Enhanced Sales Tax Incentive Program

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ESTIP Program Expanded in 2012

Town of SilverthorneA significant expansion of the Town’s current Enhanced Sales Tax Incentive Program(ESTIP) was implemented in 2012. The ESTIP program is a formal economic development program provided for in the Silverthorne Town Code.  The program provides an opportunity for new or expanding businesses to share in enhanced sales tax dollars.  Revisions introduced to the program in 2012 include a lower minimum required threshold of enhanced sales taxes, and an expanded definition of public and public-related purposes for which enhanced sales taxes can be used.   Businesses interested in learning more about the ESTIP can call the Town Manager's Office at 970-262-7305.

Division 9
Enhanced Sales Tax Incentive Program
Sec. 1-10-101. Program established; purpose.
There is hereby established within the Town an enhanced sales tax incentive program ("ESTIP").
The purpose of the enhanced sales tax incentive program is to encourage establishment and/or
substantial expansion of retail-sales-tax-generating businesses within the Town, thereby stimulating
the economy of and within the Town, providing employment for the residents of the Town and others,
expanding the goods available for purchase and consumption by residents of the Town, and increasing
the sales taxes collected by the Town. These increased sales tax collections will enable the Town to
provide expanded and improved municipal services while at the same time providing public or publicrelated
improvements at no cost, or at deferred cost, to the Town and its taxpayers and residents. (Ord.
2001-08 §1)
Sec. 1-10-102. Definitions.
The following words, terms and phrases, when used in this Division, shall have the meanings
ascribed to them in this Section, except where the context clearly indicates a different meaning.
Enhanced sales tax shall mean the amount of sales tax collected by the Town, and available to
the Town after the deduction of sixty percent (60%) of the two-percent Town sales taxes required
by election, over and above a base amount negotiated and agreed upon by the applicant and the
Town, and which amount is approved by the Town Council. This base amount shall never be
lower than the amount of sales taxes collected by the Town at the property in question in the twelve
(12) months prior to the date the ESTIP Agreement is executed plus a reasonable and agreed-upon
percentage of anticipated increase in sales taxes, or, in the case of a newly established business, an
amount which represents the good faith determination by the applicant and the Town as to the
amount of sales taxes which could be generated from the new business without the participation by
the applicant in the ESTIP. As an illustration only:
Total sales during a one-month period: $100,000
Sales tax available to Town:
Town 2% of sales $ 2,000
County 2% of sales $ 2,000
Town sales tax (gross) 4% of sales $ 4,000
Less:
Restricted portion of sales tax 1.2% of sales $ (1,200)
Total sales tax (net) 2.8% of sales $ 2,800
Less:
Agreed sales tax base (existing taxes Town receives, i.e. 10% of gross) $ (400)
Total amount of Enhanced Sales Tax $ 2,400
Up to 50% available to share under ESTIP $ 1,200
ESTIP means the enhanced sales tax incentive program created by this Division.
ESTIP Agreement means the signed agreement between the applicant and the Town, which
implements the ESTIP for a specific project or property.
Owner shall mean the record owner of the real property upon which one (1) or more businesses
is operated.
Tenant shall mean the record operator of a business located in a commercial district in the
Town. (Ord. 2001-08 §1; Ord. 2011-12 §1)
Sec. 1-10-103. Participation.
Participation in ESTIP shall be based upon approval by the Town Council exercising its sole and
exclusive discretion. Any owner of a newly established retail-sales-tax-generating business or
location, or the owner of an existing retail-sales-tax-generating business or location which wishes to
expand substantially, which newly established or substantial expansion is accomplished subsequent to
the effective date of this Division, may apply to the Town for inclusion within the ESTIP, provided
that the new or expanded business is reasonably likely to generate enhanced sales taxes of at least five
thousand dollars ($5,000.00) in the first year of operation. (Ord. 2001-08 §1; Ord. 2011-12 §1)
Sec. 1-10-104. Approval of agreement; use of funds generally.
Approval by the Town Council of an ESTIP Agreement entitles the applicant to share in enhanced
sales taxes derived from the applicant's property or business in an amount which shall not in any event
exceed fifty percent (50%) of the enhanced sales taxes. The applicant may use such amount solely for
public and/or public-related purposes such as those specified herein and which are expressly approved
by the Town Council as a part of the ESTIP Agreement. The time period in which the enhanced sales
taxes may be shared shall not commence until all public or public-related improvements are
completed, and may be limited to a specified time, or until a specified amount is reached. (Ord. 2001-
08 §1)
Sec. 1-10-105. Eligible uses.
The uses eligible for the shared enhanced sales taxes shall be strictly limited to those which are
public or public-related in nature. For the purposes of this Division, but not by way of limitation,
public or public-related purposes shall mean environmental remediation improvements such as streets,
sidewalks, curbs, gutters, pedestrian malls, street lights, drainage facilities, snow storage areas,
demolition and site restoration for redevelopment, landscaping, decorative structures, enhanced
architectural features, public transportation improvements, road and street improvements including
traffic control signals, statuaries, fountains, identification signs, traffic safety devices, bicycle paths,
off-street parking facilities, benches, public restrooms, information booths, public meeting facilities
and all necessary, incidental and appurtenant structures and improvements, installation of utility lines
and facilities and relocation extension and improvement of existing utility lines and facilities and any
other improvements of a similar nature which are specifically approved by the Town Council upon a
finding that said improvements are public or public-related improvements. Public or public-related
purposes shall also include redevelopment of existing properties, occupancy of existing vacant space
and expansion or creation of jobs in the Town. In the event the applicant is reimbursed for the cost of
such improvements from other public funds and/or grants, the amount eligible under the ESTIP
program shall be decreased by the amount of such reimbursement. (Ord. 2001-08 §1; Ord. 2011-12
§1)
Sec. 1-10-106. Increments; sharing of funds.
The base figure for sales taxes shall be divided into twelve (12) monthly increments, which shall be
reasonably related to the average monthly performance of the business or property in question or
similar businesses in the area (i.e., adjusted for seasonal variations). If in any month the agreed-upon
figure is not met by the applicant so as to create enhanced sales tax for that month, no funds shall be
shared with the applicant for that month, and no increment shall be shared until that deficit, and any
other cumulative deficit, has been met, so that at the end of any twelve-month cycle, funds in excess of
those enhanced sales taxes agreed to be shared shall not have been shared by any applicant. The Town
reserves the right to select larger increments of time, including but not limited to quarterly, biannual
and annual, in lieu of the monthly increments provided for in this Section. (Ord. 2001-08 §1; Ord.
2011-12 §1)
Sec. 1-10-107. Revenues restricted.
It is an overriding consideration and determination of the Town Council that existing sources of
Town sales tax revenues shall not be used, impaired or otherwise affected by this enhanced sales tax
incentive program. Therefore, it is hereby conclusively determined that only enhanced sales taxes
generated by the properties or tenants described in an application shall be subject to division under this
ESTIP. The Town shall collect and hold all such enhanced sales taxes in a separate account apart from
the sales taxes generated by and collected from the other sales-tax-generating uses and businesses
within the Town and to provide an accounting system which accomplishes the overriding purpose of
this Section. (Ord. 2001-08 §1; Ord. 2011-12 §1) 
Sec. 1-10-108. Criteria for approval of application.
(a) Participation in ESTIP shall be based upon approval by the Town Council exercising its sole
and exclusive discretion. The Town Council may permit such participation based in part upon the
following criteria, as a general guide.
(1) The amount of enhanced sales taxes which are reasonably to be anticipated to be derived by
the Town through the expanded or new retail-sales-tax-generating business;
(2) The public benefits which are provided by the applicant through public works, public
improvements, additional employment for Town residents, redevelopment of existing properties,
occupancy of existing vacant space, etc.;
(3) The amount of estimated expenditures which may be deferred by the Town based upon
public improvements to be completed by the applicant;
(4) The conformance of the applicant's property or project with the comprehensive plan and
zoning ordinances of the Town; and
(5) The agreement required by Section 1-10-109 below having been reached, which agreement
shall contain and conform to all requirements of Section 1-10-109.
(b) Approval shall be by motion adopted by a majority of the entire Town Council. (Ord. 2001-
08 §1; Ord. 2011-12 §1)
Sec. 1-10-109. Agreement required.
Each application for participation in ESTIP shall be subject to approval by the Town Council solely
on its own merits and in the sole and exclusive discretion of the Town Council. Approval of an
application shall require that an agreement be executed by the owner or tenant and the Town, which
agreement shall at a minimum contain:
(1) A list of those public or public-related improvements which justify the applicant's approval
and the estimated amount which shall be spent on such improvements.
(2) The maximum amount of enhanced sales taxes to be shared and the maximum time during
which the agreement shall continue, it being expressly understood that any such agreement shall
expire and be of no further force and effect upon the occurrence of the earlier to be reached of the
maximum time of the agreement (whether or not the maximum amount to be shared has been
reached) or the maximum amount to be shared (whether or not the maximum time set forth has
expired).
(3) A statement that the agreement is personal to the applicant, is not transferable and does not
run with the land or subsequent tenant.
(4) That the agreement shall never constitute a debt or obligation of the Town within any
constitutional or statutory provision.
(5) The base amount of enhanced sales taxes agreed upon by month, or other formally agreed
upon time increment as noted in Section 1-10-106 of this Chapter, and the fact that if, in any month 
as specified, sales taxes received from the property do not at least equal such amount, there shall be
no sharing of funds for such month.
(6) The base amount shall consider the historic level of sales at the property in question or a
similar property within the area in the event of a new business, and a reasonable allowance for
increased sales due to the improvements and upgrades completed as a result of inclusion within this
program.
(7) That any enhanced sales taxes subject to sharing shall be escrowed in the event there is a
legal challenge to this ESTIP or the approval of any application therefor.
(8) A statement that the obligations, benefits and/or provisions of this agreement may not be
assigned in whole or in any part without the express authorization of the Town Council, acting in
its sole and exclusive discretion, and further that no third party shall be entitled to rely upon or
enforce any provision hereof.
(9) That the agreement shall be subject to the annual appropriation of sufficient funds for
payments as provided in this Chapter pursuant to Section 20, Article X of the Colorado
Constitution.
(10) That the agreement shall provide that the successful applicant shall have no right, claim,
lien or priority in or to the Town's sales tax revenue superior to or on parity with the rights, claims
or liens of the holders as any sales tax revenue bonds, notes, certificates or debentures payable
from or secured by the Town outstanding as of the effective date of the agreement provided for by
this Section; and that all rights of the successful applicant are, and at all times shall be, subordinate
and inferior to the rights, claims and liens of the holders of any and all such sales tax revenue
bonds, notes, certificates or debentures, payable from or secured by any sales taxes issued by the
Town.
(11) Any other provisions agreed upon by the parties and approved by the Town Council.
(Ord. 2001-08 §1; Ord. 2011-12 §1)
Sec. 1-10-110. No joint venture; liability.
The Town Council has enacted this ESTIP as a joint benefit to the public at large and to private
owners and tenants for the purposes of providing the Town with increased sales tax revenues
generated upon and by properties improved as a result of this program. The Town Council further
finds that the public benefits of this ESTIP include public improvements and public-related
improvements being completed by private owners or tenants through no debt obligation being incurred
on the part of the Town, and allowing the applicant an opportunity to improve properties which
generate sales activities, which improvements make those properties more competitive in the
marketplace and further provide to the applicant additional contingent sources of revenues for
upgrading such properties. The Town Council specifically finds and determines that creation of this
ESTIP is consistent with the Town's powers as a home rule municipal corporation and that exercise of
such powers in the manner set forth herein is in furtherance of the public health, safety and welfare.
Notwithstanding any provision hereof, the Town shall never be a joint venturer in any private entity or
activity which participates in this ESTIP, and the Town shall never be liable or responsible for any
debt or obligation of any participant in this ESTIP. (Ord. 2001-08 §1; Ord. 2011-12 §1)