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After a long and contentious meeting, a majority of Loveland's City Council voted to declare McWhinney farmland blight while
also approving McWhinney's the proposal.
Councilman David Clark lectured the residents in attendance near the end of the meeting, claiming McWhinney isn't making a profit
but is just trying to be nice to the city.
In a role comparable to the keystone cops, Loveland's city attorney looked to McWhinney attorneys to answer key questions
directed to him mostly by Councilman Kent Solt.
City Manager's Comments
Loveland's City Manager Don Williams introduced the item by telling the Loveland City Council what issues he believed were
likely to be raised in the hearing over McWhinney's "Flex" URA request. In an odd sort of way, he distanced himself from the staff
recommendation to approve the item by saying his signature on the recommendation only approves it going before council but that
he could not respond to specific legal questions council had raised. He went on to lecture the council about what he believed the
boundaries of the discussion for the evening should be regarding the designation of blight and urban renewal law. Williams told the
council "we are not the legislature and don't discuss the theoretical issues regarding the legislators' intent."
Williams said the word blight is a legal "term of art" and not the "commonly used meaning of the word." Later in the meeting, right
before voting on the matter, Mayor Pielin commented it was a shame the legislature failed to provide proper language in the bill
describing blight.
The word blight is defined in Colorado's Urban Renewal Law as;
Colo. Statute 31-25-103. Definitions "Blighted area" means an area that, in is present condition and use, and by
reason of the presence of at least four factors, substantially impairs or arrests the sound growth of the municipality,
retards the provision of housing accommodations, or constitutes an economic or social liability, and is a menace to
the public health, safety, morals, or welfare:
McWhinney Presentation
Jay Hardy, Vice President of McWhinney Enterprises, presented a power point presentation to council that included references to
"public purposes" as the use for URA (Urban Renewal Authority) money. Hardy explained during his presentation that "Urban
renewal authority is about public money for public purposes."
Pictures of roadways, interchanges and other general public improvements were highlighted in the presentation as the constant
reference to "public" improvements was pitched to the council and public.
Below are some examples of "public purposes" proposed previously by McWhinney to use taxes collected by the Metro District:
1. A trolley system to shuttle shoppers around their proposed "Grand Station" (Council stopped in 2006)
2. Private parking garage for Grand Station (Council approved)
3. Demolition of the old dog track to and site preparation (roads, sewers etc..) for new buildings (Council denied demolition costs)
4. Environmental impact reports that are required when constructing a new building.
Good Governance Clause Already Removed From MFA
A part of city staff's presentation, a slide indicated the Flex URA is the only significant change made to the MFA (Master Financing
Agreement) that governs the relationship between the city and McWhinney since it was first signed in 2004. However, a recent
modification not mentioned that evening was the one passed along with the parking garage for Grand Station in 2006. This
modification removed a critical "good governance" clause that protected the public . As initially proposed, the McWhinneys were
not permitted to use the same contractor for both the public and private improvements on a particular project. This restriction was
removed thus allowing for the same contractor to do both jobs thus creating the risk of co-mingling of funds resulting in public
monies being used towards private purposes. By requiring separate contractors, an audit trail is easy to establish but not when one
contractor is doing both jobs simultaneously since equipment, labor and materials can easily be "confused" between different parts
of job site.
I-25 / Highway 34 Interchange Permanent Improvement Plan Abandoned
In what appeared to be the most absurd argument presented was that of the I-25 / Highway 34 interchange. Chad McWhinney
told council that in the 1980's the Ft. Collins City Council was told the inter-change would one day rival the Foothills Mall and
everyone laughed. He argued the strategic local of the intersection means it will continue to develop at a fast pace and that even
more traffic and development is inevitable. He even invoked his favorite tag line that "success comes to those who get in front of
the inevitable."
On the other hand, he was arguing that placing development inside the redevelopment agency means critically needed funding can
be raised for the intersection.
This was an absurd argument since developments inside the redevelopment authority have their taxes (property and sales) diverted
into the Metro District controlled by McWhinney. If property develops outside the district, the city gets all the city sales tax and a
much greater amount of property taxes. This means the council has more money (not less) at their discretion to spend on the
interchange or any other public improvement project.
A key element of the pitch to council included the planned improvements to the I-25 and Highway 34 and how approving the
"Flex" plan can help improve the intersection. This was a major part of the presentation by Chad McWhinney. The City Attorney
later informed council the improvements to I-25 and highway 34 interchange (the permanent improvements) were scrapped in a
meeting between the city attorney, Chad McWhinney and representatives from CDOT (Colorado Dept. of Transportation).
Nobody from the McWhinney organization addressed the issue of what they will do with the extra taxes already approved as part
to the URA to be collected for another 21 years. The fact they were still promoting a public improvement they new the Metro
District would never have to fund leaves doubts about their sincerity.
Upon learning of this change, Councilman Solt stated, "That is big news to me if taxpayers are now only going to get $9 million
(instead of the $35 million promised in the MFA). The interim improvements are estimated to cost $12 million but were never
intended to be a permanent solution. The original MFA was touted by those on the council in 2004 as the "long term solution" to
fixing the interchange and future traffic problems. McWhinney lobbied to also shed any responsibility for building the interchange
by lobbying the proposed RTA tax improvements last year. No adjustments have been made to accommodate for the loss of this
improvement from the MFA agreement.
While the city attorney described the decision to abandon the permanent I-25/Highway 34 interchange improvements as emanating
from CDOT, LovelandPolitics has been told differently. According to sources in Colorado's state government, CDOT was
frustrated with attempts by McWhinney to dump traffic closer to Centerra shopping centers from the off ramps instead of on
improved roads where the driver has more choices. Ultimately, CDOT determined the "Metro District" tax money came with too
many restrictions and abandoned any plans to implement the permanent improvements.
Public Comment
For over an hour the Loveland City Council heard from residents concerned about the proposed annexation. Many spoke out in
favor of downtown by telling the council they have "dropped the ball" when it comes to renovating Loveland's downtown and
should not subsidize more sprawl.
Carmen Rhodes, Executive Director of FRESC, was among the first from the public to address the council. Rhodes announced
that while she heads the statewide public policy group of FRESC, she grew-up in Loveland and cares deeply for the community.
Rhodes described FRESC (website is FRESC.org) as a public policy organization working to support responsible development
and oppose abuses of the Urban Renewal Law. Rhodes read a number of legal arguments as to why the proposed "Flex" plan
fails to comply with state statute and urged the council to vote down the proposal.
Susan Levine (formerly Davis) was among the most moving speakers from the public. She informed the council that her furniture
business in downtown Loveland was closing by the end of the week. She stated, "my family has contributed to this community for
generations." Levine nearly came to tears as she made a compassionate appeal to the city council not to vote more favors for
McWhinney. Levine concluded her comments by stating, "Let the free market allow development along the I-25 but please don't
subsidize our competition with our money."
Joan Shaffer, another downtown business person, asked the council to reconsider granting McWhinney the "Flex" URA and
consider focusing their efforts on other parts of the city. A parade of speakers followed Shaffer asking the Loveland City Council
to vote against the flex plan and "phony" blight designation.
A smaller number of speakers did defend the proposal and the McWhinneys. The few citizens who favored the proposal made
general comments regarding benefits emanating from the Outlet Malls or Centerra but failed to address any specific issues relating
to the Flex plan proposal before the council. One Ft. Collins resident who runs an insurance agency in Loveland, stated he never
came to Loveland before Centerra was built because there wasn't "much worth mentioning" in Loveland before the McWhinneys.
Another elderly cowboy who had advocated for the McWhinneys in previous meetings challenged the audience stating, "I want to
know what you all accomplished" as he went on a bit of a tirade accusing Loveland resident opposed to the Flex plan of being
loosers. As he concluded his comments he toward the door and left the meeting instead of returning to his seat among the angry
Loveland residents.
Following the public hearing, Mayor Pielin invited Chad McWhinney to return to the microphone and "rebut" in his words the
comments expressed to the council by Loveland residents. Lucia Lily, a Ft. Collins attorney working for McWhinney, used the
opportunity to try and put down comments made by residents. She did this by restating their argument in a slightly different and
flawed way in order to refute them. The audience was restless and complained amongst themselves. At one point, County
Commissioner Candidate Roger Hoffmann raised his hand and asked to speak. Mayor Pielin was wearing a broad smile when he
said, "Roger, public hearing is closed" and explained no more public comments would be allowed. The Loveland residents began
leaving the chamber slowly as the McWhinney team continued demeaning comments from Loveland residents for another hour.
Council On Trial
While the members of the City Council were discussing the matter and asking questions, Chad McWhinney stood near the public
microphone answering questions or responding with comments whenever the councilors asked a question to their staff or to his
representatives. Councilman Klassen, at one point, was explaining his concern with the Flex plan and the city's hyper investment in
pushing development along I-25. McWhinney took the opportunity to begin questioning the consistency of Klassen's votes by
asking him how voted on the 402 annexation. As the audience began making noises and gasps, the Mayor interrupted
McWhinney 's cross-examination of a councilman and told him it would be best to let the City Council ask the questions.
Council Comments and Votes
Larry Heckel said very little as midnight drew near and simply stated he liked the proposal and thought the McWhinney staff and
city staff "did a good job." Carol Johnson was equally brief while David Clark took the opportunity to make some arguments in
response to the resident who spoke earlier in the meeting.
Clark said the other blighted areas of town (demonstrated to the council by a resident earlier in the meeting with large pictures of
the old Metro Lux theater, Davidson Cheverolet and Ferraro Chrylser/Jeep) were not under consideration for any special tax
district financing because "the property owners didn't ask us." He apparently missed the point of the speaker entirely. The resident
pointed out that this was blight specifically caused by the phony blight designations in east Loveland - the irony that the council was
not only failing to fix blight with a financial tool made for this purpose but on the contrary they were responsible for causing the
blight. All three of the businesses mentioned above moved to Centerra and now the city only gets a fraction of the sales tax
collected for car sales or movie tickets bought at these businesses. A number of other councilors followed Clark's lead by making
similar comments.
The Vote
Councilmen Skowron, Rousey and Klassen were disappointing to the crowd as they made comments indicating they may not vote
to abdicate their authority to McWhinney. In the end, most of the resolutions passed on a 7-2 vote with only Councilmen
Gutierrez and Solt voting no. The use of public funds to demolish the dog track, raised earlier by Solt and Gutierrez, was rejected
by the council on an 8-1 vote with only Councilwoman Johnson voting in the affirmative.
| City Council Abdicates Governmental Power To McWhinney While Declaring Farm Land a "menace" to community Loveland's Most Comprehensive report on the Sept. 2, 2008 "Flex URA" meeting and decision |
| Legal Arguments The City Attorney argued two cases in law set the precedent from the courts allowing for Loveland's designation of agricultural land as blight determined that if 13 blocks are actually City Attorney: Said that in one case a court blighted, the city could include another 1 block that does not meet the definition in "area of blight." Councilman Solt: Argued the case is not on point (he said it was 3 of 13 blocks) because Loveland is claiming blight on various parcels of land when 94% of the area is not blighted and not even contiguous parcels City Attorney: Argued in another case a court upheld a determination of blight even though 42% of the area was "open space." Councilman Solt: Argued that the "open space" was not productive agricultural land and asked if the term "open space" had been defined to include agriculture. |
| Councilman Solt, an attorney, asks questions regarding the legality of the "Flex" Plan during the Sept. 2 meeting. He later voted against the proposal while Councilman Klassen (left above) voted in favor of the proposals. |
| Excerpt of comments made to Loveland's City Council by Liam Weston "The issue before you tonight is about integrity. State law has vested you, our elected officials, with a certain amount of discretion in interpreting and applying the Urban Renewal law as it relates to land within the city. That discretion represents the check or balance in our system of government, a government of laws, that you took a solemn oath to uphold and protect. The McWhinneys, their attorneys and other friends here this evening didn't’t take that oath and don’t have that obligation– but you do. Tonight you are being asked to make an official finding of “Blight” of nearly 500 acres of land located in 5 distinct non- contiguous parcels. To make a finding of blight you must conclude that each of these parcels meets the following definition prescribed by law:.... is a menace to the public health, safety, morals, or welfare. Can you please tell us what is menacing about an agricultural field?" |
| Chad McWhinney, above, glances back at the crowd of Loveland residents - many of whom spoke against his proposal. |
1. Abdicate City Council Authority to McWhinney through "Flex" URA No Gutierrez, Solt Yes Pielin, Clark, Heckel, Johnson, Skowron, Klassen, Rousey 2. Designate Farm Land "Blight" and make finding it is a menace to the community No Gutierrez, Solt Yes Pielin, Clark, Heckel, Johnson, Skowron, Klassen, Rousey 3. Allow the use of Metro District (public funds) to demolish dog racing track No Gutierrez, Solt, Skowron, Klassen, Rousey, Pielin, Clark, Heckel Yes Johnson |