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Colorado Springs City Council ready to tackle eminent domain ordinance

By: monica mendoza
May 12, 2014 Updated: May 12, 2014 at 7:25 pm

Colorado Springs City Council member Joel Miller will likely find out Tuesday if his fellow council members support his proposal to tighten the city's rules on government takeover of private property.

Miller's proposed eminent domain ordinance has rallied supporters who believe it is necessary to protect property owners from government's grip as the city moves forward with a number of urban renewal projects.

It also has galvanized critics who say the ordinance would strangle economic development.

Miller began pursuing changes to the city's eminent domain policy in January shortly after the city released artist renderings of the City for Champions project. Some property owners wondered aloud why the drawings of a downtown stadium, parking structure and U.S. Olympic museum were drawn right over their property, he said then.

"They are nervous, and justifiably so," Miller said then.

At first, Miller wanted the ordinance to say that the city would not condemn private property for a private development. State law prohibits taking private property "for transfer to a private entity for the purpose of economic development or enhancement of tax revenue."

But as Miller did research, he learned that Colorado cities often use the Urban Renewal Authority to declare an area as "blight" - which could include such factors as inadequate street layout, unsafe conditions, unusual topography or conditions that endanger life or property.

Typically, Miller said, developers pay for the blight studies. Once a property is declared a blight, the city can attempt to purchase it. Then, in accordance with state law, the Urban Renewal Authority sends letters to property owners called a "Notice of Intent to Acquire Property," which says it can use eminent domain to take the property. Those letters act as threats, Miller said. People who get one are likely to sell their property because they cannot afford to take the issue to court.

Vikki Walton, a supporter of the ordinance who spoke at City Hall in April, likened the "Notice of Intent to Acquire Property" letters as being mugged at gunpoint.

"He says give me all your money. Does he have to shoot you to get the money? Or is the threat enough?" she said.

Miller's proposed ordinance says the city could not send letters that threatenor imply the use of eminent domain unless they're approved by the City Council. The proposed ordinance also would give a property owner a chance to correct the blighted property.

"The blight loophole in the Colorado law is big enough to drive a bulldozer through," said Kanda Calef, Business Chamber of Southern Colorado government affairs officer. "It makes it easy for property to be determined as blighted and ultimately transferred to developers."

Miller's proposal also would limit the city's power to take private property for "traditional public purposes" - such as building streets or highways - and the city could not take property for private economic development or a combination of public and private economic development. It also would require a public hearing if the city wants to use its eminent domain power.

The city's deputy city attorney Tom Florczak, who worked on the draft of the ordinance, said in a Jan. 23 email to Miller that the proposed ordinance would severely restrict the use of eminent domain, even for traditional public and municipal purposes.

"For example, eliminating public buildings means the city could not use the power to acquire land for a city hall or a fire station," he wrote in the email.

Opponents of the ordinance say there is no need to change existing rules because the city very rarely uses condemnation. But Miller says the city has plans for many urban renewal projects, including the Southwest Downtown Urban Renewal Area where the proposed City for Champions sports and events center would be built. He also says there are plans for a Railroad Loft urban area and potential plans for South Academy Boulevard and North Nevada Avenue.

"All of those projects, which could cover thousands of parcels of private property, must be undertaken with assurances to property owners that their private property rights will be respected and that the city's power of eminent domain will not be used inappropriately," he wrote in a memo to the council.

In April, Miller made his pitch to the council, but council member Jill Gaebler said she was concerned that stakeholders such as developers and the Housing and Building Association were not included in the discussion. Council then voted to postpone the decision.

Since then, the Colorado Springs Regional Business Alliance, the Housing and Building Association and the Downtown Partnership have publicly opposed the proposed eminent domain changes and urged their members to work against the ordinance.

"We don't think the current process is broken," said Joe Loidolt, president of the Housing and Building Association of Colorado Springs. "What this ordinance is trying to accomplish is already addressed by state law."

Loidolt said the ordinance would tie the city's hands in cases where it when the city would want to take blighted property for development. The checks and balance already reside with the City Council, he said.

"The city shouldn't paint itself into a corner," he said.

In an email to its members, the Downtown Partnership said "the ordinance virtually eliminates the possibility of future public-private partnerships, which are the key to economic development."

One much talked about public-private partnership on the horizon is the City for Champions downtown sports and events center. The project was approved by the state as part of four tourism projects that will receive state sales tax rebates to help finance bonds to construct the buildings. It would be built in the southwest downtown urban renewal site.

Council member Merv Bennett said City Council has final authority on all Urban Renewal Authority plans, and also views the ordinance as limiting the city's options for economic development.

"I consider it a strategic tool in the tool box," Bennett said.

Council member Helen Collins disagrees. She said she found an alarming number of examples of the use of eminent domain in Colorado, including a highly publicized case in Breckenridge where the government wanted a private mountainside residence for open space. The case was settled April 16 with the landowners reluctantly agreeing to a payment of $115,000.

"This has gone on all over in different cities," she said. "It's a pattern all over the U.S."

Council president Keith King, who may be the deciding vote on a split council, said Monday he has concerns about limiting the use of eminent domain for public use. He said the ordinance also is unclear if it would apply to entities including a Stormwater Authority. He still is hopeful that Miller may compromise on some of the definitions of public use to include such things as buildings.

"This ordinance is about public use and how you define public use and how it plays into economic development," King said. "Some of my concerns center around those issues and the definitions, and some of the wording he has used is concerning."

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