Already having collected over $2.4 million for 146 acres of his property needed for a public water line, developer David Jenkins now wants the city's water ratepayers to fork over another $321,000 to pay his attorneys.
At issue is property in Banning Lewis Ranch used for the Southern Delivery System pipeline project built by city-owned Colorado Springs Utilities. The city said the property was worth $117,500. But Jenkins disputed that, forcing the matter to trial in May. A three-member panel who heard the case awarded Jenkins $1,954,861 for the property, and another $480,598 in interest, for a total of $2,435,459. The property was used by Utilities for the pipeline and a pump station.
Jenkins acquired the property in 2014 from Ultra Petroleum of Houston, paying $28 million for about 18,500 acres. Hence, the court judgment represents a windfall of sorts. While the tracts the city condemned represent less than 1 percent of the total acreage he owns, the court's award is equivalent to 9 percent of the price Jenkins paid for the entire ranch. But that's not enough.
On July 28, Jenkins petitioned the court for $169,407 in costs, which include expenses associated with two expert witnesses, depositions, couriers, mileage, document processing and lodging. Jenkins sought another $321,807.50 for attorney fees. The Holland & Hart firm's Denver office handled the condemnation case on Jenkins' behalf, and attorneys and paralegals logged 871.2 hours doing so, according to his court filing.
"Colorado's eminent domain statute requires a condemning authority to pay all of the land owner's reasonable attorney fees where the final determination of value by the commission exceeds 130 percent of the last written offer by the condemning authority," Jenkins' motion states. That 130 percent of Utilities' $117,500 is $152,750, which Jenkins argues represents "an incredible disparity" between the amount offered and the amount awarded at trial.
Springs Utilities says in its response, filed Aug. 18, that it doesn't object to the costs figure, but it does dispute that ratepayers should pay attorney fees. While statutes might require attorney fees be paid when an award is more than 130 percent of the final offer, the city argues that under statutory and state Constitution provisions, attorney fees are not recoverable in cases involving rights-of-way sought for "ditches, canals and flumes for the purpose of conveying water for domestic purposes."
The city also argues that at best, Jenkins should be paid only the amount of attorney fees that correlates to the land acquired outright, which was 25 acres, or 17 percent of the total. The balance of the property, or 122 acres, was comprised of rights-of-way for permanent easements and temporary easements. The city contends that under that rationale, Jenkins would receive no more than $54,707 for attorney fees.
Ironically, the SDS project, finished in April at a cost of $825 million, was originally conceived to serve the Banning Lewis Ranch, which was annexed into the city in 1988. The pipeline since has been labeled as beneficial for providing a redundant source of water as the city grows to need the water the pipeline delivers from Pueblo Reservoir.
The Banning Lewis Ranch annexation agreement — which developers contend has paralyzed development due to onerous demands from them for infrastructure — is currently the subject of talks between Jenkins' companies and Mayor John Suthers' administration. The ranch has been owned by several entities over the years before Jenkins, the region's biggest developer, purchased it.
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