A Denver City Council committee has taken the first step toward creating Colorado’s first-ever tourist improvement district. On Wednesday, June 7, the Business, Arts, Workforce & Aeronautical Services committee unanimously approved Bill 17-0653, authorizing the district, which is designed as a mechanism to help fund tourism-related facility improvements and services like the upcoming $233 million Colorado Convention Center expansion project.

This proposed district would have the authority to impose a one percent tax on stays in hotels that are located in the City and County of Denver and that have 50 or more rooms. Denver is currently home to 116 hotels that meet those specifications, 43 of which are located downtown, and a recent Downtown Denver Partnership report suggests that number will rapidly rise, as an estimated 1,181 additional hotel rooms are in the works right now.

The Denver City Council will take the next step in the authorization process when the entire Council votes on the bill in the coming weeks. Even if the bill is approved, a number of things must happen before the district will become a reality. First, the Colorado Hotel and Lodging Association must submit a petition signed by at least 30 percent of the 116 affected hotel owners (approximately 35). If it does so, the ordinance will appear on the ballot during the November 7, 2017 special election. Second, the majority of affected hotel owners (the only parties allowed to vote) must vote in favor of creating the district. If both of these things happen, city officials predict that Denver will start to see tourism improvement district tax revenues in the first part of 2018 and that the convention center expansion will begin later that same year.

The district will not fund the entire $233 million convention center expansion project. City officials estimate that the new tax would generate approximately $3.8 million a year for the expansion (as well as an additional $900,000 a year for convention center maintenance and $4 million a year for the Visit Denver marketing program). The convention center expansion will also be funded by approximately $104 million from revenue generated by extending a 1.75 percent lodger’s tax and a short-term car rental tax, as well as from proceeds from bonds issued as part of measure 2C. That measure, approved in 2015, also authorized the city to issue bonds to help fund redevelopment of the National Western Center.