To: Honorable Mayor and Members of Town Council
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 Parkway Interchange Project
Body
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Executive Summary
In order to construct the Crystal Valley Parkway Interchange (the “Project”), it is necessary to acquire extensive right of way, permanent and temporary easements, and access rights from multiple property owners. In 2019, the Town Council authorized the acquisition of these property interests and conditionally approved the use of the Town’s eminent domain power if, after good faith negotiations, the acquisitions could not be completed by agreement with the property owners.
Pursuant to this Council authorization, the Public Works Department and Town Attorney’s Office have retained appraisers and right of way agents, and have coordinated with the Colorado Department of Transportation (“CDOT”) in obtaining fair market valuations and conducting negotiations with property owners. Certain acquisitions have been completed and other acquisitions are pending closing. Unfortunately, staff has not been successful in reaching agreement with the Sheldon G. Boone Testamentary Family Trust and Margaret D. Boone Living Trust (the “Owners”) for the acquisition of 9.3 acres of right of way, a permanent easement, and access control which are detailed in Exhibit 1 to the subject Resolution (the “Property Interests”).
Based on the Town’s appraisal of the fair market value of the Property Interests, which valuation was reviewed and approved by CDOT in March 2020, the Town, through its consultant, Western States Land Services LLC, sent Owners an offer to purchase the Property Interests in the amount of $997,100. Based on an appraisal they had obtained, the Owners, through legal counsel, submitted a counteroffer in the amount of $1,851,920.72 (inclusive of appraisal cost and attorney’s fees). This counteroffer remains the Owners’ position on the value of the Property Interests. The Town and the Owners have since exchanged and reviewed their respective appraisals.
The fundamental disparity in the valuation relates to the availability of municipal water to the Owners’ property which is zoned as the Creekside PUD. Owners’ assert that, under the annexation agreement for the PUD, the Town is obligated to extend treated water to the PUD at the Town’s sole cost. Town staff does not concur in that contractual interpretation and notes that there is no precedent for the Town bearing the cost of extending municipal infrastructure to a newly developing area, similar to this circumstance. Town staff has had several conferences with the Owners’ counsel and consultants in which the divergence of opinion has been discussed in detail, but no resolution or compromise has been achieved.
On September 16, 2020, the Town submitted a revised offer in the amount of $1,096,810, which offer is Attachment B to this memorandum. No response to this offer has been received, and it is apparent to Town staff that the significant disparity between assessments of the fair market value of the Property Interests precludes reaching agreement on the fair valuation of the Property Interests at this time.
Discussion
Under 14.02.070 of the Castle Rock Municipal Code, the Town Attorney must obtain Town Council authorization to commence the statutory condemnation process to acquire the Property Interests. The Owners are afforded the opportunity to address Council and, accordingly, the Owners and their counsel were notified of the Town Council consideration of this Resolution and the opportunity to address Council.
The commencement of the condemnation action enables the Town to seek to acquire possession of the Property Interests at the outset of the legal process. Later, a judicial determination of the fair market value of the Property Interests will be made unless the Town and Owners reach agreement on valuation. The Owners 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 Owners or Town to advocate for their respective positions on the proper valuation of the Property Interests.
Staff Recommendation
Staff recommends Town Council approval of a Resolution authorizing the acquisition and possession of the Property Interests through the statutory condemnation process in furtherance of construction of the Crystal Valley Parkway Interchange Project.
Proposed Motion
“I move to approve the Resolution as introduced by title.”
Attachments
Attachment A: Resolution
Exhibit 1: Legal Descriptions
Attachment B: Revised Offer Letter dated September 19, 2020