LovelandPolitics.com
a non-partisan website about Loveland politics for residents concerned about our community's
quality of life - email us your editorial or report on Loveland topics for posting here
402 Property Purchased By City In 2007
Campaign Issue in 2011 - As Sewers Cross
Loveland - October 24, 2011

In late 2007, Loveland’s City Council was secretly planning to purchase just under 100 acres south of
Highway 402 located at 1452 South County Road 7.   The purchase and later annexation of the farmland
had been in planning for years by city staff.  This was primarily the same City Council that only three
years earlier approved the controversial Master Financing Agreement “MFA” with the McWhinneys.

In 2006 Loveland annexed some 2.5 acres two miles west of Interstate 25 on the northwest corner of
Highway 402 and Larimer County Road 9E.  This small piece of land (referred to as a flagpole) allowed
Loveland to reach Highway 402 west of I-25 and make the required claim of "continuity" with the nearly
100 acres for sale across the street. (
see Northern Colorado Business Journal article from 2008)

An election was just around the corner by late 2007 and scheduled for early November when three
candidates for City Council, Cecil Gutierrez, Kent Solt and  Don Archuleta were running on platforms
critical of the McWhinney deal while seeking to focus city attention on downtown redevelopment and
into what Gutierrez called, “primary jobs in the corps of the city instead of more retail along I-25.”  

During much of the 2007 council campaign, Archuleta was hospitalized for an emergency hip
replacement allowing Larry Heckel to slip back into another four year term with little trouble.  However,
both Solt and Gutierrez were elected in November creating if not the majority they wanted but certainly
a new vocal opposition on council.

Meanwhile, former City Manager Don Williams and his staff aggressively badgered various property
owners south of Loveland including a farmer named Paul Ehrlich (who owned the near 100 acres on the
southwest corner of I-25 and Highway 402) to annex into the City of Loveland but with little success
during the summer of 2007.  Williams argued, in private, that the only way the city could annex Ehrlich’s
98 acres along the 402 would be to buy it outright form the hostile owner who already had it up for sale.

Williams worried that the trio of new and well organized candidates, Archuleta, Gutierrez and Solt could
swing the majority in council against his quietly planned acquisition strategy that involved borrowing
money from various other city funds and paying it back out of the general fund over ten years.  
Especially disconcerting for some on city staff was that the repayment plan would ramp-up in later years
as only interest would be paid during the first five.

What made acquisition of the Ehrlich’s 98 acres especially rewarding for Williams was not its proximity
to Johnstown and distance from any significant Loveland city boundary but the fact it actually lies south
of Johnstown property on the opposite side of the west to east travelling 402 before reaching I-25.  This
would make development of commercial properties north of the 98 acres already in areas annexed by
Johnstown especially difficult given the potential need for utility easements crossing Loveland
boundaries.  Williams seriously described his strategy in a senior level staff meeting as the
Nazi “Pincer”
movement against Johnsontown by using McWhinney in the east and Ehrlich’s property in the west to
choke off any future development along I-25 that could compete with Loveland.  One staff member joked
to Lovelandpolitics at the time,
"Don's been watching too much TV lately because he thinks he is a
general in a war with Johnstown."

Public works worried the Ehrlich property was at an elevation lower than the city's waste water
treatment plant.  Connecting a sewer system uphill to Loveland would require some estimated $7 million
since it would require a pumping stations to elevate the waste while sending it north to Loveland around
Johnstown annexed property.  Then Councilman Walt Skowron was poking around with questions trying
to understand the haste the city manager had in closing a deal Skowron didn't think was in the city's
interests.  The same estimate and concerns were raised when Loveland bought the water rights in
exchange for another annexation agreement with the
Olson farm near Johnstown.

Solt broke ranks with Gutierrez and supported the majority for the Olson Farm annexation in 2008.  
Again the sewer feasibility issue was raised as Willaims was said to be reducing the sewer costs
artificially.  Posting on LovelandPolitics' blog, one city insider argued,
"it would well be double or tripple
that, there are not plans and technically its suspect because they have to pump all of 402 to the interchange
and then pump it all back, which is a huge distance and contrary to good practice. This whole thing is a crap
shoot and a bad fiscal deal for the City, only being done to feed the Pielin and Williams egos." (
Note: to the
interchange and back refers to going around the Johnstown parcel across the street to the north)

Leaving little to chance, Williams negotiated a purchase contract with Paul Ehrlich even before the
council was technically briefed in public of staff’s intention to buy the property.  In vintage Williams
fashion he cleverly excluded public comment from the first reading planned for October 17, 2007 and
boxed-in any potential dissenters like Councilman Walt Skowron by bringing only one solution to council
– buy the property outright or risk allowing annexation into Johnstown.  Williams even made sure the
item would not be discussed until the end of a long council meeting when few if any in the public would
be paying attention.  

When news of the property purchase found its way to the
public’s notice, Williams pulled the item from
the October 17, agenda rescheduled it again for the November 6, 2007 – election night council meeting.  
Shortly after the polls closed the council passed the item under strong protests from Councilman Walt
Skowron who was publicly berated by his colleague Larry Heckel.(
see video on news story from 2007).  
Of course, Williams argued the council had no choice since the option to purchase the property (at the
full asking price) expired the same night as the election in the contract negotiated by Williams.  One
commercial broker complained the city refuses to advertise the real "asking price" now in fear of public
reaction to the much lower price.  Curiously, every current Loveland City Council candidate answered no
to a Loveland Reporter Herald question as to whether they will vote to sell the 402 property at a
significant loss.

Campaign Issue in 2011
Now four years later the property is still for sale except this time the City of Loveland is the seller and it
is a campaign issue once again.  Unlike four years ago there is no contract to sell the property as the city
comes close to concluding the election but once again the property is generating sufficient controversies.

One contender to replace Councilman Heckel is his former colleague and friend Dave Clark who held the
other council seat representing Ward IV until giving it up two years ago to run for Mayor.  Now Clark is
the subject of questions regarding a loan to a company he partly owns,  Candlelight Properties, LLC,
which owns and operates the
Candlelight Dinner Playhouse in Johnstown.  Paul Ehrlich's Trust loaned
$200,000 to the company in 2009 a little over a year after selling the 402 property to the City of
Loveland.  Speculation is that previously a traditional farmer, Paul Ehrlich, may have reciprocated Clark’s
support in the property purchase with a loan using some of the proceeds from his deal with the city to
help Dave Clark.

Another owner of Candlelight is candidate Chauncey Taylor looking to replace Donna Rice representing
Loveland’s Ward 1 on city council.  Among the complaints being quietly circulated is that both Taylor and
Clark failed to disclose the loan on their campaign finance disclosure forms.  

Clark was on the city council in 2007 and voted in favor of the controversial land purchase while Taylor
is only running for the first time for council this year.  Therefore, Clark appears to be the target of the
complaints and to a lesser degree Taylor for not disclosing the loan in financial disclosure statements.  

Mysterious Letter Writer
Someone using an assumed name has contacted LovelandPolitics, the Coloradoan, Denver Post and
Loveland Reporter Herald seeking stories critical of Clark for the loan.  Below is an excerpt of the
correspondence LovelandPolitics received from someone pretending to be “Jenn Lamont.”  The complete
email can be seen in the column on the right.

“Dave Clark was on the Loveland City Council that voted to purchase property from Paul Ehrlich for
the amount of $6.5 million.

Dave voted for that purchase.  The City of Loveland still owns the property and is unsuccessfully
trying to sell it.  Dave Clark left City Council in early 2009, prior to receiving the loan. Neither Dave
Clark nor Chauncey Taylor have claimed this creditor on their applications for City Council
candidacy. It is possible the loan is paid, so within the letter of the law, they have complied with the
candidacy submission requirements.  It is equally possible the loan is not paid off.

Either Dave Clark knew Paul Ehrlich very well prior to the $6.5 million purchase (in which case he
should have recused himself) or Mr. Ehrlich has found a way to express his thanks for Dave's support.
This loan was subordinate to the original deed of Trust, making it essentially an unsecured loan.”

LovelandPolitics has followed-up with council candidate Dave Clark who acknowledged the loan is still
outstanding but denied any connection between his vote to purchase Ehrlich’s property in 2007 and the
loan Candlelight received in 2009.  In addition, Clark volunteered the fact he had no relationship with
Ehrlich prior to the city purchasing Ehrlich's farmland in 2007.  On the issue of disclosure, Clark
explained the loan was to his business and not him personally so was not something he believed needed
to be disclosed.  Clark also stated he would happily disclose the loan if he learned it was required.

Clark has also posted an explanation on his campaign website explaining the 2007 purchase of the 98
acres from Ehrlich.  A link to every candidate website is available in the right column of our
home page
by clicking on the candidate's name.

Clark has responded to the accusations by using a similar argument regarding the importance of
purchasing the Ehrlich property.  Below is what Clark has posted on his website;

"Land purchase at 402 / I25 - The claim is the city is participating in land speculation causing city
reserve funds to be “dangerously thin”.  The FACT is this purchase was NOT a short term land
speculation venture. It was part of a long range plan to protect and preserve our borders and our
future corridors into Loveland. Funding for the purchase came from city funds designated for
projects far in the future. This purchase had NO impact on current reserves except for a small
amount used from the council reserve funds."

Motive For The Purchase

The city resolution approving the purchase of the 402 property stated the only way to annex the
property into Loveland was to buy it.  This references a lack of cooperation Williams reported to council
previously regarding Ehrlich's refusal to allow any of his properties to be annexed into Loveland city
limits.  In 2007 the resolution justifying the land purchase as an official city action also stated,

“State Highway 402 has a significant impact on the image, appearance, and future economic vitality
of the City….vital southern gateway into the City”

Ironically, the same council didn't consider the south Lincoln area of 287 an important gateway into the
city by voting to delay the annexation of dilapidated properties like a storage area that looks like an auto
salvage yard occupying not only street front on Lincoln but also visible north side of the city's bike trail
east of Lincoln. Another property owner was allowed to continue a non-permitted use of storing RV's for
another decade in that corridor inside city limits by the same council.  McWhinney also developed an
auto parts store on the last lot where the two directions of Highway 287 join at the south end of the city.  
Some members of the City Council complained quietly that support for such developments seemed
inconsistent with the concern expressed over the 402 property and even complained LovelandPolitics
failed to provide proper coverage of these incidents.

Some have speculated that Williams' "Pinzer" action against Johnstown was to assist McWhinney in
monopolizing any land along the I-25 that otherwise could have eventually competed against Centerra
for retail shoppers.  City planning staff have more lately argued the development of 402 must be like Ft.
Collins' Harmony corridor.

Whether Ehrlich's transition from farmer to venture capitalist and investor into Clark and Taylor's
business was the result of some insider dealing or just coincidence will likely be debated for years to
come.  Equally interesting speculation is whether "Jenn Lamont" is really Clark's campaign opponent
Ralph Trenary trying to hide his true identity by sending accusations about his opponent to the press
under an assumed name.  Normally, people are willing to reveal themselves to the press so long as their
identity remains background for the story and is never published.
VIDEO 1
Skowron in 2007 objects To City
Purchasing Ehrlich's Property
From:        Jenn Lamont <jenn1990_ftc@yahoo.com>    
To:        "admin@lovelandpolitics.com"        
________________________________________
Sep 2011

RE:   Loveland City Council Election Scandal

In an email that follows find two documents. You may obtain
your own copies from the Larimer County Clerk and
Recorder's office to authenticate. The first document
"Statement of Authority" shows Dave Clark and Chauncey
Taylor as Manager and Partner in Candlelight Properties,
LLC.  The LLC documents on file with the State show Dave
Clark as an owner.

The second document "Deed of Trust" shows a loan was
received by Candlelight Properties, LLC on Sep 29, 2009 in
the amount of $200,000. The loan was from the
Paul Ehrlich Revocable Trust.

Dave Clark was on the Loveland City Council that voted to
purchase property from Paul Ehrlich for the amount of $6.5
million.

Dave voted for that purchase.  The City of Loveland still
owns the property and is unsuccessfully trying to sell it.
Dave Clark left City Council in early 2009, prior to receiving
the loan.

Neither Dave Clark nor Chauncey Taylor have claimed this
creditor on their applications for City Council candidacy. It is
possible the loan is paid, so within the letter of the law, they
have complied with the candidacy submission requirements.  
It is equally possible the loan is not paid off. Either Dave
Clark knew Paul Ehrlich very well prior to the $6.5 million
purchase (in which case he should have recused himself) or
Mr. Ehrlich has found a way to express his thanks for Dave's
support. This loan was subordinate to the original deed of
Trust, making it essentially an unsecured loan.  I am a fiscal
conservative, and I know these two appear to be some of the
strongest candidates from that point of view.  But this looks
very bad, and will be an interesting test for LovelandPolitics.

Also, I mailed copies of this to Gutierrez and Trenary before
the "debate".  The fact they didn't even mention it shows how
little debate is going on, and how much they possibly have to
cover.

This was found on Larimer County Public Records, searching
for "candlelight"
VISIT THE LOVELANDPOLITICS BLOG
Candidate Personal Financial
Disclosure Form - Loveland