A letter dated July 8, 2025, from Nicole C. Doheny, Manager of Finance…

This legislative notice involves a Certificates of Participation (COP) financing mechanism, a common tool used by local governments to raise capital outside of traditional voter-approved general obligation bonds. In a COP structure, the city enters into a lease of its own property to a separate leasing trust, which then issues certificates to investors. Investors receive a proportional interest in the lease payments made by the city, effectively making this a form of debt secured by city assets rather than the city's full taxing authority.

The two assets involved, the Colorado Convention Center Parking Garage and the Denver Performing Arts Complex Parking Garage, are significant city-owned infrastructure properties. By executing a 'lease-leaseback' arrangement, the city transfers the facilities to a trust and then leases them back, generating the legal basis for the trust to issue securities. This structure is widely used in Colorado municipal finance because it avoids the requirement for a public referendum under the Taxpayer's Bill of Rights (TABOR), which restricts new debt and tax increases without voter approval.

The par amount not to exceed $108 million represents the ceiling on how much debt can be issued. The actual interest rate, repayment schedule, and total cost to taxpayers will depend on market conditions at the time of issuance. Debt service payments will come from city revenues, likely from parking revenue generated by the two garages or from the city's general fund, depending on how the lease payments are structured.

Historically, COPs have been a go-to financing instrument for Colorado municipalities precisely because of TABOR constraints. Critics have argued this practice circumvents the spirit of voter oversight, while proponents note it is a legally established and efficient method for funding necessary public infrastructure. Denver has used similar structures in the past for various capital projects.

Stakeholders affected include Denver taxpayers who will ultimately service the debt, visitors and users of the Convention Center and Performing Arts Complex who depend on those parking facilities, investors who purchase the certificates, and city departments that may benefit from the capital raised through this transaction.

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Denver's Department of Finance has formally notified the City Council of its plan to enter into lease agreements on two major city-owned parking garages, one at the Colorado Convention Center and one at the Denver Performing Arts Complex, and to use those leases as the legal basis for issuing up to $108 million in Certificates of Participation. Under this financing structure, a separate leasing trust holds the properties, issues certificates to investors, and the city makes lease payments that service the debt. The arrangement is a standard but technical municipal finance tool used frequently in Colorado.

Supporters of this approach, typically city finance officials and infrastructure advocates, argue that COPs provide a fast and legally sound way to access capital for maintaining and improving public facilities without the time and expense of a ballot measure. They point out that the Convention Center and Performing Arts Complex are economic engines for Denver, and keeping their supporting infrastructure in good condition protects jobs, tourism revenue, and the city's cultural identity. The structured cap of $108 million also gives the city flexibility to borrow only what is needed at competitive market rates.

Critics of COP financing, including some taxpayer advocates and government transparency groups, argue that the mechanism effectively creates public debt without a public vote, bypassing the intent of Colorado's TABOR amendment. They contend that when a city pledges publicly owned assets to back securities sold to investors, residents deserve a direct voice in that decision. Some also note that COPs historically carry slightly higher interest costs than voter-approved general obligation bonds, meaning the public may pay more over time.

For ordinary Denver residents, the practical effect depends on how the debt is ultimately structured and repaid. If lease payments are covered by parking revenues from the two garages, the cost may be largely self-contained within those facilities' operations. If general fund dollars are needed, the obligation competes with other city services. Either way, the city will carry up to $108 million in new financial commitments tied to two of its most visited public destinations, with repayment stretching across future budget cycles.