Will a Colorado casino town deplete its historic-preservation fund to pay its bills?

Story by Jad Davenport / Jan. 18, 2002

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Central City, Colo. (Jad Davenport)

A billboard on Colorado Scenic Highway 119 from Denver to Central City welcomes visitors to the "Richest Square Mile on Earth." Though the boast may have been true for this mining town during the 1859 gold rush days, it was truer still in the early 1990s, when voters approved a state amendment allowing gambling here and in two other boom-and-bust mountain towns.

Today, however, both the gold and the gamblers are gone. Eclipsed by the mega-casinos a mile away in Black Hawk, Colo., Central City has found itself isolated once again, cut off from Denver visitors. Only five of Central City's original 23 casinos are still open.

Burdened with debt from revamping water systems for the casinos and unable to afford employee salaries, road repairs, and vehicle maintenance, the mayor and city council have raised eyebrows with a desperate and controversial funding plan. They want to absorb the bulk of $722,000 sitting in a historic preservation fund into the city budget.

It's an idea that upsets Jim Prochaska, executive director at the Gilpin County Historical Society, and other preservationists. "I think that goes against everything the voters approved," he says.

In 1990, Amendment Four, which approved limited-stakes gaming, was touted as a way to preserve the quaint character and architecture of the towns, Prochaska says. It also established the State Historical Fund and declared that 28 percent of the state tax revenue generated by gaming must be paid into the fund. Eighty percent of the fund must be used for statewide preservation, and the remainder is divided among the mining towns according to their casino revenues.

The windfall was enormous. In 2001, gaming revenues pumped $23.3 million into the State Historical Fund, making it the largest state-run preservation fund in the country. Central City has $372,064 in historic-preservation funds remaining from 2001 and is expecting another state grant of $350,000 next year. "That money was intended specifically for historic-preservation projects," says Prochaska. "And there are plenty of projects that need funding."

Mayor Don Mattivi Jr., a fifth-generation resident whose family moved to the mining camp in the 1800s, says the town has spent enough on preservation. "We've refurbished all the downtown buildings," he says. "We've salvaged the local train and restored the Coeur d'Alene mine. One third of the private homes have new roofs and foundations."

 

City equipment, in need of repair (JD)

Now, says Mattivi, is the time to look at broadening the definition of historic preservation. "The state has always said that defining what is and what is not historic preservation is up to the individual communities," he says. "Maintaining streets and repairing retaining walls is as much a part of preservation as rebuilding old structures."

But can historic-preservation money be used in part to cover the $1.8 million yearly debt service on the city's water bond? That was the question Michael Urie, city finance director, posed to the Colorado Office of State Auditor. The answer was a resounding no. The Office of State Auditor reiterated that state law specifically requires the fund to be used to "restore and preserve the historical nature" of gambling cities.

 

Boring with cards (JD)

If the city isn't permitted to use the preservation funds to finance its operation, then there will be precious little of the city left to restore and preserve, says Don Boring, owner of Annie Oakley's Emporium, a video-liquor-art store. A former casino owner, Boring shows off a fanned deck of cards pinned in a black frame. "This is the first deck of cards from the first hand of black jack played in Central City, right here in this very building," he says. "If we can't use the preservation funds to keep the city alive, then we have to tax the business owners again. The few casinos left are on thin ice; if they go under, then so does any more preservation money."

The debate has polarized the town. Opponents of the city council have found an unusual ally in Ivan Widom, the city manager. "I'm not happy with the way the city council is going on this issue," Widom says. "The reason we allowed gambling here in the first place was to help with historic preservation. If the money we earned by allowing casinos into our city is used for other purposes, then it is no longer available to individuals, businesses, and nonprofits who would like to use the funds to restore buildings."

Widom has had to face the reality that his job depends, in part, on the outcome of the debate. He has come under increasing fire from members of the city council demanding his resignation or dismissal. "People tell me, 'Don't you realize you are biting the hand that feeds you? If we can't use that money for operating expenses, you might not have a salary next year,'" he says. "What's more important? My salary or saving a city that has been around for over a century?"

 

Downtown Central City (JD)

This month, despite objections from the Office of the State Auditor, the Central City Council decided to go ahead with their plans to use a large portion of the preservation money to fund city projects. Widom says that unless new state legislation is approved that defines precisely what the fund can and can't be used for, his hands are tied. "Historic preservation is defined pretty much however the city council would like it to be defined," he says.

"People say that because Central City is a historic mining town, anything you do is historic preservation," says Widom, who has come under increasing fire from members of the city council demanding his resignation or dismissal. "But paying down the water bond, paving a street, or repairing a snowplow?" Widom laughs. "That's a bit of a stretch."

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