How to move forward with Vandaveer Ranch

I just fired off the letter below to the members of Council, NRCDC board, and Mountain Mail. I am shaking the bushes and poking the bear to try to get a rational solution to the Vandaveer conundrum. Let's see what happens now.

If you want to share this with others, please do so. I want to start a discussion in the community about how to move forward before our City and NRCDC board start to engage in a series of expensive legal battles.

October 28, 2016

To the members of the Salida City Council, Salida Mayor and NRCDC Board:

I am writing to you today about the Vandaveer property. I have a proposal that I believe can be a win-win for our City and its citizens.

The majority of the City Council has decided that there is a TABOR issue with the Vandaveer Ranch, and my understanding is that one way to remedy this situation is to sell off part or all of the ranch to retire the debt.

The NRCDC Board has a plan to sell off parts of the ranch in a “phased sale”. I have had public and private conversations with members of the NRCDC Board about this which I would like to share with you.

Under current City code, land that is in the City cannot be subdivided and sold until utilities are in place at each lot that is to be sold. In the case of Vandaveer, the 150 acres south of Highway 50 are currently one legal parcel. Different maps show the land divided up in different ways, but the land is one legal parcel. For the NRCDC board to engage in a phased sale of this property, someone needs to run utilities not only TO the south side of the highway, but THROUGH the property before any lots can be sold.

At the NRCDC meeting held on October 25, I asked the board to discuss this approach in public, but they said that the time was not right. I approached two members of the board at a break in the meeting. My impression is that they hope to sell the NRC building and use some of the proceeds to pay for infrastructure on the south side of the highway so that they can start a phased sale. Even if they are able to sell the NRC building for $3 million dollars, much of that money will go to the bank to pay down debt. I do not think that the NRCDC board should be in charge of building roads, subdividing the property, etc. I think that this should be done by private developer(s) with the expertise to make the project come together.

In addition, I have heard members of the NRCDC say publicly that they don’t have any concern with what happens to the land after the sale. They say that their only function is to sell the land to pay down debt and maximize revenue for the City. I think that this land should be sold to a developer WITH STRINGS ATTACHED so that the City gets assurance that some of the citizens’ priorities are met when the land is developed.

In the last 12 months the NRCDC Board has received three serious offers to purchase all or parts of the ranch. One was an offer by Ben Gramling to purchase the whole ranch, including the NRC building, at a price that would pay off the debt, but no more. This offer was rejected without a counter offer and without any negotiation. The NRCDC Board did not even present this offer to Council.

The NRCDC Board negotiated with LCI for months to create a land swap deal that would have brought utilities to the south side of the highway, which had the additional benefit of making land salable to the developers from Belmont for low income housing. When this deal was brought to Council, the Council majority did not approve the deal for many reasons.

Within the last few weeks, the NRCDC Board received another offer to purchase the entire ranch for a price that would have paid off the debt. While details of this offer were not made public, it sounds like there were a couple of fatal flaws in the offer and a very short time to accept, counter, or refuse the offer. The NRCDC Board rejected this offer and members have said publicly that they did not counter the offer.

I have spoken to several local developers and investors about forming an association to purchase and develop the Vandaveer property. Some of them are now gun shy and afraid to invest in Vandaveer due to the amount of legal issues that the City has raised. Also, we have seen Mr. Lowry and Mr. Sherwood from LCI spend countless hours negotiating with the NRCDC Board for the land swap deal which was ultimately rejected by Council. Because we live in a small town, these people also have a bit of information about the recent local offer that was immediately rejected by the NRCDC Board.

I still believe that the City and its citizens would benefit most if the Vandaveer Ranch were to be developed by a group of local investors acting together who will agree to provide at least several elements of the 2 master plans that were developed. One master plan was developed when the ranch was originally purchased, and one was developed this spring with a lot of community input. Both of these plans have many units of single and multi family housing and nice parks along the river and areas for commercial development. Purchasing the land and installing the infrastructure will require many millions of dollars. I envision several local developers and investors forming a development corporation that purchases the entire ranch, adds infrastructure, and then sells off parcels for other developers and builders. These smaller parcels will be much easier for smaller entities to develop. There can be a stipulation that a certain percentage of each parcel sold for residential development will be made available for affordable housing. This will ensure that the affordable housing is incorporated in every neighborhood of the development rather than being sequestered exclusively in one or two areas.

After watching the LCI deal fall apart, I think that three entities need to be a part of a large discussion. 1. You need buyer(s) who agree to work together to purchase and develop the land. 2. You need members of the NRCDC Board because they own the land. 3. You need representation from Council because that body must approve any sale of land and the Council can advocate best for the citizens to make sure that important elements are incorporated into the final development plan.

With only two of these three interest groups negotiating, there is a good chance that negotiations will break down along the line and NRCDC will present an offer to Council that gets rejected. Also, since the NRCDC has said publicly that they don’t care what happens to the land after it is sold, it makes sense to have elected officials involved who DO care what happens to the land after it is sold so that the citizens get what they deserve on this important piece of land.

I have asked members of the NRCDC Board to collaborate with local builders and developers to create an offer that is acceptable to the City Council, meets the needs of the citizens, and lets the developer come out of the process with a profit commensurate with the risk of land development. The NRCDC has told me that they do not want to be part of a collaborative process, but that they only want to look at offers. I think that this approach is very short sighted and is not in the best interests of the City and its people.

My proposal is that a couple members of the City Council join with the board of the NRCDC Board and invite interested local developers and investors to have a conversation about what this could look like. My idea is that a handful of local developers and investors come together to purchase the entire Vandaveer property. In the purchase agreement, there can be stipulations about how some of the land will be used. For example, the City can ask for land to be set aside for low income housing, parks, maybe some land for the City to own after the development is complete. The sales price will reflect the value of the concessions made. For example, if the City wants the developer to set aside a large portion of the property for low income housing, the sales price to the developer will be lower because less land will be available for the developer to sell for profit.

This process has many benefits to all players:

  1. Right now developers are gun shy about buying this property due to several issues. A collaborative process will save them time because they won’t be negotiating a contract that will ultimately be shot down by Council.
  2. The City can ask for the things it wants on this property, and adjust the sales price accordingly. The NRCDC, as the owner of the property, is involved in the process as well.
  3. Some citizens have spoken through community meetings about what they want to see on the ranch. Some have said that they just want to see the debt retired. Selling the land to developers who honor, at least in part, the community plan and pay down the debt can satisfy both factions of our citizenry.

Because the NRCDC has rejected this collaborative approach, I am appealing to you as elected City Council members to take the reins and get involved in this process. The NRCDC Board serves at the pleasure of the Council, and I think that you could be instrumental in steering them to at least try this approach. You could have the land sold quickly, to locals, and all of the things that we want to see at Vandaveer can start to become a reality.

If this plan is successful, there are several obvious benefits to the City:

  1. Selling Vandaveer to locals will provide a huge economic stimulus to town. More jobs, more tax revenue, etc.
  2. Selling the property will retire the debt and we can all move forward from discussing the TABOR issue.
  3. The community can look forward to some large scale affordable and attainable housing projects being created in just a couple of years.
  4. The community can see the Council and NRCDC Board working together, which will be a great relief to the current situation that is playing out.

Please reach out if you want to discuss this idea with me. I have a handful of developers and investors who are willing to join me in this process. I think that by working together we can make something beautiful happen at Vandaveer, as well as clear the debt and make the TABOR issue disappear.

Paige Judd

Comments

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  • I don't think I am up for the City Council meeting tonight. Here is what I was going to say if I went. I just sent it to the Council and Mayor. I hope that the City and NRCDC don't get bogged down in an expensive, drawn out legal battle. Both the Council and the NRCDC should have a common goal: maximizing the utility of the Vandaveer Ranch for the people of Salida and paying off the debt. At the end of the day, the value in Vandaveer to the citizens of the City is what is put on it in the next 20 years. Why not work together rather than argue and sue each other?

    Here's my letter to Council:

    Although I don’t agree with the process that brought us here, I am glad that the City has finally put a sales price on the Vandaveer Ranch and has stated publicly that the 160 acres south of the highway will be sold to one buyer. I have been trying to let people know that City code requires infrastructure to be in place before subdivided lots can be sold off. I have asked the NRCDC Board to be very clear about this with the public. Until someone puts in road, water, sewer, and electricity all the way through the property, this land cannot be sold in any fashion EXCEPT in its entirety. I don't think that many people who are interested in Vandaveer understand this.

    Now that the City has shared the Compliance plan, I feel even more strongly that the Council and NRCDC should negotiate TOGETHER with potential buyers. My reasons for this are:

    1. This year the NRCDC Board has received two offers to purchase the Ranch in its entirety. Neither of these offers was countered, nor were they presented to Council. If the function of the NRCDC Board is to vet offers and then present them to Council, I think that they have failed in this. Serious offers should be countered and discussed, not rejected out of hand. The NRCDC could reach out even now to these potential buyers and start a conversation about writing another offer. In my opinion, the NRCDC Board has not been responsible when dealing with potential buyers by refusing to negotiate with them.

    2. Both of the offers to buy the ranch have included the NRC building. Many have assumed that this building with its unique tenant will go to a buyer who specializes in this kind of real estate. But the NRC has received two offers to buy the building with the ranch. The details of this lease should be easily available to potential buyers. After some digging, I found them on the City website. If you are interested, look under Projects, Natural Resource Center, and under related files you can find Lease with the U.S. Forest Service. Potential buyers should also have easy access to the financial records of the NRCDC as they pertain to the Natural Resource Building. I think the NRCDC should prepare and post this information so potential buyers can assess the cash flow of the NRC building so that they can make an informed purchase decision.

    3. We all watched the long, good faith negotiations between LCI and the NRCDC Board to work out a land swap deal. Both parties invested a lot of time into this endeavor which was ultimately rejected by Council. Local developers watched this process, and are now even more gun shy to go through the same process with the NRCDC Board. Since the Council has the final say in whether a purchase agreement negotiated by the NRCDC is acceptable, it seems that they should be represented in the negotiations to make sure that any fatal flaws are exposed early in the process.

    4. The Vandaveer Ranch has two guidance documents. One is the community created plan from this spring. It is based loosely on the 2011 document titled Vandaveer Ranch Planned Development District Overall Development Plan. It is critical to buyers to know if this is still a living document. Usually when land is annexed into town, the developer works with the Planning Commission and the City Council to assign zone districts to each parcel. In the case of the Vandaveer Ranch, the zoning descriptions described do not correlate with the code that the Planning Commission is tasked with applying. Buyers should understand what the process will be when they move forward to develop this land, and the NRC does not have the authority to interpret or decide which set of rules apply to the property. This lies in the realm of City Council.

    5. I think that the final purchase agreement should include some agreements between the buyer and seller that will ensure that some components of the citizen driven master plan. The NRCDC does not want to create a complex contract with such language, but I think that the City Council has the desire and obligation to ensure that some of these components make it into the final contract. My passion is to see hundreds of units of affordable/attainable housing created by private developers, as well as having some acres set aside for future development of a low income project. As a citizen, I am asking you to make sure that this component is included in the purchase agreement. The NRC Board will not do this.

    For the reasons outlined above, I recommend that the Council and the NRCDC work together to negotiate with potential buyers. This will build trust with buyers, and may bring some gun shy buyers to the table. Please consider working together with the NRCDC Board to develop a Purchase Agreement that works for the City, its citizens, and the developer who will control this valuable piece of real estate.

  • I think you're on to a good idea for moving forward. Good job!

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