A deal between the Pikes Peak Regional Building Department and a local developer has been put on hold pending further study about its legality.
Last week, the Independent reported on the "participation agreement" between the two ("Partnering up," News, Sept. 14), raising questions regarding a potential conflict of interest. Regional Building, which issues building permits and inspects construction, would be placed in a position to monitor its partner, Nor'wood Development Group, if the deal goes through. Nor'wood has projects underway across the region.
At issue are properties owned by Regional Building within the Southwest Downtown Urban Renewal Area. Valued at $2.1 million, those tracts would be combined with surrounding property owned by Nor'wood, valued at $1.2 million, to form a new entity. Nor'wood, which would have a 63 percent stake, would then develop the property and have first right to buy the Regional Building land. The parcels at issue lie adjacent to the U.S. Olympic Museum and Hall of Fame site at Sierra Madre Street and Vermijo Avenue. The undisclosed agreement reportedly doesn't contain provisions for how much money Regional Building would get.
"We are investigating right now," Regional Building Official Roger Lovell told the Indy on Sept. 15, "and it appears we may, indeed, have a problem here. We're starting back at square one to be sure we didn't miss something. We may have a violation [of state statutes] here. Initially, it appears we can't do this. State statutes prevent us from doing it. If that is the case, we are not going to push it."
Lovell didn't elaborate on which statutes pose a problem, but state law dictates what government agencies can and cannot invest in.
When the Regional Building Commission — comprised of El Paso County Commissioner Dennis Hisey, Springs City Councilor Larry Bagley and Green Mountain Falls Town Trustee Tyler Stevens — approved moving forward with the agreement on Aug. 24, officials weren't aware of the law, Lovell says. (All of the commissioners voiced support for the deal, saying it would help economic development. Meeting minutes show Hisey said the deal had undergone "a great deal of research, due diligence and negotiation" before the vote.)
"I thought what we were doing was in the best interest of the community," Lovell says, "but if it's illegal, it doesn't matter what our intentions are. We're digging into it and researching it, and if we did make an error, we're going to make it right."
Neither the City Attorney's Office nor the County Attorney's Office was consulted on the agreement, according to Lovell, because Regional Building has its own attorney, Todd Welch.
Lovell didn't say how long the additional research would take.