ATTACHMENT D - Financial Projections Memo

REVISED | February 23, 2026 TO:

Reegan Brown, City of Boulder

FROM:Brad Segal, Amanda Kannard, Ethan Greene RE:

Preliminary Aggregate TIF Projections and Mill Levy Comparisons from a Boulder DDA

The City of Boulder is currently exploring the feasibility of establishing a Downtown Development Authority (DDA) to generate new public and private investment that will stabilize and improve economic conditions in Boulder’s central business district and adjacent commercial areas. One of the key investment tools offered by a DDA is tax increment financing (TIF). TIF allows a DDA to capture future increases in revenue generated within its boundaries from taxes on real property, personal property, and sales, and invest these revenues in a variety of improvements and enhanced services. This memo summarizes an initial analysis projecting the potential TIF that could be generated within the aggregate DDA study area. Data and calculations supporting this analysis have been prepared by subarea, allowing for adjustments as the DDA formation process proceeds and the study area further evolves. Key Assumptions: With a study area delineated, the P.U.M.A. team has been able to compile source data and generate initial projections for how much TIF could potentially be captured by the DDA. There are several key assumptions that guide our projections, including: •

Base Year: When forming a DDA, a base year is determined for capturing future tax revenue increases that can be allocated to TIF. The data sources used in this analysis are from 2024 and 2025, while the anticipated base year for a new DDA would likely be 2026.

•

Appreciation vs New Investment: For property, TIF is only generated from new investment within a DDA, not from natural appreciation of the base year values. Revenue increases from base appreciation will continue flowing to existing taxing authorities. Based on our experience with other Colorado DDAs, plus acknowledging limitations on development potential within the DDA study area, we estimate 50% of future valuation increases will be allocated to base appreciation and 50% will be allocated to the DDA.

•

Adjusted Tax Rates: Tax revenue from property and sales are allocated to a mix of dedicated and general fund uses. For the purpose of this analysis, only general tax uses are considered for capture of TIF revenues from property tax. For property tax, this includes 58.783 mills of the total 87.884 mills (and not including the mill levies from CAGID, UHGID, or the Downtown BID). Our experience suggests that taxing partners may want to protect dedicated property tax revenues for current and future bonds and other voter-initiated obligations. For sales tax, we calculate TIF revenues from the City’s portion of sales tax, ranging from today’s rate of 3.86 percent to anticipated adjustments to 3.31 percent within eleven years

Boulder DDA: Preliminary Projections

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•

Growth Rates: We apply growth rates that consider real growth beyond inflation. Scenarios range from a relatively conservative 1% growth rate beyond inflation to a more aggressive 2.5% growth rate. It is notable that post-pandemic trends in central business district property and sales tax have actually eroded when factoring inflation, thus the DDA is considered part of an overall economic development and stimulus strategy to reverse ongoing stagnation.

DDA Study Area: The DDA study area is depicted on the map found on page 4 of this memo. It includes Boulder’s traditional downtown business district plus several adjacent and related commercial areas. These areas include the following existing concentration of tax revenues that are utilized for this analysis.

Commercial Area Downtown Core University Hill South Broadway Corridor Civic Area East Pearl N Broadway/AlpineBalsam

Real Property Tax Revenue 82.9% 5.5% 3.3% 0.2% 2.5% 5.5%

Personal Property Tax Revenue 74.1% 2.0% 16.8% 0.05% 0.7% 6.3%

Sales Tax Revenue (Note A) 79.7% 8.9% 0.4% n/a n/a 10.9%

Base Value: Base Value: Base Revenue: 534,425,000 19,827,000 16,600,000 (2025) (2025) (2024 – 3.86%) Note A: Sales tax data from pre-existing City data collection geographies may not align exactly with DDA study areas. Aggregate Base Value or Revenue (Year)

Aggregate TIF Projections: Applying the key assumptions to City of Boulder and Boulder County data obtained on real and personal property values and sales tax revenue, the following aggregate TIF projections result from the DDA study area. The projected TIF revenue includes the anticipated 50% increase in real and personal property tax revenue resulting from new investment (not the anticipated 50% increase from base appreciation). Property tax TIF revenues are projected from general accounts, not dedicated funds. TIF revenues from sales tax are projected at 100% over base revenue applied to the City portion of sales tax. DDA TIF Projection: 1% Real Growth Scenario (Note B) Personal Real Property Sales Tax Property Tax Tax Revenue Revenue Revenue Year 1 $ 144,000 $ 5,400 $ 147,000 Year 5 $ 745,000 $ 28,000 $ 755,000 Year 10 $ 1,510,000 $ 57,000 $ 1,450,000 Year 20 $ 3,180,000 $ 120,000 $ 2,790,000 Year 30 $ 5,020,000 $ 190,000 $ 4,410,000 Total 30 $ 74,000,000 $ 2,800,000 $ 66,000,000 Years

TOTAL $ 296,400 $ 1,528,000 $ 3,017,000 $ 6,090,000 $ 9,620,000 $142,800,000

DDA TIF Projection: 2.5% Real Growth Scenario

Boulder DDA: Preliminary Projections

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Real Property Tax Revenue

Personal Property Tax Revenue $ 13,500 $ 71,000 $ 152,000 $ 346,000 $ 595,000 $ 8,100,000

Sales Tax Revenue

TOTAL

Year 1 $ 361,000 $ 370,000 $ 744,500 Year 5 $ 1,900,000 $ 1,900,000 $ 3,871,000 Year 10 $ 4,100,000 $ 3,900,000 $ 8,152,000 Year 20 $ 9,200,000 $ 8,100,000 $17,646,000 Year 30 $ 15,800,000 $ 13,900,000 $ 30,295,000 Total 30 $ 217,000,000 $ 193,000,000 $418,100,000 Years Note B: Numbers for East Pearl and N Broadway/Alpine-Balsam are removed from the TIF projection and mill levy tables. TIF Expectations for the First Five Years: To understand near-term opportunities for TIF in the DDA study area, a five-year projection mixes growth expectations for property and sales tax revenue increases as follows: •

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Conservative (i.e. 1% annual real growth) for property tax revenues, acknowledging that property valuations have been flat and/or eroded after factoring inflation in recent years, plus anticipating continued softness in the commercial office market that may be counterbalanced by stronger growth in retail and residential sectors. Aggressive (i.e. 2.5% annual real growth) for sales tax, anticipating the stimulative impact from the Sundance Film Festival, new hotels, and overall improvement in Downtown Boulder’s appeal as a destination attraction.

Year 1 Year 2 Year 3 Year 4 Year 5 Total 5 Years

Real Property Tax Revenue (1% real growth) $ 144,000 $ 290,000 $ 438,000 $ 590,000 $ 740,000 $ 2,202,000

Personal Property Tax Revenue (1%)

Sales Tax Revenue (2.5%)

TOTAL

$ 5,400 $ 10,900 $ 16,400 $ 22,000 $ 28,000 $ 82,700

$ 370,000 $ 748,000 $ 1,140,000 $ 1,530,000 $ 1,940,000 $ 5,728,000

$ 519,400 $ 1,048,900 $ 1,594,400 $ 2,142,000 $ 2,708,000 $ 8,012,700

GID/DDA Mill Levy Revenue Comparison: In addition to TIF, the DDA offers the opportunity to establish a mill levy for up to 5 mills. The DDA mill levy provides additional flexibility for the DDA, including funding for operations and ongoing programming. The following analysis compares mill levy revenue from the existing University Hill and Central Area GIDs (UHGID & CAGID) with a hypothetical mill levy within the DDA study area. Revenue from the existing GIDs is summarized in the following table: Existing GID Mill Levy Revenues UHGID CAGID

2025 Mill Levy

2024 Revenue

2025 Revenue

1.472 3.674

35,880 1,440,980

39,481 1,469,800

Boulder DDA: Preliminary Projections

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For comparison, potential DDA mill levy revenues are calculated for both the existing CAGID mill levy of 3.674 mills, and the maximum DDA mill levy of 5 mills. Projected DDA Mill Levy Revenues Civic Area S Broadway Corridor University Hill Downtown Core Total

Taxable Real Prop Value (2025) 1,106,865 17,460,753 29,559,557 443,310,576 491,437,751

CAGID Rate (3.674 Mills)

Max DDA Rate (5.0 Mills)

4,067 64,151 108,602 1,628,723 1,805,542

5,534 87,304 147,798 2,216,553 2,457,189

Boulder DDA Study Area Subareas Map (Note C)

Note C: The East Pearl and Alpine-Balsam subareas are removed from the TIF projection and mill levy tables but included in the above map for context.

Boulder DDA: Preliminary Projections

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