Crews could break ground on the Air Force Academy Visitor’s Center and surrounding development this summer after steep increases in cost and significant delays driven by the coronavirus. 

“It’s been a complicated and a really difficult process, but we’re almost there,” said Bob Cope, economic development manager for the city of Colorado Springs. 

The bond markets fell apart in March of last year because of the coronavirus just as the bonds for the project were offered for sale. Since then, the markets have largely recovered and Cope said he expects the bonds to be sold in June because similar projects have recently been financed.

Following the delay, the Colorado Springs City Council had to increase the bonding authority for the project by $10 million earlier this year bringing the total debt limit up to $90 million to cover the visitor’s center and public infrastructure across the 51-acre site. A business improvement district set up for the project will be responsible for paying back the debt, not the city.

The anticipated costs went up, in part, because of the steep increases in construction material prices, Cope said. The costs were also driven by legal fees, design fees and study updates, according to city documents.

The bonds for the project will be paid back by in part through taxes paid by new businesses, including restaurants and retailers, expected to move in near the visitor’s center. One of the largest and most important is a hotel and conference center expected to cover about 10 acres that will be built and owned by Provident Resources Group, a Louisiana-based nonprofit. The nonprofit builds projects with tax-exempt bonds that serve a public benefit and drive tax revenues for local governments across the country, said Steve Hicks, chief executive officer and board chairman. 

For example, Provident is working with officials in Minnesota to build a new indoor waterpark at the Mall of America that the nonprofit will own. The city of Bloomington doesn’t want to hold the debt associated with the waterpark, but will benefit from increased tax revenue from the new attraction, Hicks said. 

The same holds true for the planned 300,000-square-foot convention center and hotel near the Air Force Academy Visitor’s Center, he said. The convention center will drive tax revenue and is therefore eligible for tax-free financing. If it were just another hotel on the interstate, it would not be eligible for the same bond structure, Hicks said.

Provident through a special purpose entity could issue up to $225 million in bonds for the convention center construction, according to a legal notice. 

After infrastructure is put in, work could start on the new hotel and conference center in August, Hicks said. 

“It will be a first class hotel with convention space,” Cope said. 

The new center will also be key in paying back the bonds for the visitor’s center and even though it will be owned by a nonprofit it will owe property, sales and lodgers taxes, he said.

The revenue generated by the hotel will also be reinvested in the facility over time to keep it updated as opposed to going to shareholders, he said. 

The visitor’s center is the last City for Champions project and will receive part of $120.5 million in future state sales tax revenues generated over 30 years, under a 2013 measure approved by the Colorado Economic Development Commission. Some of the other City for Champion’s projects include the U.S. Olympic and Paralympic Museum, the Switchbacks stadium and Robson arena.