Loveland City Council took two actions Tuesday that seem to be at odds with each other.
The council voted to place a new sales tax question on the November ballot, seeking a 1% tax increase on all goods but grocery food, twice as much as the 0.3% and 0.2% increases voters turned down last November.
The money, if approved by voters, would go 50% to infrastructure and capital equipment, 30% to municipal operations and maintenance, and 20% to public safety. The city had needs in all of those areas before the COVID-19 pandemic and resulting economic downturn, and those needs will only grow, even as sales and sales tax receipts have fallen.
The council also agreed on first reading to give $250,000 in incentives to Metropolitan Theatres Corp. to help it turn two smaller theaters at MetroLux 14 in the Promenade Shops into an IMAX theater. A second vote will be required to make it official.
Citizens understandably have expressed confusion as to why the city needs to increase taxes if it has enough money to offer a quarter million dollars to a theater owner for remodeling — $200,000 as a cash payment and $50,000 in building permit and construction use tax waivers.
If the theater were a project that promised to bring good-paying — and much needed — primary jobs to Loveland, or if it would easily repay the investment through increased sales tax receipts, it might be worth the outlay. But it promises neither.
Councilors based their support on the idea it would be a tourist attraction. An IMAX theater, it is believed, would attract 65,000 visitors a year to the east Loveland shopping center, some of them from out of town.
But at an executive session on the subject, inadvertently broadcast June 2, councilors were told there are about 30 such theaters in the state. Most of them in the Denver metro area. The nearest are in Westminster and Broomfield.
How much of a tourist attraction would the theater be if so many others already exist in about an hour’s drive of Loveland?
Loveland Economic Development Director Kelly Jones said a deal between MetroLux and IMAX would prohibit other IMAX theaters from opening within 5 miles of Loveland’s for at least 10 years as well as at the Cinemark theaters in Fort Collins. But that would not preclude similar theaters from springing up elsewhere in Fort Collins or Greeley.
An Associated Press story that appeared in Friday’s Reporter-Herald examined the hardship that has hit the movie industry during the pandemic. Movie theaters have been closed, and when they reopen it can’t be a full capacity.
Meanwhile, movie studios have been at a standstill, allowing some films to go straight to streaming instead of releasing them to theaters, and delaying the release of others, waiting for better circumstances in which to release them. And the Los Angeles Times reported July 17 that studios have struggled to resume production as the need for quick and reliable COVID-19 test results for employees, increased cleaning and other safety measures have proved challenging, slowing the future release of new movies.
Some question the future of the industry and whether viewers will want to venture out for a communal movie experience, or if they will feel more comfortable staying home in front of a big-screen television.
Any time the Loveland City Council offers incentives to a business, it wagers that the city will get something of value in return. Sometimes it fails, like the $900,000 cash payment that the city gave to Bill Beierwaltes and his wife, Lynda Beierwaltes, in 2008 to launch Colorado vNet LLC, in exchange for the custom sound systems company creating 250 high-paying local jobs.
The economic downturn of 2008-09 short-circuited that effort, and it took five years for the city to recoup two-thirds of its money, possible only because the vNet incentive contained a mechanism to claw back the money if the incentive did not produce the promised outcome.
Today, many residents who were in Loveland a decade ago remain skeptical about incentives. Some lost their jobs in the pandemic and even those who still have jobs have concerns about the local economy and worries about whether they can afford a sales tax increase, even if they see the need for it.
The City Council should take those concerns to heart when considering whether to give final approval to give $250,000 away.
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Editorial: Loveland City Council actions give mixed message - Loveland Reporter-Herald
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