To: Honorable Mayor and Members of Town Council
Through: David L. Corliss, Town Manager
From: Jeff Brauer, Director of Parks and Recreation
Title
Resolution Approving the Purchase and Sale Agreement Between the Guardian Angel Trust and the Town of Castle Rock for the Lost Canyon Ranch (35-acre inholding)
Body
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Executive Summary
The Parks and Recreation Department requests Town Council approval of a resolution authorizing the Town’s purchase of an approximately 35-acre parcel adjacent to the Lost Canyon Ranch Open Space, including associated non-tributary groundwater rights and well infrastructure, from Guardian Angel Trust for $1,100,000. The property lies along the southeastern edge of Lost Canyon Ranch Open Space near Horse Thief Cave and includes an access easement through and across Lost Canyon Ranch Open Space.
This acquisition advances the Town’s priority to preserve and secure open space, consistent with community survey direction showing residents’ desire to protect natural areas and expand passive recreation opportunities. This purchase agreement represents a rare opportunity to permanently protect an irreplaceable open space edge area at risk of private residential development, safeguard the tranquility and character of the Lost Canyon landscape, and strengthen long-term public access and management of the broader open space system.
The transaction includes associated water rights. Castle Rock Water has done an initial evaluation of the groundwater component and estimates a rough value of approximately $69,000 to $87,000 based on the underlying estimated quantity (approximately 52.6 acre-feet). Castle Rock Water will purchase the water rights for a value to be finalized during due diligence, reducing the net open space acquisition cost to the Conservation Trust Fund.
Upon Council approval, staff will open escrow, deposit the $25,000 earnest money as required by the Purchase and Sale Agreement, and begin the 60-day due diligence period to complete remaining exhibits, finalize key documents, and confirm suitability. Closing will occur after due diligence is complete and all conditions are satisfied, including adoption of the required appropriation ordinance, with an outside closing date of April 1, 2026. Staff are requesting approval at this time to secure the opportunity and proceed with escrow and due diligence activities.
Discussion
In 2023, during the Town’s evaluation of the Lost Canyon Ranch Open Space acquisition, staff also assessed an adjacent approximately 35-acre parcel previously owned by the Jobe family. Acquisition efforts were not successful at that time. Subsequently, the Guardian Angel Trust, established by Thomas Sandgaard of Sangaard Capital, purchased the parcel for $1,000,000 and has now offered to convey it to the Town for $1,100,000. This parcel represents a strategic addition to the Town’s open space system because it is immediately adjacent to Lost Canyon Ranch Open Space and sits in an area where future private residential development could directly affect the open space experience and the Town’s long-term stewardship efforts. Acquiring the parcel now prevents potential development along the Lost Canyon boundary that could introduce new roads, lighting, noise, fencing, and activity incompatible with the area’s open space character, and permanently protects the tranquility and scenic quality of this portion of the landscape.
The site is also described as having notable natural resource value and potential archaeological interest. Town ownership allows these resources to be managed conservatively and intentionally for long-term protection, rather than being subject to incremental disturbance associated with private development. In addition, the parcel includes an easement allowing access through and across Lost Canyon Ranch Open Space. Ownership of both the land and the associated easement simplifies long-term access, enforcement, and management, and reduces future uncertainty for the Town’s open space program.
This acquisition directly responds to community priorities expressed through recent surveys, which consistently show residents’ desire to preserve natural areas and invest in open space. Securing this inholding delivers a tangible outcome that aligns with Town Council direction and community expectations, while also addressing a time-sensitive opportunity. Edge parcels and inholdings adjacent to major open space holdings are rarely available and typically become significantly more difficult and costly to secure once developed or encumbered.
The Purchase and Sale Agreement provides a structured and conservative framework for the transaction. The agreement includes a 60-day due diligence period during which the Town may conduct title review, survey work, environmental investigation if deemed necessary, and water rights verification, and may terminate the agreement in its sole discretion if the property or water rights are found to be unsuitable. Closing is contingent upon Town Council approval of the resolution.
Certain exhibits to the agreement, including the final location map and legal description and the forms of special warranty deeds for the property and water rights, are not yet complete. Staff’s intent is to secure the agreement and complete these technical and legal components during the due diligence period. This approach allows the Town to lock in a rare acquisition opportunity while maintaining full discretion to withdraw if due diligence results are not satisfactory.
Placement of the property into a new or existing conservation easement is not anticipated. Based on prior evaluations and existing site information, an environmental assessment is not expected to be required; however, the agreement preserves the Town’s ability to conduct a Phase I environmental assessment as part of prudent risk management.
Budget Impact
The acquisition cost is not to exceed $1,100,000, plus standard closing and due diligence costs such as title insurance, recording or documentary fees if any, survey work, and inspections as needed. Funding is proposed through the Conservation Trust Fund, requiring a budget transfer from Parks and Recreation improvements to the Open Space Acquisition account. The Purchase and Sale Agreement will also authorize staff to remit the $25,000 earnest money deposit upon Council approval. Castle Rock Water will provide a financial contribution to the deal to purchase the water rights, approximately $69,000 to $87,000 with the final number to be determined during due diligence, reducing the net acquisition cost to the Conservation Trust Fund. The specific contribution amount and accounting treatment will be finalized administratively in coordination with Castle Rock Water and the Finance Department.
Staff Recommendation
Staff recommend approving the resolution as introduced by title.
Proposed Motion
“I move to approve the resolution as introduced by title.”
Attachments
Attachment A Resolution
Attachment B Purchase and Sale Agreement
Attachment C Property Map