To: Board of County Commissioners
Through: Bryan Weimer, Director, Public Works and Development
Prepared By:
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Larry G. Mugler, Planner, Long Range Planning, Public Works and Development; Loretta Daniel, Long Range Planning Program Manager, Public Works and Development
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presenter
Presenter: Larry Mugler, Planner, Long Range Planning Division, Public Works and Development
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Subject:
title
11:30 AM *South Metro Enterprise Zone Program Arapahoe County Expansion
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Purpose and Request:
recommended action
The Colorado Office of Economic Development and International Trade (OEDIT) manages the Colorado Enterprise Zone (EZ) Program, which is a program to promote a business-friendly environment in economically distressed areas of the state by offering state income tax credits for businesses and tax benefits for nonprofit organizations to assist with the needs of these communities. OEDIT is currently conducting a required review of the 16 EZs in the state that occurs every ten years and provides the opportunity to add eligible areas to the EZs.
In June 2024, OEDIT and the Colorado Economic Development Commission approved the addition of a large part of eastern Arapahoe County to the South Metro EZ. The purpose of this study session is to seek the Board of County Commissioners’ approval to submit eligible areas of unincorporated Arapahoe County for inclusion in the south metro enterprise zone redesignation process.
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Background and Discussion: At the Board of County Commissioners (BOCC) study sessions in October 2023 and April 2024, staff described the Colorado EZ Program and identified an opportunity to include the eastern part of unincorporated Arapahoe County. As a result, the South Metro EZ is composed of the City of Englewood; portions of Sheridan, Littleton, the Town of Parker; and a large portion of eastern Arapahoe County. The BOCC also directed staff to research ways to manage the program since the City of Englewood, which has served as the South Metro EZ Administrator for the past ten-plus years, wants to relinquish that role. This study session will not address the administration of the South Metro EZ; however, a decision regarding that position is needed by the end of 2025. Staff will schedule a future study session to address EZ administration.
Redesignation. Every 10 years, per the Enterprise Zone statute, OEDIT is required to review the EZ designations to ensure that the zones continue to meet at least one of the following EZ eligibility criteria:
• unemployment rate at least 25 percent above the state average
• five-year population growth rate below 25 percent of the state average
• per capita income below 75 percent of the state average.
The redesignation process helps ensure the program remains responsive to current economic conditions and areas that no longer qualify are considered “not distressed.” The state created a redesignation mapping tool that displays census geographies (counties, county subdivisions, tracts, block groups, and Census Designated Places) that are eligible for consideration in the 2024-2025 Enterprise Zone Redesignation Process, based on American Community Survey data. This tool was used to determine the additional areas of Arapahoe County that qualify to be included in the South Metro EZ.
With facilitation assistance from Denver South Partnership, County staff have worked with staff from jurisdictions throughout Arapahoe and Douglas Counties to identify qualified EZ areas. The jurisdictions that will be part of the redesignation application for the South Metro EZ are Englewood, Sheridan, Littleton, Arapahoe County, Aurora, Centennial, Greenwood Village, Strasburg (a portion in Adams County north of Colfax Avenue), Parker, Lone Tree, and Douglas County. Urban enterprise zones are limited to a maximum population of 115,000, and the current South Metro EZ has a population of slightly over 50,000. Based on proposals from participating jurisdictions, the proposed EZ will have a population of approximately 90,000. This will provide a population buffer should additional areas qualify for EZ designation in the next 10 years.
OEDIT has set an August 1, 2025, deadline for the submittal of applications for redesignation for the 16 EZs in the state. The EZ Administrator in the City of Englewood will be submitting the redesignation application for the South Metro EZ.
In August and September, OEDIT will review all the EZ redesignation applications, and the Colorado Economic Development Commission will review and approve the new EZ areas in October. The new EZ designations and boundaries will be effective on January 1, 2026.
Arapahoe County EZ Redesignation Proposal. By expanding the South Metro EZ boundaries in the county, the EZ program can offer state income tax credits that incentivize businesses to develop and expand, as well as retain and create jobs, to a broader area. This strengthens economic and financial stability, both for the unincorporated areas of the county and the major cities in the county. This approach is in alignment with Arapahoe Forward, the 2025 strategic plan, by supporting small business growth, job opportunities, and nonprofits’ initiatives.
Staff utilized the state’s mapping tool and analyzed the number of businesses and potential business growth in areas of the county. As a result, the following areas are proposed to be added to the South Metro EZ:
• The east county area has been expanded with two additional Census Block Groups south of Quincy Avenue and west to the Aurora city limit. Businesses, farms, and ranches located within these boundaries may be eligible for the EZ tax credits.
• The Four Square Mile area. The eligible Block Groups include small and medium sized businesses.
• The southeast portion of Dove Valley. This is the only business/campus area in the county that qualifies.
• A Block Group in Strasburg in Adams County on the north side of Colfax Avenue. In discussions with the Adams County EZ administrator and staff, this Block Group was agreed to be added to the Arapahoe County “portion” of the South Metro EZ since this area is on the north side of Colfax Avenue (the “main street” in Strasburg) and the south side of Colfax Avenue is already in the South Metro EZ. Adams and Arapahoe counties are jointly working on an update to the Strasburg Subarea Plan since the community straddles both counties, and Adams County has emphasized economic development in the plan. Both counties are striving to assist businesses in the unincorporated rural communities. It should be noted that in the existing Adams County EZ, a portion of Arapahoe County in Aurora on the south side of Colfax, in the vicinity of the Anschutz campus, is in the Adams County EZ. Since the Adams County EZ is facing the population cap, this area will be removed from the Adams County EZ and Aurora is proposing to add it to the South Metro EZ.
Other business areas, such as Inverness and the industrial area east of Watkins Road on E Quincy Avenue, did not meet the eligibility criteria. A table summarizing the population and Block Group information for the four areas identified, and maps defining these areas are in the attachments.
Fiscal Impact: Assuming that the Economic Development Commission approves the proposed redesignated South Metro EZ areas, staff would need to work with the future EZ Administrator to assist businesses within the unincorporated Arapahoe County portion of the EZ to be certified for the state tax credits. This is expected to be less than one-third of an FTE during 2026.
Alternatives: The staff recommendation is to support the application of the expanded areas including east county, the Four Square Mile area, and portions of Dove Valley and Strasburg for redesignation of areas with the South Metro EZ. An alternative would be to discontinue Arapahoe activities regarding the EZ program and exclude unincorporated portions of Arapahoe County from the EZ Program.
Alignment with Strategic Plan:
☐Be fiscally sustainable
☐Provide essential and mandated service
☒Be community-focused.
Staff Recommendation: Staff recommends that the Board support the proposal to redesignate areas within the South Metro EZ, including portions of unincorporated Arapahoe County. If the proposal is supported, staff will continue working with the OEDIT and other local jurisdictions to identify an appropriate EZ Administrator.
Concurrence: The other jurisdictions involved in the proposed application are in the process of obtaining letters of support for the updated South Metro Enterprise Zone boundaries. This includes Englewood, Sheridan, Littleton, Aurora, Centennial, Greenwood Village, Strasburg (a portion in Adams County north of Colfax Avenue), Parker, Lone Tree, and Douglas County. Community Resources and the Commissioners’ Office were also involved in this process and concur with the recommended areas for inclusion.