Since the introduction of the framework for settlement of the condemnation case by the Telluride Town Council at a public meeting last month, sharp differences of opinion have been expressed. Each side says that their preferred strategy – mediated settlement on the one hand, condemnation on the other – is likelier to protect more of the property as open space, and that the other side is pursuing a strategy that risks too much for too little in return.
But controversy and contention over the Valley Floor is nothing new and debate over its potential development has been a recurrent headline news item over the past quarter century.
In 1980, the San Miguel County Planning Commission, with perhaps little or no idea of the explosion in public sentiment that would develop over the years, first grappled with an attempt to bring regional development objectives into a Master Plan. As part of that process, the commission invited input from all the major landowners in the area to try to coordinate future build-out densities. The commission's efforts were aided in 1981 by a new advisory committee known as the Telluride Regional Planning Advisory Committee. On TREPAC's recommendation, the County Planning Commission, with agreement by the Telluride Valley Corporation that had acquired the Valley Floor in 1967, zoned the long stretch of property leading into Telluride as a Planned Unit Development in Reserve. This zoning designation was intended to allow landowners a future option to enact a PUD in return for delaying development plans at the time. As part of the give and take with the county planners, TVC agreed to a build-out density of 1,770 people on the Valley Floor. Preliminary plans did not include either a golf course or reservoirs, features that would subsequently provoke outcry, but did have an allowance for a large hotel as well as provisions for affordable housing.
Later in 1981, TVC sold its Telluride area holdings to the Cordillera Corporation for $6.5 million. An option to purchase the land, available at the time to the Town of Telluride, was not exercised. Cordillera, a company controlled by Neal Blue, co-founder of the atomic energy and defense contracting company General Atomics, was the predecessor to the San Miguel Valley Corp.
Initially silent on its intentions for development on the Valley Floor, the new owner, now SMVC, floated initial ideas in the mid-80s that were anathema to Valley Floor preservationists. SMVC's plans called for up to 7,000 people on the Valley Floor, a golf course and four reservoirs. Faced with popular outrage, the company shelved its plans and retreated into a largely mute mode again after a brief flurry with Telluride when the town tried to condemn SMVC property near Society Turn in order to use the land for a sewage treatment facility. SMVC convinced the town to end its condemnation effort by offering a land trade and gave Telluride the Society Turn location in exchange for the two sewer ponds located in the middle of the Valley Floor.
SMVC's silence was loudly shattered on March 31 of 1993 when a company fax was sent to the office of San Miguel County Planner Charlie Knox. Whether the so-called April Fools Day fax was sent in error or by disgruntled SMVC staff, and whether or not it was a hoax, as SMVC officials subsequently claimed, was never absolutely determined. The fax came with a General Atomics cover page and was addressed to SMVC president Charlie Haas. It was from Kevin Scanlan who had previously been introduced to Telluride and county officials as SMVC's planner. Scanlan noted to Haas that he had already shared the fax contents, a series of five proposals in connection with future development of SMVC's property, with Neal Blue. Among other things, the fax proposed draining the Valley Floor wetlands by means of irrigation ditches "in the guise of agricultural activities," in order to create more developable land, and purchasing the Telluride Times Journal, presumably to help influence public sentiment. It also called for creation of a "series of lakes" and suggested using mine tailings located on the Valley Floor to "line the bottoms of the lakes." Also called for was a hotel and commercial development.
The memo included in its conclusion prophetic words: "This region of Colorado is a vocal one and these people will not go quietly."
The SMVC fax helped to galvanize a movement in Telluride to reserve a portion of public funds for acquiring land to be held as open space. Although the Valley Floor wasn't the only land in mind, it was a critical piece. The Telluride Town Council adopted an ordinance that put the issue to public vote in 1993 and the ballot question, calling for 20 percent of all town revenues (with some exemptions) to be dedicated to an open space fund, passed with 61 percent of the 896 votes cast in favor of the "Twenty Percent Solution."
Two years later, the Community Planning and Advisory Committee, made up of property owners, local government officials and volunteer citizens, was formed. In 1996, CPAC engaged the services of Community Works as a consultant in the new regional planning effort. A study produced by Community Works recommended density and development on the Valley Floor that was reminiscent of previous proposals. The study called for a 400-person hotel, build-out density of 1,770 people, and a golf course. Neither the Telluride Town Council nor the San Miguel County Commissioners chose to accept or try to enact the recommendations.
In 1998, efforts between Telluride and SMVC to come to terms over the Valley Floor intensified but wrought little more than sharp words. In October, Telluride Town Councilmember Amy Levek met with SMVC vice president Johnnie Stevens. In a follow-up memo, Stevens wrote to Levek that SMVC "does not trust the town's motivations." Stevens indicated that the company was inclined to try to deal with Mountain Village, rather than Telluride, as the former was "more businesslike." At the heart of difficulties was a piece of real estate known as "The Wedge," a roughly triangular segment of land at the base of the Boomerang Road that was subject to land exchange discussions between Telluride and the property owner, the United States Forest Service, and that was viewed by Mountain Village as a possible gondola corridor to connect to SMVC's Valley Floor property. In the face of Mountain Village's objections, Telluride's land exchange talks with the USFS over the Wedge collapsed. Shortly afterwards, at the end of December, Stevens wrote a letter to the Telluride council in which he stated, unequivocally, that SMVC would not agree to annexation to the town or enter into any developer agreement. Councilmember Jerry Greene was quoted as saying "I don't know where the idea came from that we were attempting to frustrate their development intentions," and councilmember Kirk Brady called the letter "unduly hostile." Mayor John Steel conjectured that SMVC had taken umbrage to the town's Open Space Master Plan, which originally contained a blanket statement that no development should occur on the Valley Floor. Steel pointed out that the statement had been removed.
The next news of major impact came in June 2000 when SMVC announced its intention to enter into annexation discussions with Mountain Village.
"It is time to make a decision," said SMVC's Stevens. "Now is the time to do it." Stevens said the development plans for SMVC's property would follow the CPAC recommendations, i.e. a major resort hotel near the Boomerang Road, clusters of free-market and deed restricted housing both north and south of the Highway 145 Spur with build-out density of 1,770 people, and commercial development near Society Turn. He said the development plans also called for a possible golf course and a gondola link to Mountain Village.
Almost immediately, the Telluride Town Council responded to SMVC's announcement by ordering preparation of an appraisal of the SMVC property, a survey of the property's boundaries, and legal documentation in anticipation of a possible condemnation action. In response to the town's reaction, and to an outcry of opposition from the public that included a 1,500-strong, hand-holding, protest march known as the Rally for the Valley, Mountain Village officials in July called for a regional meeting and deferred taking action to begin annexation. In August, SMVC dropped its annexation efforts.
Some eight months in preparation, an appraisal of all of SMVC's property, excluding a piece of land near the Telluride airport, was completed by Chase and Company and presented to the Telluride council in February 2001. Colorado state statute requires an appraisal by a local government attempting to acquire private property by means of eminent domain. The Chase appraisal indicated a market value for SMVC's holdings of $22.6 million. Also in February, the Telluride council retained Leslie Fields of the Denver law firm Faegre & Benson to serve as outside counsel for its contemplated condemnation action.
The next news of moment came from non-political quarters. Following designation of the San Miguel River by the Trust for Land Preservation in March 2001 as "one of the West's few remaining hydrologically-intact wetlands," the Trust for Historic Preservation in July 2001 named the Valley Floor one of the top eleven most endangered historical sites in the nation. Politics were not long out of the fray, however, and later in July a suit against the town was filed by Yogi Kirst, George Harvey and Bob Demspey who claimed that by adopting a resolution to condemn the Valley Floor, the Town Council had violated a provision of the town's charter that requires an ordinance to be passed in such an instance. In support of the suit, Kirst claimed that the town had "failed to negotiate over the past ten years with Neal Blue and SMVC," and argued that, as a result of such failure, "condemnation was improper." Rather than "overwhelming and sustained support from the citizens of the Town of Telluride for the acquisition of the Valley Floor," as purported by council, the plaintiffs argued that "there is broad and adamant opposition to Town Council's action and desire to condemn the Valley Floor."
SMVC filed a similar suit but it was dismissed, the court ruling that the landowner had no standing for such a case as its land was in the county, not the town. Two months later, in a move that brought ramifications of the stiffening legal battle sharply home to many, SMVC closed the Valley Floor to all public access.
In November, the Telluride council adopted an ordinance to authorize condemnation, thereby strengthening both its political and legal bases for exercising its power of eminent domain.
In early February 2002, Telluride Mayor John Steel surprised councilmembers as well as the public by releasing a memo that outlined basic terms of a possible moratorium agreement that he said he had brokered with SMVC. The proposed agreement called for the town to suspend its condemnation efforts for two years in return for SMVC's suspension of development plans for a like term. The moratorium agreement would be predicated on SMVC reopening the Valley Floor to traditional public uses and to entering into regional talks about the property's future. Steel quickly abandoned his proposal in the face of opposition from members of the public.
Meanwhile, the local environmental organization, Sheep Mountain Alliance, drafted a new condemnation ordinance that it circulated in the winter months in the form of a petition for an initiated referendum. Faced with a choice of adopting the SMA ordinance or referring it to voters, the Town Council was sharply split. The council was stimulated by SMA's effort, nonetheless, to repeal its original initiative to condemn the Valley Floor in favor of a newly worded ordinance that identified only the Valley Floor south of the Hwy. 145 Spur and not the other SMVC parcels that had originally been included. A special public election to decide the matter was scheduled for June 25. That vote was firmly in favor of condemnation with 609 of the electorate in favor, and 385 opposed. The following month, notification of intent to condemn was filed in court. In a follow-up election in November, voters approved a ballot question to permit new debt, secured by future revenues dedicated to open space, to help finance the Valley Floor acquisition. The tally came in at 505 for, and 385 against.
Owing to the lapse in time since the first Telluride-ordered appraisal, a new one had been ordered that accounted for just the south side of the SMVC holdings. In preparation for its defense, SMVC had also ordered an appraisal. In August 2003, both appraisals were completed but the values they ascribed to the contested 572 acres were far apart. The Chase and Company appraisal valued the land based on 14 35-acre lots with 36 acres deemed undevelopable. With water rights, the total valuation came in at $19.3 million. National Valuation Consultants, appraiser for SMVC, took a more complicated future-oriented approach and valued the land based on two different potential development scenarios that it then weighted based on their respective likelihood. The SMVC appraiser estimated a market price for the Valley Floor at $48.2 million, almost $30 million above the Chase estimate. The National Valuation bill came to Telluride, the responsible party for costs of condemnation, in the amount of $554,593, a figure that was roughly twice what the council had authorized for the job. A check for $200,000 was sent to the appraising firm.
Given time to review and assess the updated Chase appraisal, the Telluride Town Council in late October 2003 made a good faith offer to SMVC to buy the Valley Floor for $19.5 million. Thomas Ragonetti, lead defense attorney for SMVC in the pending condemnation case, vigorously rejected the offer and asserted it had been made in "bad faith." Ragonetti had equally strong words for the Telluride council's condemnation plans, advising council in writing to "please be advised that our client will consider the initiation of any condemnation proceeding with respect to its property to be totally inappropriate, unlawful, and in bad faith. We will resist the proceeding by every legal means."
Ragonetti's words were heard but not heeded, either by the out-going council or the in-coming one. In December the newly elected council publicly acknowledged its support of condemnation and followed up in early January with a unanimous vote to file a legal action, which it did, in district court, in March 2004. The fight was fully on.
As its first counter punch to the Telluride suit, SMVC filed a motion in April asking the suitably named District Court Judge Charles Greenacre to dismiss the town's condemnation petition with prejudice, meaning the petition could never be brought again once dismissed. It was an anticipated ploy. SMVC's next offensive, on the contrary, was anything but expected and led to an extended period of escalated hostility between camps and brought the Valley Floor to the front and center of a much larger political and legal arena.
In April, after two months of a see-saw ride, the Colorado General Assembly passed House Bill 1203. The bill, in its original form, was intended to restrict the ability of towns in the state to condemn property for purposes of urban renewal. The genesis of the bill was a case involving the Arvada Urban Renewal Authority that had used the power of eminent domain to condemn an older commercial area and part of a lake to allow a new Wal-Mart to be built. An amendment to the bill, originally introduced by Republican lawmaker Rep. Shawn Mitchell of suburban Broomfield, augmented the legislation to prohibit all home rule municipalities from condemning land outside their borders for open space purposes. It further forbid any entity such as a recreational district from providing funding for such a condemnation. The proposed amendment, in addition, would serve to make HB 1203, if enacted, retroactive to January 2004, thereby pre-dating Telluride's condemnation petition. The amendment was clearly intended as a direct hit against that petition. According to Telluride Mayor John Pryor, the bill was "nothing short of a hijacking of our rights under our town charter." Sam Mamet, the associate director of the Colorado Municipal League, was even more emphatic. He called the bill "pure and simple special interest sleaze," and squarely fingered Ragonetti as the "driving force" behind the bill's codicil that quickly came to be known as "the Telluride amendment." Mamet said, in no uncertain terms, that Ragonetti "drafted the amendment and got it on the bill."
When the bill, after its amendment had been stripped and then re-added, was passed by both the house and senate, Mamet said, "We lost in the court of political opinion and now we are going to have to win in the court of legal opinion." To help do just that, and after taking input from the public, Telluride hired a new lawyer, Gerald Dahl, to challenge the constitutionality of HB 1203. Dahl, formerly general counsel for the Colorado Municipal League, came to his assignment with extensive background and experience in local government and land use issues. He quickly put his knowledge and experience to work and things soon turned around in Telluride's favor.
At the beginning of October, Judge Greenacre ruled against SMVC's motion to dismiss and scheduled a resumption of court proceedings. In Greenacre's summation, he wrote, "the Colorado constitution clearly authorizes the extraterritorial exercise of the condemnation power by a home rule municipality." Greenacre further found that open space was a legitimate purpose for condemnation and that Telluride had met the prescribed standard of making "a reasonable good faith offer" to SMVC. Most importantly, the district judge found that the Colorado General Assembly could not take away by means of enacting a statute the power of eminent domain granted to a home rule municipality by the state's constitution. Greenacre found the Telluride Amendment "to be without force."
Appealing the case, SMVC was quickly disappointed again as the Colorado Court of Appeals almost immediately upheld the lower court ruling.
In December, Judge Greenacre set the date for a valuation trial for Jan. 9, 2006, and ordered mediation between the parties to be completed no later than Dec. 1, 2005. Neither party filed a motion to object.
With yet more time gone by, and old estimates of value deemed stale, new appraisals were ordered by both Telluride and SMVC. In June 2005, the same month that formal mediation discussions commenced, the current valuations of the Valley Floor came in at $26.0 million and $51.0 million, respectively.
With the presentation to the public by the Telluride council on Dec. 14 of the "essential elements" and "framework" of a proposed settlement agreement with SMVC, and Council's subsequent unanimous adoption in January of the framework as an ordinance balloted for a Feb. 14 special election, the history of the Valley Floor, minus ensuing debate marked by flourishes of inflated and, at times, inflammatory rhetoric, comes to the moment. Whatever direction voters give in three weeks, it is doubtful that the future course of Valley Floor events will be any less divisive or newsprint-worthy than they have been for the past twenty-five years.
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