County, town request mediation to put an end to costly Prospect debacle

Working through three lawsuits and a lot of hard feelings

Gunnison County and the town of Mt. Crested Butte are asking everyone involved in the spate of lawsuits among partners in the Prospect subdivision to sit down together and try to work through the myriad issues being decided in court.

In a letter from the town and the county inviting Prospect Reserve Metropolitan District’s 1 and 2 to mediation, attorneys Kathleen Fogo and David Baumgarten outline the three lawsuits that have resulted from a dispute between the two Prospect Reserve Metro Districts.
That dispute ultimately pulled the county and the town into the fray. With the long list of claims and counter-claims to be considered in Gunnison District Court, a timely or inexpensive end to the battle does not seem to be in sight.
“We believe an effort should be made to see if the dispute can be resolved so that all of the governmental entities can go back to the business of cooperating together to serve the public interest,” according to the Fogo/Baumgarten letter.
The dispute started with an attempt by Prospect’s Reserve Metro District No. 2, which is comprised of the subdivision’s homeowners, to escape the debt incurred by Reserve Metro District No. 1, which essentially represents Prospect’s developer, Crested Butte Mountain Resort.
When District No. 2 tried to levy a tax to pay for legal counsel that would help it navigate its separation from District No. 1, it violated the terms of the service agreement made with the town of Mt. Crested Butte at the subdivision’s inception. That brought the town into the mix with a lawsuit to stop the tax.
After some legal jockeying, District No. 2 compelled the county to levy an additional 50-mill tax on the Prospect homeowners to pay more than $400,000 in 2013 for what amounted to legal counsel, although it was budgeted as an operational expense. That was on top of a 56-mill levy that was being collected to service the debt from which District No. 2 was originally trying escape.
So, with the addition of a county mill levy, Prospect homeowners are on the hook for about 175 mills. That’s $175 of property tax for every $1,000 in property value—and in Prospect that could amount to a big tax bill.
So to avoid more lawsuits and further gridlock among partners that should be able to work together, the town and the county are requesting a round of mediation with Howard Kirshbaum, a former Colorado supreme court justice with experience in legal matters related to local governments.
A meeting among all the parties is scheduled for February 7 to discuss if mediation is an avenue everyone would be willing to explore.