DALLAS - A lawsuit filed Feb. 25 seeks to block incentives from the city of Aurora for an $824 million Gaylord Rockies resort hotel near Denver International Airport.
The suit, filed in Adams County District Court by Aurora residents David Bishop and Regina Thomson, claims that the Denver suburb's plan to provide $300 million of subsidies for the project violates the state constitution.
Aurora's declaration of the proposed hotel site as "blighted" was also illegal, according to the suit.
In a separate legal action, opponents of the Gaylord development are demanding that the Colorado Economic Development Commission reconsider $81.4 million in sales-tax increment financing for the project. Denver hotel operators have fought the project since it was first proposed four years ago.
Hotel backers say that lawsuit has held up final private financing needed to move forward with construction, and this lawsuit is almost certain to do the same. They also have said the project cannot proceed without the smaller amount of incentive money offered by the EDC. A nullification of the much larger incentives from the city of Aurora would certainly be a severe, if not fatal blow for it.
Aurora officials and Gaylord Entertainment Co. announced plans for the 1,500-room hotel in June 2011, calling it an economic development project.
Houston-based Rida Development Corp. took over as lead developer in 2012, but the hotel would still carry the Gaylord flag.
To make the project viable, Aurora pledged tax increment revenues from city excise taxes for 30 years to the project. The city also created a general improvement district empowered to levy property tax equal to 40 mills for 33 years and pledged all revenues from that tax to the project.
The city also authorized creation of an "enhanced taxing area" wherein tax rates above the city's base excise tax rates would be committed to the project for 33 years.
The two citizens' lawsuit argues that several of those funding mechanisms are invalid, illegal and unconstitutional.
To gain urban renewal financing options, Aurora declared the land as blighted. A 2010 state law forbids the use of the "blighted" standard for agricultural land unless it meets a series of strict conditions, according to the lawsuit.