Thursday, September 15, 2016

UPDATE: Regional Building takes second look at questionable deal

Posted By on Thu, Sep 15, 2016 at 10:32 AM

click to enlarge This vacant lot in lower downtown was one of two properties Regional Building planned to use to partner with Nor'wood Development Group. - PAM ZUBECK
  • Pam Zubeck
  • This vacant lot in lower downtown was one of two properties Regional Building planned to use to partner with Nor'wood Development Group.

UPDATE: It's worth noting that we've found out that the proposal for the land development deal was submitted verbally, not in writing, to the Regional Building Department board. This, along with the recent determination that the deal might not be legal, raises questions regarding El Paso County Commissioner Dennis Hisey's statement in which he asserts "a great deal of research, due diligence and negotiation has gone into this Participation Agreement."

————-ORIGINAL POST 10:32 A.M. THURSDAY, SEPT. 15, 2016—————————

A deal reported in this week's edition of the Independent, "Partnering up," that would give Nor'wood Development Group control of $2.1 million worth of property in the lower downtown area is undergoing further examination for its legality.

The Pikes Peak Regional Building Department had agreed to pursue a "participation agreement" in which it would place two properties it owns near the Olympic Museum site into a new entity with Nor'wood properties. The new entity, with Nor'wood having a 63-percent stake, would then develop the property and have first right to buy the Regional Building land.

Now, Regional Building Official Roger Lovell tells the Indy the deal is on hold.

"We are investigating right now," he said today, "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 are at issue, 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, he says. (All of the commissioners voiced support of the deal, saying it would help economic development and be good for the community.)

"I thought what we were doing was in the best interest of the community, but if it's illegal, it doesn't matter what our intentions are," Lovell says. "No way in hell are we going to move forward until we know this is fully vetted and legal. We're digging into it and researching it, and if we did made an error, we're going to make it right."

Regional Building is represented by attorney Todd Welch.

The reversal, he says, stems from the Indy's story, which triggered a bevy of emails to him, but he didn't disclose what those emails said or who they were from.

County Attorney Amy Folsom says via email she was not asked for legal advice on the agreement prior to its approval, nor should she have been. "The Regional Building Department has independent legal counsel so the County Attorney was not — nor should it have been —consulted," she says.

The City Attorney's Office hasn't responded to a similar question posed by the Indy on Wednesday.

Nor'wood is the biggest developer in the region, with projects under way throughout the city. Such an agreement between it and Regional Building would place the latter in a position of conducting building inspections and issuing permits to its business partner, which Colorado Ethics Watch's executive director Luis Toro says constitutes the appearance of impropriety.

Lovell didn't give a timeframe for determining whether to move forward with or scrap the agreement.

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