HomeMy Public PortalAboutTBP 1996-10-09
. /~ .
//--<'l ) "'- ---~..
/ '~
/' "',
T<?I~ itF~~~~!lRt{
P.O. Box 120/153 Fraser Avenue ~
Fraser, Colorado 80442
(970) 726-5491
FAX Line: (970) 726-5518
TOWN BOARn A(~ENnA
SPECIAL I\IEETIN(;
OCTOBER 9, 1996,6:30 p.m.
I. Roll Call
2. Open Forum
3. Request for executive session pursuant to c.R.S. 24-6-402 (2.3) (e) ".. .developing
strllteg~'.lhr and receiving reports on the progress ({negotiations; and instructing
negot iut ors. ,;
4. Staff Choice
5. Board Choice
------.-----.-.---------.. --.'--.- -...~-,_.._- ---"-' ~ .._, ".-- --- . ..... "'_'U
,-,- .-....-..-.------.-. .,.-,. -.-,.. ..- --.--.--..--.-.------__._.._.___._ ..h_.____ ,__.
MEETING SCHEDULE I~EMINDER
October 9th Planning Commission
October 16th Town Board Regular meeting
October 2 I st County-wide elected officials meeting in Ilot Sulphur Springs, 9:00 a.m. - 12:00
October 23rd Planning Commission
DDtDb., II Ballaweenlll
ýÿ
.
.
TOWN OF FRASER
"Icebox of the Nation"
P.O. Box 120/153 Fraser Avenue
Fraser, Colorado 80442
(970) 726-5491
FAX LIne: (970) 726-5518
Manager's Briefing: October 7, 1996
A special meeting has been called for Wednesday, October 9, 1996 at 6:30 p.m.
We will be discussing the Village at Winter Park Ranch, the offer the Town has submitted to
I
Colorado Community First State Bank, and interest that other parties that have expressed, either
I
fonnally or informally, in partnering with Fraser on this property.
i
11~ ~c,( fA t~OtJM\ Il.d",tc f 1:> 4-.: ~tU"L.
tl\dOY~ d--'^ 0 P I t\l'(Tl\
vl
~ will ~. i~V1 \- ~I.~J vJjday
HJqk+ .
--
ýÿ
. .
BAKER, CAZIER AND McGOWAN
O{~aa< q;~~
I
OF PROFESSIONAL CORPORATIONS 62495 U.S. HIGHWAY 40 EAST
i
BOX 50p
JOHN L. BAKER, P,C, GRANBY, COLORADO 80446
STANLEY W. CAZIER, P,C, TELEPHONE (970) 887.3376
RODNEY R. McGOWAN, p,c. FAX (970) 88~.9430
October 3, 1996
Mr. Chuck Reid, Town Manager
TO\\-TI of Fraser
P.O. Box 120
Fraser, CO 80442 CONFIDENfIAL
Re: Village at Winter Park Ranch
Dear Chuck:
This letter will respond to your inquiry regarding Safeway's expressed interest in
purchasing the supermarket site that City Market has proposed to acquire from the Town, and,
whether there are any legal requirements that the Town put the property to bid or solicit
proposals from each interested party.
I
I
There is no express statutory provision requiring the Town to utilize a bidding or simi~ar
process when disposing of Town-owned property. Disposition of municipal real property is :
governed by CRS 31-15-713, That statute provides that real estate which is not held or used for
a governmental purpose may be sold and disposed of, by ordinance, upon such terms and
I
conditions as the governing body may determine, Accordingly, absent some statutory provisi~n
to the contrary, the Town may legally choose to advertise for bids, to solicit proposals from th~
two interested parties, or to deal with one party exclusively. Of course, regardless of the legal:
authorities, the Board could conclude that it is advisable from a public policy standpoint to i
solicit proposals or obtain an appraisal of the property, to avoid public criticism and insure th~t
the Town receives a fair price for the property. :
While there is no requirement that the Town solicit bids or proposals for the sale ofth~
supermarket site, there is at least the possibility that Safeway could attempt to stop a sale to qty
Market, by asserting that the Town has no authority to acquire the Village at Winter Park Raneh
property with the intention of selling a portion for private use. There are some older Colorado!
Supreme Court cases which suggest that a governmental entity may only acquire property for i
governmental uses, and may not engage in "speculation" through the buying and selling or i
property. In Farnik v. Commissioners, 139 Colo. 481, 341 P.2d 467 (Colo. 1959), the Supremf
,
:
c: \WP\LETrERS\CHRE6AQ3 ,WPO
I
. .
Mr. Chuck Reid
October 3, 1996
Page 2
Court disapproved ofthe Weld County Commissioners' practice of reserving and leasing the
mineral interests relating to properties acquired for unpaid taxes. While the Court found that the
County had the authority to sever the mineral interests, it also concluded that the County could
not hold and lease those interests indefinitely as a means of raising revenues. In so holding, the
Court stated:
The county has no power to acquire real or personal property as a speculation or an
investment, nor does it have the power to retain property lawfh!ly acquired for the use of
the county when the use therefor no longer exists. It may acquire and retain such
property as it now reasonably needs, or in the foreseeable future may reasonably need _
no more. Such needed property is exempt from taxation - other not needed property
should be on the tax rolls as provided by law.
This same holding was later applied in a case involving a statutory municipality, in
Centennial V. Littleton, 154 Colo. 191,390 P.2d 471 (Colo. 1964). In that case, the Court held
that Littleton could not legally retain a reversionary interest in, or a share ofthe profits derived
from a piece of property that was no longer needed for municipal purposes and which was sold
to a private business. The Court again referred to the lack of authority on the part of a
governmental entity to acquire or hold property for "speculation or investment".
The underlying rationale behind these cases seems to be that no public purpose, other
than raising revenues, was being served by the public entity's acquisition or holding of the
properties in question. In our case, I believe a valid distinction can be made in that the
acquisition of the supermarket site and its sale to a private developer does serve a public
purpose, since it is the only means by which the Town can acquire the additional property
intended for open space and park purposes. Further, since the supermarket site will be
immediately conveyed to the developer on closing, that property will not be held off of the tax
rolls, which was considered to be a factor in the Famik case. Giv~n lh~se dIstin(;tions, I believe
that the Town would have a good chance of prevailing in court ifSafeway, or anyone else, were
to challenge the proposed transaction. On the other hand, the final decision would be made by
the District Judge, or perhaps an appellate court, so I cannot guarantee any particular result.
If it appears that there is a substantial likelihood Safeway will institute litigation, we may
want to explore further the possibility of bifurcating the transactions involving the supermarket
site and the remaining property and structuring the supernlarket site transaction as a sale directly
from the Bank to City Market. It was my understanding from our earlier discussions, however,
that the Bank wanted the Town to be the purchaser of the entire property, to satisfy its tax
considerations.
ýÿ
. .
Mr. Chuck Reid
October 3, 1996
Page 3
Please let me know if you or the Board have further questions regarding this matter.
Because the issues discussed herein could be the subject of subsequent litigation involving the
Town, I would recommend that the contents of this letter not be shared with anyone other than
members of the Board and Town staff.
Rodney R. McGowan, P.C.
RRM:sw
Copy Sent by Fax to Fax No. (970) 726-5518.
. .
Confidential
10/8/1996
To: Board
Re: developing strategy etc:
From: Liz
I asked Chuck to research if CIRSA would cover our legal costs and/or a
settlement if Fraser were involved in litigation over this project.
After reading Rod's letter I feel comfortable that we are not violating
any statute. My concern is that we might be opening ourselves up to some
costs that could make this project much more expensive than planned.
If CIRSA will cover these costs and the appraisal comes back looking like
we are not giving the supermarket site away then my opinion is that we
should continue with the project as structured.
If there is a risk that CIRSA will not cover our legal cost~ then I think
we should explore other ways to structure the deal that minimize the risk
of litigation but will result in the following outcom~.
1. Gets rid of PUD Special Use Permit.
2. Results in a supermarket building no larger than 42,000 sq ft with
three ancillary businesses to total no more than 9000 sq ft combined.
3. Guarantees removal of soil contamination and gas tanks at a cost
comparable to that if the project was eligible for the PST fund.
4. Protects the wetlands/op~n space park in perpetuity.
5. Results in the supermarket site being sold to City Market.
6. Guarantees $ from supermarket site regardless if developed.
To explain why I think #5 is important:
1. If Safeway buys supermarket site then City Market may locate outside of
Fraser decreasing our ta~ $, or may locate in less desirable location as
defined by citizens ie the Maryvale Meadow.
2.Given inability of current Safeway to keep up appearances I have concern
that it would really go to pieces if they moved to Hogan, regardless of
their 'assurances that they would not let this happen.
3. Hopefully having City Market across the street will encourage Safeway
to upgrade their existing location. I have a slight concern that Maryvale
may try to woo them into a new lopation which could be a problem.
\
.
ýÿ