City, state fail to strike open-space deal on Section 16
Section 16, whose trails are used by thousands of people a year, faces an uncertain future after an apparently permanent breakdown in the city's negotiations to buy it
from the Colorado State Land Board as open space.
Brownell Bailey, the board's executive director, even raised the spectre this week of having the land “fenced off” if neither a purchase plan nor a lease renewal is hammered out before the end of 2010 (when the current lease terminates). Although emphasizing that “it's not what we'd like to do, “ he observed that “it's private property, and without a recreational lease, people would have no right to be there. If they were, they would be trespassing.”
The scenic, remote, 640-acre hillside property is located just south of the city's Red Rock Canyon Open Space and west of the White Acres Open Space.
The state and city have been far apart on a sale price for several years, but the recent failure to reach an agreement is crucial because without a deal by Oct. 1, the city's Trails, Open Space and Parks (TOPS) program will lose a $1 million grant from the Greater Outdoors Colorado (GOCO) lottery fund that would have made the purchase more affordable.
Chris Lieber, manager of City Parks development and TOPS, said he does not see a way now to make the Oct. 1 deadline. “It is disappointing,” he said. “All the parties worked hard, but we couldn't get a deal done. I also feel bad for our partners with GOCO, because we'll be stepping away from the $1 million grant they provided, and for the Palmer Land Trust and Friends of Red Rock Canyon, who had pledged to raise $640,000 in donations.”
Assuming no purchase, the city faces a tough decision on whether it can even continue leasing the property for recreational use. Through city or county leases, the public has been able to access Section 16 going back to the 1970s. As recently as the 1980s, the fee was a relatively cheap $640 a year. But it has risen by leaps and bounds in recent years. In the current five-year agreement - paid by a GOCO grant - the cost worked out to essentially $40,000 a year. But if the city wants to renew after the lease expires in 2010, the annual rate would zoom up to $156,000.
Created when Colorado became a state, the Land Board has ownership of various property sections, with the mandate to use the land to earn as much money as possible for state schools and institutions.
Based on phone conversations with Bailey and Lieber this week, the purchase price gap is massive. The state values the land at $8.9 million (with a fair market value of $5.2 million); the city at $2.8 million.
Lieber said its figure is based on an appraisal in the past year that was paid for jointly by the city and the Land Board. And, he noted, under the terms of the GOCO grant, the city cannot pay more than the appraised price.
However, Bailey described that appraisal as “corrupted,” saying it failed to account for the developability of the land. Under state law, he pointed out, there could be 18 homesites on Section 16, of 35 acres each. The state has a previous appraisal, for $8.9 million, which factors in the possibility of homes being built there, he said.
The land's developability appears to be the main gap between the city and the state. The city is paying a higher amount per acre for Red Rock Canyon's nearly 800 acres ($12.9 million) and White Acres' 40-plus ($1 million) than it would for Section 16's 640 acres if the price was $2.8 million. However, Red Rock and White Acres front on to main roads, while Section 16 has a ridge between it and Gold Camp Road.
About 15 years ago, a developer looked at building in Section 16, but eventually backed off. Issues included lack of access - drilling a tunnel through the ridge was even considered - and a limited amount of buildable sites on a property that is mostly hillsides broken up by canyons.
A large public outcry also rose up in opposition, and in 1998 the Land Board placed Section 16 into what it called a “Stewardship Trust.” At the time, many local outdoors leaders had hoped that would protect the property from development, but Bailey said that all the Trust designation means is that a building proposal would get a “thorough review.”
Even if it were possible to pay more than the appraised amount for Section 16, the consensus among City Council and the Parks Advisory Board is against doing so, according to City Council member Scott Hente, citing discussion on the matter at a public meeting of those two entities Aug. 17. “I don't want the city paying an inflated price,” he said. With the state's proposed amount, along with the spectre of a nearly quadrupled lease, Hente said, “It's kind of like two kicks in the butt.”
Bailey is also not pleased with the city's purchase of White Acres, which he said represents a “strategy” to limit access to Section 16. No road from White Acres into Section 16 now exists, but Bailey said the state would like to have a right of way that would allow such a road to be cut in.
Lieber said the state has not presented a formal request for such a right of way, but if it did the ultimate decision would be up to the Parks Board and City Council. At the same time, the TOPS ordinance “prohibits encumbrances such as easements,” he pointed out, and a decision on that “would need to come prior to our closing in December” on the first phase of the White Acres purchase.
Asked why a new lease would be so much higher, Bailey said the state's policy is to price its leases at 3 percent of the property's fair market value, and 3 percent of $5.2 million is $156,000. The increase seems radical because the amount had been “artificially set” five years ago at 1 percent of a then-lower fair market value. That had been done so as to help the city cover the lease cost while negotiating the property's purchase, he said.
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