DDA’s Denver Pavilions deal takes away millions in Denver taxes

The Downtown Development Authority’s Real Estate Buys Impacting Denver’s Property Tax Revenue

The Downtown Development Authority’s recent real estate acquisitions come with more than just a purchase price. The properties, including the Denver Pavilions mall, will be removed from the city’s property tax rolls, resulting in a loss of over $2 million in revenue that funds local schools and municipal services.

The DDA, an independent entity tasked with revitalizing downtown Denver, operates with city oversight and is exempt from paying property taxes. Last fall, voters expanded the DDA’s boundaries and authorized $475 million in bonds for redevelopment projects in the downtown area.

Recently, the DDA board approved a $37 million purchase of the struggling Denver Pavilions mall and a $23 million acquisition of two parking lots behind the mall. These transactions still require approval from the City Council.

Denver Pavilions had a property tax bill of nearly $1.7 million this year, while the two parking lots were taxed approximately $475,000. Denver Public Schools receive the majority of property tax revenue collected in Denver, with the city receiving the remainder.

DDA’s decision to buy the Pavilions was driven by the mall’s default on an $85 million loan, rather than allowing it to go back to the lender. Properties owned by lenders, like the Denver Energy Center, are still responsible for property taxes until they are sold to a new owner.

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