Central City Parkway development decision delayed

Council Deliberates Reassigning Developer Agreement

By David Josselyn

Work Session

Council met with Staff for a Work Session immediately prior to the regular meeting on Tuesday, April 16, 2019. The topics covered were marijuana store hours, Belvidere Theatre use options, and a gaming revenue presentation.

City Manager Daniel Miera informed the council that interested parties have contacted him regarding expanding hours of operations for the marijuana dispensaries in the City considering many other municipalities have done the same. The Council directed Staff to draw up a proposal for them to consider.

Next, the Council reviewed the results of the March 18 charette by Form Works and Dunakilly regarding uses and design for the Belvidere Theatre. Two primary options were given based on input from attendees which would allow for individual tenants, a restaurant and bar (retaining the historical name Shoo Fly Lounge) with garden patio, and a complete renovation of the theater to optimize use as an entertainment venue. Option One, which would create five tenant spaces, a small addition to the kitchen and larger restrooms on the first floor, has a total price tag of $2.75 million. Option Two, creating four tenant spaces with a larger addition to the kitchen, would have an estimated cost of $2.9 million. Both options are less than originally anticipated, although prices are based on current costs and could increase. Council liked items in both options and will have a future work session to decide what plan to use giving them time to review the details and have questions answered.

Council then had a report from Lisa Roemhildt, Main Street Advisor on gaming revenue statistics from 2017and 2018 compared to projected revenues in 2019. In the categories of Colorado State Historical Fund Revenues, State Gaming Tax Revenue, and Device Fee Revenues, both cities of Black Hawk and Cripple Creek not only increased from 2017 to 2018, but also have a projected increase in 2019. Central City; on the other hand, shows a similar increase from 2017 to 2018, but projected revenues decrease in 2019 to just above 2017 actuals. Central City charges the most for Device Fees in all three Colorado gaming cities. The reason for the decrease was not explained.

Regular Council Meeting

Mayor Fey convened the regular meeting at 7:00 p.m. in City Hall Council Chambers. Council members; Jeff Aiken, Judy Laratta, Jackie Mitchell, Jack Hidahl, and Mayor Jeremy Fey were present. In attendance for Staff were City Clerk Reba Bechtel, City Attorney Marcus McAskin, Finance Director Abigail Robbins, City Manager Daniel Miera, Community Development Director Ray Rears, Public Works Director Sam Hoover, Utilities Director Jason Nelson, Fire Chief Gary Allen, and County Sheriff Division Chief Tom Ihme.

Mayor Fey led the Pledge of Allegiance and then asked for any amendments or additions to the evening’s agenda. There were no additions or amendments to the agenda.

Mayor Fey asked if there were any conflicts of interest for any member of the council. Alderman Hidahl disclosed that he was contacted by a party regarding an item on the agenda which he did not respond to, “but took notes.” Alderman Aiken stated he was contacted by the same person who had a lot to say regarding Resolution 19-07. It was determined that this did not present a conflict.

Consent Agenda

The Mayor called for a motion to approve the consent agenda which consisted of the minutes from the April 2 meeting and regular bill lists through April 9. Alderman Laratta moved to approve the Consent Agenda and was seconded by Alderman Aiken. The motion passed unanimously.

Public Forum

Mayor Fey opened the floor to the public for anyone who wished to speak to a topic on that night’s agenda. No one chose to speak to the Council at that time.

Resident Lisa Leben addressed the Council. Leben urged the Council to table Resolution 19-09 which establishes a sidewalk design of gray concrete with a broom finish. “As a fan of the red colored concrete I would like more consideration for the design in the downtown core,” said Leben. Resident Deb Wray chose to address council on the same issue saying, “Ditto.”

Reassignment Reassigned to Future Date

Attorney McAskin introduced Resolution 19-07 which would conditionally consent to the assignment of the Morrone Ranch/ Gold Mountain Development Agreement dated May 17, 2011 to Global Funding Partners. This Resolution does not change the terms of the 2011 Agreement, it only assigns the development from Wedgewood Heights Development Company to Global Funding.

The original 2011 agreement refers to “A world-class mountain resort” above Central City off Bald Mountain Road that would include a hotel, spa, convention center, theater, 9-hole golf course, tennis courts, miniature golf, tube slide, bunny ski hill, ice skating rink, single family homes, townhomes, condominiums, and apartments. The developer would have no rights until it acquired the property from the owners: Gina Melstrom, Gloria Morrone, Martin Scaff, and Marvinchi Italian Design, LTD. The agreement makes the assumption that all property would be annexed into the City limits per the Annexation and Development Agreement of February 16, 1999; however, only Melstom’s and Morrone’s properties were annexed.

Wedgewood Heights has not been financially able to acquire any of the property or make an offer acceptable to the owners, but Global Funding is not only financially viable, but ready to begin development this summer which is why the owners are seeking reassignment. Even if the developer is reassigned, Wedgwood would have rights to develop should it acquire the property according to the 2011 agreement. Reassignment of the developer would not change the original 2011 Agreement in any way.

If the Resolution were to pass that night, Phillip Devon of Global Funding stated he could start development in late May or June this year. If the Resolution passes in two weeks (at the May 6 Council Meeting), then Devon states there will not be enough time in the 2019 construction season to begin a project and it would be put off until 2020. He also states that he would be in no hurry to acquire the property since he would be paying taxes on land that would just sit there for a year, opening the door for Wedgewood to acquire the land instead.

Phillip Devon advised Council that his plans for development are different than Wedgewood Heights. Mayor Fey asked, “None of us were here in 2011 and the majority (of development) was commercial; and now it is going to residential?” Devon’s plan is to start with 250 one-to-three bedroom single-family homes and focus on a small section of the total land. Devon is not opposed to commercial development, but there are no plans for commercial in the first phase. According to Devon, he can build about 30 houses per month, so all 250 could be built by the end of 2020, although it will depend on how quickly lots pre-sell. This would add at least 250 vehicles with most of them travelling up and down Eureka Street contributing to wear and erosion. The development is above the water treatment plant which would require additional storage and a pumping station to move water uphill. The stormwater and wastewater drainage would all be funneled down through Central City. Emergency services would need to be increased for the added population, and without a secondary access road, evacuations would send all residents down through Central City further congesting evacuation efforts.

Alderman Hidahl remarked, “I don’t want the City involved as a third party and I think this (development agreement) should be declared null and void.” Phillip Devon responded, “All that would do is transfer ownership to me and Wedgwood would have to buy the land from me instead.”

Alderwoman Laratta commented, “I think when somebody is ready to move forward on something, and it is a benefit to the City, and it has been deemed legal, and we are not going to get into trouble, we should not get in their way by dragging our feet. I think dragging our feet has been a big problem.”

Alderman Hidahl expressed concern that the project needs to pay for itself. The original design focused on commercial properties which would generate revenue to pay for expansion of services the City provided, but strictly residential would not do that. Hidahl suggested including a requirement to establish a Title 32 Metropolitan District whose fees would be used to pay for City services. Attorney McAskin commented that they City could urge the formation of a Title 32 District, but he is not sure they could make it a requirement.

Mayor Fey stated, “It’s all too messy for me; I would rather start from the beginning. This assignment makes me nervous.” Director Rears reassured “We have this established agreement and we adjust transferring who the recommended developer is. Staff has not started any negotiations of the development.” Attorney McAskin reminded, “The City already signed this agreement (in 2011). The request is for this agreement to be assigned to this new entity if they close on this property. If they do not (close on the property), the assignment and assumption will be revoked.” He continued, “We cannot amend this tonight. The only thing before you tonight is do you want to give consent to assign the agreement to another entity?”

Alderman Hidahl outlined three items he would want to see: a commitment to a metro district, a statement that the City is assigning this agreement with the understanding the project will pay its own way, and that the original development agreement will be renegotiated.

Mayor Fey asked, “Do we as a Council want to move forward with the reassignment knowing that almost every aspect (of the 2011 Agreement) will be renegotiated?” Alderwoman Laratta emphatically replied, “Yes!” She added to Phillip Devon, “I’ve watched the City and been to many meetings and done a lot of reading. I can count on one hand the number of developers that have come to want to help the City; we should come along side you.” She then proclaimed, “We should pass the resolution.”

Alderman Hidahl moved to table the resolution until the City Attorney can draft a resolution with recitals addressing the three issues that have been raised and was seconded by Alderman Aiken. The resolution passed four to one with Alderwoman Laratta voting against.

Miller Engineers Approved

Director Hoover introduced Resolution 19-08 which would approve an engineering related Professional Service Agreement with Miller Engineers. The objective is to assist the city with the storm water master plan which will include a reprioritized project list for capital improvements.

Alderman Hidahl commented he read through the agreement and has a couple questions. “How long has the consultant been in business” and “what other municipalities have they worked for?” Director Hoover responded, “I don’t have that information, Jack.” Hidahl then asked, “Have they ever been involved in a lawsuit with faulty products?” Alderman Laratta asked, “How do you feel about these people.” Director Hoover replied to both, “I met with Heather (with Miller Engineers) and I have no reason for concern. I did sit with Heather for quite some time. They (Miller) came up and did a survey of the City and understand what our needs are and what our concerns are. I am very comfortable with the engineering group. I do feel we will get our money’s worth.” Manager Miera added that the company was formed in 1984 and has worked with clients in four states, also, “I have never worked with the individuals Sam (Hoover) has met with, but I have worked with the company.” Miera said his prior interactions were good but made sure to say he is not soliciting for the firm.

Alderman Aiken moved to approve Resolution 19-08 and was seconded by Alderwoman Laratta. The motion passed unanimously.

The Red and the Gray

Director Hoover introduced Resolution 19-09 which would memorialize the installation of new or replacement sidewalks in a natural grey concrete with broom finish within the Downtown Commercial Core. Hoover commented that the concrete issue was brought up in March as a safety concern and the stamped colored concrete is perceived to be slicker than the gray concrete. The original design guidelines established a wooden boardwalk with a pecan color and Hoover said he cannot match that design with modern materials. Adding color to the gray concrete increases the price by five to seven cents per square foot and adding a stamp adds even more to the price. Hoover recommended to use total gray with a broom sweep which increases production efficiency and saves money.

Alderman Aiken commented that he is all in favor of saving some money, but he also has nothing against the red stamp sidewalks. Alderwoman Laratta stated she is also in favor of saving money.

Alderman Hidahl commented that the streetscape should have conformity in the town. “I’m sensitive to Ms. Leben’s concern about the sidewalk and I remember that Eureka and Lawrence were flagstone and the guideline was to be compatible with the flagstone.” Hidahl said he would be in favor of completing the Spring Street project with the Colorado sidewalks and work on a streetscape guideline for future projects.

Alderwoman Mitchell commented “I worked on the HPC (Historic Preservation Commission) and there is not a design guideline in there.” She said they (the HPC) do not advise on projects. She added, “I don’t like the gray, but it is cheaper.” Mitchell then said, “I don’t know if we should be spending money on what is historically accurate for trash cans or what benches should look like.”

Alderman Aiken commented that the sidewalks along the Big T Parking Lot could be gray since they are off Historic Main Street. Alderwoman Laratta agreed saying, “Let’s not hold you (public works) up.”

Alderman Hidahl made a motion that the sidewalks should be installed with red color and a stamp finish.” Prior to a second, Alderwoman Laratta commented, “I don’t agree with the red; let’s save some money and do them all gray. Nobody sees those walks.” The motion was seconded by Alderman Aiken. The motion passed three to two with Alderwoman Laratta and Mayor Fey voting against.

Alderman Aiken moved to table Resolution 19-09, the gray cement Resolution, indefinitely and was seconded by Alderwoman Mitchell and Alderwoman Laratta simultaneously. The motion passed unanimously.

Gauging Station Relocation

Senior Water Treatment Plant Operator Jack Beard introduced Resolution 19-10 which would approve a nonexclusive revocable license agreement with the Colorado Division of Water Resources for City-owned property in Clear Creek County. This would relocate a stream gauging station that is located in Clear Creek County on Fall River Road. Idaho Springs owns the property on Fall River, but Central City has design rights for a diversion pipeline, “And we want to protect those rights,” said Beard. Alderman Aiken clarified, “This helps protect our water rights in the future?” Beard replied, “Yes.”

Alderman Aiken moved to approve Resolution 19-10 and was seconded by Alderwomen Mitchell and Laratta simultaneously. The motion passed unanimously.

Staff Reports

Manager Miera presented Staff Reports since the last meeting. No one had any questions on comments.

Council Comments

Mayor Fey reported, “I have been working with a group called the Holistic Homestead and I would like council’s opinions on having a farmer’s market in the lot at the Y (the intersection of Spring and Lawrence Streets near the Burger Joint),” he continued, “Do you think it would benefit the city?” Alderman Aiken stated, “It wouldn’t hurt; give it a try.”

Mayor Fey then addressed Alderman Hidahl, “Jack, I really, really appreciate the homework you do and the knowledge you bring. It helps me feel better about the decisions we make.”

Public Forum

Mayor Fey opened the floor to the public for anyone who wished to speak to the council on any items not on the agenda. Three people chose to address Council.

President of the Historical Preservation Commission Deb Wray announced, “We are having a 50th Anniversary Dinner on May 6 and we would like people from the City (of Central) there.” It is a fundraiser for the Gilpin Historical Society and will be at the Ameristar.

David Wilson of Sherman and Howard LLC next addressed Council. He said, “On March 12, we presented the concerns that the City was not honoring its agreement” with the Business Improvement District (BID) bondholders for the Central City Parkway. The firm received a letter from the City dated April 12, which “tried to excuse and not present a solution. Nothing has changed; where does that leave us?” Wilson stated that they have researched and concluded there is “no doubt there was a breach of contract two years ago” by the City of Central. He was referencing the sale of City property to a commercial entity without requiring that entity to be included in the BID boundaries.

Mayor Fey interrupted saying, “I don’t think this is the proper forum for this subject.” Wilson responded, “We received the letter late on Friday (April 12) afternoon and apologize for the late notice. The Bondholders are taking this very seriously. We wanted to come tonight to be sure that our concerns were not swept under the rug and are a matter of public record.”

Alderman Aiken commented, “I appreciate that Bill (Porter, CPA representing the Bondholders) made it here from Atlanta when BID members that live ten miles away could not be here.”

Bill Porter next addressed the Council on the same matter. Porter said the bondholders are “asking City Council to direct the City Manager and City Attorney to enter into conversations and discussions with the BID in solving the problem. We are not expecting any conversations tonight from Council.” He added, “If the intent (of the City) is to diminish the value of the bonds, then we will have no choice but to tie this up.”

Mayor Fey responded, “The idea that we have brushed this off is not correct. We have had discussions about this, we have had executive sessions about this. I interpreted the letter (sent by the City) with a different tone and it sounds like we have some things to continue to work out.”

Alderman Aiken comment, “I appreciate you guys coming in.”

Manager Miera addressed the press saying, “The statement made tonight by people addressing the council may not be factually accurate and should not be taken as such.”

Mark your calendars

Council moved to enter Executive Session at 9:49 p.m. regarding matters that may be subject to negotiations regarding proposed amendments to the 1999 Growth IGA. The next regular Council Meeting will be Tuesday, May 7, 2019. A special meeting may be called to resolve Resolution 19-07.

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