By Caleb Stento
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In a special meeting on Wednesday, Nov. 7, the Ouray City Council decided to reject a proposed settlement of a lawsuit filed by Alpenhof, LLC, in a four to one vote with Councilman Richard Kersen the lone dissenter. City Administrator Patrick Rondinelli and City Attorney Kathryn Sellars had signed off on the settlement, pending acceptance by the council.
Alpenhof filed the suit in July 2011, shortly after council denied a preliminary development plan to subdivide and develop Parcel C of Ouray Vista Subdivision. The suit alleges denial of the plan was a taking of property without compensation. The city code states developers must mitigate natural and geologic hazards, but Alpenhof contends the hazard presented by Skyrocket Creek is man-made. The city constructed a dam and blasted a channel through rock to divert the creek from depositing debris in the hot springs pool, directing flow past Parcel C. The district court ordered that the parties attempt mediation before heading to trial.
During the public hearing portion of the council meeting several members of the community addressed council and expressed their disapproval with the proposed settlement. One of those voices was Tom Henderson, President of the Ouray Vista Homeowners Association.
The concern Henderson expressed was that the city would be creating a special improvement district, partially funded by residents of Ouray Vista, by accepting the settlement and would be bypassing the required steps outlined in Ouray’s home rule charter to create a special improvement district.
City Attorney David Masters said the settlement would not mean that creation of a special improvement district would be imminent, but one could be created five, 10 or 15 years down the road, or never created at all.
In June 2011, council denied approval of the plat, voicing concerns for public safety if buildings were allowed on Parcel C, in the northernmost section of Ouray Vista. When Ouray Vista Subdivision was approved, Parcel C was excepted from development because of the flooding probability on Skyrocket Creek. Alpenhof now wants to develop 10 residential lots in Parcel C.
According to the proposed settlement, Alpenhof would construct an armored berm, pay for some of the cost of enlarging a creek culvert under Highway 550 and submit Parcel C to a special or local improvement district that would pay for the rest of the culvert work and maintain the berm. All of those actions were conditions suggested in 2011 by city staff for plat approval, which Alpenhof resisted.
City council members had objected to plat approval without regard to mitigation requirements because of safety concerns, with two members stating they could not understand why anyone would develop that particular location.
After the public hearing was concluded council discussed the proposed settlement further before voting. Councilman John Ferguson said his main concern was and always has been public safety and that is why he couldn’t approve moving forward with the settlement.
Another part of Alpenhof’s lawsuit, called a Rule 106 action, alleges the city council’s denial was arbitrary and capricious, beyond its jurisdiction or an abuse of discretion. On Jan. 23, Judge J. Steven Patrick dismissed the Rule 106 claim, and Alpenhof’s appeal of that dismissal is pending.