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Action is now pending in the Colorado General Assembly to reform the State’s constitutional initiative process, which is the mechanism available to the electorate for amending the Colorado Constitution.

Under the existing constitutional structure, an initiative proposal for a constitutional amendment will be placed on the ballot for the State’s general election if the proponents can secure petition signatures from registered voters equal in number to 5% of those that cast votes at the last general election for the office of the Secretary of State (Colo. Const., Article V, Section 1(2)).  An initiative measure that reaches the general election ballot becomes law and amends the Colorado Constitution if approved by a simple majority vote (Colo. Const., Article V, Section 1(4)).

The Colorado initiative process has often come under criticism as setting too low a bar in allowing the State’s fundamental organic governing document, its Constitution, to be amended by a mere majority of voters.  Advocates of initiative reform contend that most constitutional initiative proposals would more appropriately be grist for the legislative process; while not perfect, the representative form of government arguably furnishes a policy-making filter that the existing initiative process lacks.  Supporters of the existing initiative process hold that it is a pure form of democracy, empowering the common citizen at a grassroots level.

Historically the Colorado initiative process has produced various controversial constitutional amendments (e.g., the Taxpayer Bill of Rights (TABOR); Amendment 2, which barred legislative protections based on sexual orientation and was ultimately declared unconstitutional by the U.S. Supreme Court; and authorization for medical marijuana).  In other circumstances, the constitutional initiative process has embroiled opposing factions in expensive, time-consuming political campaigns beyond those commonly entailed in legislative affairs.

Members in the two houses of the Colorado General Assembly have proposed Senate Concurrent Resolution (SCR) 11-001 to amend the constitutional initiative process.  If passed by the General Assembly, SCR 11-001 would go on the ballot for the 2012 general election.  SCR 11-001 would modify the initiative process in two significant respects:

• The petitioning process would entail a level of geographic distribution:  initiative proponents would have to obtain signatures from each U.S. Congressional District in Colorado at least equal to 70% of the total number of required signatures divided by the total number of Congressional Districts.
• The voting requirement for adopting a proposed amendment would be raised to 60% from the existing simple majority standard.

The 60% threshold would not apply to the repeal, in whole or in part, of initiatives previously adopted under the old initiative structure.  Instead those repeals would require only a simple majority vote, thereby preserving the same “playing field” for removing initiative measures adopted under the old structure. (Interestingly, though, it appears that the new geographic distribution standards in the petitioning process would apply to any such repeal efforts.)

It may be informative to contrast Colorado’s initiative structure with the requirements for amendment under the United States Constitution.  Any amendment to the U.S. Constitution has to be proposed by a two-thirds vote in each house of Congress, or by two-thirds of the state legislatures, and can be adopted only by ratification of three-fourths of the states (U.S. Const., Article V).  Apparently the founding fathers saw merit in imposing rigorous standards for constitutional amendment.

I attended the Colorado Real Estate Journal Industrial Owners & Managers Conference & Expo on Wednesday, September 15, 2010. 

There were several panels discussing various elements of the industrial real estate market in the Colorado Front Range.

• The investment panel seemed to reach a consensus that new industrial development would not occur until the third or fourth quarter of 2011. 
• They also noted that larger industrial properties are owned by public REITs, for which cash flow is important.  Some of those companies seem to be leasing for very low rates in order to maintain occupancy and cover operating expenses.
• Ned White of Intergroup Architects led the engineering and design panel and noted that construction technology has improved so much that there is not a big difference between a fairly standard efficient building and a LEED certified building, except that the LEED certified building requires $50,000 to $75,000 additional cost (regardless of the size of the building) in order to process the paperwork to obtain the certification.
• This same panel also noted that there is significant risk in the market of subcontractors defaulting during projects, resulting in delays and cost increases.  They suggested negotiating a final construction price with a pre-selected general contractor in order to balance price and strength of subcontractors, rather than using a "hard bid" approach to select a general contractor.
• Two attorneys from our office, Tom Macdonald and Bill Kyriagis, spoke on legal aspects of medical marijuana facilities.  In summary, it is still against federal law to possess or sell marijuana, but the Justice Department has issued a memorandum that prosecution of owners or operators of medical marijuana facilities will not be a priority if the owners or operators comply with state and local law.  However, there is still a possibility that the property used for the medical marijuana facility could be subject to the broad federal forfeiture statute.  This is especially troublesome if the Justice Department’s priorities were to change.

There are still some challenges in the industrial market with lack of financing, low rents and relatively high construction costs.  It appears these could be in place for the next year or so.

 Photo by mrshife (flickr)