To: Honorable Mayor and Members of Town Council
Through: David L. Corliss, Town Manager
From: Michael J. Hyman, Town Attorney
Title
Resolution Authorizing the Acquisition and Immediate Possession of Certain Real Property through the Statutory Condemnation Process in Furtherance of the Construction of the Crystal Valley Interchange Project (Hyperion Fund L.P. Parcel, 4.685 acres located along north and south sides of Crystal Valley Parkway, east of Interstate 25 and west of Plum Creek Boulevard]
Body
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Executive Summary
The proposed Resolution authorizes the acquisition by means of eminent domain of 4.685 acres of property (the “Hyperion Property”) owned by Hyperion Fund L.P. (the “Owner”) that is needed for the construction of a new interchange at Interstate 25 and Crystal Valley Parkway (the “Project”) The description of the property is attached as Exhibit A to the Resolution. Construction of the Project is the primary transportation priority for the Town, having been the subject of local and regional planning efforts for more than 35 years.
On May 7, 2019, Town Council approved Ordinance No. 2019-008 which authorizes the exercise of the Town’s eminent domain powers to acquire property for the Project in the event that, after good faith negotiations, such acquisition cannot be completed by agreement with the property owner. At that time, only a small portion of the Hyperion Property was needed for the original configuration of the Project. On March 5, 2020, the Town’s property agent, Nancy Ragland of Western States Land, LLC, sent the Owner an offer to purchase 0.675 acres of the entire 4.685-acre parcel - which offer was not accepted by the Owner.
On January 4, 2022, a Screening of Conceptual Options Workshop was held to evaluate three alternate designs proposed for the Project. The workshop included staff from the Town, CDOT, Douglas County, FHWA, and Jacobs Engineering Group. The alternate design favored by the attendees included an eastbound to northbound loop ramp to I-25 with a roundabout at the intersection of Wilcox Street/East Frontage Road and Crystal Valley Parkway. This alternate design greatly improved the operations of the heaviest traffic movement, the eastbound to northbound movement to I-25. The roundabout also decreased traffic delays and queues, thereby improving air quality as well as vehicle and pedestrian safety. At the conclusion of the workshop, it was recommended by all attendees that the Town move forward with this alternate design. As a result of these design changes, Town staff determined that it needed to acquire fee simple title to the entire Hyperion Property.
On July 27, 2022, Ms. Ragland sent the Owner a letter withdrawing the previous offer to purchase. On November 15, 2022, Town Council amended Ordinance No 2019-008 by adopting Ordinance No. 2022-029 authorizing a “full take” of the Hyperion Property. On November 17, 2022, Ms. Ragland sent the Owner notice of the Town’s interest to acquire the Hyperion Property and of the Owner’s right to obtain an appraisal at the Town’s cost. A copy of Ordinance No. 2022-029 was provided to the Owner at this time.
In anticipation of the Council’s authorization, the Public Works Department and Town Attorney’s Office retained an appraiser, David Kilty, to update his earlier fair market valuation of the Hyperion Property. On November 15, 2022, Mr. Kilty issued his report, estimating the fair market value of the Hyperion Property at $816,228.00. A copy of the Owner’s appraisal was received by the Town on March 30, 2023, which appraisal estimated the reasonable market value of the Hyperion Property at $1,228,556.00 - approximately 50% higher than the Town’s appraisal.
On April 10, 2023, Ms. Ragland sent the Town’s final offer for the Hyperion Property to the Owner, offering to pay the sum of $816,228.00 as total compensation for the Property. The Owner was given until April 21, 2023 to accept the Town’s offer. Thus far, the Town has received no response its offer and can only assume that an impasse has been reached in the negotiations. It is apparent to Town staff that a mutual agreement cannot be reached in a reasonable timeframe to ensure that construction of the Project remains on schedule.
Discussion
According to Section 14.02.070 of the Castle Rock Municipal Code, if the Town is unable to reach agreement with a property owner on purchase price, time of possession, or any other terms of acquisition, the Town Attorney will so advise the Town Council. A public hearing is then scheduled at which the Town Council will be apprised of the prior negotiations and determine whether the statutory condemnation process for acquisition of the property should be initiated with the District Court. The property owner will have the opportunity to address Council at hearing. It should be noted that the Town Attorney’s Office has sent a letter dated April 24, 2023, to the Owner and its legal counsel notifying them of the Town Council’s consideration of the proposed Resolution and their opportunity to address Town Council.
The commencement of the condemnation action enables the Town to seek to acquire immediate possession of the Hyperion Property at the outset of the legal process. Later, a judicial determination of the fair market value of the Hyperion Property will be made unless the Town and the Owner reach agreement on valuation. The Owner may elect to have the fair market value determined by a Court-appointed commission or by a jury. In any event, the commencement of the condemnation action does not restrict or impair the ability of the Owner or the Town to advocate for their respective positions on the proper valuation of the Hyperion Property.
Staff Recommendation
Staff recommends Town Council approval of a Resolution authorizing the acquisition and possession of the Hyperion Property through the statutory condemnation process in furtherance of construction of the I-25 Crystal Valley Interchange Project.
Proposed Motion
“I move to approve the Resolution as introduced by title.”
ALTERNATIVE MOTION
“I move to approve Resolution as introduced by title, with the following conditions: __________________.”
“I move to continue this item to the Town Council meeting on __________.”
Attachments
Attachment A: Resolution
Exhibit 1: Legal Description
Attachment B: Final Offer Letter dated April 10, 2023
Attachment C: Notice of Hearing dated April 24, 2023
Attachment D: CVI Project Overview Map
Attachment E: CVI Property Acquisition Map - Hyperion Parcel