UPDATE: Cleanup costs for Colorado Springs downtown land: $4.4 million

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UPDATE:
City Council just voted 8-0 in favor of the land swap, which will place the cleanup burden on the downtown master developer, Nor'wood Development Group.

Speaking in support were Council of Neighbors and Organizations executive Dave Munger, Chamber and EDC executive Dirk Draper, Downtown Partnership executive Susan Edmondson, contractor and neighboring landowner Chuck Murphy.

When a woman spoke against the project as sending contamination down Fountain Creek, Council President Richard Skorman told her she was wrong.

"You don't know what you're talking about," Skorman said. "The mitigation is going to happen. That’s why we’re here. It’s going to be approved by state authorities and go through a rigorous process. I don’t want you misleading the public."

Councilor Bill Murray, who has been critical of the land swap, wasn't present for the vote.

—————ORIGINAL POST 2:19 P.M. TUESDAY, APRIL 25, 2017————————

A land swap is on the City Council agenda for a vote today (Tuesday) that would sell city pr
The green and pink properties are now owned by the city but if owned by the developer would speed development around America The Beautiful Park. The orange portion is now owned by the developer, and the city wants to acquire it for a trail and stormwater facility. - CITY OF COLORADO SPRINGS
  • City of Colorado Springs
  • The green and pink properties are now owned by the city but if owned by the developer would speed development around America The Beautiful Park. The orange portion is now owned by the developer, and the city wants to acquire it for a trail and stormwater facility.
operty adjacent to America the Beautiful Park to entities controlled by Nor'wood Development Group, which is owned by David Jenkins, the region's biggest developer.

Nor'wood is the master developer for the Southwest Downtown Urban Renewal Area where the property is located.

Appraisals conducted by the city of two city-owned tracts and a tract owned by Jenkins were obtained by the Independent.

A vacant parcel at 125 Cimino Drive is valued at $1,118,500. A neighboring parcel directly north is valued at zero, because of contamination. (More about that in a bit.)

The Jenkins parcel at 301 Cimino, which the city says it needs to create a trail in tandem with the Cimarron and Interstate 25 interchange, is valued at $904,000.

Those appraisals were done in February by East West Econometrics of Louviers, Co.

The reason for the zero value is that the two city tracts are polluted with various contaminants left over from the use of that property decades ago for a coal gasification plant. The city is being sued over contamination from the north parcel.

LT Environmental Inc., Arvada, was hired by the city to provide an estimate to clean up the toxic sites. In a Feb. 14, 2017, report to the city, LT put the cleanup cost at $4,455,612. That breaks down to $722,521 for the 125 Cimino property and $3,683,091 for 25 Cimino.

Council wants Jenkins to indemnify the city against problems arising from the pollution, and a presentation to Council states the developer will assume that obligation.

Here's the city's overview of the deal, according to backup materials provided for today's Council meeting:
As part of the CDOT I-25 /Cimarron Improvement Project (“Project”), CDOT is required to construct a trail and stormwater BMPs in conformance with the City’s Drainage Criteria Manual, Vol. II. CDOT proposed a trail and stormwater vault in the existing Cimarron right of way. The trail proposed by CDOT was ADA compliant, but not truly accessible and not preferred by the City’s Park Department. The BMP proposed by CDOT is a vault which will take significant City resources to maintain. If the City obtains the property at the northeast corner of I-25 and Cimarron Street, known as 301 Cimino Drive (the “CSJ Property”), CDOT has agreed to install a trail that the City Parks Department believes will be more accessible and a water quality pond that will require less maintenance effort from the City. The CSJ Property is owned by CSJ No. 7, LLC and Urban Enterprises, LLC. An independent appraisal of the CSJ Property was obtained by the City and indicates the CSJ Property has a fair market value of $904,000.00.

The City wishes to exchange two (2) City-owned properties in the immediate vicinity for the CSJ Property (see Figure 2). These properties are identified as 25 Cimino Drive and 125 Cimino Drive (the “City Properties”). The City Properties are currently vacant. An independent appraisal of the City Properties was obtained by the City and indicates the City Properties have a combined fair market value that is $543,600.00 less than the value of the CSJ Property.

On November 26, 2006, City Council adopted a Statement of Intent (SOI) in support of the Southwest Downtown Urban Renewal Area. On August 26, 2008, City Council adopted a new SOI in support of the Southwest Downtown Urban Renewal Area, which replaced the previous SOI. The 2008 SOI provides, among other provisions, for the transfer of half of 25 Cimino and all of 125 Cimino to the CSURA in support of the Urban Renewal Plan. The remaining half of 25 Cimino was to be converted into parking. Under the 2008 SOI all of the City Properties were intended to be part of the Southwest Downtown Urban Renewal Project. The land exchange will accomplish one of the purposes of the 2008 SOI by making the City Properties available for redevelopment in support of the Urban Renewal Plan.

CSJ No. 7, LLC and Urban Enterprises, LLC desire to exchange the CSJ Property for the City Properties. A condition of the land exchange would be that CSJ No. 7, LLC and Urban Enterprises, LLC will assume the responsibility for and release the City from any necessary environmental remediation of the City Properties.

The proposed land exchange would offer the following benefits to the City:
• Acquire needed property for bike/pedestrian trail from Midland/Greenway Trail intersection;
• Relieve the City of any environmental remediation obligations it may have with respect to the City Properties;
• Support the implementation of the Southwest Downtown Urban Renewal Plan and fulfill the intent of the 2006 SOI and 2008 SOI; and
• Exchange can be completed with no financial obligation from the City.

The City, in accordance with the Real Estate Manual, obtained appraisals for all three (3) properties. Environmental studies and cost estimates have also been completed. These costs were supplied to the appraiser. Based on the amounts of these costs the appraiser has valued the CSJ Property and the City Properties accordingly. A financial evaluation of the land exchange is shown in Table 1. As can be seen from this table, the CSJ Property’s value exceeds the City Properties’ value by $543,600.00.

CSJ No. 7, LLC and Urban Enterprises, LLC are not seeking remuneration for the difference in the values of the properties; however, they would like the difference recognized by City Council as a donation. As such, if Council approves this land exchange, the Division Manager of Traffic Engineering will bring a resolution to Council after the land exchange has closed in order for Council to accept the donation in accordance with section 4.4 of the Real Estate Manual.

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