Urban Renewal Authority FAQs

A city can only take property for urban renewal once the property has been declared blighted - and property can only be blighted if it meets four out of 11 criteria - and only for the purposes of creating a public good. Contrary to popular belief, a local authority cannot take property away only to generate more tax revenue.

Most people enter into a settlement agreement with the local authorities in which they agree on a package of financial benefits and, in many cases, the land owners end up better off than they were before. Even those people who go through eminent domain come out with at least fair market value for their property and generous relocation packages.

Eminent domain is a tool of urban renewal that gives local governing bodies, including urban renewal authorities, the right to assemble private property for the purpose of accomplishing a necessary public benefit project. The law of eminent (condemnation) may only be used to benefit the public and requires that the private property owner be justly compensated for their property, meaning that he or she must be paid fair market price for the property.

Urban renewal is primarily the act of revitalizing a failing urban area in order to restore economic vitality and improve the safety of the area, although the urban renewal statute is flexible and can be used for development, as well as redevelopment. Understanding that redeveloping urban areas is much harder and more expensive than new development, Colorado has empowered local authorities with certain tools, including eminent domain and tax increment financing, to encourage urban renewal activities. All 50 states have some form of urban renewal law.

Redeveloping land is considerably more difficult than developing new property. Previously developed sites often lack necessary infrastructure, access and improvements to make them useable. Additionally these sites are often burdened with contamination from years of neglect or through prior uses. With such problems plaguing the sites, there is no demand for the property and the market fails to support it. The tools provided to local authorities through urban renewal are the only way to support the redevelopment of such sites.