To: Honorable Mayor and Members of Town Council
From: Robert J. Slentz, Town Attorney
Title
Town Attorney’s Report: Dawson Ridge Metropolitan District Nos. 2, 3, 4 Request
Body
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Gregg Miller, President of the Board of Directors of the Dawson Ridge Metropolitan Districts Nos. 2, 3 and 4 submitted the attached September 5th letter to the Town Manager. The purpose of this discussion is to obtain Town Council consensus on an appropriate response to the letter. To give Council an adequate basis to assess this request, it is necessary to briefly summarize certain land use, development and financial matters attendant to the Dawson Ridge PUD and the five Dawson Ridge Metropolitan Districts. Districts Nos. 1 and 5 did not join in the request made in the letter.
Dawson Ridge is an 1883-acre tract annexed in 1984 located in the extreme southwest corner of the Town. The 1984 annexation contract has never been amended to reflect current Town policy on water, infrastructure development or land use. The annexation contract makes reference that the property will participate in funding a new “full access” interchange through an assessment district. The PUD development plan for the property was approved in 1986 proposing 7900 residential units, and up to 433 acres of non-residential. As currently zoned, this would be the second largest planned development, second only to the Meadows. The 1986 zoning has never been formally reviewed by the Planning Commission or Town Council.
In 1985 the Board of Trustees approved formation of the five Districts, each District to serve the property within the District. Unlike current practice, under the service plans and IGA’s with the Town, the Districts were authorized to construct all of the municipal infrastructure (water, sewer, etc.). The 1985 service plans have never been amended and under the terms of the Special District Act and Title 11 of the municipal code, the Districts are obligated to obtain service plan amendments due to the gross disparity between the projections in the service plans and the actual capital development and financing by the Districts.
District 1 issued general obligation bonds to fund development of the initial infrastructure (a self-contained water system, streets, etc.) and one subdivision plat was approved, but no building permits were issued. Thereafter, the master developer filed bankruptcy which led District 1 to default on its bonds and its filing of Chapter 9 bankruptcy in 1990. In 1992 District 1 proposed to issue exchange refunding bonds, despite the fact that under the municipal code, the District needed to submit an amended service plan. There was also a concern that the PD plan reflected an overly intensive development.
In order to permit the refunding to go forward, but preserve Town control over the development and the Districts, in October 1992, the Town and Districts 1-5 entered into a Suspension Agreement which is attached. As pertinent here, the Suspension Agreement provides:
Districts:
II.A.1. …the powers and authority of District 1 and Districts 2-5 under each of the Intergovernmental Agreements shall be suspended until such powers and authority resume pursuant to the terms hereof.
II.B. (the authority of the Districts will resume when) that district has submitted an amendment to its Service Plan to the Town for review and approval.
Landowner:
III.B. The rights, privileges, duties, and obligations of District 1 (if it obtains title to real property subject to the Annexation Agreement) and the Town under the Annexation Agreement shall not resume until such time as District 1, as the owner of the Property within District 1, and/or a successor owner, has submitted a development plan to the Town for review and approval or until this Agreement is rendered null and void pursuant to Section I.A.3. hereof.
Districts 2-4 make the following request that the Suspension Agreement be amended to lift, in effect, the above restrictions as applied to those Districts.
“The property owners within Dawson Ridge District Nos. 2, 3, and 4 (“Districts”) have requested that our Districts take action to enable the development with the respective District boundaries. This request includes but is not limited to, funding public improvements and taking other action in regard to the Crystal Valley interchange.”
The Suspension Agreement contains the following provision on amendment:
This Agreement may be amended from time to time by agreement between the parties hereto; provided, however, that no amendment, modification, or alteration of the terms or provisions hereof shall be binding unless the same is in writing and duly executed by the parties hereto.
The “parties” to the Agreement are the Town and the five districts.
Staff Recommendation
The Town Manager and Town Attorney recommend that Districts 2-4 be advised that the Town Council does not intend to consider an amendment to the Suspension Agreement at this time. However, the involvement of representatives of all five Districts in conjunction with the landowners on planning and financial commitments of the new Interchange is strongly encouraged.
In support of this recommendation we ask Council to consider the following:
1. An amendment of the Suspension Agreements requires concurrence of all five Districts. Amending the Suspension Agreement with Districts 2-4, risks invalidating the Suspension Agreement.
2. Districts 2-4 have not addressed the express requirements of the Suspension Agreement that a development plan for the entirety of Dawson Ridge be approved by the Town Council and service plan amendments for the Districts are approved by the Town Council pursuant to the Special District Act and the Municipal Code.
3. The rationale for suspending development activity in Dawson Ridge until the land use and financing for the development is endorsed by Town Council is more compelling today, than it was in 1992. The annexation contract and IGA’s do not reflect current Town development policy, most critically regarding infrastructure development and water rights and supply. Moreover, it is simply not possible to ask financial participation from the Dawson Ridge and Westfield owners/districts without acknowledging the appropriateness of the underlying land use and construction of the current constraints referenced above.
Proposed Motion
“I move to direct the Town Manager to respond to the District request as outlined in the Staff memorandum.”
Attachments
Attachment A: District 2-4 Letter
Attachment B: Suspension Agreement