Contractor’s lawsuit continues through district court system

Motion to dismiss is denied

The sparring over the legality of Gunnison County’s “workforce housing fee” entered a new round last month after the Gunnison District Court denied the county’s motion to dismiss a Gunnison County Contractor’s Association (GCCA) lawsuit seeking an end to the fee.

Judge Steven Patrick could have dismissed the case if all of the county’s claims had been proven “beyond doubt” in the motion. But according to court documents, the county’s major arguments, such as claiming the fee was not a tax in all cases, left enough room for debate that the judge is willing to allow the suit to continue.
“We’re pleased that the lawsuit is being looked at as a viable case to go to trial,” says GCCA president Joe Puchek.
Essentially, what the county commissioners have called an impact fee, local contractors say is an illegal tax collected on building permits. Now it is up to the court to decide which it is.
After the county’s request to dismiss the case was denied, the plaintiffs filed an amendment to their original complaint that answers some of the questions that were brought up by the county’s motion to dismiss.
“In the amended complaint we basically clarified that the GCCA was not seeking reimbursement of fees; they were seeking [a ruling by the court on the legality of the fees] and the individuals were seeking reimbursement,” says Amanda Bradley, who represents the plaintiffs for the Denver-based law firm Hale-Friesen.
The plaintiffs include GCCA; Crested Butte-based Alpine Construction; Nicholas and Sara Mirolli of Almont; and “all similarly situated residents, businesses and property owners in Gunnison County.”
In the suit, filed June 12 of this year, GCCA claims the county’s workforce housing linkage fee is a tax and places an undue burden on the construction industry.
The suit also raised doubts about the construction industry’s role in bringing employees into the area who would need low-income housing.
The county says the fee is intended to provide the funds to build affordable housing for the county’s workforce.
In a statement, the Board of County Commissioners said, “We believe that we have responded appropriately to our greater communities’ housing needs through an impact fee…
“If the court finds that our impact fee is appropriate, it is our intent to continue our program. If the court points out a flaw in our fee, we will fix it and move forward to respond to our community’s workforce housing needs, which are critical to our economic development.”
County attorney David Baumgarten has repeatedly defended the program, pointing to places where impact fees have been successfully defended in court and the breadth of the problem of affordable housing.
The aim of the suit was to have the fee eliminated and have the fees already paid to the county returned, with interest, under the requirements of the Taxpayer’s Bill of Rights (TABOR).
According to Bradley, standing under TABOR will give the plaintiffs an edge in getting to trial quickly.
“Under a provision of TABOR, there are procedural allowances in TABOR to get the case determined on a fast track,” she says.
The suit gets another day in court on Friday, November 7, when Judge Patrick will decide if the suit matches the definition of a class action suit, which was the way GCCA filed it.
Since the county implemented the workforce housing linkage fee in 2006, it has faced nearly constant criticism from some members of the building industry.
The first attempt to address the issue required a payment for residential development of between $586 and $17,252 for development in the county, and $1,971 to $58,022 in the Crested Butte area. Commercial and industrial development carried a fee of $912 per 1,000 square feet of development in the County and $3,067 per 1,000 square feet in Crested Butte.
The commissioners later adopted a countywide fee that didn’t differentiate between Crested Butte and the rest of Gunnison County.
As of press time, the county’s affordable housing fund holds more than $727,000 and continues to grow with each permit issued.