Back in 1988, the city negotiated a special deal with the people who then owned Banning Lewis Ranch.
Ever since then, new owners have tried to undo the agreement — which requires developers to pay for all infrastructure costs associated with the 17,760-acre property.
The cost: $12,000 an acre.
Secret negotiations to undo the agreement have been underway for months, and at least one City Councilor is livid over the secrecy.
Here’s the history: When Ultra Resources bought the property from a bankrupt California company for $20 million in 2010, the Houston company filed suit to have the annexation agreement voided, arguing that oil and gas development would not impose the same costs and burdens upon the city as residential, commercial and industrial development. Before the suit was settled, Ultra sold the property to Dave and Chris Jenkins’ business interests, which continued the action.
The court ruled for the city.
Since then, lawyers for both sides have been negotiating a potential settlement. According to City Councilor Bill Murray, the matter is likely to come before City Council in a closed executive session during next Tuesday’s meeting — and he’s not happy about it.
In a Facebook post Monday afternoon, Murray shared his concerns.
“Banning Lewis Annexation agreement modification — bigger than the C4C stadium and as transparent!!!!! [sic],” Murray fumed. “Is the Council or community ready for a closed session on settlement negotiations (?) on a legislative action? These negotiations have been going on since July of last year without Council involvement or approval. The Court clearly stated that the Lewis Banning annexation agreement (Case #11-01634-HRT) went with the bankruptcy and could not be voided except by legislative actions. The court ruled that the agreement was ‘Not’ a contract… “But, upon compliance with the requirements of the Colorado Municipal Annexation Act, Colo. Rev Stat. &31-12-101 et seq., the Annexation Agreement became a legislative act that set the boundaries of the City.”
When asked for more details, Murray said the following:
“In July 2007, the city approved a study in which BLRC actively participated, which estimated that the overall infrastructure obligations under the Annexation Agreement totaled $891 million for the entire Banning Lewis Ranch. The city then established the Banning Lewis Annexor Obligation fee of $2,355 per acre; the Banning Lewis Parkway Fee of $8,163 per acre; and the Banning Lewis Interchange Fee of $1,392 per acre; for total shared infrastructure fees of $11,910 per acre, or approximately $200 million for the property. Of course, this does not include the additional requirements for water, wastewater or electricity.”
Murray believes that Council shouldn’t simply withdraw into executive session, receive a presentation from administration officials, rubber-stamp it and then act upon it in open session with little opportunity for public analysis, comment or discussion.
“I’m going to exercise my right of bifurcation,” said Murray, “and ask for the history be presented publicly. I just found out that the city has been in these negotiations for months — I don’t even know who’s doing the negotiations at this point. It seems to me that someone is doing a clever little dance around this. This is a legislative matter, and all of Council needs to be involved. We do have very precise responsibilities in this regard.”
And there’s not much time to consider the issue.
“The owners of the ranch have until Feb. 15 to appeal,” he said, “so that means that Council has to approve any settlement at our next meeting (on Tuesday, Jan. 26).”
The parties must agree on the deal quickly, Murray said, because the state legislature must also approve it before Feb. 15.
The agreement is expected to include two main provisions:
- The Jenkins’ interests will transfer several thousand acres of ranch property to the city, to be left undeveloped as open space or reserved for nondevelopment purposes..
- Annexation fees will be substantially reduced, and shared developer/city/utilities responsibilities will be precisely delineated.
Both parties clearly have an interest in arriving at a settlement. If the Jenkins group prevails on appeal, the city would have no leverage over future development plans, no open space and no assured market for water from the Southern Delivery System.
If the city prevails, the Jenkins group will find themselves stuck in a strange limbo between city and county jurisdictions. Local developers have long contended that the costly 1988 annexation agreement effectively sterilized the property. The fact that most of the land remains undeveloped 28 years later seems to support that view.
Open space advocates may find a lot to like in a settlement agreement, but not everyone will be pleased.
“If we approve (that kind of) settlement, you can forget infill development,” Murray warned. “It’ll be First & Main [on Powers Boulevard] all over again.”