Loveland's Independent News Source
City Contemplates
Eminent Domain for New
Downtown "Catalyst"
Loveland - January 21, 2014

According to a January 14, 2014 article in the Loveland Reporter-Herald all lights are green for a new downtown
urban renewal financed development proposed by the City of Loveland.  The newspaper's article titled
"A New Start
in Downtown Loveland" stated,

"Mike Scholl, Loveland's economic development manager, said the city has had preliminary conversations with
some of the property owners, who expressed 'a general willingness.'

LovelandPolitics has learned quite the opposite is true and Scholl has been informally polling Loveland City
Councilors about using
Eminent Domain to coercively  take the property of one longtime Loveland resident who has
so far been unwilling to discuss selling into to the City of Loveland's newest "catalyst project" for downtown.

Stretching north from E 1st St. just beyond E 3rd St. while encompassing everything between Cleveland and Lincoln
in downtown, the project promises 200 apartments, a new 44,000 square foot Larimer County building and movie
theater.  New Jersey-based developer Michaels Development Co. won the city's competition to develop the project  
because Michaels Development Co. was the only qualified respondent to the city’s request for proposals.  The city
has entered into an exclusive 6 month negotiation period with Michaels Development Co. to negotiate mutually
agreeable terms of the deal.  Details of the city's expected contribution and other financial details were discussed in
back-to-back private meetings with pairs of city councilors to avoid Colorado's open meetings law.
see city
manager's office memo setting-up the meetings

As part of Michaels’ proposal, the City of Loveland will buy all the properties in the proposed project area and join
them together in an Urban Renewal District using a blight designation so public bonds can be issued.  Accessing the
newly raised public debt, the Michaels Development Co. Intends to develop the project using public bonds which
will be paid back over the next 25 years from the
TIF (Tax Increment Financing) generated by the project's  future
property taxes.  In addition, the City of Loveland will donate taxpayer funds into the project; an amount not yet

One Owner Not Willing

Russ Morgan, a longtime Loveland resident and commercial property owner, controls a critical piece of the proposed
project area on the northeast corner of Cleveland Ave. and E 3rd St. in downtown Loveland.  Contrary to Scholl's
assertions to the newspaper,  Morgan did not show
"general support" for selling his property when speaking with
Scholl but instead indicated no interest in the city acquiring his private property.

Morgan's reasons appear to have been misconstrued to the elected officials who, off the record, indicated they were
told Morgan was cranky, claimed his father told to him to never sell property and has a personal vendetta against
Loveland Director of Planning Greg George.  Instead, Morgan's reasons evolve around what he calls a "fraudulent"
grading permit granted by the city on a parcel adjacent to commercial property he owns further south on Cleveland
in Loveland.  The matter is currently in dispute (see document links upper right).

Morgan's commercial interests have already suffered financially from prior City of Loveland economic development
activities.  The Rialto-Bridge project first proposed building up against windows on a building owned by Morgan.  
Later, the City of Loveland donated $19,000 to Morgan's downtown commercial tenant Data Tracks as an incentive
to relocate in the
Rocky Mountain ACE project on south Taft Ave.

This time, however, Morgan appears ready for a fight with the city.  On November 9, 2012 Morgan's attorney sent
the City of Loveland a "Notice of Claim" complaining the grading permit issued to Timothy Reader for work already
completed on his 204 12th St. SE property was fraudulent.  According to Morgan's attorney, the City of Loveland not
only issued the permit after the work had been completed but failed to obtain the necessary topography maps
required when re-grading the elevation of a parcel.

The complaint contends the City of Loveland allowed Reader to construct a berm into a storm water drainage area
of his property thus pushing drainage east onto the backside of Morgan's Cleveland facing properties.  Water
draining from around the properties now apparently floods into the backside of Morgan's properties rented
currently to a variety of tenants.  For reasons not entirely clear to LovelandPolitics, the City of Loveland allowed the
development along 12th St. SE using only a trickle channel for water instead of the standard curb and gutter
normally called for in city code.  According to the complaint;

"The constructed berm has blocked the flow of stormwater from and off of the Morgan property, as well as from
the upgradient stormwater flows from other properties that flow down to the Morgan property, causing storm
water to pond upon the Morgan property with resulting damage and/or potential damage to the pavement and
commercial structures that are located on the Morgan property."

According to the same complaint the berm was constructed onto an existing city utility easement and water
drainage area thus illegally placed without permission from the city.  Of particular interest to Morgan is Loveland
Director of Planning Greg George's approval of a post grading permit despite the fact no topography information was
submitted as required by Reader's engineer.

Morgan has sought to readdress his grievances with the city but to no avail.  The city's official response came from its
insurance provider (even though Morgan sought no monetary damages) stating the city is not liable due to
governmental immunity.  Curiously, the insurance provider, CIRSA, did acknowledge the berm was constructed
without city approval stating,

"The berm was built by Master Metal Works without the knowledge or consent of the City of Loveland prior to its
construction.  The City of Loveland has agreed to accept the engineer's report to state the berm is acceptable in its
complete condition and poses no risk to other property."

In the meantime, Morgan complains the city's legal counsel told him there is no appeal process available for
fraudulent grading permits being issued and since the city has immunity even if it were the result of negligence or  
corruption the matter has been dropped.

Morgan says he has not even reviewed the city's proposal to acquire and develop his downtown property.  It
appears as though he is still seeking some response from the city as to how his neighboring property owner can fill-
in a city drainage easement causing him significant problems without even a permit only later to be given the
permit without any of the necessary documentation.

previously paid-out nearly half a million dollars to the Klen brothers in Loveland after they alleged George
and his planning staff violated their civil rights.   Morgan appears equally persistent as the Klens in righting what he
sees as a city wrong by a planning staff that he believes doesn't always follow its own code.
Aerial view of the property at 204 12th St. SE (center right)
and the adjacent four buildings owned by Russ Morgan (left).
Morgan contends Reader (owner of 204 12th St.) filled-in the
storm drainage easement on his property without permission
thus pushing the water east onto Morgan's tenants like
Summit Limo, Equipment Limo, a small engine repair shop
and a hobby shop.

Read Morgan's Attorney Letter to City of Loveland

Read City of Loveland Response
(by insurance carrier)

Read permit documents filed with city after grading
the parcel and changing the elevation

Grading permit fast track application

Grading permit application

Grading Permit Report

Grading Modification Plat
View of 204 12th St. SE and the infamous parking lot
and berm Morgan contends was built over an existing
city easement and stormwater drainage area.
Aerial view of the proposed new "catalyst" project for
downtown areas
Google street view of Morgan's Cleveland Ave.
property downtown.  Current tenants include one
residential and a brewery (left). Both historic buildings
likely to be demolished in the redevelopment scheme