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Nor'wood negotiates to buy government land southwest of downtown 

click to enlarge Nor'wood Development Group will buy this building at 101 W. Costilla St. - FILE PHOTO
  • File photo
  • Nor'wood Development Group will buy this building at 101 W. Costilla St.

If at first you don't succeed, work out a new deal and continue moving forward.

That might be an apt description of Nor'wood Development Group's efforts to gain control of land located in the Southwest Downtown Urban Renewal Area owned by the Pikes Peak Regional Building Department.

After an agreement with RBD collapsed last fall due to conflict of interest questions and legal requirements, Nor'wood persuaded the Regional Building board, composed of elected officials, to simply sell the property to Nor'wood without placing it on the open market.

Nor'wood's pitch? The sale "will benefit the entire community," according to minutes from the RBD commission's Nov. 17, 2016, meeting that quoted Nor'wood's president Chris Jenkins.

"Mr. Jenkins stated by creating one large piece of property with the purchase of these parcels, it will yield a better project for the block and for the community," the minutes say.

The RBD's "participation agreement" with Nor'wood was approved by RBD commissioners on Aug. 24, 2016. The deal called for RBD and Nor'wood to develop and market property owned by both in the urban renewal area, for which Nor'wood is the master developer, in the vicinity of the Olympic Museum site at Vermijo Avenue and Sierra Madre Street.

The partnership was to include RBD's building and parking lot at 101-111 W. Costilla St. and a vacant lot at 435 Sahwatch St., which have a combined value of $2.1 million, according to assessor records. It also was to include Nor'wood's seven tracts in that area, which are worth $1.2 million.

RBD commissioners lauded the agreement as a boost to economic development, especially in a largely dormant area adjacent to America the Beautiful Park.

Then-El Paso County Commissioner Dennis Hisey, who served on the RBD board before leaving office in January, said during the August meeting that the Nor'wood agreement had undergone "a great deal of research, due diligence and negotiation," according to the meeting minutes. (Other commissioners were Green Mountain Falls town trustee Tyler Stevens and Colorado Springs City Councilor Larry Bagley.)

But within a few days after the Independent's story about the deal, RBD backed away, citing state statutes that specify what types of investments are allowed for a public agency like RBD. Private land speculation and development isn't among those.

As well, the participation agreement would have placed RBD in the odd position of issuing building permits to, inspecting construction of and making other regulatory decisions about its own business partner. That, said Colorado Ethics Watch executive director Luis Toro, creates the appearance of a conflict. (RBD officials denied such a conflict would exist, however.)

The original agreement was devoid of details such as types of development that would occur on the land, how much money RBD would receive under the partnership and whether the land would be taxable. It's now exempt because RBD is a government agency.

Now, RBD plans to sell the property to Nor'wood after the commission determined at its Nov. 17 meeting the sale is "in the best interests of the public good," the minutes state.

Jenkins appeared at the meeting and said Nor'wood has been working to "create a vision around how do we bring investment into southwest downtown." Jenkins noted the museum, for which his family has donated a 1.7-acre site, will serve as an anchor in that district, which has been "dilapidated for a very long time" and consists mostly of warehouses, some no longer in use. The minutes of the November meeting also note Jenkins pointed out his family has been assembling property in that area. Land records show properties owned by Jenkins' entities abut the RBD land to the north, west and south.

"Mr. Jenkins stated by creating one large piece of property with the purchase of these parcels, it will yield a better project for the block and for the community," the minutes say. "[RBD legal counsel] Todd Welch stated RBD is in a situation where it can benefit the entire community by selling this property to Master Developer."

The RBD board, which now includes County Commissioner Mark Waller instead of Hisey, voted unanimously on Feb. 22 to approve the sale, although no price has been agreed upon.

"The Board requested to review any purchase proposal prior to approval, so it will go back to the Board," Regional Building Official Roger Lovell reports via email.

Though he says he's unsure when that will happen, RBD minutes of the Feb. 22 meeting state that Lovell said his goal is to complete the deal within five or six months.

Outlining reasons the commission confined negotiations to Nor'wood alone, Lovell says in the email, "They are the Master Developer of Southwest Downtown ..., they own adjacent land, they are active working to bring investment to the district with their involvement in the U.S. Olympic Museum/district master planning and predevelopment work, etc."

He also notes that RBD has no need for the land, and a sale to Nor'wood would spur development in that area while also returning the property to the tax rolls. As the parcels sit today, taxes on the RBD land would come to $38,381, with the biggest share going to Colorado Springs School District 11.

Lovell says the RBD has no plans for how it will spend the sale's proceeds.

Jenkins didn't respond to the Indy's email asking for information about Nor'wood's plans for the property.

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