Arts Center Bleeding El Paso County Taxpayers Since 1982

While reviewing the April 11, 2023 El Paso Board of County Commissioners meeting agenda recently, notes from an executive session caught my eye. The announcement for the executive session contained vague information. That’s nothing new, as other executive session have had sparse information.

Executive Session request pursuant to C.R.S. § 24-6-402 (4)(b) and (e) for the purposes of receiving legal advice on specific legal questions related to an amendment to a lease agreement with the Broadmoor World Arena concerning the Pikes Peak Center; and determining positions relative to matters that may be subject to negotiations, developing strategy for negotiations, and instructing negotiators, specifically related to the amendment to the lease agreement.

We were curious, so we asked for the Pikes Peak Center lease agreement documents through a Colorado Open Records Act (CORA) request. 

Some History

Pikes Peak Center

The Pikes Peak Center for the Performing Arts opened in 1982. At that time, it was promoted as a way to revitalize downtown Colorado Springs. 

Revitalize the downtown? That’s familiar language that has been used by El Paso County (EPC) politicians over and over again for decades. Back then, the construction was advertised as not needing financial support from local taxes. Voters fell for it and agreed to the idea. The state-of-the-art facility was built. The acoustics were the best you could find at that time. 

What was the problem with the Pikes Peak Center, as the years passed? According to a former county official, it wasn’t profitable. Also, by 2004, it was in need of a new roof and some renovations. Taxpayers were on the hook for an event center that was bleeding money even though taxpayers weren’t supposed to be impacted. 

Is there any better argument for government not getting the taxpayers into the entertainment business? Government should never put taxpayers on the hook for city auditoriumsmuseumssports arenas, or event centers. There is no incentive for government to make a profit. The expensive upkeep for the facilities leaves taxpayers on the hook forever.  

The solution to the Pikes Peak Center bleeding money in 2004 was for the Broadmoor World Arena to lease the county-owned building for $1 per year, for 25 years. The 2004 Board of County Commissioners entered into the agreement. The Broadmoor World Arena would be responsible for all upkeep and repairs of the building. To date, taxpayers have made a whopping $19 off of this building deal.

Parking Garage for the Pikes Peak Center

In conjunction with the Pikes Peak Center lease, EPC also decided to enter into an agreement with the Broadmoor World Arena for use of the adjacent county-owned parking garage. The county would collect all parking revenues from the Pikes Peak Center events and keep them, while paying $60,000 – $65,000 annually to the Broadmoor World Arena to compensate them for the parking revenue collected during their events. 

Initially, the county brought in more money through the parking garage than it paid out to the Broadmoor World Arena, so appeared to be a good decision. Recently however, we the taxpayers have taken a hit.

How much was collected by EPC’s parking garage for Pikes Peak Center events for the past 5 years? 

2018- $67,955

2019- $59,115                                                                                     

2020- $ 8,200                                               

2021- $13,525                                             

2022- $ 2,602

A total of $151,397 collected, for a net loss to the taxpayers of about $ 149,202!

We asked EPC Open Records Manager Michael Madsen for details about why so little has been collected for parking in recent years:

Hello Ms. Marshall,

Regarding your question “Did the county stick to the contract the past 5 years and pay the full reimbursement for the parking to the Pikes Peak Center? Why was so little collected?”

To clarify, the county has a lease agreement with the Broadmoor Arena but there is no formal contract. There has been no change to the original lease. Here is a breakdown of the years for when $0 was collected.

  • For the years 2020 and 2021, the $0 months are a result of the Pikes Peak Center being closed during mandatory COVID shutdowns.
  • For the year 2022, the county garage was in a transition phase as it implemented a new payment system.

Thank you,

Mike

A source within EPC told us that wasn’t accurate. Our source said that no parking revenue was collected in 2022 because there were no parking attendants, and the automatic arm in the garage was placed in the up position at all times, which allowed vehicles to come and go without paying for parking. 

Still, taxpayers continued to write checks to the Broadmoor World Arena for the uncollected parking funds. Do you ever feel like government’s ATM? 

El Paso County Executive Director of Communications Vernon Stewart reached out to us. Stewart said it is important,

“…to be aware that there are significant financial matters that should be considered. The most substantial impact is an early termination fee which county staff estimate to be $800,000 dollars should the County choose to terminate the agreement. This amount was calculated by staff based on the conditions of the lease that include 100% reimbursement of capital improvements that the tenant has incurred during the past five years plus remaining undepreciated purchases for Furniture, Fixtures, and Equipment (FF&E) made during the life of the agreement. In addition, under the terms of the lease for any sale of this structure the potential buyer would be subject to these same terms and conditions. Lastly, we will continue to evaluate and explore any and all options available to us regarding this agreement and its terms.”

Here are the comments by your El Paso County Commissioners. We heard from all of them except Commissioner Holly Williams.

Commissioner Bremer:

“We take our responsibility to taxpayers very seriously. While the current agreement is not one that is maximally beneficial nor one I believe to be within the scope of county government, it is our duty to honor the obligations of previous commissions. We are always considering the future implications on the decisions we make and will treat this decision the same.”

Commissioner Gonzalez:

“Ms. Marshall, I have not concurred with the opinion that we do “not anticipate further discussion… and will continue to operate under the existing lease agreement.”  I believe that discussions and negotiations between the County and Broadmoor World Arena should continue, and all ideas and options looked at.”

Commissioner VanderWerf:

“The county and board have made a conscious effort to divest itself of things that we no longer need or should be doing. We have been selling facilities and properties and have become more aggressive in disposing of vehicles that we no longer need. We sell these properties to put back into circulation for private use as we take those dollars and reinvest them in county services. Examples include the detox facility that we were staffing and managing that we were able to contract out to a nonprofit.”

Commissioner Geitner:

“While I do not believe that the lease is in the best interest of taxpayers, the structure of the lease leaves few remedies to explore without further costs. I remain open to continuing to evaluate and look for solutions that honor taxpayers in all areas of the county, and I am grateful for the work we have done in the last two years since I was elected to focus in on the core responsibilities of government.”

Reach out to the El Paso County Commissioners and ask what they are doing to remedy this bad deal for taxpayers. They need to sell the Pikes Peak Center as soon as possible to someone who can assume all the risks, and reap all the rewards. Let’s get taxpayers out of this bad deal. A lesson needs to be learned —no more taxpayer funded entertainment venues!

Cami Bremer  CamiBremer@elpasoco.com

Carrie Geitner  CarrieGeitner@elpasoco.com

Longinos Gonzalez  LonginosGonzalezJr@elpasoco.com

Stan Vanderwerf  stanvanderwerf@elpasoco.com

Holly Williams   HollyWilliams@elpasoco.com

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