- Via Wikimedia Commons, CC BY 3.0
- Colorado Springs Airport sits east of the cargo transportation facility.
Now, the city is suing MDC Colorado LLC, also called Midwest Builders MDC Colorado, alleging breach of contract and fraud in failing to disclose that it hadn’t paid the tax bill.
At issue is a lease that dates to 1998 between the airport and MDC, which constructed the cargo facility, located on airport land.
The lease required MDC to pay taxes on the property, and it did so until 2013, the year the lease expired, according to the city’s lawsuit.
But MDC didn’t notify the city of the unpaid tax bill, the suit says, and “continued to ignore the City’s repeated efforts to determine if MDC was interested in exercising its option to extend the Agreement.” The city assumed ownership of the facility in 2014.
Over the next three years, the El Paso County Treasurer’s Office sent notices of the unpaid taxes to MDC, which is based in Lenexa, Kansas, but uses a registered agent in Centennial and is delinquent with business filings in Colorado, Secretary of State records show.
Unbeknownst to the city, the tax lien was sold on Oct. 22, 2014, to PTL Partners LLC of Denver. PTL paid the cargo facility’s taxes for three years and then applied for a tax deed in 2017, which would have transferred ownership of the terminal to PTL had it gone through.
“Only then, in 2017, was the City notified — by the Treasurer, not MDC — of the Cargo Terminal’s outstanding property taxes,” the lawsuit says, noting that MDC ignored the city’s attempts to reach the company. The city has paid the 2013 taxes of about $15,000 to prevent the sale, says Treasurer Mark Lowderman. PTL had also paid $25,000 in subsequent years’ taxes but recovered that money from other taxing districts that had received the tax payments during those three years, because the property should have been declared tax exempt when the lease ended and the city became the owner of the terminal, Lowderman says. The 109,837-square-foot facility, on the airport’s west side, is now leased to Sierra Nevada Corp.
“Once the lease is broken,” he says, “the building becomes owned by the city.”
MDC was served with notice of the lawsuit at its registered agent’s office in Centennial in March and hasn’t filed an answer. The city is seeking unspecified damages in an amount to be determined at trial and wouldn’t comment on the pending case.
Lowderman says the county conducts a tax lien auction once a year and usually has about 400 properties for sale. Statutory interest is 10 percent per year, making it a safe investment. “It’s a lead-pipe cinch, because there’s no way you don’t get your money back,” Lowderman says. “After three years, the investor applies for the deed, and the owner has to pay three years back taxes, plus 10 percent per year interest. If the investor doesn’t get the money and interest, he gets the property. You can’t lose.”