LOVELAND — Not only did Loveland voters recently pass two citizen-initiated ballot measures generated out of opposition to taxpayer subsidies for a new private development, but three new council members who supported those initiatives were the deciding voices Tuesday on a resolution that could finally kill that project for good.
But the 5-2 decision, with Councilman Dana Foley leaving the room before the vote, to repeal the resolution to develop what is known as South Centerra and its accompanying public financing agreement possibly put the city at risk for a multimillion-dollar lawsuit.
At issue was the agreement between the city, Larimer County, and other taxing districts to partner with Chad and Troy McWhinney to develop South Centerra, a 148-acre urban renewal project that would bring new retail and housing to the area near the existing Centerra development at the junction of US Hwy 34 and Interstate 25. It used a controversial funding method known as tax increment financing (TIF).
Under the South Centerra agreement, the city would give up 1.25 percent of all sales tax revenue from retail within the development for 25 years to help with the infrastructure for the project.
Those against the project lost a battle at the state level to kill the project, so they organized two ballot measures aimed squarely at the development. Question 300, which removed a 3 percent sales tax on the retail sales of food for home consumption, and ballot question 301, which now requires voter approval for urban renewal projects (URA).
Both overwhelmingly passed, while two council/fire authority-referred initiatives that would have combated the passage of 300 and 301 lost, albeit by a much closer margin.
But Tuesday night, a new makeup on the city council took that one step further when they voted to repeal the original resolutions agreeing to the project.
Troy Krenning, who won a close race with Dan Anderson (400 votes separated the two) for a seat that did not have an incumbent in the race; Erin Black, who defeated incumbent John Fogle by about 800 votes; and Laura Light-Kovacs, who won the seat vacated by Don Overcash — who unsuccessfully chose to run for Mayor — by about 700 votes, were among the five council members who voted to repeal the resolution. Mayor Jacki Marsh and Councilwoman Andrea Samson were the other two.
Marsh has led the opposition against South Centerra from the beginning.
Foley, who is also the chairman of the Urban Renewal Authority, walked out of the meeting before the vote, frustrated with the mayor for what he said was an improper motion, improper rules and unfair conduct.
Foley also said he wanted no part in a vote that could possibly make him personally liable in a lawsuit against the city for breach of contract, which is not covered under the city’s liability insurance.
“There is an unrealized liability,” Foley said. “I was not able to obtain legal advice, knowing that a breach of contract would not be covered. I don’t want to be part of an illegal act.”
Foley said there were multiple issues with the repeal vote. First, he said, was Marsh ran the resolution as new business, which did not allow for public comment. He also took issue with Marsh not allowing him an opportunity to ask questions of the city attorney or comment on the resolution.
The rules of the council allow for only 10 minutes on new business, and Foley believes Marsh put it there for that very reason, he said.
“The citizens were not able to be heard on the motion or the reasons for it,” Foley said. “And I wanted to bring forth a motion to study and understand what the fiduciary effects and the liability of the actions we were about to take. And by not having that information, it was reckless and irresponsible to take that action.”
For her part, Marsh said Foley knew it was on the agenda under new business and could have challenged that before the meeting. She also said the topic has been discussed and the public has had many opportunities to speak on the matter dating back to January. She added many people did speak — both pro and con — on Tuesday about the topic during public invited to be heard, and she asked the council if they wanted to amend the rules to allow public comment during new business, but it did not have the votes.
She said the main reason she put the item on as new business was purely timing.
“It was a well-discussed item,” Marsh said. “But timing here is of the essence. The more time that goes by, the more liability the city might incur should we go to court and have to pay damages.”
Marsh was clear that a flip of the board was a loud message from the voters about South Centerra.
“From my standpoint it is an illegitimate URA,” she said. “I have said that from the beginning. The difference now is we had a change of council. The voters of Loveland spoke very loudly, and I think South Centerra was the catalyst for flipping.”
Foley is also questioning whether or not the resolution violated the newly passed Initiative 301 that requires a vote of the people before any major changes are made involving URAs.
“I have to look out for the citizens of Loveland and the financial health and resiliency of the city,” Foley said. “And in anyway I can, stop the bleeding the best as we can.”
Complete Colorado will continue to follow the story.
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