A popular Manitou Springs restaurant is suing the city and two landowners after they lost access to the dirt parking lot next door in the midst of the multimillion-dollar makeover of West Colorado Avenue.
Attorneys for the owners of Adams Mountain Cafe say the restaurant has lost business because its customers are no longer able to use the roughly 45 spaces it once leased from a local property management company along the main stretch of the small foothills community, where parking has always been a hot commodity.
In a lawsuit filed in 4th Judicial District Court in May, the cafe’s lawyers argued that the city bought “a small sliver” of the dirt lot from its owners, who then used the city’s acquisition as a pretense to terminate the lease 15 years early.
But attorneys for Westside Property Management LLC say the lot’s owners were well within their rights to terminate the lease, which includes a provision stating that the landlords have the option to end the agreement early if Manitou Springs or any other entity initiates eminent domain proceedings — as the city did.
“It comes down to what rights you bargain for in a release. A court can’t give somebody more rights than they’ve bargained for under a release,” said Jim Zendejas, an attorney for the owners of the lot and the property management company, Diane and Robert Wilcox.
Patrons of the cafe at 26 Manitou Ave. are still using the dirt lot, despite the early end to the lease, said Manitou Springs Mayor Ken Jaray.
“We totally disagree with all of the allegations in the complaint. We don’t believe that there was anything we did wrong,” Jaray said.
He added that he hopes to see a speedy resolution to the case, which the City Council discussed in a closed session Tuesday night.
The lawsuit comes as shops and restaurants along the stretch struggle to maintain business, as potential customers are often deterred by an ever-changing maze of traffic barriers and lane restrictions related to the reconstruction project.
The effort, known as the Westside Avenue Action Plan, is slated for completion at the end of this year. It will transform the four-lane span of Colorado Avenue, which becomes Manitou Avenue, from 31st Street to U.S. 24 into a two-lane avenue bisected by a center turn lane and flanked with bike lanes, widened sidewalks and vintage street lights. Manitou Springs is among the local entities chipping in funds for the roughly $35 million project, which is mostly being paid for by the Pikes Peak Rural Transportation Authority.
The restaurant was for years located in the Manitou Spa building at 934 Manitou Ave., but moved in 2014 to its current location. It is owned by Farley McDonough, who also serves as the board president for the Manitou Springs Urban Renewal Authority, and her husband, David.
McDonough declined to comment on the lawsuit, referring The Gazette to her attorneys in a text message. One of her attorneys, Colorado Springs lawyer Greg Walta, said he generally does not comment on pending litigation and directed a reporter to a recently-filed response to a motion to dismiss the lawsuit.
Among the defendants in the lawsuit is Transportation Resource Services, Inc., a contractor that worked with the city to acquire property rights for the project.
The lawsuit alleges that the construction project originally required a 10-foot wide easement along the southern boundary of the parking lot, but that the Wilcoxes “insisted” that TRS add to those plans so that the city would also need to buy a roughly 300-foot square patch of land from them. The complaint states that the Wilcoxes did so “with the intent to create a fraudulent and bad faith pretext” to end the lease early.
Jeffrey Weeks, an attorney for TRS, argued in a motion to dismiss that construction plans called for the acquisition of the swatch of land early in the process. He added that 18 new paved parallel parking spots will be added along Manitou Ave in front of the restaurant and the lot is part of the improvement project.
The city bought the piece of land in January 2018, and Diane Wilcox notified the cafe’s owners the following month that the lease would be terminated within two weeks.
The cafe’s attorneys say that the loss of the parking lot has decreased the value of the restaurant property, left Adam’s Mountain Café out of compliance with city parking requirements, and impaired the cafe’s ability to pay its mortgage and other bills. Farley McDonough has said that she’s posted a notice that customers’ vehicles may be towed if they park in the lot, and that several customers — including some who are elderly or have young children — have stopped coming to the cafe because of the loss of parking, according to recent court filings.
The complaint asks for “compensatory damages” including attorneys’ fees and other costs, and states that the cafe will also seek “punitive damages in an amount equal to three times plaintiffs’ actual damages.”
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