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Utilities considers “potential uses” for property bought years ago for reservoir

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One of many homes bought by Colorado Springs Utilities. - PAM ZUBECK
  • Pam Zubeck
  • One of many homes bought by Colorado Springs Utilities.
Drought had plagued the region for several years. The 2002 Hayman fire had burned 138,000 acres of forest from near Lake George to Jefferson County, and Colorado Springs was running out of water.

Those conditions prevailed when Colorado Springs Utilities started throwing money at property owners in the Jimmy Camp Creek area to amass enough land — fast — for a reservoir to store water pumped there by the yet-to-be permitted Southern Delivery System.

“In 2002, 2003, 2004, there was an unprecedented drought,” says Jessica Davis, project manager, “and because of that, it caused an extreme condition where we were really concerned about water supply and storage. City Council directed acquisition of these properties for a reservoir site.”

Now, 16 years later, the city has all but abandoned Jimmy Camp — located northeast of the city — as a possible reservoir site, but it still owns 15 tracts of land for which ratepayers paid about $6.8 million in buyouts and relocation fees.
Although Utilities earlier this year targeted the properties for sale, the new CEO, Aram Benyamin, hired Oct. 2, apparently is taking a second look, Utilities officials say.

“With the change in leadership, we want to step back and make sure we’re making the right decision for ratepayers and Utilities,” says Davis. “We still want to evaluate that site for other potential Utilities uses.”

That means a reservoir still could be built on that site, though that’s not likely, due to the site’s archaeological values, Davis says. The Parks Department reports that Jimmy Camp’s bluffs contain one of the best exposures in the world of the Cretaceous-Tertiary (K-T) boundary, which marked the end of the Mesozoic Era, or the Age of Reptiles (dinosaurs), some 66 million years ago.

Utilities’ buying spree started in February 2003, resulting in acquiring 15 properties for about $4.5 million. Another $2.3 million was paid to sellers for relocation expenses, though most simply rented their homes from Utilities.

In some cases, Utilities paid three times the market value as reported by the El Paso County Assessor’s Office.
A directional sign to homes. - PAM ZUBECK
  • Pam Zubeck
  • A directional sign to homes.
But a few years later, via the permitting process for the Southern Delivery System — a 50-mile pipeline from Pueblo Reservoir — another site was picked. The Bureau of Reclamation, Corps of Engineers and Environmental Protection Agency concluded the preferred reservoir site lay several miles south of Jimmy Camp at Upper Williams Creek on East Bradley Road. Yet to be built as part of SDS’ Phase 2, the reservoir has since been named the Gary Bostrom Reservoir in memory of a former Utilities water officer.

In 2009, the SDS project won its federal permit, and the pipeline became functional in April 2016.

The Jimmy Camp properties’ values have yet to surpass the amounts paid by Utilities. For example, one home on 25 acres for which Utilities paid $485,000 is valued today by the Assessor’s Office at $299,002.

Six, however, are worth more today than what Utilities paid, though the combined value remains 18 percent less than the amount paid by Utilities, according to assessor records.

While the purchase agreements allow sellers to buy back their properties for the amount Utilities paid, none has been asked their preference, because the liquidation process is in its infancy, Davis says. Seven of the eight homes involved in the deals remain occupied by the former owners under $300-per-month leases — also a perk of the deal offered when Utilities bought the properties.
Utilities will comply with the city’s Procedure Manual for the Acquisition and Disposition of Real Property Interests, which includes inviting other departments to buy the parcels.

The Parks Department might want dibs on several tracts that lie close to Corral Bluffs Open Space, for example, but will not be given any break on price, which will be established by appraisals, Davis says.

Barring an internal acquisition, the properties could be marketed through an auction or some other disposal method that complies with the manual.

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