwise have flowed to the city's general property tax accounts. Two factors have the potential to offset these near-term fiscal impacts, though neither is fully quantifiable at this stage. First, to the extent the DDA funds improvements and services that address underfunded or unfunded needs currently within the city's responsibility — district-level infrastructure reinvestment, enhanced maintenance and activation of public spaces, co-investment in corridor and mobility improvements — the city's effective liability for those expenditures is reduced. The DDA's supplemental service model is explicitly designed to fund above the city's baseline service level rather than replace city obligations, but the practical effect is that district-serving investments the city would otherwise need to prioritize and fund are instead supported by DDA revenues. The dollar value of this offset will depend on the scope and sequencing of DDA programming established through the IGA, but it represents a meaningful factor in assessing the DDA's net fiscal impact on the city over time. Second, and more significantly over the long term, successful DDA investment should generate economic activity above and beyond what current city projections reflect. New development, commercial revitalization, increased district activity, and higher property values produce additional sales and property tax growth — of which the city captures its proportional share on the natural appreciation portion (the 50% of property value growth not allocated to TIF), as well as the full benefit of any growth above the DDA's TIF base in sales tax-supported funds once a revenue sharing arrangement is established. If the DDA achieves its reinvestment goals, the longer-term trajectory of city revenues within the district should exceed what current projections assume in the absence of coordinated intervention.

In aggregate, the DDA creates a near-term fiscal planning requirement — particularly for sales-tax-supported funds that will need to model a range of TIF capture outcomes in their multi-year forecasts — alongside a set of mitigating factors that are real but not yet fully quantified. Council should expect updated fiscal analysis as part of the IGA framework and ballot measure materials presented later this year. From a workplan perspective, advancing DDA formation will require significant nearterm staff capacity related to legal drafting, financial modeling, intergovernmental coordination, ballot preparation, Plan of Development refinement, community engagement, and implementation planning. This work is currently anticipated and budgeted.

Equity Analysis While the proposed district boundary is geographically limited, the authority’s governance structure, funding priorities, and program design present meaningful opportunities to advance equity through intentional decision-making. Key considerations include inclusive board recruitment, reducing barriers to participation, multilingual outreach and materials, support for small and independent businesses, culturally responsive placemaking, accessibility improvements, and investments that make public spaces safer and more welcoming for all. The draft Plan of Development incorporates several strategies with equity implications. These include creating public spaces that serve a broad range of users; supporting local and independent businesses; providing technical assistance to small businesses navigating property improvements or potential relocation; offering outreach materials and application support in multiple languages; and establishing board and committee practices that expand participation across languages, cultures, ages, and abilities. The DDA also has the potential to advance equitable economic opportunity by directing resources toward older commercial spaces, underutilized storefronts, and small businesses that face barriers to reinvestment. Programs such as storefront improvement grants, tenant improvement support, vacancy activation efforts, business navigation assistance, and targeted recruitment of neighborhood-serving businesses can help ensure that reinvestment benefits a diverse range of businesses and community members. To date, staff has incorporated equity considerations into both process and decisionmaking. This has included use of the city’s Racial Equity Instrument (REI) to evaluate potential impacts and inform strategy development. Staff has also engaged with CC-inR to gather input and refine approaches, including a dedicated feedback session on May 8th. CC-in-R feedback has helped staff further define what inclusive investment looks like in practice by elevating community priorities that may not emerge through

traditional engagement, identifying who may benefit or be left out of proposed investments, and highlighting potential barriers or displacement concerns. In addition, a Downtown Community Connector has participated directly in the Planning Group, providing ongoing input to help ensure that community perspectives, particularly from historically underrepresented groups, are reflected throughout the process.

Climate, Resilience, and Sustainability Considerations Formation of a DDA is primarily a governance and financing action. It does not directly approve specific capital projects or create immediate physical impacts. However, the authority could enable future investments that advance Boulder’s climate, resilience, and sustainability goals. The draft Plan of Development emphasizes climate responsive public spaces, multimodal access, reinvestment in existing infrastructure, water wise landscaping, shade, seating, improved pedestrian and bicycle connections, and support for compact mixed-use development. These types of investments can support mode shift, reduce pressure for outward growth, improve comfort during hotter periods, and strengthen the resilience of public spaces and infrastructure. Future DDA projects would be evaluated individually for climate, sustainability, and resilience impacts. The Plan of Development would provide the guiding framework, but specific projects would continue to require appropriate review, budgeting, and public process. Reinvestment in Boulder’s central business district also offers the opportunity to expand workplace and living options that do not rely on vehicle ownership and optimize energy use on a day-to-day basis. In addition, existing infrastructure is utilized to promote growth, strengthening the community-wide benefits of Boulder’s vibrant urban core.

Community Engagement The DDA formation process has been intentionally community-informed and builds on prior planning and engagement efforts rather than starting from scratch. Staff and the Planning Group have recognized that downtown, University Hill, the Civic Area, and surrounding areas have been the focus of extensive outreach over time. As a result, the engagement approach has prioritized targeted, high-value touchpoints that fill gaps, elevate underrepresented perspectives, and provide transparency about the specific implications of DDA formation. Since September, staff has conducted sustained and iterative engagement to inform the proposal. This has included monthly meetings with both the Planning Working Group (6

meetings) and the Technical Working Group (6 meetings), as well as dozens of additional small-group and one-on-one working sessions. These conversations have allowed for detailed feedback, issue refinement, and ongoing collaboration throughout the formation process. The Planning Group has played a central role in shaping the proposal. The group includes property owners, business owners, civic and institutional partners, and community representatives with direct relationships to the proposed district. Through this forum, members have helped test assumptions, refine priorities, review boundary considerations, explore funding and governance options, and shape the draft Plan of Development. Targeted stakeholder engagement has complemented this work and included coordination with key partners such as the Chamber, the University of Colorado Boulder, the University Hill Neighborhood Association, the Downtown Boulder Partnership (DBP), and relevant Boards and Commissions. In addition, staff has hosted public information sessions, conducted targeted outreach to directly affected stakeholders, and maintained regular updates through city communication channels. Engagement efforts have emphasized accessibility and transparency, including providing clear information about the DDA formation process and its potential implications. If council moves forward with referral of DDA formation to qualified electors, engagement will shift to a more education-focused phase. This will include clear, accessible information about the formation question, funding tools, administrative structure, and potential implications for property owners, businesses, residents, lessees, and other eligible voters within the proposed boundary, with continued attention to inclusive and equitable outreach.

Next Steps for City Council Council feedback on the proposed funding structure, administrative approach, draft Plan of Development, and transition framework will inform the next phase of work. If council supports moving forward, staff will continue refining the administrative and implementation framework, including preparation of draft ordinance language related to DDA formation and development of ballot measures and associated election materials for council consideration ahead of the November 2026 election. Below is an outline of the anticipated transition and implementation process associated with potential DDA formation.

Transition Plan: From CAGID/City Operations to DDA Control The following outlines a recommended sequence and timeline for transitioning parking assets, services, and governance from the city and CAGID to the DDA. Staff anticipates a 12–24 month managed transition, during which the city would retain a consultant to handle day-to-day DDA administration while the Board and internal working groups work through the substantive policy and operational questions. Anything labeled “Month 0” is work conducted prior to the November election. Transition Planning and Board Preparation (Month 0). The city's ongoing relationship with the Board runs through several formal channels: the city’s appointment authority, council's review of the annual budget, and compliance with an Intergovernmental Agreement. The intent is to preserve meaningful city oversight while giving the Board the operational independence needed to function effectively. The Mayor appoints, and council confirms, an initial board of between 5 and 11 members per state statute, with a majority required to be property owners or residents within the district, along with business owners or operators within the district. One City Council member is also appointed to the board. The Planning Group's preliminary recommendation is to identify the initial board members that would be brought forward for appointment prior to the November election. Establishing the board shortly after the election is important so it can take the formal actions required to organize the DDA, approve the Plan of Development, and negotiate an IGA with the city. Consultant Procurement & Working Group Launch (Month 0). Concurrent with Board formation, the city would issue an RFP for a management consultant to run DDA operations during the transition. The consultant would report to both the DDA Board and the city staff liaison. The city would also stand up an internal cross-departmental Working Group to work through five substantive issue areas: (1) maintenance and operations of the parking structures, including a condition assessment and full cost-ofservice model; (2) parking policy alignment — distinguishing decisions that stay with the city from those that can be delegated to the DDA; (3) redevelopment and investment coordination, including a protocol for how the DDA engages with the city when DDA assets are involved; (4) a complete inventory of services currently provided by the city or CAGID that would transition to the DDA, including any labor or contract constraints; and (5) prioritization of initial capital projects and services to help guide initial DDA board consideration. Intergovernmental Agreement Development (Month 0-Month 3). The IGA is the central governance document for the city-DDA relationship and should cover asset transfer terms and liability allocation, revenue and financial arrangements (including any revenue sharing back to the city), maintenance standards and any city services

provided under contract, the DDA's rate-setting authority and any council notification requirements, enforcement authority, capital project approval thresholds, annual reporting and audit rights, and dispute resolution. The city will draft an IGA to help establish expectations before the DDA Board would negotiate and consider such an agreement. Formalization of the DDA (Month 4). DDA Board approves the Plan of Development and IGA. Clock starts on sales tax TIF. Base year for property tax TIF is 2026. Can begin collecting property taxes and making operational expenditures. Asset & Service Transfer (Months 4+). Once the IGA is executed, staff executes the legal transfer of assets — deeds, contract assignments, account transitions — and formally winds down or places CAGID in dormancy. Public communication goes out to parking customers and district businesses. By Month 18, the DDA Board should make a decision on permanent staffing, either hiring an Executive Director or extending the consultant engagement. Steady State (Month 24+). The DDA pursues its first revenue bond issuance for priority capital projects, conducts its first comprehensive Plan of Development refresh at Year 3, and continues the annual IGA review and joint study session cadence with Council.

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Attachments Attachment A – First Draft Plan of Development Attachment B – Proposed DDA Boundaries Attachment C – DDA Projected Financial Details