NEXT IN STORE: Aurora looks to boost local businesses to reap more tax revenue

AURORA | Aurora, like many urban Colorado cities, is fueled primarily by sales taxes, and those revenues increasingly aren’t meeting the city’s demand.

Aurora lawmakers studying the budget last month were apprised of a looming budget shortfall next year, with a grim outlook for retail sales taxes increasing on their own.

The problem is complex. Retail sales are weak. Businesses are closing and new ones are filling enough vacant storefronts. Competition among the metro area is fierce.

All that has prompted Aurora city officials to develop a retail strategy aimed at bolstering the local economy and maintaining a steady stream of sales tax revenue, which currently accounts for 57% of the city’s general fund.

“Just to be clear, we are not waiting for the adoption of the retail strategy. We are already boots on the ground, doing work,” said Jeanine Rustad, Aurora’s director of planning and business development.

City budget officials are predicting an $11.5 million shortfall in the city’s 2026 estimated budget that must be addressed. While tax hikes and budget cuts are on the table, the city is looking at ways to generate more tax revenue by helping businesses generate more sales.

The plan focuses on attracting new high-volume retailers, enhancing existing shopping centers, and getting consumers to dig deeper in their wallets and more often in Aurora. Plans did not identify what the cost of potential programs would be, nor what the return could be in terms of increases sales tax revenues.

“Retail is important to provide not only shopping but also gathering spaces,” Rustad said, quoting The Future of Cities: Adapting to Changes in the Retail Landscape, National League of Cities. 

“In addition to creating jobs and economic vitality, retail provides an essential piece of social infrastructure.”

The strategy aims to improve the city’s economy and livability by increasing merchant profitability, enhancing shopping centers, and providing engaging shopping experiences. Additionally, Rustad emphasized that the goal is not only to keep shoppers in Aurora but also to attract outside visitors. With online shopping on the rise, Aurora must compete nationally for retail dollars. 

Aurora officials outlined key components of the city’s involvement in retail:

• Building relationships between city officials, property owners, and businesses

• Offering financial incentives to attract new retailers

• Engaging with local business improvement districts and East Colfax Avenue development associations

• Providing small business counseling and training

• Adapting to changing retail trends

Sales tax incentives have successfully attracted companies like Nordstrom Rack to Aurora, and the Restaurant Incentive Program has brought new restaurants such as Mason’s Dumpling Shop, Leezakaya and the newly opened Alpaca Chasqui Grill.

The city is also working with the Havana Business Improvement District and planning a “downtown” development association for the Colfax Corridor to support neighborhood businesses. Rustad said the city also offers small business counseling and training through city staff and the Aurora South-Metro Small Business Development Center. 

Rustad said the city retail team plans to study specific shopping centers across the city to identify opportunities for intervention and redevelopment. Factors such as occupancy rates, sales tax revenue per square foot, and tenant mix will guide decision-making regarding which areas need urgent attention.

Healthy retail centers generate $300 in sales tax revenue per square foot of retail space, according to city officials. Anything below that may indicate economic trouble for the business, and ultimately, the city. A healthy shopping center occupancy rate is 90-95%. Anything below 90% may require intervention, Rustad said.

There are numerous locations in Aurora that don’t meet those goals, according to city officials.

Michael Burayidi, an urban planning professor at Ball State University, and the author of multiple books and studies about revitalizing urban areas, said that Aurora’s metrics are all valid factors to understand the “health” of a retail center. He said that 30% vacancy rate is usually when a shopping area will begin to “spiral.”

A strong retail mix is essential. An excess of service-based businesses, such as gyms, medical offices or churches, over traditional retail can signal economic decline, Rustad said.

The presence of an anchor tenant or a large national retailer is critical for attracting foot traffic in Primary Retail Centers. In recent years, Aurora has lost several strip-mall anchor tenants, most recently Big Lots and some Walgreens.

Burayidi said service-based businesses and mixed-use residential units above retail also helped reduce crime rates in areas because it creates constant foot traffic, which can prevent criminal behavior. 

Center appearance can also affect foot traffic with signage, lighting visibility and overall upkeep. This can be affected by management and property ownership.

City staff has categorized Aurora’s retail centers into four classifications:

Primary Centers – Strong anchor tenants, high sales per square foot, and modern upkeep. They draw people in.

 Shadow Areas – Smaller retail hubs located near major shopping centers or big-box stores like Home Depot, close to anchors.

 Micro Centers – These are standalone locations targeting niche markets in surrounding communities. Niche locations for targeted communities like Walmart.

 Secondary Centers – Increasingly struggling areas with low consumer traffic and fragmented ownership. Varied maintenance or appearance. 

From more recent studies, Burayidi said he did not think “big box” stores were as necessary for foot traffic as long as there were central activities to drive people to a location. He said aspects like ice skating rinks or adding a pickleball court to a strip-mall could drive people to the locations and encourage them to shop after. 

Burayidi said legacy businesses — longstanding, often family-owned establishments — are key to community identity and foot traffic. He said cities need to take proactive measures to prevent closures when younger generations choose not to continue the business.

“The other thing to keep in mind with respect to these shopping malls now is that retail is no longer the draw, and so you have to have an experience,” Burayidi said. “Experience is now the draw. People go to a mall for the experience, and then they stay to do the shopping.”

Aurora officials said they make extra efforts to support those legacy businesses. The city works to prevent redevelopment from displacing businesses and collaborates with the Small Business Development Center to assist struggling establishments, offering resources to help them grow and remain in Aurora.

Challenges facing retailers

Rustad acknowledged the external, operational and low-consumer traffic challenges Aurora’s retail centers face.

External challenges can include homelessness, crime and economic factors. 

“The city has some role to play in homelessness and crime prevention,” Rustad said. “We cannot, unfortunately, control the economic factors.”

Operational challenges can include poor strip-mall management, which leads to poorly maintained parking lots, buildings and landscaping. There could also be a lack of appropriate lighting or signage for visibility and a deteriorating landscape. Rustad said that when the city enforces building and landscape codes, instead of collecting fines, it should consider offering incentives.

“Tenants may also come together and decide they want to chip in,” Rustad said, mentioning that the city has seen tenants get together to replace bad lighting.

Low consumer traffic challenges include a weak tenant mix, poor external marketing and extensive intervention is often required. Rustad said the Aurora often sees this third category and much of the second category in Secondary Centers.

“What staff is doing now is coming up with specific implementation tools and a way to rank those tools so that we can come back to (business owners) in the near future and find out what the city priorities are,” Rustad said. 

Public safety, and perception, are paramount

Rustad went on to list some general retail strategies they have already looked into for Aurora. 

“First and foremost, we need to address crime. It is expected from retailers that there’s 2% attrition through retail theft. When it gets to 4%, that’s a red flag. Some of the retailers we’ve lost in the city have seen as high as 7%,” Rustad said. “When crime rates rise and theft becomes excessive, businesses leave,” Rustad said. “We need to address these concerns proactively.” 

Theft can impact a retailer’s decision on whether to remain open, while the presence of homelessness or nearby drug activity may contribute to a sense of insecurity or feeling unsafe, Rustad stated in an email.

Naomi Colwell, Aurora Chamber of Commerce CEO, said that many of the businesses she works with also have a problem with crime, or at least the perception of it. She said the East Colfax Corridor used to have parades with all of the schools and flower pots lining the street. It was a lively place where people wanted to hang out and have fun.

Mayor Mike Coffman also said he is actively working to bring the Colfax Corridor back to that vibrant place without gentrifying it. While Aurora is often touted as the most diverse city in Colorado, northwest Aurora, is the most diverse part of the city.

Colwell and the Aurora Police Department said they hope that with time, they can get back to having police foot patrol in areas around the city, especially on Colfax in the art district. 

Burayidi said that crime or even the perception of crime, can deter shoppers. Although most serious crime in Aurora is down according to Aurora Police Chief Todd Chamberlain and Commander Michael Gaskill, many people don’t realize the work the city of Aurora has been doing to reduce crime. 

Burayidi said that one city he studied began posting crime rate comparisons to actively show crime declining. It needs to be continuous and persistent.

“It is hard to change people’s perception,” Burayidi said. 

Aurora’s overall crime in 2024 declined to numbers below 2020, after a spike in 2022. Theft also spiked from about 7,500 incidents in 2020 to 8,100 incidents in 2022 and back down to 7,300 incidents in 2024. 

Year-to-date, year-over-year, city crime statistics for the beginning of February showed a 9.6% increase in shoplifting reports. 

Aurora Police and private security can help build on crime reduction, experts say. Rustad said business improvement districts can merge to provide that private security. The best solutions include increased police presence, private security collaborations and business improvement districts to enhance safety.

Visible law enforcement assures most shoppers and acts as a real deterrent to shoplifters, scofflaws and other criminal behavior.

Chance Horiuchi, executive director for the Havana Business Improvement District said On Havana has near-constant community engagement events where they have the police department attend to allow shoppers and Aurora businesses to engage with the local officers and get to know them on more personal levels.

The Gardens at Havana shopping center recently added a police store-front.  While officers are not stationed full-time, the store-front creates a place they can stop during the day to potentially bring more police presence to the area.

Home delivery boon a bust for local retail?

Online shopping is another area that affects local retail businesses, large and small. Whether it is people shopping online for items to pick up at a brick and mortar or people online shopping to have it delivered to their homes, it does still bring sales tax revenue to the city but it doesn’t build the retail and business community.  

“I would say that that is going to continue to be the trend,” said Greg Hays, the budget director for the City of Aurora. “More and more people are shopping online.”

Rustad told the Sentinel it is difficult to identify on-line sales metrics completely and they cannot be broken out by ward.

When it comes to city planners making the city’s retail more competitive, the city staff actively works to attract retail and restaurants, talking to developers and retailers, Rustad said.

“I like to think of our retail team almost as matchmakers,” Rustad said. “They have access to data of what’s available. They know the brokers out there and can help center managers.”

The city’s small business counselors also provide training and incentives, such as restaurant programs, to encourage local entrepreneurs to thrive.

Officials are also encouraging existing businesses to expand within Aurora rather than relocate. The loss of Liberty Justice Brewing on East Colfax Avenue to Denver is an example of what the city hopes to prevent in the future.

One opportunity officials identified is tailoring retail options to local needs. For example, a convenience store primarily selling alcohol and tobacco products could pivot to providing grocery essentials for nearby residents as new housing developments emerge.

City staff are finalizing a comprehensive retail strategy report to strengthen Aurora’s economy, stabilize retail centers and attract new businesses. The report, currently in its final stages, aims to provide council members with detailed insights into citywide demographics, ward-specific retail conditions and best practices from other cities. 

Staff are also evaluating funding options and prioritizing redevelopment efforts based on need. The final report is expected to be completed in April, with a presentation to the Planning and Economic Development Committee in May and full council approval by June. 

Council members will receive regular updates, which will be incorporated into community discussions. Rustad said it is important for the city council to give feedback to refine the strategy before finalizing it.

Retail issues affecting different parts of the city

Ward I: Northwest Aurora

Ward I has $14.6 million in annual sales tax revenue and 3 million square feet of retail space, with a 3% vacancy rate. The median household income in Ward 1 is the lowest in the city at $52,000. Rustad said there needs to be a possible look into getting mixed-income to generate the consumer base to support retail.  Challenges include low spending per capita and a lack of strong anchor tenants, leading to low consumer traffic. Rustad said even getting a grocer in the area would help a lot. 

Ward II: Northeast Aurora 

Ward II has $21.6 million in annual sales tax revenue and 1.3 million square feet of buildable retail space, with a 1.5% vacancy rate.  The median household income in Ward 2 is relatively high at $89,154. A challenge is that the area is rapidly developing, so the city needs to strategically plan for appropriate retail locations, Rustad said. But the opportunity is developing very rapidly.

Ward III: West Central Aurora

Ward III has $37 million in annual sales tax revenue and over 5.2 million square feet of rentable retail space, with a 4.6% vacancy rate. With a high vacancy rate, Rustad said it is something they are already looking into addressing.  The median household income in Ward III is around $60,713. Challenges include the largely undeveloped city center and the low-performing area surrounding the Town Center of Aurora Mall, or the Aurora Mall as many call it. Rusted said the underdeveloped city center is also an opportunity because it’s the “heart of Ward III.” I-225 can be an opportunity to bring shoppers into Ward III. 

Ward IV: East Central Aurora

Ward IV  has $38 million in annual sales tax revenue and 5.3 million square feet of retail space, with a 2.9% vacancy rate. The median household income in Ward 4 is the lowest in the city at $67,940. Challenges include car dependency in this area, which means people need to get in their cars to serve their needs, Rustad said. 

Ward V: Central Aurora

Ward V has $24.7 million in annual sales tax revenue and 3.9 million square feet of existing retail space, with a 3% vacancy rate. The median household income in Ward 5 is almost $81,000, the highest in the city. Challenges include older strip centers and micro centers that lack strong anchors. There will probably be future conversations of redevelopment, Rustad said. There are aging and outdated centers that are underperforming. Some centers are also having challenges with access and visibility and need help with signage and other maintenance. 

Ward VI: Southeast Aurora

Ward VI has $24.2 million in annual sales tax revenue and 3.1 million square feet of existing retail space, with a 4.5% vacancy rate. The median household income in Ward VI is the highest in the city at almost $130,000. “This is somewhere we can help through marketing, making sure we’re getting strong retail and restaurants that are desirable and will bring people,” Rustad said.