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Pueblo West property owners lose SDS battle

COLORADO SPRINGS — Colorado Springs City Council Tuesday approved condemnation on 13 Pueblo West properties along the route of the Southern Delivery System, despite objections from several of the property owners.

    The property owners maintained they were not treated fairly, and that Colorado Springs Utilities failed to negotiate its offers. One said he signed an agreement Monday only after being strong-armed into the deal, and that he is still upset that his concerns about land value were not addressed at all.

    Council voted 7-1 to proceed with eminent domain, believing Utilities staff has exhausted all other avenues to solve the problem. Even at that, Mayor Lionel Rivera questioned Project Director John Fredell after it was revealed that Colorado Springs could spend up to $5,000 to help settle disputes of easement payments as low as $1,550.

    “There has to be flexibility in the real estate manual,” Rivera said. “You, the project director, can use your discretion.”

    Fredell earlier explained that 120 of 133 properties or easements in Pueblo West are under contract, with new settlements on Monday with 2 of the 15 holdouts. All of the remaining properties are for easements valued at $1,550-$5,000. While Utilities will continue to work with the remaining 13, Fredell said they appear to have reached a dead end.

    There has already been one condemnation filed, approved at a meeting last October.

    “I believe we’ve reached a point where we cannot agree on compensation with the remaining properties,” Fredell said.

    Counter-offers from landowners ranged from $5,000 to Herb Walsh’s offer to sell his house to Colorado Springs for $225,000 — an offer he said he withdrew when he realized the price wouldn’t cover his relocation costs.

    Dwain Maxwell, Walsh’s neighbor on Kirkwood Drive, said he would accept the value of $2,200 on his property, but would need an additional $10,000 for the aggravation he expects during construction.

    “We can’t substantiate, ‘My property is worth X dollars more,’ ’’ Fredell said. 

     Utilities will pay for second-opinion appraisals at the property owner’s discretion, Fredell added.

    The property owners pointed out that it agreed to do that in its 1041 land-use agreement with Pueblo County.

     While the city’s real estate manual does not require separate appraisals on land values under $5,000. However, the conditions in the 1041 agreement do not mention a value threshold.

    Under questioning from council, Fredell said the agreement does not mention when the timing of those appraisals has to occur, and moving it to later in the process saved costs for Colorado Springs ratepayers. However, Fredell made a verbal commitment to pay for a second appraisal at an Oct. 27, 2008, meeting in Pueblo West when other concerned property owners questioned him about land values.

     "We want to make sure this works out so you are fairly compensated," Fredell said at the 2008 meeting, which had been hosted by Utilities in advance of the Pueblo County 1041 hearings.

     Adam Underhill, a property owner on Kirkwood Drive, said Fredell told him Monday at his home that he would have to accept an offer or give up the chance.

     Underhill originally was offered $6,200, which included payments for trees and other improvements on the back of his property. After several meetings, Underhill made the case that he would have to relocate an electric fence for his dogs, board them during construction and retrain them to stay in their new boundaries. Colorado Springs agreed to pay $11,950 instead of the original offer.

     Fredell held this up as an example of how Colorado Springs negotiates, saying the payment changed when convincing reasons were offered.

     Underhill, however, said that Colorado Springs refused to negotiate for months and that he is still being offered only 30 cents per square foot on land he paid 80 cents per square foot just three years ago. He said Fredell told him Monday that Colorado Springs would not pay for a second appraisal after he signed the agreement, yet an e-mail arrived from someone else in Utilities minutes later saying Colorado Springs would pay.

    “Where my problem lies is that one hand doesn’t know what the other is doing,” Underhill said. “Are they going to be able to use the 1041 when they want and not follow it when they don’t?”

     Council members were mostly reluctant to move into eminent domain proceedings that could lead to condemnation in court, but said that would provide a remedy for property owners who feel the values are too low. The concern of most of council was to get the project started within the next year — another condition of the 1041 permit.

     “This is a 62-mile pipeline, billions of dollars project. We as a city government have to have responsibility to our ratepayers,” said Councilman Bernie Herpin. “We cannot allow a 400-foot section hold up a project.”

    “This is a long process,” added Councilman Sean Paige. “If we bend too much, everyone we’ve made a pact with feels they got a raw deal. We want to move this along.”

    Tom Gallagher received applause from Pueblo West property owners at the meeting, however, when he disagreed with his fellow council members. He was the lone vote against condemnation.

     “Condemnation puts a cloud on property and diminishes the value,” Gallagher said, alluding to his own experiences with having property condemned and negotiating fair settlements in the course of his work as a surveyor.

    Gallagher also chided Fredell for spending millions of dollars on SDS engineering while playing hardball with holdout landowners.

     “What these people are asking is a pittance compared to what we are spending for engineering,” Gallagher said. “I’m not going to sit here and let these guys be trampled.”