Broomfield City Council unanimously approved the formation of a business improvement district and urban renewal area that would partially fund the over $200 million Broomfield Town Square project.

Funding for the large development comes from a combination of the business improvement district, the urban renewal areas and a previously approved metro district, another type of government body.

Approved at Tuesday’s meeting, the new Broomfield Town Square Business Improvement District is expected to raise $50,000 per year for new infrastructure at the site, but that is expected to increase as more land is added to the district and as development of the town square continues.

A business improvement district is a legal governmental entity created by a municipality such as Broomfield to collect property taxes to spend on improvements in a defined area. The business improvement district currently encompasses just over three acres at the northeast corner of Main Street and First Avenue. More of the project’s land will be added to the district as the city transfers ownership to the Broomfield Town Square Alliance. Currently, Broomfield owns some of the land where the project is expected to be built.

The alliance, composed of Milender White Construction and City Street Investors, is working to build the development, which would include more than 600 housing units, a market hall and a lake. According to a statement from Tim Fredregill of Milender White, the first phase of the project is expected to cost $270 million.

City Council and the Broomfield Urban Renewal Authority also unanimously approved the formation of a new urban renewal area and modifications to an existing renewal area that encompasses part of the planned area for the development.

The renewal areas allow the project to be funded with tax increment financing. That’s a term for collecting higher levels of tax revenue spurred by higher economic activity. The tax increment method doesn’t involve a new tax or raising tax rates.The existing renewal area, the Broomfield Plaza-Civic Center Urban Renewal Area, includes areas north of First Avenue and west of Lamar Street. It was amended to not overlap with the new area, the Broomfield Town Square Urban Renewal Area. The new area encompasses the project area east of Main Street and west of Spader Way.

Some of the special taxing districts in the affected area will contribute to the project as well, sending the property taxes collected for them from the area to the project. These districts include Boulder Valley School District and the Mile High Flood District. Broomfield agreed in 2019 to contribute up to $54 million in tax increment financing to the project.