Friday, February 5, 2016

UPDATE: Jenkins holds two carrots for BLR issues

Posted By on Fri, Feb 5, 2016 at 1:13 PM

click to enlarge David Jenkins has a couple of carrots he can use in negotiations with the city over easing up requirements under the Banning Lewis Ranch annexation agreement. - NOV. 19, 2014 COVER ART BY TANYA JEFFREY
  • Nov. 19, 2014 cover art by Tanya Jeffrey
  • David Jenkins has a couple of carrots he can use in negotiations with the city over easing up requirements under the Banning Lewis Ranch annexation agreement.
UPDATE:

Jamie Fabos, Mayor John Suthers' chief communication officer, notes that Suthers addressed the issue of the Banning Lewis Ranch annexation agreement during an interview with The Gazette on Dec. 30.

During that interview, Suthers said he wasn't involved in the negotiations, but rather the city's planning department and Springs Utilities were doing all that. (Councilor Bill Murray says Suthers' Chief of Staff Jeff Greene is involved.)

"At this point in time, the appeal (of the federal court's ruling that the annexation agreement isn't a contract — a ruling favorable to the city) to the 10th Circuit Court of Appeals has been delayed so there can be some discussion," Suthers said during the interview. 

"The plan for this today is much different [than it was when the annexation agreement was approved in 1988]," he said. "Less density, more open space, and the infrastructure needs are different, and the developers are saying, 'Hey, we'd like to negotiate the annexation agreement.'"

"The important thing is the developers will pay the infrastructure cost," he said. "The question is, what's the infrastructure needs for the development? What's under debate, given how the project has changed, what's the appropriate infrastructure that ought to be required? So we'll see in the next couple of months about whether some agreement could be reached and taken to Council."

OK. I missed that interview. But did I also miss City Council approval of a different master plan for the BLR? How about a zoning change for the entire 20,000 acres? Did I miss that, too? Suthers seems to know something the rest of us don't: That plans for the property have changed. If they've changed, as he assures us they have, then I would presume the way to go about that is to submit a request to city planning for a master plan change, or rezoning or whatever other kind of procedure is necessary within the confines of existing city requirements.

Is there a formal process whereby someone can seek an annexation amendment? Or is it one of those behind closed doors things like what's happening with BLR?

Instead, it seems the developers, David Jenkins chief among them, are jumping past all those hurdles and going directly for the annexation agreement, and it's all being done without the public's knowledge or participation. The public will learn of it only when it's officially presented to City Council, and we'll see how much gets altered at that point.

We hope this corrects the record on what's up with BLR.

———-ORIGINAL POST FRI., FEB. 5, 2016, 1:13 p.m.———

Mayor John Suthers' staff apparently is in negotiations with mega-developer David Jenkins over whether to amend the Banning Lewis Ranch annexation agreement. Colorado Springs Business Journal and Independent columnist John Hazlehurst reported on this last month.

This is important, because the outcome of those negotiations will determine how much developers will have to pay for public infrastructure. And as we've reported, developers haven't always stepped up to the plate to do their share, and the city hasn't always made them do so. Just ask the EPA.

Apparently, the crux of the negotiations, besides developer fees contained in the 1988 annexation agreement, is how much land Jenkins will hand over to the city as open space.

A court case about the annexation agreement started when the land, roughly 20,000 acres, was held by Ultra Petroleum of Houston. Ultra sold the land to Jenkins in mid-2014, so Jenkins took Ultra's place in that federal case. The city won a key decision last year that ruled the annexation agreement isn't a contract, so it can't be redone like a contract. Hence, the current negotiations to amend the annexation agreement.

City Councilor Bill Murray says the topic will come up at the Council meeting on Tuesday and he'll have plenty to say, such as raising questions about why the talks should be kept secret from the public.

It might seem like the city is holding all the cards here, given the federal court's decision on the contract question.

But let's look again.

David Jenkins is one of the most successful developers in the region for a reason. - FILE PHOTO
  • File photo
  • David Jenkins is one of the most successful developers in the region for a reason.
First, Jenkins certainly can use the open-space dedication as a bargaining chip: The more concessions in the annexation agreement he gets, the more land the city receives.

He also could use another pending court case as leverage.

Colorado Springs Utilities is sparring with Jenkins in state district court over how much 86 acres on the ranch is worth that's being used for the Southern Delivery System water pipeline, or SDS, about which we recently wrote quite a bit last week in our cover story, "On the line," Feb. 3.

CSU won a court order for immediate possession of those 86 acres three years ago, and paid $73,400 into a special account. That's the value a Utilities appraisal said the land is worth.

But the city and Jenkins, who also took Ultra's place in this case after he bought the land, continue to litigate over the land's value.

A May 23 court date is set, but meantime, Jenkins is trying to persuade the court to allow him to cite as evidence the values of other land in the vicinity, while Utilities is trying to prevent that.

One evaluation involved roughly 1,100 acres the city obtained for a future reservoir as part of SDS. The reservoir site, southeast of Colorado Springs, cost Utilities $10,500 per acre, an amount paid to the owner, State Land Board. (For what it's worth, Utilities couldn't have condemned the property, because the State Land Board isn't subject to such actions.)

If that $10,500 figure is applied to Jenkins' 86 acres, he'd walk away with $903,000. Worse, a prior appraisal of land in that area came in at $35,000 per acre, making Jenkins' possible take-away $3 million.

Although it's not known if the condemnation lawsuit has creeped into Suthers' negotiations with Jenkins, who gave money to Suthers' mayoral campaign last year, it's worth noting that the Utilities VS Banning Lewis Ranch eminent domain action is still in play at the very time the city and Jenkins are facing off over the annexation agreement. It's also worth noting that Suthers has no official say-so over Utilities. That's the Council's domain.

So ask yourself: What are the chances they're being dealt with separately?
 

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