Loveland's Independent News Source
Illegal Agreement for Exclusive Sale of
County Building by URA Delayed
Loveland, February 26, 2018

On the night of November 7, last year then Loveland Mayor Cecil Gutierrez presided
over his last full Loveland City Council meeting.  Six of the eight council members in
attendance that evening remain on Loveland's City Council today.

On the agenda that election night was final approval of an agreement to purchase the
Larimer County building in downtown Loveland and turn it over to longtime Loveland
resident Rocky Turner's company LPR Construction identified by its holding company
name of Longbow Industries.  Turner's company would be granted a subsidy of
$750,000 in exchange for buying and "improving" the building for $732,000.  

In addition, Turner's company would be given most of the parking spaces in the parking
lot (40 of 54) behind the Pulliam Building (also being sold by the county to the city).  The
City of Loveland cost for the parking lot was agreed to be $271,000 which in-turn, would
be mostly leased to Longbow (40 of 54 spaces) for 50 years for a onetime cost of
$10.00 while Loveland taxpayers will cover cost of snow removal and other routine
ongoing expenses for the duration of the 50 year lease.

Turner is a board member of the secretive
LBP (Loveland Business Partnership) for
whom a disproportionately large number of city and urban renewal authority contracts
and subsidies flow.  

The legal problem: The scheme anticipated "selling" Turner's company the building
through the Finley URA (governed by Loveland's Urban Renewal Authority) which
Loveland fraudulently declared the otherwise well maintained county building as legally
"blighted...menace to society" in 2012 to artificially reduce its value thus boosting the TIF
(Tax Increment Financing) post future sale by the county.   Further complicating the
transaction, Larimer County asked for reimbursement of up to $250,000 in future lost
property taxes resulting from the artificially lowered property value and fake urban
blight declaration.

According to Colorado law, URA's may not sell real property in secretly negotiated
agreements but instead must obtain fair value by offering the property through a
competitive bidding process.  

Below is the State Statute that the subsidy Loveland's City Council voted to approve on
November 7, 2017 violates,

Colorado Revised Statutes Title 31 Government Municipal § 31-25-106

(2) An authority may dispose of real property in an urban renewal area to private persons
only under such reasonable competitive bidding procedures as it shall provide or as provided
in this subsection."

Loveland's Director of Economic Development Kelly Jones (pictured upper right) along
with her subordinate Mike Scholl (also pictured upper right) walked Loveland's City
Council through the slides (column right) shortly before they voted unanimously to
approve a plethora of resolutions permitting the transactions to proceed.

Current members of Loveland's City Council who voted on election night to violate this
statute by gifting the public building to Rocky Turner's company include Leah Johnson,
John Fogle, Dave Clark, Don Overcash, Richard Ball and Steve Ols
on.  What they didn't
anticipate on election night was the election of Jacki Marsh, instead of her well funded
opponent John Fogle, to win the seat of Mayor of Loveland.

So confident were both Fogle and his longtime friend and then Mayor Gutierrez, they
held meetings with various developers in the city to introduce John Fogle as the new
mayor prior to the election.  According to Max Cooke, an Australian developer who
purchased the Aspen Knolls development, he was introduced to Fogle by Gutierrez as
the city's incoming mayor with whom all future discussions regarding city incentives
should be discussed.

Mayor Marsh Launches Inquiry Into City Incentives

While approved, the agreed upon transaction was not to take place until later January
and early February of 2018 according to the agreements signed in late December 2017
between the city, county and Turner's Longbow Industries.  The city manager, mayor
and city attorney were empowered to complete the transaction without returning to the
city council for approval.

Mayor Marsh met with Loveland's legal team in mid-January to review a number of
items.  It was during this meeting she raised concern over the state law and whether
anyone had reviewed the agreement for compliance with Colorado's urban renewal
laws which require disposal of real property only through competitive bidding and
public notice.

Loveland's then city attorney Clay Douglas promised a quick answer as his staff
researched the question.  Within the week, the city attorney acknowledged his office
failed to identify the problem with the agreement and specifically, Moses Garcia (the
city's current acting attorney following Douglas' retirement) who was the one assigned
to work on the agreement from the city attorney's office.  Douglas documented his
conclusions in an email to all the members of Loveland's City Council.

Acting With Malice?  Loveland City Manager Steve Adams Goes Rogue

Loveland City Manager Steve Adams re-assured Mayor Jacki Marsh, over city emails
obtained by LovelandPolitics, that they were looking into the matter indicating no
decision was made long after she had already learned from the city's legal team the
original agreement was determined to be illegal under Colorado law.

Because the original agreement serves an illegal purpose, to guarantee Longbow
Industries a sole source contract to purchase the county building from the URA absent
any competitive bidding, it is unenforceable.  Nonetheless, Adams continued
communicating with members of the city council by cautioning them of a perceived
liability if the city didn't consummate the transaction as agreed in the 2017 agreement
approved by the former council under Mayor Cecil Gutierrez.

According to the Purchase and Sales agreement between the City of Loveland and LPR
signed on December 17, 2017, the City of Loveland would need to purchase the
property from Larimer County before January 31, 2018 or the subsidy obligations
would terminate along with any liability for the city as stated below,

"The parties agree that conveyance of the Property from the County to LURA by
January 31, 2018, is a condition precedent to any obligations set forth in this
Agreement, and that failure of the County to convey the Property to LURA by such
date shall terminate this Agreement with no consequence to or obligation by either

Mayor Marsh, acting as a city official, communicated to Adams her understanding the
agreement would not be amended or extended without new direction from the newly
elected city council.  Adams ignored Mayor Marsh, failed to convene a public meeting on
the subject with council and unilaterally signed an extension of the agreement with an
illegal purpose without the authority of the only citywide elected official (mayor) or the
legally constituted city council.

City Council Deliberation February 13, 2018

Nearly two weeks passed before Loveland City Manager Steve Adams allowed a
discussion by council on the topic.  He arranged for a "special meeting" to be held in
conjunction with a routine study session by instructing councilors the discussion about
how to comply with the state's "competitive process" would need to take place in a
closed door executive session meeting.

Mayor Jacki Marsh insisted on questioning staff in open, prior to the closed session,
against strong objections by Mayor Pro Tem Don Overcash who repeatedly interrupted
the mayor demanding they discuss the matter in closed session.

When Mayor Marsh inquired to Mike Scholl about the origin and process of selecting
LPR Construction to receive the property in a sole source contract, Scholl first
stammered looking towards the city attorney proclaiming he didn't know what he could
say in public since, "
that was discussed in an executive session."  Colorado law also
prohibits municipalities from conducting votes or making substantive governmental
decisions during a closed session meeting.

During the February
13, special meeting, Councilman John Fogle tried to embarrass
Mayor Marsh by demanding the city attorney disclose who brought forward the
information about their illegal agreement, which he supported.  Curiously, even
normally quiet newly elected Ward 1 councilman Jeremy Jursvig tried to pile-on Mayor
Marsh using his "authority" as an appraiser for Larimer County who works for Larimer
County Assessor Steve Miller.

Mayor Marsh questioned the suspect over year old appraisal of the county building

which set the value of $732,000 used in the transactions
.  Unlike a prior appraisal from
2013, the January 2017 appraisal the city relied upon to determine the property's value
failed to use comparable properties, erroneously stated Larimer County hasn't assigned
a value to the property (according to the Assessor it is $1.7 million) and lastly only used
the income model to determine value by assigning a slightly higher per square foot
rental rate yet still finding the property worth even less than it was four years prior
when the revenue method assigned a
n even lower square footage rate.

Mayor Marsh pointed to a nearby smaller
but similar office building selling for over $3
million indicating the county's building could approach a value of $4 million.

Councilman Jursvig defended the appraisal moments after saying he would not comment
on the appraisal due to his position with the county.  Jursvig stated,

"Madam Mayor, as an appraiser, I cannot comment on the value of this building
because that would be violating the terms of my license.  I am just looking at the
appraisal right now....It may be dangerous to tread into allegations against this
appraisal.  Without commenting on this appraisal they are going to look at a market
approach and income for a commercial property.  I would feel there is no reason to
believe there is impropriety using those approaches

Mayor Marsh shot back,

"...they did not look at comparable sales in the 2017 appraisal [market approach].....
what they looked at was rental income [only].....try and find something for $10 a
square foot in downtown Loveland those are June of 2016.  Maybe if you do place and
time you can make an argument but I look at
...they did not look at comparable sales
in the 2017 appraisal.

Marsh pointed to offices above Vintage Willow renting for $18 per square foot and
Chase Bank (where Mayor Pro Tem Overcash has his business) renting for $14 per
square foot.

Mayor Pro Tem Overcash then interrupted the mayor again instructing Councilman
Jursvig to read the prepared motion to move into a closed session stating,
"I don't want
to re-live the past again."

The council retreated into closed session to determine how a "competitive" bid process
would be allowed while maintaining their agreement to sell LPR construction the
building.  The result is detailed on the column to the right of this story where city staff
member Mike Scholl explains to a commercial broker,
their strategy on February 21,
2018, eight days after the current council met to discuss the issue and their response.  
Below is an excerpt from Scholl's email which can be read in full in the column to the
right of this story.

"The City’s intent is not to act in a speculative manner and to profit from a real
estate transaction but rather to support the growth and expansion of a local

Fortunately, state law clearly prohibits the disposition of real property for the purpose
of helping just one selected private person or his company and instead requires a truly
competitive bidding process.   It appears the current strategy being employed is "
not and say we did
Click on thumbnail images below to see
slides presented by Kelly Jones and Mike
Scholl to induce Loveland's City Council
into voting for an illegal subsidy for
Longbow on November 7, 2017
County Building - 205 E. 6th Street
- Marketing Opportunity

From: Mike Scholl [mailto:Mike.]
Sent: Wednesday, February 21, 2018
12:04 PM
To: Kris Laine <>
Cc: Ken Cooper <ken.cooper@larimer.
org>; Steve Adams <Steve.>
Subject: FW: County Building - 205 E.
6th Street - Marketing Opportunity

Dear Ms. Laine,

The City Manager requested that I
follow up with you regarding your
email, he is also copied on this email.

Thank you for your offer to act as a
broker and to market the property on
behalf of the City. I would like to offer
some additional information regarding
the deal that was negotiated with
Larimer County, which will shed some
light on why the City is not hiring a
commercial real estate broker at this

In 2016, Larimer County agreed to sell
the County Building and associated
parking lot to the City for the appraised
value. The City and County jointly
commissioned an appraiser, Don
Shannon to complete a full appraisal of
the building, which came back at
$732,000 for the building and
$271,000 for the parking lot for a total
of $1,003,000 for both parcels. At that
time, it was decided that the Loveland
Urban Renewal Authority (LURA) would
act as the purchaser and a purchase
and sale agreement was entered into
with Larimer County.  The parties have
not closed on the property as of today
and the building and parking lot are
still owned by Larimer County.

Through the City’s Economic
Development Department, the City
entered into an agreement with LPR
Construction and Longbow Industries
whereby they would acquire the
building for $732,000 and invest over
$1.5 million to renovate and occupy
the building. LPR/Longbow is a very
successful construction company that
was started in Loveland that has been
in business for nearly forty years. They
had outgrown their current location
and are looking to expand in Northern
Colorado region. It was at that point,
LURA agreed to buy the building for
the appraised value and sell to
LPR/Longbow for the same price. It
was only after the fact that staff
realized that the LURA statute requires
a competitive bid process to sell the
property. The bid process takes into
account many factors including, but
not limited to the sale price. As a
result, LURA recently published an
RFP, which you reference in your
email below. The City/LURA are
committed to a fair and transparent
RFP process and welcome all
responses. Here is a link to the public
bid process and I’ve also attached the
RFP documents.


Because the City/LURA and Larimer
County mutually agreed to set the sale
price at the appraised value, if the City
were to sell the building at a price that
exceeds $732,000, the City has an
obligation to Larimer County to share
any profits.
The City’s intent is not to
act in a speculative manner and to
profit from a real estate transaction but
rather to support the growth and
expansion of a local company
Loveland and to support the ongoing
revitalization of the downtown district.
Therefore, the impact to the City
taxpayers would be neutral regardless
of the sale price.

I have also copied Ken Cooper, the
Project Manager for Larimer County. If
you are interested in representing the
County as the seller, please reach out
to him directly.

Also, if you have any further questions,
please feel free to reach out to me
either through email or by phone. My
contact information is below.


Mike Scholl, Economic Development
Economic Development Department
City of Loveland
(970)593-2965 (cell)
“Leadership is the art of accomplishing
more than the science of management
says is possible.” Colin Powell

Audere est Facere

From: Kris Laine [mailto:]
Sent: Tuesday, February 20, 2018 5:
20 PM
To: City Council
Subject: County Building - 205 E. 6th
Street - Marketing Opportunity

Dear Mayor and Council:

I have recently received information
regarding the above referenced
building.  I am a seasoned licensed
Real Estate Professional in Colorado
and have extensive experience in
Commercial Real Estate.  I did inquire
previously, and was told that the
building was not for sale and that a
contract was in place for the
purchase.  On Friday, I was sent a link
for an RFP for this property, and
learned that it was available for
purchase through a submittal RFP
process.  I have read through the RFP
and believe that this property, if
properly presented, could bring forth
additional funds for the County and

Given the current market conditions in
Loveland and Northern Colorado, I
believe the County and City have an
opportunity to capitalize on the value
of this asset.  Giving this asset the
marketing exposure, not only
Nationally but Internationally, will bring
forth potential investors both inside
and outside of Colorado.  A strong
marketing program will help facilitate
many conversations, thus exploring all
the growth and employment
opportunities the right investor would
have with this property.

I would appreciate the opportunity to
discuss the property and what the
expectations are as it relates to not
only the highest possible value, but
also, strategic discussions as to
Highest and Best use for the property.

I would be happy to send along my
resume, qualifications and list of
references.  Please feel free to email
or call me directly.

Thank you for your time.

Kris Laine, RPA
BHHS - Top 13% Nationally