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LovelandPolitics
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Loveland - January 2, 2014
In a public report to Loveland's City Council following the 2013 Big Thompson flood, a city
staffer boasted to Loveland's Council that since the Big Thompson flood of 1976 the City of
Loveland has prevented residential building within the floodplain via strict zoning regulations.
The inference was that only people residing in properties built before 1976 were at risk thanks
to professional city planning efforts following the 1976 disaster.
In fact, the majority of Loveland residents evacuated from the rising Big Thompson river on
September 12, 2013 were residents of a large apartment complex built in 2003. The 128 unit
apartment complex housing over 300 souls was evacuated by city fire fighters knocking
door-to-door while struggling to communicate with many residents who had limited English
proficiency.
While the Loveland Reporter-Herald newspaper did provide coverage of the apartment complex
evacuations and emergency shelters filling with those residents, the obvious question was not
raised of why the city allowed high density housing on some of the lowest elevations in south
Loveland right on the outside bend of the Big Thompson River within FEMA's floodplain.
Contrary to the staff's assertion that the lessons learned from the 1976 Big Thompson flood
were successfully implemented through better city zoning, the aptly named Waterford Apartment
complex in south Loveland stands as a monument to the contrary.
Good Governance Takes a Backseat To One Councilor's Conflict of Interest
In 1994 Loveland developer Don Marostica purchased the land where the Waterford
Apartments would later be built from the Continental Grain Company which operated the
Loveland Foods processing plant nearby. Marostica paid just $270,000 for the 36.1 acres
along the south bank of Big Thompson River east of S. Lincoln Ave. and north of Highway 402
(14th Street). In order to acquire the property, Marostica formed a limited liability company
named CTM Place LLC.
1. 7/20/1994 Continental Grain CO to CTM Place LLC SEC 24 T 5R 69 $270,000
One neighboring property owner told LovelandPolitics that in 1994 nobody believed the mostly
open and agricultural county land was valuable given the history of flooding and then current
zoning restrictions limiting uses to agricultural or other very low-density developments like
maybe a cemetery if approved.
In 1996 Marostica along with partners Joe Tarantino and Richard Connell applied for
annexation to the City of Loveland of the former Loveland Foods processing plant and adjacent
36 acres they acquired to develop. The area mostly in the 100 year floodplain was zoned
"Open" by Larimer County thus not eligible for the high-density, high-value uses Marostica and
his partners planned. The City of Loveland signed the annexation agreement with Marostica
and his partners on January 18, 1996. That agreement contemplated the development
Marostica was seeking by changing the zoning to commercial along Lincoln Ave (1000 to 1040)
and multi-family residential at the lowest portions bordering Big Thompson River north of
Highway 402.
Within months following the annexation (even before the established deadlines to bring the
property into compliance with city code per the annexation agreement) Marostica and his
partners began selling the commercial lots they created along S. Lincoln from 1000 to 1040 now
located within city limits. The Loveland Reporter-Herald recently ran a front page story
regarding J and J Fitness, one business at 1000 S. Lincoln, trying to rebuild after last year's
flood. With the exception of the Shamrock gas station on the northeast corner of S. Lincoln
and Highway 402 (14th Street), all the commercial development north of the gas station but
south of Big Thompson River resulted from this annexation as Marostica and partners sold the
lots listed below for further development;
1. 5/28/1996 Burdick Duane William LOT L4 $800,000
2. 8/22/1996 Autozone LLC LOT L1 $625,000
3. 2/21/1997 Arvidson James L LOT L6 $625,000 (1000 S. Lincoln)
4. 3/27/1998 McCrimmon Alliance LOT L3 $1.1 million
5. 9/20/2000 Arvidson James L LOT L2 $201,100
As a known tax dodger, Marostica was repeatedly pursued by the IRS for unpaid taxes between
1980 to 1996 after bankrupting several companies in Ft. Collins and leaving former partners
and creditors in financial trouble. The Waterford property scheme, however, paid off and
Marostica was able to settle his tax debts and announce his candidacy for local political office.
The Sterling native whose reputation closed doors in Ft. Collins found Loveland a more
agreeable place to do business. Unlike Ft. Collins, Loveland's planning department was still
fairly underdeveloped at the time and the local newspaper more likely to print what they were
given instead of researching stories about local developments.
In 2001 Marostica was elected to Loveland's City Council were he wasted no time setting the
ground work for the Waterford Apartments development among other ventures. In the
meantime, an area along Big Thompson River called the "Riparian Corridor" was preserved
under the 1996 annexation agreement for later conservation. Marostica exploited that
preservation to begin building his new community identity as a concerned developer looking for
ways to contribute to the community despite the fact it was already mandated under his 1996
annexation agreement.
Waterford Apartments Development
Brisben, an Ohio based developer known for building controversial low-income dwelling units,
was engaged in a legal battle with the City of Colorado Springs when first approached by
Marostica in early 2001. The City Council of Colorado Springs had denied Brisben's application
to cluster low-income units in their city under a project application submitted by Brisben in
1998. Brisben was involved in numerous appeals and legal fights with the City of Colorado
Springs at the time they were approached by Marostica.
In October of 2001, Marostica sold a 13 acre parcel of the 36 acre Continental Grain Company
land he purchased for only $270,000 to Ohio developer Brisben for $600,000. Following the
property sale, Marostica got busy throughout the following year obtaining various subsidies for
Brisben to include a $400,000 utilities oversizing agreement, $600,000 in city fee waivers for
traffic mitigation and other benefits for the project.
Then Councilman Marostica used his influence on council not only to approve Brisben's building
plans but even sought various subsidies from his fellow councilors. By voting to approve just
under $600,000 in City of Loveland fee waivers (including Capital Expansion Funds), Marostica
managed to rebate to Brisben the price they paid for his property thus making the land
acquisition costs for their project essentially zero. None of Marostica's colleagues questioned
his conflicts of interest in the matter nor did the Loveland Reporter-Herald after being contacted
by LovelandPolitics regarding the matter. In fact, the reporter responded he believed
Marostica's version that he didn't even know Brisben at the time of the votes.
By 2003 the first phase, a 128-unit multi-building apartment complex was constructed and given
the city address of 600 block of 14th Street in Loveland. However, the second phase intended
to be the 400 block of 14th Street went into bankruptcy and was never completed. By 2006 an
entity calling itself "CTM Family Trust Farm LLC" acquired the unfinished "Tract B" of the
development along with the water rights for $1,445,000. According to Colorado Secretary of
State records, the registered and controlling partner of CTM Family Trust is McWhinney on
Rocky Mountain Blvd. in Loveland. Whether McWhinney intends to finish the planned
development or was simply looking to buy water rights is not clear.
Flood Victims Seek Shelter In Loveland
According to the FEMA floodplain map revised in 2011, the Waterford Apartments were not
technically inside the floodplain just the parking lot and areas surrounding the apartments. It is
likely the developer slightly raised the elevation of the land when constructing the apartments
and later appealed to have the floodplain map redrawn based on the new elevations.
Historically, changing the elevation of a parcel on floodplain also adversely impacts other lots
either across the river or further downstream as the increase in elevation forces the water to
take another path. Whether the apartments will be included in the some 77 properties being
added this month by FEMA remains to be seen.
In the September 2013 flood the Waterford Apartments were not spared. A number of dwellings
along the first floor of two structures were flooded thus destroying the carpets in the units not to
mention the personal effects of the families who were evacuated. One of those residents with
children, Daisy Velasquez, told LovelandPolitics she was without a home for more than a month
as the owners of Waterford Apartments debated whether or not they would replace the carpet.
Brisben's subsidized financing of the project requires certain low-income unit rents be kept
"affordable" thus less funds are available for upkeep and repair. Traditionally, cities try and
prevent such developments as they become a burden to taxpayer's over time given the limited
funds available for maintenance and the potential for increasing crime in the area.
The Valequez family was only one of numerous families who not only lost their personal
belongings to the flood water but also a place to live. First taking shelter in the city's temporary
shelters they later relied on local churches, family and friends to help them find housing and
re-establish their lives. While some were successful in finding new housing and replacing lost
essentials like clothing for their children, others continue to rely on local charities while trying to
rebuild their lives after the flood invaded their newer apartments at Waterford Apartments.
| Loveland's Waterford Apartments |
| Waterford Apartments in south Loveland in September of 2013. |
| Waterford Apartments Financial Burden on City of Loveland Since its construction and bankruptcy of the second phase (which was not finished) the complex has been a financial drag on the city. Heavily subsidized through special financing and city fee waivers exceeding $600,000, the Waterford Apartment complex has become a crime center in south Loveland. The number of police call in a single year number in the hundreds and range from domestic dispute, property thefts and many other crimes according to Loveland Police records for 2013. In addition, the costs to local services of building apartments into a floodplain are enormous. Evacuations, temporary shelters and other related costs of poor planning are impacting the city's 2013 budget. John Hartman, city budget officer, requested an emergency supplemental appropriation from Loveland's Council on October 1, 2013 of nearly $5 million to cover the estimated costs emergency services incurred during the flood over the city's regular budget emphasizing the complete costs and additional appropriations wouldn't be known until early 2014. Seventy percent of the emergency funds were appropriated from Loveland's utility enterprise funds. |
| Poor Planning: How Loveland Allowed Multi-Family Units Below BT |
| Former Loveland Councilman Don Marostica became wealthy developing Waterford Place |
| Click to enlarge FEMA map |