Silverthorne’s Wal-Mart Supercenter debacle finally over
SILVERTHORNE – As Target stocks shelves in preparation for its grand opening, the town of Silverthorne is tying up the last messy ends of a more than six-year-old Wal-Mart Supercenter debacle.
The Silverthorne Town Council last week approved a settlement agreement between the defendants, the town of Silverthorne, and the plaintiffs, Split Creek parties. The settlement disentangles a murky series of real estate deals begun, but never completed, when Silverthorne was courting the Wal-Mart Supercenter.
When Wal-Mart backed out of its negotiations with Silverthorne to build the store, the town was left holding the bag on those contracts. In 2001, Silverthorne resident Bob Wyler and others who had been negotiating land deals with the town to make Wal-Mart a reality filed suit against Silverthorne.
Wyler and his associates – referred to in the settlement as the Split Creek parties – sought $15 million in damages, alleging profits unrealized because of lost business opportunities. But in the settlement approved last week, the town won’t pay Wyler any cash. Instead, it will rezone a portion of Wyler’s land near the county fairgrounds, sell 7 acres of town-owned land to Wyler for a nominal price and allow Wyler to mitigate wetlands impacts on town-owned property.
The settlement avoids the expense of a trial in which, town attorney Jerry Dahl wrote in a memo to the town council, “the financial exposure to the town was very significant.”
“I think both parties saw an unacceptably high level of risk going forward with trial,” he said. “I would never say the town was bound to lose. We were concerned about their defenses, and they were concerned about our claims.
“This settlement didn’t take either party to the cleaners. It allowed some development to take place in a way that generates some value and profit to the Split Creek people and still protects the town’s budget and purse,” Dahl wrote.
The town’s effort to bring a Wal-Mart Supercenter to town began in 1996. It was spurred by City Market’s decision to move to Dillon, which meant Silverthorne stood to lose a large chunk of sales tax revenue. A gigantic Wal-Mart might have not only replaced that lost revenue, but also improved the town’s bottom line significantly.
Before any public announcement about the plans was made in early 1997, the town began a series of real estate negotiations, at one point having someone else buy the land in their stead, to pull together the land required to build the large store. Those early, behind-the-scenes deals were necessary, town officials later said, to keep a lid on the cost of the land. Had sellers known the town was buying their property, town officials said the prices on those lots would have skyrocketed.
Initially, the town thought the best site for the store was at the base of the Mesa Cortina subdivision, near the current Formby Ford dealership at the intersection of Adams Avenue and Buffalo Mountain Road. The town purchased a 37-acre parcel there, known as the Mesa Cortina 2 site (MC2). A soils study, however, showed that the land – located at the base of a hill – was a geologically unstable nightmare. The town then shifted its focus to the Split Creek parcel, a 15-acre piece of land west of the Blue River and just north of the fairgrounds.
Silverthorne officials contracted with the owners of the Split Creek Parcel to sell them MC2, which the town no longer needed. The intent, said Dahl, was to coordinate the closings on both properties “such that Wal-Mart would be able to provide the funds to acquire and develop the Split Creek site.”
Once the town’s intentions became public, however, that never happened.
Community opposition to the project became loud and fierce, with some residents accusing the town of fiscal irresponsibility in making the unpublicized land deals. Eventually, Wal-Mart pulled out of the negotiations.
Under the terms of last week’s settlement, Split Creek gets seven acres of the MC2 property, but the town keeps the remaining 30 acres. Eventually, Dahl said, residential lots now platted on that land likely will be vacated and the town’s portion of MC2 designated open space.
On Wednesday, council approved the sketch plan phase of rezoning the MC2 and Split Creek parcels and is expected to accept them at the final stage during the group’s Feb. 26 meeting. Closings to seal the deals are set for late spring.
Mayor Lou DelPiccolo, who in 1997 was the first councilmember to speak out against the risks of the Wal-Mart contracts, had little to say about the agreement.
“I’m glad to see there is a settlement,” he said. “A settlement never satisfies anyone, but at least it satisfies everyone partially.”
Dahl said the timing of the settlement, so close to the date of Target’s opening, wasn’t intentional.
“A lawsuit and settlement has its own schedule,” he said. “But every now and then, schedules intersect in interesting ways.”
The main elements of the Silverthorne/Split Creek settlement
– Split Creek parcel: The town will zone 1024 Old Highway 9, the Split Creek parcel west of the Blue River and north of the fairgrounds, as C1 (commercial) and allow a water and sewer connection to serve a bathroom on the property. A compliance agreement governing nonconforming uses on this property will be updated.
– Mesa Cortina (MC2) parcel: The town owns this 37-acre parcel of land,
currently part of the county. The town will annex the entire parcel and zone it residential and commercial. The town will sell 7 acres at the bottom of the hill to the Split Creek parties for $50,000. This parcel will be developed for a C1 use. The remaining 30 acres will remain in town ownership and not be
developed; it likely will be designated as open space.
– Wetland mitigation: The town will make two 3-acre tracts available to the Split Creek parties for enhancement as wetlands mitigation areas – one in Cottonwood Park near the river and not involving the potential elementary school site and a second on town-owned property between the Blue River Run development and the river. Mitigation on these properties can be
related only to the Split Creek property.
Jane Reuter can be reached at (970) 668-3998, ext. 229, or by e-mail at email@example.com.
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