PK KAISER, in his official capacity as Arapahoe County Assessor, and Joann Groff, in her official capacity as Colorado State Property Tax Administrator, Petitioners, v. AURORA URBAN RENEWAL AUTHORITY, Corporex Colorado LLC, Fitzsimons Village Metropolitan District No. 1, Fitzsimons Village Metropolitan District No. 2, and Fitzsimons Village Metropolitan District No. 3., Respondents.
Supreme Court Case No. 22SC92
Supreme Court of Colorado
January 22, 2024
541 P.3d 1180 | 2024 CO 4
Attorneys for Petitioner Arapahoe County Assessor: Ronald A. Carl, Arapahoe County Attorney, Benjamin P. Swartzendruber, Senior Assistant County Attorney, Littleton, Colorado
Attorneys for Petitioner Colorado State Property Tax Administrator: Philip J. Weiser, Attorney General, Robert H. Dodd, First Assistant Attorney General, John H. Ridge, Senior Assistant Attorney General, Jessica E. Ross, Assistant Attorney General, Denver, Colorado
Attorneys for Respondent Aurora Urban Renewal Authority: Kutak Rock LLP, Thomas W. Snyder, Daniel C. Lynch, Denver, Colorado
Attorneys for Respondents Fitzsimons Village Metropolitan District No. 1, Fitzsimons Village Metropolitan District No. 2, and Fitzsimons Village Metropolitan District No. 3.: Fairfield & Woods, P.C., Craig D. Joyce, Lee Katherine Goldstein, Denver, Colorado
Attorneys for Amicus Curiae Colorado Counties, Inc.: Hall & Evans, LLC, Andrew D. Ringel, Ethan E. Zweig, Denver, Colorado
Attorneys for Amicus Curiae Colorado Municipal Bond Dealers’ Association: Brownstein Hyatt Farber Schreck, LLP, Carolynne C. White, Christopher O. Murray, Rosa L. Baum, Denver, Colorado
Attorneys for Amicus Curiae Colorado Municipal League: Robert D. Sheesley, Rachel Bender, Denver, Colorado
No appearance on behalf of: Respondent Corporex Colorado LLC.
En Banc
JUSTICE BERKENKOTTER delivered the Opinion of the Court, in which CHIEF JUSTICE BOATRIGHT, JUSTICE MARQUEZ, JUSTICE HOOD, III, JUSTICE GABRIEL, JUSTICE HART, and JUSTICE SAMOUR, Jr. joined.
JUSTICE BERKENKOTTER delivered the Opinion of the Court.
¶1 We granted certiorari to consider whether the Colorado State Property Tax Administrator‘s methodology for implementing Tax Increment Financing violates Colorado‘s Urban Renewal Law.
¶2 The respondents in this case, Aurora Urban Renewal Authority, Fitzsimons Village Metropolitan District Nos. 1, 2, and 3, and Corporex Colorado LLC (collectively, “AURA“), sued the petitioners, JoAnn Groff, the Administrator (“Administrator“), and PK Kaiser, the Arapahoe County Assessor (“Assessor“), contending, as pertinent here, that the Administrator‘s methodology for implementing Tax Increment Financing (“TIF“) violates Colorado‘s Urban Renewal Law (“URL“) to the extent it differentiates direct benefits from indirect benefits when proportionately adjusting the base and increment values of blighted property located in urban renewal areas. AURA argued that the Administrator‘s methodology improperly deprives urban renewal authorities of property tax revenues the authorities should receive
¶3 We conclude that the Administrator‘s methodology and the Assessor‘s application of that methodology does not violate the URL. The URL expressly requires the Assessor to proportionately adjust the base and increment values of properties located in an urban renewal area but does not prescribe a methodology for doing so. Instead, the URL imbues the Administrator with broad authority to determine how the base and increment values of those properties should be calculated and proportionately adjusted. Because the URL does not preclude—and this court‘s precedent supports—the Administrator‘s methodology, we reverse the portion of the division‘s judgment concerning the Administrator‘s methodology for adjusting the base and increment values and conclude that the district court correctly entered summary judgment.
I. Colorado‘s Urban Renewal Taxation Scheme
A. The URL
¶4 In 1975, the General Assembly “declare[d] that there exist in municipalities of this state slum and blighted areas which” present a serious concern to the safety and welfare of Colorado residents.
B. TIF and Property Taxes Generally
¶5 The URL authorizes urban renewal authorities to fund redevelopment through, as pertinent here, TIF.
¶6 TIF also provides a mechanism to pay off that debt.
¶7 Notably, the methodology used to assess property values within an urban renewal area impacts not only the property tax revenue available to the developing urban renewal authority, but it also affects the property tax revenue allocated to other local taxing authorities, like school districts and county governments.1 Bank of Com. v. Hoffman, 829 F.3d 542, 545 n.1 (7th Cir. 2016) (TIF “is a mechanism utilized by municipalities to encourage development by issuing tax-exempt municipal bonds to pay for part of the development infrastructure.” (emphasis added)). In the end, the Administrator‘s TIF methodology determines who gets how much of the property tax pie.
¶8 This is so because the URL delegates to the Administrator the responsibility to determine how to value property within an urban renewal area.
[t]o prepare and publish from time to time manuals, appraisal procedures, and instructions, after consultation with the advisory committee to the property tax administrator and the approval of the state board of equalization, concerning methods of appraising and valuing land, improvements, personal property, and mobile homes, and to require their utilization by assessors in valuing and assessing taxable property.
¶9 Thus, pursuant to
[1] ¶10 The Reference Library is subject to the approval of the State Board of Equalization,
C. How the Administrator‘s TIF Methodology Allocates Property Tax Revenue
¶11 With this background in mind, we next explain the first step in how assessors allocate property tax revenue between urban renewal authorities and local governmental entities. Under the URL, assessors identify two different property values within an urban renewal area: a base value and an increment value. The base value is the value of the properties in an urban renewal area before the adoption of the urban renewal plan. E. Grand Cnty. Sch. Dist. No. 2 v. Town of Winter Park, 739 P.2d 862, 864 (Colo. App. 1987) (noting that the assessor determines the base value “by assessing the value of the property within the urban renewal area prior to adoption of the urban renewal plan“); see also
¶12 The increment value, in contrast, is any value attributable to the redevelopment of the urban renewal area.
¶13 When the general reassessment of all property in the state occurs every two years, see
In the event there is a general reassessment of taxable property valuations in any county including all or part of the urban renewal area subject to division of valuation for assessment under
paragraph (a) of this subsection (9) ..., the portion[ ] of valuation[ ] for assessment ... under ... subparagraph[ ] (I) ... of saidparagraph (a) shall be proportionately adjusted in accordance with such reassessment or change.
¶14 The next step in the Administrator‘s methodology—which determines and proportionately adjusts the base and increment values—is the subject of the dispute in this case, so we turn there now.
D. How the Administrator‘s TIF Methodology Proportionately Adjusts Base Value and Increment Value
¶15 Recall that the Reference Library details the methodology that assessors must follow when valuing and assessing real property in an urban renewal area. Huddleston, 913 P.2d at 17. Consistent with
¶16 By calculating “non-reassessment changes,” assessors seek to “isolate the value attributable solely to the change in the property.” Id. at 12.16. The Reference Library defines “non-reassessment changes” as follows:
Non-reassessment changes are property specific and affect the increment only. Value changes to specific properties are caused by one or more of three events:
1) Changes to the physical characteristics of a property
2) Changes to the legal characteristics of a property
3) Changes in a property‘s use
Typically these events follow the undertakings of a[n urban renewal authority] .... The value, if any, attributed to new development is evidenced by these events. A non-reassessment event that impacts the value of property in a TIF area is attributable to the increment, whether or not such change is demonstrated to be directly caused by undertakings of the [urban renewal authority] .... However, indirect benefits resulting from market perceptions that properties located in a TIF plan are more or less desirable/valuable are evidenced when any sort of reassessment event occurs, and such event applies proportionately to both the base and increment.
Id. at 12.15 (second emphasis added).
¶17 The construction of new housing units within an urban renewal area is an example
¶18 Conversely, reassessment changes are not caused by changes to the physical characteristics, legal characteristics, or use of property in urban renewal areas.4 See id. at 12.15. Rather, reassessment changes are generally caused by changes in economic conditions that indirectly impact property values. Such changes in value are often the result of general market conditions, like market supply and demand and interest rates, that affect all property—not just property within an urban renewal area—similarly. Id.
¶19 Notably, pursuant to volume 2, section 12.15 of the Reference Library, reassessment changes also include “indirect benefits resulting from market perceptions that properties located in a TIF plan are more or less desirable [or] valuable.” In other words, reassessment changes capture indirect benefits to property values that can‘t be identified as the result of redevelopment efforts. Reassessment changes are allocated proportionately to the base and increment values, and thus, property tax revenues produced by these changes are proportionately allocated to local governmental authorities and urban renewal authorities. Id.
¶20 Having explained the nuances of the Administrator‘s methodology, we turn to the procedural history of this case.
II. Procedural History
¶21 In June 2018, AURA sued the Administrator and the Assessor, contending, as pertinent here, that the Administrator‘s methodology for implementing TIF and the Assessor‘s application of that methodology violate the URL. AURA sought declaratory and injunctive relief.
¶22 After AURA and the Assessor filed cross-motions for summary judgment, the district court granted summary judgment in the Assessor‘s favor, concluding that the Administrator‘s methodology and the Assessor‘s application of that methodology were “required by and compliant with the URL” and its legislative history. On appeal, AURA challenged, among other things, the district court‘s determination that the Administrator‘s methodology is consistent with the URL.
¶23 In a split, published opinion, a division of the court of appeals affirmed in part and reversed in part the district court‘s summary judgment. Kaiser, ¶¶ 101–103, 507 P.3d at 1049–50. The majority agreed with the Administrator‘s methodology to the extent it differentiated reassessment changes from non-reassessment changes. Id. at ¶¶ 78–79, 507 P.3d at 1046 (“These distinctions clearly are consistent with the URL and are within the expertise and delegated authority of the Administrator.“).
¶24 But the majority disagreed with the Administrator‘s methodology to the extent it differentiated direct benefits from indirect benefits. Id. at ¶ 81, 507 P.3d at 1046–47. The majority explained that crediting the base value with indirect benefits didn‘t make sense because, “[b]ut for the TIF plan, there would be no market perception that a property in the TIF plan was more or less desirable or valuable.” Id. at ¶ 80, 507 P.3d at 1046. Consequently, the majority concluded that “[i]t does not effectuate the legislature‘s intent to credit the base value with the increases in value caused by the urban renewal plan.” Id. For these reasons, the majority reversed the summary judgment in favor of the Assessor and remanded to the district
¶25 Judge Yun concurred in part and dissented in part. Id. at ¶ 104, 507 P.3d at 1050 (Yun, J., concurring in part and dissenting in part). Specifically, he disagreed with the majority that the Administrator‘s procedures for “proportionately adjusting the base and increment values is contrary to law.” Id. Judge Yun concluded that the Administrator‘s methodology was entitled to deference because the regulations at issue are complex and call for “technical expertise.” Id. at ¶ 115, 507 P.3d at 1052 (quoting El Paso Cnty. Bd. of Equalization v. Craddock, 850 P.2d 702, 705 (Colo. 1993)). He summarized his view as follows: “As I see it, the majority‘s disapproval of the Reference Library‘s distinction between direct and indirect benefits crosses the line into the area of public policy.” Id. at ¶ 119, 507 P.3d at 1053.
¶26 The Administrator and the Assessor petitioned this court for certiorari review. We granted that petition.5
III. Analysis
¶27 The question presented in this case is whether the Administrator‘s procedures for implementing TIF violate the URL. More precisely, the parties disagree whether the Administrator‘s procedures violate the URL to the extent they differentiate direct benefits from indirect benefits.
¶28 To answer this question, we begin by setting forth the standard of review. Then, we compare the relevant portions of the URL and the Administrator‘s procedures, and in doing so, conclude that the Administrator‘s methodology does not violate the URL.
A. Standard of Review
[2, 3] ¶29 The issue presented concerns questions of statutory interpretation. We review such questions de novo. McCoy v. People, 2019 CO 44, ¶ 37, 442 P.3d 379, 389. “Our primary task in construing a statute is to effectuate the intent of the General Assembly.” Kinder Morgan CO2 Co., L.P. v. Montezuma Cnty. Bd. of Comm‘rs, 2017 CO 72, ¶ 24, 396 P.3d 657, 664. We do so by “giving ‘words and phrases their plain and ordinary meanings’ and reading the statutory scheme as a whole, giving consistent, harmonious, and sensible effect to all of its parts.” People in Int. of A.C., 2022 CO 49, ¶ 10, 517 P.3d 1228, 1233 (quoting McCoy, ¶¶ 37–38, 442 P.3d at 389). “If the statute is unambiguous—that is, not open to multiple interpretations—then our work is done.” Id., 517 P.3d at 1234.
[4, 5] ¶30 We apply the same rules when construing an administrative regulation. Regular Route Common Carrier Conf. of Colo. Motor Carriers Ass‘n v. Pub. Utils. Comm‘n, 761 P.2d 737, 745 (Colo. 1988). An agency‘s interpretation “of its own rules is generally entitled to great weight unless it is plainly erroneous or inconsistent with ... the underlying statute.” Berumen v. Dep‘t of Hum. Servs., 2012 COA 73, ¶ 25, 304 P.3d 601, 606 (quoting Bishop v. Dep‘t of Insts., 831 P.2d 506, 508 (Colo. App. 1992)).
B. Application
[6] ¶31 Under the plain language of the URL, can the Administrator require an assessor to differentiate direct benefits from indirect benefits when proportionately adjusting the base and increment values of properties located in an urban renewal area? Two provisions of the URL lead us to conclude that she can.
¶32 First, pursuant to its plain text,
¶33 In our view, these provisions of the statute answer the question presented in this case. Read together, the language in subsection (9) isn‘t reasonably susceptible to multiple interpretations. On the contrary, it‘s unambiguous, unequivocal, and mandatory.
¶34 And here, it is what the General Assembly did not say that speaks volumes. In enacting the URL, the General Assembly opted not to prescribe a methodology for implementing TIF or incentivizing urban renewal. Instead, the URL imbues the Administrator with broad authority to determine how the base and increment values of properties located in an urban renewal area should be calculated and how to proportionately adjust those values. See
¶35 AURA nonetheless asks us to affirm the portion of the majority‘s decision that voided the Administrator‘s methodology because, in AURA‘s view, the methodology conflicts with the URL‘s purpose of redeveloping blighted areas. As noted, AURA specifically challenges the portion of the Administrator‘s methodology that credits the base value with “indirect benefits resulting from market perceptions that properties located in a TIF plan are more ... valuable.” 2 ARL 12.15. According to AURA, these indirect benefits result from urban renewal authorities designating blighted property as being “located in a TIF plan.” Id. Therefore, AURA argues, these indirect benefits should be credited to the increment, and thus, to urban renewal authorities in the form of increased property tax revenue. The Administrator‘s methodology instead credits the base value with all property valuation increases that can‘t be directly attributed to redevelopment activities. As a result, it is other local governmental entities—not urban renewal authorities—that receive the property tax revenue derived from those increases in value.
¶36 The majority was persuaded by AURA‘s policy arguments, agreeing that “[m]arket perceptions that properties located in a TIF plan are more or less desirable or valuable logically are attributable to the TIF plan, not general market conditions.” Kaiser, ¶ 80, 507 P.3d at 1046. Thus, the majority concluded that the portion of the Administrator‘s methodology that “credit[s] the base value with the increases in value caused by the urban renewal plan” is inconsistent with the purpose of the URL, id. at ¶ 81, 507 P.3d at 1047, and declared it void as a matter of law, id. at ¶ 98, 507 P.3d at 1049.
[7] ¶37 There is, without question, a certain logic to that reasoning. But “[i]t is not up to the court to make policy or to weigh policy” when interpreting unambiguous statutes. Edwards v. New Century Hospice, Inc., 2023 CO 49, ¶ 27, 535 P.3d 969, 975 (quoting Town of Telluride v. Lot Thirty-Four Venture, L.L.C., 3 P.3d 30, 38 (Colo. 2000)). Instead, courts must interpret and apply unambiguous statutes as written. See A.C., ¶ 10, 517 P.3d at 1234.
[8] ¶38 Here, the relevant provisions of the URL—
¶39 Nevertheless, AURA asserts that the Administrator‘s methodology yields absurd results for urban renewal authorities. AURA contends this methodology is flawed because it “presumes all valuation increases are the result of general market conditions” and “undercounts the valuation changes caused by the TIF designation and initial redevelopment planning that indirectly affect these property values.” In support, AURA cites four examples in which the Assessor credited sharp increases in property values in urban renewal areas to the base values of the properties located in those TIF plans. The following table illustrates AURA‘s examples.
| TIF Area | Initial Base Valuation | Post-TIF Assessed Valuation | Post-TIF Base Valuation | Post-TIF Increment Valuation |
| #4408 | $805,519 (2014) | $1,784,143 (2015) | $1,784,143 (2015) | $0 (2015) |
| #4406 | $539,932 (2014) | $1,586,563 (2019) | $1,505,796 (2019) | $80,767 (2019) |
| #4407 | $297,929 (2014) | $1,185,212 (2019) | $1,124,832 (2019) | $60,380 (2019) |
| #4401 | $259,482 (2014) | $525,978 (2018) | $525,978 (2018) | $0 (2018) |
¶40 Applying the Administrator‘s methodology, the Assessor credited the increment value only to the extent property values were directly benefited by non-reassessment changes, i.e., redevelopment efforts. See 2 ARL 12.15. This was because, in these areas, no redevelopment occurred between when the Assessor assigned an initial base value and when he subsequently reassessed the properties in those urban renewal areas in the years identified above. The Assessor therefore concluded that the property value increases were caused by reassessment changes—like general market conditions and/or market perceptions that the property was more valuable because it was located in an urban renewal area—and credited only the base value with these increases. See id. When redevelopment thereafter began in these areas, the incremental values of the properties dramatically increased.
[9] ¶41 AURA is correct that we can‘t read statutes “in a manner that would ‘lead to illogical or absurd results.‘” A.C., ¶ 10, 517 P.3d at 1233–34 (quoting McCoy, ¶ 38, 442 P.3d at 389). But we do not perceive absurdity in these examples. Rather, we conclude that the Administrator is acting well within the scope of her authority under the URL in adopting a methodology that balances the interests of local taxing authorities and urban renewal authorities by requiring a more direct relationship between AURA‘s redevelopment efforts and the tax revenues it receives as a result of those efforts. Put another way, the Administrator‘s methodology is aimed at ensuring that an urban renewal authority receives only property tax revenues produced as a result of its actual urban renewal projects—not simply its urban renewal plans.7 On this last point, our decision in Byrne is instructive.
¶42 In that case, we considered the constitutionality of TIF shortly after the General Assembly amended the URL to include it. Byrne, 618 P.2d at 1381. The City and County of Denver (“Denver“) argued, as relevant here, that TIF was unconstitutional because it diverted to the Denver Urban Renewal Authority (“DURA“) tax revenues Denver had used to fund other public services, like schools. Id. at 1381–82. This court rejected Denver‘s constitutional challenge, reasoning, among other things, that TIF did not deprive Denver of tax revenues to which it was entitled because “[t]he portion of tax revenues allocated to DURA represent [sic] the amount generated by virtue of increased property valuation which would not have existed but for the project.” Id. at 1387 (emphasis added). The court explained that
¶43 Contrary to AURA‘s assertion and the division‘s conclusion, the Byrne decision supports the Administrator‘s methodology. In Byrne, we explained that TIF did not deprive Denver of tax revenues to which it was entitled because the tax revenues at issue would not have been produced but for DURA‘s redevelopment efforts. Id. In effect, then, we interpreted Colorado‘s urban renewal taxation scheme as adopting the “direct relationship” approach to implementing TIF. Id. This approach ensures that urban renewal authorities receive those tax revenues produced as a result of redevelopment efforts. At the same time, the approach ensures that municipalities and other local governmental entities still receive tax revenues necessary to fund other public services, such as road repair and fire protection.
¶44 To be sure, not all states follow the “direct relationship” approach. Some states, such as California, have in years past adopted the “deemed” approach to implementing TIF. See generally Richard Briffault, The Most Popular Tool: Tax Increment Financing and the Political Economy of Local Government, 77 U. Chi. L. Rev. 65, 69 (2010); see also Cal. Redevelopment Ass‘n v. Matosantos, 53 Cal.4th 231, 135 Cal. Rptr.3d 683, 267 P.3d 580, 591 (2011). Under the “deemed” approach, local taxing authorities responsible for upkeeping roads and schools, among other services, “are allocated a portion based on the assessed value of the [blighted] property prior to the effective date of the redevelopment plan.” Matosantos, 135 Cal. Rptr.3d 683, 267 P.3d at 591. But unlike states that follow the “direct relationship” approach, states that follow the “deemed” approach never adjust the base value of blighted property located in urban renewal areas to account for changes caused only by general market conditions. Instead, the base value remains “frozen,” and all property value increases are “deemed the result of the urban redevelopment efforts by the municipality and [are] distributed to the urban renewal authority.” Town of Winter Park, 739 P.2d at 864; see Matosantos, 135 Cal. Rptr.3d 683, 267 P.3d at 591 (“In essence, property tax revenues for entities other than the redevelopment agency are frozen, while revenue from any increase in value is awarded to the redevelopment agency on the theory that the increase is the result of redevelopment.“). Importantly, these states’ TIF schemes don‘t contain a provision like Colorado‘s
¶45 Since we announced Byrne, two divisions of the court of appeals have interpreted
[10] ¶46 Today, we reiterate the principle discussed in Byrne: Colorado‘s TIF scheme requires a “direct relationship” between an urban renewal authority‘s redevelopment efforts and the tax revenues it receives. Byrne, 618 P.2d at 1382. To the extent other decisions differ from this principle, those decisions are inconsistent with Byrne and
¶47 Still, AURA argues that “[t]here is an obvious, lawful alternative to the Administrator‘s methodology.” Specifically, AURA proposes that the Administrator proportionately allocate “a percentage of valuation change to Base Valuation to reflect the percentage of market appreciation in the county generally.” AURA explains that “[t]he remaining valuation would be allocated to Incremental Valuation as being indicative of the impact of the TIF area on property values.”
[11] ¶48 As we have explained, however, the plain language of the URL controls. “When a statute is unambiguous, public policy considerations beyond the statute‘s plain language have no place in its interpretation.” Edwards, ¶ 27, 535 P.3d at 975 (quoting Samuel J. Stoorman & Assocs., P.C. v. Dixon, 2017 CO 42, ¶ 11, 394 P.3d 691, 695). AURA may well be correct that there is a better method for implementing TIF in order to maximize urban renewal efforts. But it is not up to courts to make or weigh policy. Instead, the URL explicitly and unambiguously adopts the direct relationship approach by virtue of requiring proportionate adjustments whenever there is a general reassessment, and it entrusts the Administrator with crafting the methodology to determine how to make these adjustments.
¶49 For all these reasons, we conclude that the Administrator‘s methodology of differentiating direct benefits from indirect benefits does not violate the URL.
IV. Conclusion
¶50 We reverse the portion of the division‘s judgment that voids the Administrator‘s methodology for proportionately adjusting the base and increment values of property located in urban renewal areas and conclude that the district court correctly entered summary judgment.