Late last week, there were two news stories reporting on important developments for real estate in the Denver area.  Given the continued state of the economy and commercial real estate, I was pleased to see these reports.  While actual development resulting from these events may be some time off, important ground work is being laid now. 

First, the Denver Business Journal reports that Regional Transportation District (RTD) has adopted a more flexible policy for transit‑oriented developments (TOD), which are anticipated to be constructed along RTD’s FasTracks expansion.  Four pilot projects will be selected by RTD to test this new policy. 

According to the DBJ, RTD’s new policy:

  • gives developers more flexibility with regard parking requirements for TODs;
  • allows RTD to take a combination of up-front cash and a deferred payment (profits interest or revenue participation for instance) for the sale of property to a developer; and 
  • encourages cooperation with developers in an effort to bring in more federal and non‑profit funding. 

Second, the Denver Post reports that Greyhound is looking to move its bus station from its current location at 19th & Curtis Streets (right across the street from The Ritz‑Carlton) to somewhere in the metro area near a major RTD bus or rail station.  This certainly is good news for The Ritz‑Carlton and also for downtown.  This is a key area of downtown, in close proximity to the Arapahoe Square redevelopment area.  In fact, the boundaries of the Arapahoe Square urban renewal area are being redrawn to include the Greyhound site.  The redevelopment of the Greyhound site could have a tremendous impact on the central part of downtown, and with its inclusion in an urban renewal area, the economics of such a redevelopment might actually make sense sooner rather than later.

I am a firm believer that being proactive during the downturn will mean we are better poised to be one of the first markets to really see a rebound.  It is good to see RTD, DURA and others making decisions today that will hopefully attract new development to Denver when the market starts its recovery. 

Whether caused by the failure to follow precise escrow instructions or inattention to detail by one or more of the parties to a closing or payoff, the indebtedness secured by a lien on real property is often satisfied, but such lien is not released of record.  Title companies conducting closings often close on a payoff letter from the holder of the debt, without having obtained a lien release on the date of closing.  Many times, such lien release is not subsequently obtained and recorded, leaving the property owner with a cloud on its title.  Fortunately, Colorado law offers some guidance and leverage for those who find themselves in that situation.

C.R.S. 38-35-124 requires that the creditor or holder of an indebtedness secured by a lien on real property release that lien of record with ninety days following the satisfaction of such indebtedness and receipt of reasonable costs to release the lien unless: (i) the debtor requests that the lien not be released, or (ii) the person satisfying the indebtedness requests in writing that the holder of the debt deliver to him or her the cancelled instrument of indebtedness (e.g. the promissory note) at the time of satisfaction, in which case the creditor is relieved of any further obligation or liability under C.R.S. 38-35-124 after such delivery has been completed.  Any creditor or holder of the indebtedness who fails to comply with Section 38-35-124 is liable to the owner of the real property encumbered by such indebtedness and to any other person liable on such indebtedness for all actual economic loss incurred enforcing the rights provided under Section 38-35-124, including reasonable attorney fees and costs.

If nothing else, “reminding” a creditor that fails to release its lien of the foregoing statutory requirements will likely persuade an otherwise unmotivated (former) creditor to aid in clearing title to your property.

Residents of the northern Douglas County City of Castle Pines North, or Castle Pines as it’s now known, voted on Tuesday to abolish the City’s recently established urban renewal authority.  The yes votes on Question 300 outnumbered the no votes by almost 2 to 1.  In abolishing the City’s urban renewal authority, residents decided not to grant City Council and the urban renewal authority – here one and the same body – the urban renewal powers granted to such authorities by Colorado’s urban renewal laws (31-25-101, C.R.S.), including the ability to capture and direct to the construction of new public improvements incremental tax revenues created by virtue of new or redeveloped portions of the City.  So, why did Castle Pines’ residents reject the authority  I’ve got some ideas, but first a little background on urban renewal. 

Urban renewal laws have been on the books for more many years, and the authorities created under the laws have successfully implemented numerous urban renewal projects across Colorado. The Denver Urban Renewal Authority is just one such example.  Urban renewal laws grant urban renewal authorities the power to issue bonds to pay for qualifying elements of an urban renewal project, which typically consists of public streets, drainage improvements, sewer lines and other public infrastructure, but in any event, improvements that are intended to eliminate blight.  The urban renewal authority captures the incremental property and sales tax generated on redeveloped property (for a maximum period of 20 years), calculated as the difference of such taxes before and after developing the property.

Urban renewal projects are permitted, as an initial matter, only within areas where an urban renewal plan has been adopted by the municipality containing the urban renewal authority.  To establish an urban renewal plan for a particular area, the municipality must first determine that the area is “blighted.”  It is this determination of “blight” where residents often run into issues. 

I believe the residents of Castle Pines didn’t like their community being labeled as blighted, as most people don’t like to have their property labeled as blighted.  Unfortunately, the urban renewal law requires a finding of “blight”, based on a number of indicia as a prerequisite to establishing an urban renewal authority, notwithstanding that many of the indicia don’t fall into the category of conditions most people associate with blight – like faulty lot layout, defective title conditions, unusual topography and inadequate street layout.  

Also, I believe the residents of Castle Pines thought the incremental tax dollars captured by the urban renewal authority amounted to a tax increase.  With or without an urban renewal authority, the incremental taxes generated by development are collected by the government.  But, the rationale behind the urban renewal law is that such increment would not be available if the development did not occur.  In other words, the development enabled by public financing of a portion of the public improvements would not have occurred, and therefore the increment would not be available, but for the urban renewal’s ability to capture the increment.  In sum, the urban renewal authority is not responsible for tax increases, it merely uses the increased taxes collected by virtue of development to encourage development.  

Finally, I believe the residents may have thought “urban renewal” should be relegated exclusively to urban areas.

The real debate here should not be focused on whether a community contains indicia of blight or if the development is located in an urban area, but instead on specifically when and where it is appropriate to use tax increment financing to stimulate development, if at all.  If the debate does not focus on these issues, the public will continue to get lost in the meaningless distinction between the practical and legal interpretations of “blight” and “urban” under the urban renewal law.  Urban renewal laws could be easily reconstituted to address specifically when and where tax increment financing is appropriate, and I think they should be.

 

CREW Denver’s 11th Annual Women of Influence awards luncheon was held yesterday at The Ritz-Carlton.  The theme of this year’s event was “Leading the Renaissance.”  Fawn Germer, Oprah-endorsed, best-selling author of 6 books including Finding the UP in the Downturn, delivered an inspiring keynote address encouraging everyone to turn adversity into opportunity.  All attendees received a signed copy of Fawn’s book.  Otten Johnson was the Keynote Sponsor, and First American Title Insurance Company was the Book Sponsor.  The event was a big success and a complete sell-out. 

 There were 16 nominees for the Women of Influence award, all outstanding, well-qualified women who are “Leading the Renaissance” in their own and different ways.  At the event, the four finalists were announced, all hailing from different sectors of commercial real estate. 

 The four finalists were:

  • Cyd Petre, Senior Vice President, Special Assets Group, Colorado Business Bank — Cyd leads the Special Assets Group at Colorado Business Bank and her group’s charge is to deal with troubled real estate loans.  Using creative and out-of-the box approaches, Cyd and her team have successfully resolved over 50% of the banks troubled loans in 2009 and are well on their way to the same success for 2010.
  • Karen Blumenstein, Project Developer, THF Realty, Inc. — Karen managed to renegotiate a public-private partnership for a retail project that was put in place when the economy was soaring.   Things were not working the way that the players had envisioned and Karen found a way to restructure the deal in order to help save a project.   
  • Tracy Huggins, Executive Director, Denver Urban Renewal Authority — Under Tracy’s leadership, DURA has managed to take the most difficult projects under the most difficult economic circumstances and find a way to make them happen.  These projects have included Dahlia Square and a third school in the Stapleton redevelopment. 
  • Tristin Gleason, Co-Owner, Project One Integrated Services, LLC — Tristin, as the owner of a small business providing construction management/owners representation services, managed to refocus her company on public projects in the education, public safety and utility realms.  As a result, Tristin’s company hired 2 additional people in 2009 and 5 in 2010, a track record unheard of in the construction business during this downturn. 

Tracy Huggins was named the 2010 CREW Denver Woman of Influence.   Otten Johnson congratulates Tracy and all of the other nominees.

Several weeks ago The New York Times ran an article about noise and vibrations caused by wind turbines.  The article noted that excessive noise has led to complaints and even lawsuits from neighboring landowners.  This shows that while new wind turbine designs are quieter and safer than earlier models, operators of wind turbines (as well as those who lease land to them) still need to remain cognizant of possible nuisance claims that can be brought by neighboring landowners.

Wind Turbine small.jpgTo prevail on a nuisance claim, a neighboring landowner needs to show that the wind turbines substantially interfere with the use and enjoyment of his or her property.  This can be a difficult and fact intensive proposition, especially since courts tend to consider the social utility of the complained of use. 

However, the risks are substantial: a prevailing landowner may be entitled to recover money damages for dimunition of property values or even an injunction that restricts the continued operation of the wind turbines.

Developers and landowners might consider the following ways to avoid potential nuisance claims:

  • Carefully compare potential wind farm sites.  Rural and open spaces far away from residential developments are best.
  • Examine the feasibility of negotiating and obtaining advance waivers from adjoining landowners before beginning construction.  Maybe a neighbor would be willing to waive a nuisance claim for something as simple as having a say in the color or placement of the wind turbines.
  • Assess the cost-effectiveness of operating the wind turbines at a slower rate or only during certain hours of the day.
  • Inquire about insurance plans that cover nuisance claims.

Wind energy is important, both for the economy and the environment.  Care needs to be taken to minimize the risk of nuisance claims derailing the industry’s continued growth.

Photo by the russians are here (Flickr)