Community discovers that once you’re on the growth train, it’s hard to get off

ERIE, Colo. — When Leon Wurl showed up in Erie, he was already a legendary figure. As a town administrator, he’d helped turn several down-at-the-heels Colorado mining towns — including now-glitzy Aspen — into growing communities. "He was like an astronaut to us," says Vic Smith, a former Erie mayor who worked with Wurl.

Erie, a busted coal-mining town 25 miles north of Denver, was on the cusp of transforming into a bedroom community. Hired by the town in 1993, Wurl crafted plans to pave the town’s dirt streets, bring its failing water treatment plant up to snuff, replace its strained sewage system, and spruce up the town hall — all using impact and building fees charged to housing developers.

To honor Wurl after his unexpected death in 1998, family and friends mixed a handful of his ashes into the first load of asphalt spread onto old-town Erie’s streets. Wurl had paved the way for Erie to grow.

And grow it did. Backed by a development-friendly board of trustees, Erie was one of the nation’s fastest-growing communities in the ’90s. As subdivisions popped up like mushrooms across former dryland farm fields, the population surged by 400 percent.

This growth created a political backlash, however. Last April, Erie voters elected Wurl’s antithesis — slow-growth advocate Barbara Connors — as mayor, along with three others who favor growth constraints to the town council. It was a dramatic turnover that sparked a battle this past winter over who would control the pace of Erie’s growth.

"A vicious race"

During Connors’ first months in office, she turned the town’s pro-development establishment on its head. The outspoken Manhattan transplant fired the town’s administrator because "he was one of their boys." She raised impact fees on building permits and placed a moratorium on new permits until the town ironed out questions about the capacity of its sewage treatment plant. By picking Boulder County’s planning manager to fill a vacated trustee seat, she secured the board’s slow-growth majority at 5-2.

Outraged opponents mounted an effort to remove Connors and her second in command, Mayor Pro Tem Paul Carter. A group dubbed Erie 20/20, financed largely by development interests, quickly collected more than the 400 signatures needed to force a recall election.

Connors’ opponents focused their attention on her decision to put the brakes on annexing 640 acres of land next to busy Interstate 25. They argued that Erie would lose badly needed sales tax dollars if it didn’t annex the land and encourage retail businesses to move in.

Because Colorado statute caps the percentage of revenue municipalities can collect from property taxes imposed on residents, towns are pressured to boost sales tax revenues by promoting business development. On the tightly packed Front Range, this often means that communities compete for prime commercial real estate. "It’s a race to annex land," says former mayor Smith, who now sits on the town’s planning and zoning board.

Connors didn’t deny Erie’s need to attract more businesses. So far, the only major retail development is a strip mall on the edge of town. But annexing the land would only guarantee more houses, says Connors, and not the businesses that the town so desperately needs.

When the dust settled in early February, residents voted to keep both Connors and Carter in office. "It was a vicious race," says Connors. But "a majority said they want managed growth."

A chicken-and-egg dilemma

A former nonprofit administrator, Connors isn’t out of the woods yet. Erie is in a bind that plagues many young, growing communities — thanks in large part to Leon Wurl’s model of funding the town’s expansion through building and impact fees.

Bedroom communities like Erie that don’t have a job or sales tax base — nearly half of Erie’s 8,500 residents work somewhere else — find building and impact fees an attractive tool. Instead of saddling existing residents with the costs of upgrading and maintaining roads, sewer and water, Erie puts the burden on newcomers by charging a hefty price for building homes. Over $35,000 in building and impact fees is tacked onto a house that costs $155,000 to build.

But unless these fees are combined with other income streams, they can become a trap. The fees pay for new roads, water and sewer, but as towns grow, they can’t keep pace with the costs of maintenance and other services, such as schools, police and fire protection. This creates incentive to keep on growing in hope of one day catching up. In Erie’s case, the town has such a slim retail and commercial base that building and impact fees fund most of its budget. So if building slows — as it has with the current recession — so does the town’s revenue.

"Erie’s been living on impact fees and building fees," says planning and zoning board member Smith. "We’re going to wish to God we didn’t have all the houses if we don’t move on to commercial development fast."

This quickly becomes a chicken-and-egg dilemma, however. Towns often turn to large chain stores and the sales tax dollars they provide as a quick fix to their budget woes. But to attract "big-box" stores, a town needs tens of thousands of residents.

"We need houses to fund the commercial development," says Mike Burns, a developer whose Erie Corporate Center project next to I-25 calls for first building 400 homes.

Connors replies that the idea of first building a lot of houses and then expecting that "the big-box stores — the Targets and Home Depots — will come and pay our way out of debt with their taxes is such a crazy and irresponsible notion." She would rather see Erie attract businesses that "won’t completely violate the idea of a small town."

Connors says that she’s been too busy battling to keep her mayoral seat to determine exactly what those businesses are. And finding time to do this will continue to be the trick. Town officials say there are more than 10,000 building permits in the pipeline; if approved, these new homes could balloon Erie’s population to nearly 35,000 — something that residents from Erie’s coal-mining and farming days might never have imagined.