Lorson Ranch losing land, tax money to SDS pipeline 

Out to Powers Boulevard. South past the airport. Down to Fontaine Boulevard, then east. Four lanes all the way.

There, 15 miles from downtown Colorado Springs, across the street from a cow pasture, more than 200 homes have popped up in a 1,400-acre subdivision squarely in the path of the Southern Delivery System.

This presents problems for the developer and the subdivision's residents — and the latest glitch in the city's campaign to buy roughly 300 parcels of land for the pipeline.

First, the 66-inch diameter water line will affect the developer's plans for storm drainage and sewer lines in the planned 6,800-home community.

"I can't run stormwater over [the pipeline], and I can't put pipes through it. We may have to build lift stations to pump sewage over the top of this thing," says Dave Cocolin, who oversees what's known as Lorson Ranch. "You can see the dollars start to add up."

Second, the pipeline will claim eight acres from Lorson Ranch Metropolitan District, removing those acres from tax rolls. That means residents will pay more — an extra $2 million-plus over 30 years — for such things as parks and street repairs provided by the district.

"Our service plan never contemplated the loss of this acreage," Cocolin says.

Colorado Springs Utilities has $25 million set aside for land acquisition at fair market value. There's no precedent in Colorado for a public agency to pay another public agency for lost tax revenue.

"I've never heard of that," says condemnation attorney Jody Alderman, of Denver. "It would be quite a novel claim."

But in Oklahoma the issue went to the state Supreme Court, which sided with taxing districts, Cocolin says, and developer Lorson LLC might try the same strategy.

"I can't over-emphasize enough," Cocolin says, "our goal is to make sure the people who bought houses so far will be protected from having to pay increased tax dollars because of the Southern Delivery System going through Lorson Ranch."

Cocolin's half-dozen alternate routes have been ruled out by Utilities due to cost, and due to the city's Bureau of Reclamation permit restricting the pipeline to a 500-foot corridor. A deviation would trigger a new, undoubtedly protracted environmental study, and the city-owned utility doesn't have time. It wants the line up and running by 2016.

"It's not a trivial exercise to deviate from the study area," says Daniel Higgins, SDS construction and delivery program manager.

Besides, the city says every extra piece of pipe adds to the $1.1 billion project's cost. Lorson's alternatives exceed the study boundaries by up to 1.5 miles and would add up to $8.1 million to the bill, says Utilities spokeswoman Janet Rummel.

City folks also note that Utilities unveiled the pipeline's proposed alignment in 2002 and that five public meetings were held in 2003. Lorson didn't participate, Rummel notes.

Cocolin says LeRoy Landhuis didn't buy the land until 2004, but concedes, "Shame on us. We should have known and figured out how we were going to deal with this thing."

An appeal to El Paso County commissioners and City Council fell flat. In a 2008 letter, Mayor Lionel Rivera said, "Please understand the Colorado Springs City Council and our staff must be responsible fiscal stewards to our rate payers."

How much Utilities will pay Lorson will be determined by appraisals. If the figure doesn't suit the developer, litigation could follow.

"We're not able to please everyone," Higgins says.



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