For over half a decade, Montezuma County had fought--three times all the way up to the Colorado Supreme Court--to bring some equity to the state's property-taxation system. And last month the court finally agreed with the county, ruling that Montezuma could indeed charge the Mesa Verde Company--owned by ARA, the folks who bring you those overpriced hot dogs at Coors Field--property taxes on its concession business at Mesa Verde National Park.
The dispute started back in 1988. "Some folks who have little businesses outside the park, they came to the commissioners complaining about the fact that this large company doesn't pay taxes on their use of the land, when landowners outside the park do," remembers Bob Slough, who does contract legal work for Montezuma County.
The Montezuma County commissioners ordered their assessor to assess interest on the Mesa Verde Company's use of the land, and in 1989 the county sent the company a bill. The company filed a protest in district court, arguing that it was exempt from such property taxes under state statute 39-3-15. While that protest was pending, the county sent the company another bill for 1990 taxes. Mesa Verde sued again--and ultimately the district court agreed the company could not be taxed by the county. Montezuma County appealed the decision to the Colorado Supreme Court. "The district court said the county didn't have standing to argue against the state constitution," Slough says.
And the Colorado Supreme Court concurred. "In effect," Slough adds, "they were telling us to sit down, shut up and do as we were told--the legislature had passed the law, and we couldn't do anything about it."
That's where the court was wrong. The Montezuma commissioners convinced Sam Cassidy, then their state senator, to introduce a bill that would give counties some significant rights--including standing in constitutional debates. "Amazingly enough," Slough recalls, "the legislature did pass this bill."
Slough refiled his case, and this time the district court ruled that Montezuma County had standing to argue constitutional matters. "After all these years, we were finally in court," Slough says. Once there, Montezuma County argued that exemptions such as Mesa Verde's were unconstitutional. The company argued that the entire statute was unconstitutional. The district court agreed.
So Slough again appealed to the Colorado Supreme Court. On April 24, 1995, the justices rendered their 5-2 decision: The statute was not unconstitutional, since Article X, Section 10, provides: "All corporations in this state, or doing business therein, shall be subject to taxation for state, county, school, municipal and other purposes, on the real and personal property owned and used by them within the territorial limits of the authority levying the tax."
Hold that thought.
The court also noted that Article X specifically proscribes "the legislative power `to impair the financial base of government operations' by exempting corporate bodies, such as Mesa Verde, from their share of taxation."
Hold that thought, too.
Montezuma County didn't get to enjoy its win for long. "I had always known that if we did get a favorable ruling, it would affect other deals," says Slough. "It was no surprise to me that people suddenly were hollering."
They were hollering the loudest in Denver, where officials suddenly realized the court's decision could raise holy hell with the deal the city was negotiating with Comsat, owner of the Nuggets, for the $132 million Pepsi Center. Although the official terms have yet to be released, written into the deal was a property-tax exemption for the entire project. In exchange for that $3 million-a-year break, Comsat promised to pay the city $2 million annually and also deed over the Pepsi Center after it was completed. Of course, Comsat received other considerations: It would book McNichols and the Coliseum and keep all proceeds from tickets, seat taxes and concession sales beyond the $2 million. Auditor Bob Crider calculated that those terms were so sweet they could cost the city more than $100 million during the thirty-year lease.
Suddenly, it looked like there might be no lease at all. No new arena. No hockey team. And maybe no Nuggets, once their McNichols lease expired in 2008. On April 26 Mayor Wellington Webb's office announced that the deal might have to be renegotiated.
But lobbyists were already greasing the wheels at the Colorado Legislature. They were trying to push through last-second legislation to protect tax breaks not just for the Pepsi Center, but also at Coors Field, Denver International Airport and a host of other projects that had received exemptions at the expense of the state constitution--and the counties in which they are housed.
Slough and a Montezuma commissioner hurried from the Four Corners to Denver, where they joined a group of county assessors meeting with the governor; Romer indicated he'd just had a parley with interests on the other side, including the Mesa Verde Company. "Nobody was particularly interested in talking to us," Slough says.
They were too busy talking to other people. Assorted organizations, including the Broncos and Nuggets, had asked the Supreme Court to reconsider its Montezuma decision; the court refused on May 8--the last day of the legislative session. And after that, lawmakers worked at amazing speed, considering their usual snail-like pace. A few minutes before midnight, they passed an amendment to House Bill 1071 that could potentially protect all of these tax exemptions. If Roy Romer signs the bill--as he is almost certain to do, since he helped broker the deal--all Montezuma County's hard work will be undone.
"To watch the legislature scurry around, I'm just astounded by what I saw and what I hear happened," Slough says. "They didn't have to get involved in this...the Supreme Court had made its decision.
"The basic issue in the case is very significant. Since the State of Colorado has so much publicly owned land, all these interests around the state could generate a lot of tax monies for various counties and school districts. I would think everyone would be happy about it, except those special interests getting these tax breaks."
Hold that thought.
