David Jenkins asks the city to annex another 673 acres 

Bigger city?

click to enlarge A house is among several buildings on ag land at issue. - COURTESY ASSESSOR'S OFFICE
  • Courtesy Assessor's Office
  • A house is among several buildings on ag land at issue.

Less than a year after City Council reduced developers' obligations in the Banning Lewis Ranch annexation agreement to encourage development of those 20,000 acres, the city's boundaries might grow again.

David Jenkins, owner of Nor'wood Development Group that owns most of the BLR land, submitted a petition on February 21 to add another 673 acres of land that lies just outside the city's northeast boundary.

The five tracts included in the proposal would expand the city limits if approved. They include a portion of the Falcon Highlands suburban subdivision, a low-density residential development, but most of the property in the proposed annexation is largely vacant and used for grazing.

Some wonder if the proposal lines up with the city's newly adopted comprehensive plan, called PlanCOS. Approved by City Council in January, the plan "envisions limited but strategic additional outward expansion of city limits, and a focus on developing and redeveloping property currently within city boundaries."

But the plan does allow for adding new territories if they're of "fiscal benefit to the city." Retail businesses pump sales taxes into city coffers — the main source of funding for Colorado Springs. But residential developments cost the city more money to maintain and service than they bring in, due to very low property taxes. Because of that, Mayor John Suthers has previously said annexing residential property makes "little sense."

While not enough information is yet available to know precisely how Jenkins wants to develop the acreage, City Councilor Bill Murray says, "We've got to make sure they follow PlanCOS, and this could be a good test case."

According to the annexation request and County Assessor's Office records, most of the Jenkins property is zoned rural residential and agricultural. Jenkins bought a portion of the land from Ultra Resources in 2014 and the rest from Cygnet Land LLC from 2015 to 2017.

Before Jenkins took an interest in the area, Ultra bought most of the Banning Lewis Ranch, which covers about 38 square miles, in 2011. It was hoping to drill for oil and gas, but test wells were a disappointment. When Ultra sold BLR to Jenkins, the Houston company retained mineral rights.

The newly proposed property for annexation straddles Woodmen Road just west of the Falcon area. It's bordered on the north by grazing land, on the east by vacant federal land, on the northeast by 5-acre lots in Falcon Highlands, on the south by grazing land and single-family homes on lots of less than an eighth of an acre, and on the west by vacant and agricultural land.

The parcels lie north of the BLR property, which despite annexation in 1988 remains largely undeveloped due to the original annexation agreement's demanding requirements of developers, such as building fire stations, a major parkway and other infrastructure.

The new agreement, approved by Council in April 2018, backs down those mandates. In particular, developers will no longer be required to build fire or police stations (they were originally required to build five fire and four police stations). The City Auditor's Office concluded the new rules — which instead charge developers $677 per acre for police protection and $1,631 for fire service — "do not cover the full cost of land acquisition, construction, and initial outfitting of the required police and fire stations."

And that means that the city's taxpayers may be on the hook for some large expenses related to developing BLR, which accounts for 20 percent of the city's land area.

That said, a financial advisory firm hired by Suthers concluded the city will gain $49 million in net revenue in 30 years if 7,400 acres of BLR is developed.

Suthers lobbied heavily for the relaxed annexation agreement, saying development was leapfrogging over BLR into El Paso County.

Asked about the new annexation request, Suthers says via email through a spokesperson, "At this point we don't have a formal application, so any comment would be premature."

But in a July 11, 2018, interview, the Indy asked Suthers when the city will stop expanding its boundaries, to which he responded, "Maybe sooner than you think."

click to enlarge An annexation proposal seeks permission to add 673 acres to Colorado Springs. - CITY OF COLORADO SPRINGS
  • City of Colorado Springs
  • An annexation proposal seeks permission to add 673 acres to Colorado Springs.

"It makes very little sense for the city to annex residential property," he said, "because, frankly, our property taxes are so low and particularly the city's share of property taxes is so small that it doesn't produce enough revenue to take care of the infrastructure."

But if an annexation brings retail — which generates sales taxes, the city's largest source of revenue — he's all for it.

"As long as I'm mayor," Suthers said at that time, "and based on conversations I've had with the existing Council, we don't want a bunch of residential properties that aren't accompanied by revenue-producing properties."

He also pledged to do financial analyses on annexation proposals so city taxpayers don't end up footing the bill for developers.

Not much is known about Jenkins' plans for the property, because his son Chris Jenkins, president of Nor'wood, didn't respond to an email and a phone call seeking comment.

City planner Catherine Carleo says via email David Jenkins hasn't filed planning documents yet, but notes "initial conversations" between city officials and Jenkins suggest "the conceptual approach is a mix of residential and commercial land use."

PlanCOS calls on the city to: "Focus on productively developing and redeveloping areas already in, nearby, or surrounded by the city in order to preserve open spaces, maximize investments in existing infrastructure, limit future maintenance costs, and reduce the impacts of disinvestment in blighted areas."

To do that, the city should modify fiscal impact requirements for master plans and annexations to forecast impacts 30 years in advance, PlanCOS says. Currently, 10-year forecasts are required for annexations with master plans, new stand-alone master plans and major master plan amendments.

While the city did conduct a 30-year forecast on BLR, City Councilor Andy Pico, whose district covers that area, says via email the city hasn't consistently done so. "Requiring that for all may require an ordinance," he says, adding he and Councilor Don Knight are working on that and other ordinance changes.

City planning director Peter Wysocki says via email an update of fiscal impact analysis methods and requirements is underway but won't be completed until fall.

Council President Pro Tem Jill Gaebler says she's reluctant to welcome new vacant land into the city, especially if homes are planned.

"I would have significant concerns, because it doesn't align with our comprehensive plan," she says. "Typically, that kind of development on the outskirts is residential, which doesn't bring significant revenue to the city. We're trying to have the city be more fiscally sustainable by filling in existing space. We need to focus on maintaining what we have before we expand the boundaries, generally."

Gaebler also noted the city is having trouble providing prompt police response to high priority calls. "It's not very prudent to be extending right now," she says.

PlanCOS' recommendation for long-term financial impact stems from the city's goal to assure that added territory "will have a fiscal benefit to the city, will be well aligned with existing and planned city infrastructure, or will support the primary economic development objectives of the city and regional partners." PlanCOS also recommends updates of the city's annexation policies, notably in providing guidance for "strategic annexations" along the city's periphery.

How the Jenkinses' latest proposed annexation fits into the city's long-range plan or whether it satisfies the PlanCOS guidelines is unclear. Carleo says no land use application or master plan has been submitted, but when they are, they will be public records open for inspection.

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