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Lake Gulch Whiskey Resort in Black Hawk

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Council approves $50 million Tincup Whiskey Distillery Resort

By Randy Beaudette

The regular online meeting of the Black Hawk City Council highlighted the annexation of Lake Gulch Whiskey Resort Properties, an Emergency Declaration for the City of Black Hawk, and an agreement for the July 4th fireworks.

Mayor Spellman called the Council to order followed by Roll Call and an online Pledge of Allegiance. Roll call revealed Council members that were present online included Linda Armbright, Paul Bennett, Jim Johnson, Greg Moates, Hal Midcap, and Benito Torres. Also present online were City Attorney Corey Hoffmann, City Manager Stephen Cole, City Clerk/ Administrative Services Director Melissa Greiner (and webinar host), and Deputy City Clerk, Michele Martin

City Attorney Hoffmann asked Council to declare any Conflicts of Interest on any issue appearing on the agenda other that than those already disclosed and filed with the City Clerk and Secretary of State. There were no objections from the City Council or from anyone online.

Approval of Minutes

Black Hawk City Council the meeting minutes from the March 11, 2020 regular meeting and the March 18, 2020 special meeting with no corrections.

Public Hearings

Mayor Spellman opened the Public Hearing for Agenda items 7. A. through I. All items were pertaining to the proposed annexation and zoning for the property known as the Lake Gulch Whiskey Resort. In his opening remarks Mayor Spellman stated, “The documents which comprise the Public Hearing are comprehensive, deliberative, and cogent. A tremendous amount of time and energy has gone into accomplishing this. What you will see here today is a bit of blue sky and even a few rays of sunshine in an otherwise bleak and gloomy time. This is a project all of Gilpin County can rally behind, be excited about, and look forward to when we emerge from this unsettling and dark time. It is the first significant development to diversify Black Hawk and Gilpin County from being a single-industry community and relying solely on the gaming industry for revenue and employment. I would say this pandemic is our clarion call to embrace a project such as this one, which has so much to offer, as you will all now see.”

Representatives from the City’s consultant, Baseline Engineering, introduced the project to the City Council and those viewing remotely through the Zoom online meeting app. As part of their presentation, Baseline read a Resolution from the Gilpin County RE-1 Board of Education supporting the development. What was most significant was when Baseline produced a Consent to Annexation Agreement signed by the Gilpin County Commissioners. An opposition letter from Central City with unfounded concerns about the development was quickly and easily answered by Ethan Watel, a planner with Baseline, and City Attorney Hoffmann. Baseline senior planner, Vince Harris, emphasized that access to the Lake Gulch Whiskey Resort would have connectivity through Black Hawk’s roadways. That route would be from Bobtail Street up to Miners Mesa Road, with a new connection from Miners Mesa Road to Lake Gulch Road. Mayor Spellman added that from the very first negotiations with Proximo, it was important and the City insisted that the Lake Gulch Whiskey Resort be fully integrated with the City and not be an isolated outpost. The new road connection accomplishes that.

Next up was the applicant and a dazzling presentation by Proximo Spirits distillery brand experience director, Rodrigo Braun, consisting of a number of videos. Braun stated Proximo Spirits, Inc. is the seventh largest distiller in the United States and Tincup Whiskey, which is what will be distilled in Black Hawk, is only one of the many brands the company produces. The impressive lineup includes Stranahan’s and Pendleton Western whiskeys, Jose Cuervo Tequila, Hanger 1 and Three Olives vodkas, as well as Bushmills and Sexton Irish whiskeys. The company has distilleries in the United States, the U.K., and Mexico. “This will be the largest distillery in the whole State of Colorado,” Braun proudly proclaimed. The Black Hawk distillery will use 100,000 of gallons of water per day, bring 45 full-time and 45 part-time jobs to Gilpin County, and attract 60,000 annual visitors to the distillery resort. In addition to the distillery and bottling works, the resort will include a restaurant, event center, an outdoor amphitheater, lodging and camping, outdoor actives such as hiking, mountain biking, ziplines, and an ax throwing area. Braun emphasized the company’s commitment to historical provenance and that Proximo would celebrate the mining history of Black Hawk, in part by designing the structures to resemble Black Hawk’s mining and milling history. He concluded by announcing “the name Black Hawk will be prominently displayed on the Tincup whiskey bottles as they go throughout the United States and around the world.”

This concluded the staff and applicant presentations. Mayor Spellman then asked for public comment at which time Gilpin County Commissioner Ron Engels, who is a Central City resident and former Mayor, spoke in support of the project. Commissioner Engels stated for the record, “The Gilpin County Board of County Commissioners unanimously and enthusiastically support Proximo relocating their Tincup Distillery to Gilpin County and Black Hawk, this annexation proceeding being the next step in the process. During one of our many special meetings this last week, and as you saw earlier in this presentation, we signed our consent to the annexation. Also, we have had very positive negotiations with the City addressing the minimal concerns we had over the impact such a large project might have to the county. Those of you who know me, understand that I have been beating the drum of economic diversity for years. For as much as we appreciate the casinos that have made Black Hawk and Central City home, having them alone as our economic engine left us in the same unsustainable situation was we were in during the gold rush days in the County. We first and foremost mourn the loss of life and livelihood the world-wide pandemic we are in the midst of has caused. But we also must see it as stark, sad evidence of how fragile our dependence on a single economic driver is. Gilpin County, Black Hawk, and Central City will be dealing with the financial fallout of this pandemic for years to come. As we welcome Proximo and Tincup to the County, we are happy, we are excited to have a new partner in not only regaining our economic stability, but in moving it forward. The Gilpin County Board of County Commissioners welcomes you all to the little kingdom of Gilpin and at least I personally am looking forward to the day when we can lift a welcoming glass of Tincup together face to face. And for such an auspicious event, I might even be convinced to crack open the bottle of Bushmills 1608 I’ve been jealously guarding the last 12 years.”

Commissioner Engels was the only public speaker for or against the project.

City Attorney Hoffmann then informed City Council that just prior to the Council meeting and Public Hearing, Central City had filed a lawsuit against the City of Black Hawk, Proximo Distillers, LLC, and RSM Partners LLC seeking to stop the project. Attorney Hoffmann stated he had not had time to review the Complaint, but would inform Council as to its merit once he had reviewed it.

City Council then proceeded to vote on the following Agenda items 7. A. through I., all passing unanimously.

Lake Gulch Whiskey Resort Annexation (Resolution 25-2020)

Resolution 25-2020 which is Resolution Making Certain Findings of Fact Regarding the Proposed Annexation of Parcels of Land to the City of Black Hawk, Colorado, known as the Lake Gulch Whiskey Resort Annexation.

Annexation of Parcels

Black Hawk Council considered the following:

CB2, A Bill for an Ordinance Approving and Accomplishing the Annexation of Parcel No.1, Consisting of Contiguous Unincorporated Territory in Gilpin County Also Known as a Portion of the Lake Gulch Whiskey Resort Annexation.

CB3, A Bill for an Ordinance Approving and Accomplishing the Annexation of Parcel No.2, Consisting of Contiguous Unincorporated Territory in Gilpin County Also Known as a Portion of the Lake Gulch Whiskey Resort Annexation

CB4, A Bill for an Ordinance Approving and Accomplishing the Annexation of Parcel No.3, Consisting of Contiguous Unincorporated Territory in Gilpin County Also Known as a Portion of the Lake Gulch Whiskey Resort Annexation.

CB5, A Bill for an Ordinance Approving and Accomplishing the Annexation of Parcel No.4, Consisting of Contiguous Unincorporated Territory in Gilpin County Also Known as a Portion of the Lake Gulch Whiskey Resort Annexation.

CB6, A Bill for an Ordinance Approving and Accomplishing the Annexation of Parcel No.5, Consisting of Contiguous Unincorporated Territory in Gilpin County Also Known as a Portion of the Lake Gulch Whiskey Resort Annexation.

CB7, A Bill for an Ordinance Approving and Accomplishing the Annexation of Parcel No.6, Consisting of Contiguous Unincorporated Territory in Gilpin County Also Known as a Portion of the Lake Gulch Whiskey Resort Annexation.

CB8, A Bill for an Ordinance Approving and Accomplishing the Annexation of Parcel No.7, Consisting of Contiguous Unincorporated Territory in Gilpin County Also Known as a Portion of the Lake Gulch Whiskey Resort Annexation.

Lake Resort Whiskey Resort Zoning Change (CB9)

Council Bill 9 is Bill for an Ordinance Zoning Certain Property Within the City of Black Hawk to Commercial/ Business Services Zoning District and a Planned Unit Development Overlay Known as the Lake Gulch Whiskey Resort Planned Unit Development, and Amending the City’s Zoning Map. RSM Partners LLC submitted seven petitions for the annexation of land in unincorporated Gilpin County into the City of Black Hawk known as the Lake Gulch Whiskey Resort annexations. In addition to and concurrent with the annexation petitions, the applicants are requesting approval of an initial zoning to the Commercial/ Business Services zoning district and a Planned Unit Development which is an overlay zoning district allowed in Black Hawk. Proximo Distillers, LLC is under contract to purchase the properties from RSM. Proximo plans to purchase the property with the purpose of developing a distillery for the Tincup Whiskey brand. The development is proposed to include a distillery, barrelhouses, a visitor’s center, residential uses, guesthouse and cabins, a restaurant, event space, retail, parking and outdoor activities.

Mayor Spellman made the following statement related to Central City’s opposition and lawsuit. “It is important that everyone attending this online meeting today, understand that three out of four major governmental entities in Gilpin County support this history-making project. It is amazing what we can accomplish when we are all pulling in the same direction. This is called good governance.”

He continued, “Central City’s opposition to a project that will benefit all of Gilpin County demonstrates a decisive lack of leadership and failure to look out for their residents and businesses of their City by squandering precious revenue at a time like this on a frivolous lawsuit. Instead of waiving their casino’s device fees at a time like this to offer them relief, they would rather line the pockets of their city attorney as well as outside legal counsel. These actions are shameful – the Council’s action amounts to intellectual bankruptcy and confirms they are devoid of how to better their City without resorting to extortion by filing a senseless lawsuit. Central City, you cannot extort your way to success, and you cannot extort your way to prosperity. It will only bring further ruin to your city, which you cannot afford. It appears your actions are rooted in jealousy, envy, and spitefulness which will bring doom and gloom to the city you claim to love and represent. This is beyond shameful – this is pathetic and irresponsible in the governance of your city.”

Before closing the Public Hearing Mayor Spellman went on to thank the Black Hawk City staff and Baseline Engineering for their diligent work on this development. He thanked the Gilpin County Commissioners for their collaboration and support adding, “More work lies in front of us, but I have no doubt that together we will accomplish it.” Not forgetting the Gilpin County Board of Education, the Mayor thanked the board for its Resolution. He concluded by acknowledging Proximo for their hard work and commitment to this project. “With what we are experiencing today in our country, a lesser company than Proximo would have at a minimum delayed this Public Hearing, if not pulled the plug altogether. Proximo is to be commended for their fortitude, steadfastness, and commitment to this development. There have been tough negotiations between us, but also camaraderie, which at our last meeting ended with shots of Tincup. To say we are excited about your project would be an understatement to the extreme. We, in Black Hawk and Gilpin County, look forward to a long relationship. Tincup Whiskey has found a new home in the City of Black Hawk, County of Gilpin, in the state of Colorado.” With that Mayor Spellman closed the Public Hearing.

Emergency Declaration (Resolution 28-2020)

Black Hawk City Council approved a Resolution Consenting to and Extending the Order Declaring a Local Disaster Emergency In and For the City of Black Hawk, Colorado in response to the COVIOD outbreak. The extension will expire on April 24, 2020.

Fireworks Show (Resolution 29-2020)

A Resolution approving the 2020 Fireworks Production Contract between the City of Black Hawk and Western Enterprises, Inc. Boom Town Fireworks Production Contract for 2020 with a 6% increase since over last year’s contract. The increase is due to increased production cost from overseas suppliers. This year’s proposed show will last 30 minutes as usual, but there are some changes worth noting. This year, the north side Casey display will include 3-inch and 4-inch shells. Western Enterprise indicated the change from 2.5-inch shells to 3-inch shells would reduce the risk of afire, but not entirely eliminate it. Western Enterprises stated the difference between the 4-inch shells and last year’s 5-inch shells would not be discernable to the viewer. This year’s south side Mesa display will include more 6-inch shells. Redistributing the shells shot from each site will result in more shells fired from the Mesa than in past years. The goal is to create a complete show from each site that will compliment each other during the 30-minute fireworks show across the city. Black Hawk City Council Approved Resolution 29-2020 unanimously.

City Attorney

City Attorney Corey Hoffmann suggested that in light of Central City’s lawsuit against the annexation, council recess into Executive Session.

Executive Session

Black Hawk City Council moved to recess into Executive Session per C.R.S. 24-6-402 (4) (b) to confer with an attorney for the local public body for the purposes of receiving legal advice on specific legal questions.

Next Meeting

The next scheduled Black Hawk City Council regular meeting will be held on April 8, 2020 at 3:00 pm online to help folks practice social distancing during the COVID-19 pandemic. For more information about the agenda and to request online meeting access, visit www.cityofblackhawk.org.

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