Developers associated with the Gold Hill Mesa neighborhood are exploring legal action against the Colorado Springs Gazette in light of its recent three-part series about the Westside subdivision it reported is sitting atop shifting soils.

The newspaper’s first installment, published Aug. 25, said that city planners and regional building staff allowed development at Gold Hill Mesa to continue uninterrupted, despite learning more than three years ago that perhaps dozens of homes in the development were slowly sinking, heaving and flooding.

Two days prior to the Sept. 22 publication of the second article, GHM announced it had hired a law firm to “investigate potential claims against the Gazette arising out of its recent reporting that places Gold Hill Mesa in a false light,” according to a Sept. 20 news release from Gold Hill Neighborhood LLC, the development’s business entity.

In the release, Reilly Pozner LLP, the Denver trial firm retained by Gold Hill Neighborhood LLC, asserted the Aug. 25 article “contained false and misleading information which was harmful to the GHM development and homeowners in the neighborhood.”

For example, the release stated, the Gazette reported that 24 homes in the neighborhood were being impacted by issues such as sinking, heaving and flooding.

The 24 homes in question were not located within GHM, according to the release. In 2016, 24 homes were impacted by the landslides on the west side of town,  said Roger Lovell, a building official with the Pikes Peak Regional Building Department. Most of those homes were located in the Broadmoor Bluffs and Skyway neighborhoods, Lovell said.

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Stephanie Edwards, vice president and developer representative for Gold Hill Neighborhood LLC, said she was “very limited” as to what she could comment on in relation to any potential legal action, but she said GHM is in the process of assessing its legal options.

LOST SALES

The claims published by the Gazette impact the entire “ecosystem” of Gold Hill Mesa, which comprises nearly 500 residences, builders, Realtors and consultants, Edwards said.

“We are aware that sales of residential homes, both new homes and resales, have been negatively impacted by the Gazette’s stories, including contracts being canceled with the Gazette stories cited as a reason,” she said.

Edwards said GHM has experienced similar impacts with the commercial development adjacent to 21st Street and U.S. 24 on the neighborhood’s northwest side.

“We had been working for nearly a year on the business plan and site design for a commercial anchor in which all parties were enthusiastically moving forward with a letter of intent,” she said. “Although there were no concerns as to the viability of the project being constructed on this site, the project was put on hold by the business entity as a direct result of the recent media reports and the political uncertainty they have generated.”

Most recently, the Gazette reported that the Colorado Geological Survey is withholding its recommendation for approval of a second development phase at Gold Hill Mesa, where 55 single-family lots are planned on nearly 9 acres.

The survey’s report calls into question the stability of the site’s northeast slope, in addition to existing concerns of settlement and liquefaction, according to an article published Oct. 27.

“Without further testing, the agency cannot give its consent to moving ahead with the project,” according to the Oct. 19 report written by CGS senior engineering geologist Jonathan Lovekin.

The community center at Gold Hill Mesa.

The report echoed concerns Lovekin expressed in recent months about another plot, known as Filing 11, and the development as a whole, according to the Gazette. Approval of home construction in the Filing 11 area was put on hold in April after Lovekin asked that the developer — Gold Hill Mesa — test the plot for its settlement potential, the Gazette reported.

That report referred to a roughly 4-acre parcel along 21st Street, for which the developers already had an approved grading plan, Edwards said prior to the Oct. 27 article.

She was quick to point out that CGS’ report did not mean construction had been halted. The developers are still in the approval process for Filing 11 and expect results of the required testing by late November, Edwards said.

“We were surprised and troubled by [CGS’] sources and their methods,” Edwards said. “The application and interpretation of that satellite didn’t match with our ground survey data or the realities that we see on the ground. It was an unusual approach, and they didn’t provide the data or the report until we asked for it.”

GHM has hired an additional geotechnical firm, Bryant Consultants, for oversight and peer review, Edwards said.

STIGMA

As of Oct. 24, no property owners in the Gold Hill Mesa area had sought to have the values of their homes modified due to soils subsidence, said El Paso County Assessor Steve Schleiker.

“I will be monitoring the sales within the Gold Hill Mesa subdivision to determine if there is any stigma or diminution in value,” Schleiker told the Colorado Springs Indy. “I am currently doing the same in many of our neighborhoods, such as the landslides in Skyway and Broadmoor Bluffs.”

Although property values do not appear to have taken a direct hit, resident Justin Burns worried the Gazette’s articles would affect the neighborhood in less tangible ways. Another resident was on the verge of closing the sale on her home so she could move closer to her grandchildren, but the buyer pulled out after the Gazette series, Burns said.

“Do I think that we’ll have a negative impact as a whole neighborhood? God, I hope not,” Burns said. “That’s going to be like 2008.”

Before he found Gold Hill Mesa, Burns said he had looked all over Colorado Springs for a resale property where he could make a home with his husband and two French bulldogs, but nothing met his criteria. The couple ultimately opted to build a new house, and Gold Hill Mesa’s amenities and proximity to downtown Colorado Springs made it an attractive option.

Burns was aware of the master planned community’s history as the site of Golden Cycle Mill, which for half a century processed more than 40 percent of the gold ore from the Cripple Creek Mining District. But he felt confident that the developers had done sufficient environmental remediation work, and the couple moved into their home in January 2018.

Aside from a drainage problem that impacted the home’s patio, Burns has few complaints about his nearly two years as a resident of Gold Hill Mesa. And even then, he said, that problem was swiftly resolved.

“We went to the builder and the builder said, ‘This is a development problem.’ … [The developer] fixed the curb and put in a drain,” Burns said. “We didn’t have any extra expense there, so that was really nice… They’ve seemed to be open and listening and wanting to do as much as they can.”

Now, Burns and other residents feel the Gazette’s series has unfairly stigmatized a neighborhood already fighting a public perception battle.

“There was a comment in the [Oct. 6] Gazette article about homeowners not feeling comfortable or feeling afraid to come forward, which I think is kind of a crock of shit,” Burns said. “We want to get to the bottom of it, and if there are legitimate claims, please come forward so we can get them resolved.”

Gold Hill Mesa is “a very open and caring community,” Burns said, “and we want to hear about anyone’s house or challenge or situation.”

“We’re not in bed with the developer or the builder. We’re in bed with the neighborhood,” he added. “That’s why we have chosen to live there and continue to live there and continue to invest in the neighborhood.”

FURTHER IMPACTS

In an example of what Edwards called the “ecosystem” of Gold Hill Mesa, Realtor Carol Alexander, of the Alexander Real Estate Group in Colorado Springs, said the stories in the Gazette have “most definitely” impacted not only the home she has listed on Calle de Seville, but also the sales of homes to buyers who had expressed interest in living in GHM.

“Everyone who called or that I spoke to about the home was aware or had ‘concerned’ friends and family who ultimately steered them away from the property because they felt it was unsafe,” Alexander said via email.  “There are so many other areas of town that have known and actual subsidence or landslide issues, but the city still allowed development in those areas with little or no disclosure even.”

Alexander has lived in Colorado Springs since 1984, she said, and the land in Gold Hill Mesa has been subject to more scrutiny than other areas.

“The developers have taken a decades-long eyesore and massive land erosion site and stabilized it, and are making it into a productive, artistic, community-oriented thriving neighborhood and providing a lot of much-needed housing,” she said. “Gold Hill Mesa is such a popular and convenient neighborhood to live in and in my opinion, the misinformed and biased reporting has done a terrible disservice to the community, current homeowners, builders and prospective owners for the area.”

GAZETTE RESPONSE

Gazette Editor Vince Bzdek provided the following comments to the Business Journal via email.

“We certainly believe our reporting reflects solid ‘due diligence’ in covering a story of significant impact on existing and future homeowners at Gold Hill Mesa, as well as their neighbors,” Bzdek wrote. “In addition to quoting at length from the official recommendations of the State Geological Survey, we spoke with the site developer’s geological engineer and with several respected scientists, academics, building inspectors and Realtors. To the extent that the questions the State Geological Survey has raised about the site’s stability and capacity to handle potential seismic activity have reflected ‘negatively’ on anyone — developers, city planners, geologists, or otherwise — it is our job to inform our readers of what are the conflicting views on those subjects.

“When all of the ongoing studies have been completed, we will have a better sense, we hope, of what is really going on ‘under the surface’ at Gold Hill Mesa. If the state’s issues can be addressed and (if necessary) mitigated once and for all, we will report that. If new testing proves the land is indisputably safe so the future values of homeowners’ property and the neighborhood are not adversely affected, we will report that as well.”