A bankruptcy court judge sided with the city of Colorado Springs in June, ruling that the Banning Lewis Ranch annexation agreement is not a contract and can't be set aside, as sought by its latest owner, the David Jenkins family.
But Banning Lewis Holdings and two other entities controlled by Jenkins filed a notice in July, saying they'd appeal the ruling to U.S. District Court. Chris Jenkins, David's son and president of Nor'wood Development Group, declined to comment on the case, as did the city. Both cited pending litigation.
The 17,760 acres forms the city's eastern flank. It was annexed in 1988 but never developed, other than a section on the north end. After changing hands a few times, it was acquired by a California company, which filed for bankruptcy in Delaware in 2010. In early 2011, an auction was announced to sell the land "free and clear" of liens, claims and other encumbrances. Ultra Resources, a Houston-based oil company, bought most of the land for $20 million, while Oakwood Homes bought several thousand acres.
Ultra had disputed the annexation agreement in bankruptcy court. The company planned to drill for oil and gas, not develop it for homes and businesses. When mineral tests came up dry, Ultra sold the property to Jenkins for $28 million in November, and his companies stepped into the case in Ultra's place.
While the original 1988 annexation agreement set developer costs for roads and infrastructure at $891.8 million, a 2007 city study concluded development fees should total $11,910 per acre. Even that, which would total about $200 million, has been called onerous by developers.
Bankruptcy court Judge Howard Tallman ruled in June that "because the Agreements are of the type that run with the land and are properly recorded, the Agreements are not only valid and enforceable among the non-debtor parties such as the City or the other Annexors, but they are also binding on the Debtor's successors in interest."
Tallman also dismissed developer Randy Case's motion to intervene as an owner of a portion of land that once was part of the ranch, given that the annexation agreement was upheld.
Open-space advocates hope the ruling gives the city an edge in negotiations to set aside 12,000 acres of the undeveloped property for public use. Jenkins' appeal could be seen as leverage to encourage the city to revisit the annexation agreement.
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