City of Ouray and Alpenhof Poised to Enter Settlement Agreement
by Samantha Wright
Nov 01, 2012 | 1469 views | 0 0 comments | 3 3 recommendations | email to a friend | print
HISTORIC – The historic Skyrocket Creek north channel diversion, pictured here last spring, diverts water and material away from the Ouray Hot Springs Pool to the south, through a notch blasted through solid rock, and into a manmade channel bordering the proposed Alpenhof subdivision. (Photo by Samantha Wright)
HISTORIC – The historic Skyrocket Creek north channel diversion, pictured here last spring, diverts water and material away from the Ouray Hot Springs Pool to the south, through a notch blasted through solid rock, and into a manmade channel bordering the proposed Alpenhof subdivision. (Photo by Samantha Wright)
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OURAY – The Ouray City Council holds a special meeting next Wednesday, Nov. 7, to determine whether to enter into a proposed settlement agreement that would put an end to an ongoing legal dispute with a local property developer.

Alpenhof LLC sued the City of Ouray in August 2011, after the company’s development plans for a problematic parcel of land in north Ouray were thwarted by action of the Ouray City Council.

The plaintiff owns the northernmost 2.2 acres of the Ouray Vista Subdivision known as Parcel C, and seeks to subdivide the parcel into 10 single unit residential lots. When the rest of Ouray Vista was approved for development years ago, Parcel C was excepted from development because of its proximity to the flash-flood prone Skyrocket Creek channel.

The creek is famous locally for flash-flooding. It historically flowed directly toward the Ouray Hot Springs Pool. But in 1929 after a devastating flood filled the pool with mud and debris, city forefathers built an earthen dam across its natural channel in a gully above the pool, and blasted a notch through solid rock to divert the creek’s flow toward what is now the Alpenhof property.

Alpenhof principals Galen and Rod Rasmussen acquired the property with an eye toward developing it. They submitted an Outline Development Plan to the City of Ouray in 2006, proposing the subdivision of their Parcel C into 10 single-unit residential lots. This plan was approved in February 2010, with the stipulation that the Rasmussens would “armor” a large berm between the Skyrocket diversion and their property to protect it from the threat of flood.

The Rasmussens paid for an environmental engineer to execute an expensive study to determine how best to armor the berm, but this work and expense was rendered moot in 2010, when a flood event occurred that deposited massive quantities of debris in the lower channel, and the city subsequently conducted excavation that significantly altered the berm.

In June 2011, the Ouray City Council voted to deny Alpenhof’s preliminary development plan, again citing safety concerns stemming from the flooding danger posed by the Skyrocket diversion.

The legal battle between the city and Alpenhof is over who should pay for environmental mitigation to protect the proposed subdivision from the Skyrocket Creek diversion’s flooding potential. The city has maintained that the Skyrocket diversion poses a natural geologic hazard and that, per city code,  Alpenhof should be responsible for the cost of designing and constructing a catchment basin and armored berm.

The city also wanted to subject the property to a special improvement district to improve an existing culvert under Highway 550 in order to protect property owners on the other side of the highway from flash flood events.

Alpenhof’s principals, through attorney Andy Mueller of the Tisdel Law Firm, have countered that the city’s action in denying their development proposal constituted a taking of its property, arguing that the hazard created by Skyrocket Diversion’s channelized debris and water as it passes by their property is not naturally occurring. Rather, it was caused by the city’s artificial channelization, they say, and the city is therefore responsible for paying for mitigation, so that the Rasmussens can develop their parcel to its full potential.

The parties entered into court-ordered mediation earlier this year.

The resulting draft settlement agreement appears to give the city everything it wanted. Under the terms of the agreement, Alpenhof agrees to build an armored berm adjacent to its property and to enlarge the Skyrocket catchment basin in accordance with engineered plans which must be approved by the United States Army Corps of Engineers. Final plat approval of Parcel C is contingent upon these improvements being made.

Alpenhof also agrees to participate in a special improvement district for the enlargement of the Skyrocket Creek north channel culvert under Highway 550, and to pay $80,000 toward the cost of this improvement, with funds coming in the form of $8,000 from the sale of each of its 10 lots.

Finally, the settlement agreement obligates Alpenhof to pay $100,000 to reimburse the city’s legal fees incurred over the course of the lawsuit, and protects the city from liability stemming from the Skyrocket diversion’s flash flooding hazard.

The upcoming Wednesday, Nov. 7 meeting begins at 6 p.m. in Massard Auditorium at the Ouray Community Center. Upon convening, council will immediately enter into executive session to discuss the draft settlement agreement. This will be followed by a public hearing, after which council is scheduled to vote on whether to enter into the settlement agreement, which would in turn necessitate approval of  Alpenhof’s Preliminary Plat Application at Ouray Vista Subdivision.

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