Loveland's Independent News Source
Council Split On Whether
"Eminent Domain" Is A Tool for
Acquiring Properties for 'Catalyst'
Loveland - May 27, 2014

Eight years after the controversial U.S. Supreme Court ruling in Kelo Vs. New London , battles over eminent domain
are rising across the country as cities threaten to use their new found police powers over the heads of reluctant
property owners standing in the way of new city sponsored private developments.  Loveland is no exception.

Prior to 2005, "public-private" takings (where government condemns productive private property under eminent
domain than transfers it to another private owner) were rare and not considered legal by many courts.  The
Supreme Court changed all that in Kelo by overturning lower court rulings and siding with New London,
Connecticut; allowing the city to seize the home and private property of Susette Kelo for use by a private developer
who promised greater tax returns than what Kelo was paying.  The debate centered on whether the taking was
truly for a "public" use as required in the Fifth Amendment takings clause.

As first reported by LovelandPolitics on January 21, 2014, the City of Loveland's efforts to acquire all the private
properties located between E 1st Street and slightly beyond 3rd Street in downtown continues running into trouble.
The city is hoping to replace an historic building currently housing a small brewery, 1940's single family residence,
old commercial buildings and an art deco style 1930's gas station.  In the place of those older buildings, 200 new
apartments, a 44,000  square foot Larimer County office building and movie theater are planned as part of the city's
ongoing historic revitalisation of downtown.

New Jersey developer Michaels Development submitted the only qualified bid in a selection orchestrated last year
by Loveland's economic development and planning services staff.  As proposed in Michael's offer, the City of
Loveland will buy all the properties located inside the proposed project area for Michaels while establishing
another urban renewal authority that can raise public debt to build the project repaid by diverted future property
taxes over the next twenty-five years.  Following the city's acquisition and urban blight declaration of the properties
it will sell them to Michael's at a discounted price to subsidize the project.

As we reported last January, some owners of historic properties are not looking to sell, especially for demolition of
their historic buildings by the city but fear eminent domain by the city will take their property  at an even lower
price than a negotiation might yield should they continue resisting.   Whether these owners can really stop the city
may depend entirely on where their property is located within the project and how each councilor feels about using
eminent domain against that individual owner.

Councilors Threaten to Use "The Tool" To Acquire Historic Gas Station Property

One property owner within the city's quadrant of interest learned last week where he stands with at least 4 of the 9
Loveland City Council members.

Referring to eminent domain as
"the tool," Loveland Councilwoman Joan Shaffer encouraged longtime downtown
business owner Gene Stires to continue negotiating with the city to sell his property by alluding to the "tool" which
she indicated got him to the table in the first place during the May 20, 2014 council meeting.  Joining Shaffer was
Loveland Councilman John Fogle whose language was slightly more direct.  These comments came after their
colleagues Councilmen Troy Krenning and Hugh McKean told Stires he was welcomed to keep his property on
Lincoln Ave if he chooses not to sell.

Krenning stated,
"If you want to save the tell Mr. Cahill and his team to go away and we'll leave you
alone - probably
"  Later in the same meeting Councilman Hugh McKean also indicated he will not support eminent
domain as the "
tool" the city can use to close the negotiations if the city feels insufficient progress is being made.  

Stires, who owns the 1930's art deco former gas station at 123 N. Lincoln in downtown, doesn't want to sell his
property to the City of Loveland.  Stires appeared at Loveland's City Council meeting last week in an attempt to gain
an historic landmark designation backed by a unanimous recommendation for historic preservation by the city's
appointed citizen's advisory committee.   Stires appears to be playing up the historic past of his property in an effort
to gain leverage over the city in negotiations to buy his property.   When Stires spoke to Loveland's City Council he
began his testimony stating his first option is to keep the property and building where it is currently located.  

Conspicuously absent from the presentation by city staff was the building's use as a marijuana dispensary in
defiance of federal laws before Loveland voters rejected a ballot measure on allowing such dispensaries within city
limits.   Stires is fond of telling visitors that his was not only Loveland's first marijuana dispensary but he believes
the first in the State of Colorado which proudly displayed a window sign "Smithstonian."

Loveland city staff did point out it was used as a Pentecostal Church for 2 years in the 1970's and ceased providing
gasoline sometime in the late 1960's.  Considerable time was spent discussing the potential use of an old dining
trailer Stires acquired and is currently restoring.   At one point, Councilman Troy Krenning stated, "
I feel like I am in
the Twighlight Zone
" before attempting to bring the conversation back to Stires' request for historic designation.

After extensive deliberation the council voted 6-1 against designating Stires' property as an historic landmark with
2 of the 9 present abstaining from the vote.   On the issue of using eminent domain the council was split.   Only four
expressed an opinion (2 for and 2 against).

Can The City Condemn Stires' Property and Take It By Eminnet Domain?

Yes for several reasons.  Unlike Russ Morgan's properties (reported last January) Stires' historic gas station sits on
the area city planners hope to locate the Larimer County new office building.  That means the property's ultimate
use will be for a "public use" thus not necessarily a "public-private" eminent domain action.

In addition, the 2005 Kelo ruling paved the way for cities to use the "tool" of eminent domain even in the cases of
private development.  In other words, though controversial, Loveland staff has the option of taking Stires' property
through eminent domain if at least 5 city councilors vote yes to the action.   Today only 2 of the 9 are on the record
opposing such an action.

Loveland City Manager Bill Cahill did inform Loveland's Council the project could be completed around Stires'
parcel but wasn't entirely sure of the details when asked during last week's council meeting.

LovelandPolitics learned Larimer County plans a parking area for their office building where Stires' old gas station
sits therefore any "work-around" disrupts the parking plans for the new $15 million county office building.  The
parking could be located across Lincoln on another parcel but according to county officials that places too high a
burden on handicap citizens who will need to cross a busy street to access the county offices.  Especially important,
those offices will house county revenue staff responsible for collecting fees on annual automobile registrations.   
Therefore, many local residents would likely prefer to park next to instead of across the street from the county's new

Stires may have damaged his own bargaining position by entering discussions to move his building using city funds.  
Sympathetic councilors unwilling to support an eminent domain action by the city to obtain Stires' property
indicated they can change their minds if he doesn't negotiate in good faith.  This provides an opening for those on
city staff to return to the Loveland City Council after 30 days and say the negotiations failed.  At this time, removing
the building or demolishing it seem less outrageous since the owner already contemplated and discussed the details
but simply couldn't agree with the city on price.
Loveland business owner and longtime resident failed
to get an historic designation from Loveland's City
Council for his property at 123 N. Lincoln in Loveland.
Google street view of Russ Morgan's Cleveland Ave.
property downtown.  Current tenants include one
residential and a brewery (left). Both historic buildings
will be demolished in the redevelopment to make room
for new apartments.
Video Highlights - Council Hearing
May 20, 2014

1. Gene Stires tells his side of the story to
Loveland's City Council
see video

2.  Councilwoman Joan Shaffer along with
Councilman John Fogle dangle using the "tool"
over Stires' head indicating they will support
taking his property through the eminent domain
see video

3.  Councilman Troy Krenning makes a course
correction during the meeting expressing his
belief Stires can decide not to sell and the city will
"go away."  Krenning reminds his colleagues their
immediate task is to rule on Stires' historic
designation request not other matters
see video