El Paso County officials last week gave the OK to a plan that allows the Pikes Peak or Bust Rodeo Foundation to fund renovations of Norris-Penrose Event Center on Colorado Springs’ southwest side.

But before crews complete the $2.6 million in upgrades, the county wants protection in case environmental contaminants surface during construction. Tons of rubbish is buried at the site, and mine tailings linger from a gold mill’s 20th-century operations.

Under terms of the agreement, unanimously approved by county commissioners on July 30, the county and the Pikes Peak or Bust Rodeo Foundation — which owns the center — together will buy a 10-year environmental liability insurance policy with a coverage cap of $10 million.

“There is a balancing test here that we’ve got to engage in,” commission Chairman Mark Waller said. “What is the risk here to the public, and what’s the public gain that comes from this? ... I’m sure we got to the right answer on this issue.”

The foundation and county negotiated for more than two years on the new pact, replacing one enacted when the county sold the property to the nonprofit for $10 in 2005.

The event center’s 54,000-square-foot arena already has a new concrete floor, said foundation secretary Ralph Braden.

Under the new terms, the foundation can install restrooms, air conditioning, and electrical and lighting fixtures, Braden said. It also will upgrade the kitchen and make aesthetic improvements to the building’s exterior, he said.

The county will shell out the nearly $200,000, one-time premium for the insurance plan, and the foundation will reimburse the county for half of that cost over the policy’s lifetime.

The policy will cover needed pollution cleanup, claims of injury or improper waste disposal that might arise and related costs, including legal expenses, said Senior Assistant County Attorney Cole Emmons.

The foundation will pay any deductibles, which would amount to $100,000 each, Emmons said.

“It’s the smart move to make sure that we have funds available to address any issues that are found to protect our residents,” Commissioner Longinos Gonzalez Jr. said.

The county and foundation also agreed to modify an earlier environmental indemnification agreement, under which the county could have been held liable for the contamination.

Under the new pact, the county also will give up a contractual right and deed restriction on about 10 acres. The changes will allow that vacant land, now used for rodeo parking each year, to become collateral for a $2 million loan from Kirkpatrick Bank to pay for most of the improvements, Braden said.

“Right now, the building permit is very close to being ready to issue,” he told commissioners. “We’re ready to go.”

The contractual right and deed restriction still will apply to the rest of the event center, about 60 acres.

The “right of first refusal” allows the county to buy back the property if the nonprofit wants to sell it. The deed restriction stipulates that the property “shall be owned and used in perpetuity as open space, (for) recreational and equestrian activities and for no other purpose.”

The remodeling plan originally included the construction of a chuckwagon-style restaurant, but the foundation scaled back the vision, Braden said. The nonprofit still hopes to build the restaurant someday, he said.

Most of the other improvements should be done by the end of the year, he said.

In the 1940s and ’50s, the northern part of the property was a landfill for trash and building debris, including the remains of one of the old Antlers hotel.

In 2002, the county applied for an Environmental Protection Agency grant to clean up the site, but it withdrew its application when it learned it would need matching funds, former county spokesman Dave Rose has said.

“Based on the historic operations at the center, there are known contaminants there: arsenic, lead and zinc in particular,” Emmons told commissioners. “There are also maybe mercury and cyanide.”

The center’s general manager told consultants in 2014 that trash could be found a few inches beneath the surface of the main arena, according to a site assessment released later that year. The manager noted that his staff had unearthed trash while grading the arena.

Those solid wastes might be a source of asbestos, methane gas and groundwater contamination, the assessment concluded. Gold mine tailings found across the property — vestiges of the Portland Mill, just northwest of the center — also could lead to high levels of metals in groundwater and soils.

In the late 1990s, “elevated concentrations” of arsenic, barium and lead were found in stream sediment on the property, according to the assessment, which was prepared by Colorado Springs consulting firm CTL/Thompson for The Broadmoor Hotel.

The hotel once considered buying the event center from the foundation but withdrew from the deal in August 2014.

The EPA said in a 1997 letter that contaminants in water and sediment samples weren’t high enough to threaten horses on the property or wetlands downstream. The mine tailings, too, were unlikely to be a public health risk, the letter stated.

CTL/Thompson has completed two more environmental assessments on the property over the past two years, Braden said. Those assessments were provided to the county and the insurer that will provide the environmental coverage, he said.

Contact the writer: 636-0108

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