COLORADO SPRINGS–A lawsuit filed in El Paso County District Court Friday against Interquest North Business Improvement District (INBID) by Timothy Leonard, President of the Deepwater Point Company, alleges that the quasi-governmental special district has “repeatedly failed to disclose public documents.”
Leonard represents several business owners in the development who are concerned about the practices of the INBID Board of Directors and management company.
The special district controls public improvements on 106 acres of land on the north side of Interquest Parkway just east of Interstate 25 that includes hotels, movie theaters, restaurants, fast-food outlets, banks, the Great Wolf Lodge and the new Scheels All Sports store being built just south of Federal Drive.
The INBID special district, which has taxing powers and is supposed to provide public improvements like sewers, streets and other infrastructure, was formed in 2004. INBID has so far issued more than $11 million in bonds and may ask the Colorado Springs City Council to okay up to $13 million more this year.
City Council granted Scheels a $16.2 million sales tax credit allowing the company to keep half of the city’s 2% sales tax for 25 years in February, 2019 as an incentive to build here.
In May, 2019 the City Council heard a request from INBID representatives to exclude Scheels from the district, something that would reduce Scheels’ costs by an estimated $193,800 per year, based on its projected annual sales at the time of $20.4 million. Other estimates claim that Scheels’ annual sales could top $60 million per year.
Excluding Scheels from the district would have shifted the financial burden of paying off bonds for public improvements that benefit Scheels onto the other businesses in the district.
The property is owned through layers of shell companies by Colorado Springs’ largest land developer, Nor’wood Development Group, which also owns the Banning Lewis Ranch. Nor’wood is operated by Chris Jenkins and his father, Dave Jenkins.
All of the board members of INBID are either owners or employees of Nor’wood.
The complaint says that Nor’wood has “ignored, evaded or denied Applicants’ requests” to disclose what Leonard claims are public records he is seeking under the Colorado Open Records Act (CORA) since September 2019.
The complaint goes on to say, “Applicants are concerned that District board members, in association with Nor’wood, use the District as vehicle for advancing their own and Nor’wood’s private interests to the detriment of the District’s taxpayers.”
Examples cited include allegations that, “All of the District’s outstanding bonds were purchased and are currently held by entities which are themselves owned by the same person who owns Nor’wood. [And] the District paid for improvements benefiting a residential property that was later sold to a joint venture to which Nor’wood is a party. The residential property was then excluded from the District, but the District was not reimbursed for the cost of the improvements which benefited the property.”
The complaint also alleges irregularities in board elections including providing ballots “only to electors who specifically request them,” and conducting elections at a law office in Denver, more than 57 miles from the district.
INBID officials told Complete Colorado last year that the District does not maintain a list of qualified electors, but that they obtain a list from the County Assessor’s Office immediately preceding an election.
The complaint says, “Although there are numerous electors who own or lease taxable property within the District, District officials issued only five ballots for the election. A total of four votes were cast, all by individuals associated with Nor’wood.”
In an April 15 press release announcing his candidacy for the May 5th INBID Board of Director’s election Leonard said, “If you haven’t noticed, special district abuse is way out of control. Some metro districts and business improvement districts have evolved from necessary extensions of the local government into fiefdoms abused by a handful of developers and their attorneys. Custom bond issues and subsidizing big retailers at the expense of the other unsuspecting businesses are saddling them with monumental taxes and debt payments.”