Annexation developers and town hit a snag in plan

Who really pays for the dump cleanup?

by Mark Reaman

Recent correspondence between the town of Crested Butte and the developers proposing an annexation in town show some tension between the two parties over the cleanup of the old dump that lies beneath a portion of the property. The pace of the review process is also starting to concern the developers.

In a six-page letter dated April 9 from Cypress Foothills attorney Marcus Lock, the developers laid out proposed terms for a pre-annexation agreement. The letter focused on the “Old Town Landfill” and conditions requested by the developers for a pre-annexation agreement.

The developers want access to the portion of the dump beneath town property where they would dig to see what landfill material is beneath that land. They would not disclose what they find to the town unless requested in writing and then the developers could require a confidentiality agreement with the town to keep the results under wraps.

The letter goes into deep legal and insurance parameters associated with a cleanup. The suggestions include that the cleanup can take place six days a week, 12 hours a day.

But the major tension arises from part of the proposed pre-annexation agreement terms dealing with the developers getting some compensation for the project. The letter requests that “Cypress will be entitled to a credit in the amount of the Estimated Cleanup Costs. The Estimated Cleanup Costs will be deducted first against the purchase price of the Sales Parcel, and then against exactions, impact fees, requirements, and in lieu payments due and owing to the Town as a result of the Slate River Addition Annexation Project. Because this credit would be based on the Estimated Cleanup Costs, Cypress is taking all of the risk that the cleanup will be more expensive than anticipated. In addition, since the Estimated Cleanup Costs are also determining the amount of the required letter of credit, the Town is protected against Cypress attempting to ‘overestimate’ the cost of cleanup for the purpose of realizing phantom credit.”

Attorney Lock wrote that he hopes the town sees the value of the proposed development for residents of Crested Butte.

Lock pointed out the benefits of cleaning up the Old Town Landfill in a way that protects the town. He again noted the overall development would host a mix of public, residential and civil uses. The developers want a timeline that would allow the cleanup to start in the spring of 2016.

Near the end of the letter, the developers note, “The purpose of the letter is to convey our position on these issues and give the parties a point from which to negotiate. Moreover, the terms set forth above are obviously conceptual in nature and are not binding on either Cypress or the Town.”

Town attorney John Belkin replied to Lock in a letter dated May 4 after consulting the town staff and council in an executive session on Monday, April 27.

“In sum, your letter seems inconsistent with what was initially offered to the Town Council, and upon which the Town Council adopted Resolution No. 3, Series 2015 approving the Slate River Annexation Concept Review Application… Cypress [had] offered to the Town Council that Cypress would clean up the old Town landfill. Such offer was the centerpiece of the Town council’s approval of the application. From the contents of your letter, it now seems that Cypress is requesting to be compensated for its clean up efforts on the landfill. Further, that Cypress is now requiring certain conditions on moving forward with the cleanup, many of which are inconsistent with what the Town has explained to Cypress will be required of Cypress in connection with the clean up.”

Belkin’s letter from the Town states that if Cypress wants to be compensated for the cleanup, the developers should make the request of the council at a public meeting. Belkin’s letter also makes it clear that based on these new requests from the developers, the council has the option to reopen and reexamine the terms of the resolution that approved the annexation concept.

On Wednesday, May 6 Lock responded to Belkin’s town letter stating that the Town seemed to misunderstand or misinterpret the original letter. He again emphasized that it was meant to give the parties a point from which to negotiate.

Lock wrote that he was “troubled by the implicit suggestion in your letter that the Town was not aware that Cypress Foothills, LP intended to seek some credit in exchange for cleaning up the Old Town Landfill. I have discussed this precise issue with you and Michael Yerman multiple times.”

Lock cites specific instances that such a trade was discussed between the developers and the town staff. Lock expressed other concerns in the May 6 letter. He is concerned with trying to negotiate specific exchanges so early in the annexation process and is disappointed in the slow pace of the process.

Lock said Cypress is still willing to clean up the landfill at its expense but “expects some benefit in exchange for taking on this obligation.” He said the developers understand those benefits are subject to negotiation. And he said Cypress is willing to try and negotiate terms and has “no objection to the Town Council being directly involved in those negotiations.”

Lock ends the letter saying that the developers are becoming increasingly concerned about the pace at which the pre-annexation agreement is progressing. But the letter also concludes on a possible optimistic note stating that Lock has a “sincere belief in the merits of this development project, including the benefits of cleaning up the Old Town Landfill…Cypress is willing to provide the financial wherewithal to make this happen, to ensure that the cleanup is done safely and professionally, and to do so in a way that protects both parties’ interests. I hope it is not an opportunity that the Town lets slip away.”