By Joel Warner
By Michael Roberts
By Joel Warner
By Michael Roberts
By Alan Prendergast
By Michael Roberts
By Michael Roberts
By Amber Taufen
The Denver City Council will soon begin deliberations on how to rezone the 26 acres of land that used to be the stuff dreams were made of, determining what will take the place of young love, carousel music and cotton candy. In a neighborhood known for its tree-lined streets, a contest between strip malls and public gardens was bound to get controversial. And the political maneuvering so far has had as many twists and turns as a carnival ride.
Among the political loop-the-loops: The city planning office is acting as PR agent for the private investor who hopes to redevelop the now-dormant Elitch's site at 38th Avenue and Tennyson Street; Elitch's owner Sandy Gurtler is feuding not only with a neighborhood organization set up to monitor the redevelopment but also with newly elected city councilman and longtime nemesis Dennis Gallagher; and the city, which heavily subsidized the Gurtler family's recent relocation to the Central Platte Valley, has backed itself into a deal whereby it will have to make zoning decisions about a property in which it now has a direct fiduciary interest.
Even Hollywood actress turned Las Vegas hotelier Debbie Reynolds has a bit part in the melodrama. But in what may be the most bizarre development, the Elitch's rezoning has been cloaked in silence--all because the office of City Attorney Dan Muse has decided that councilmembers who bother to inform themselves about rezoning cases are prohibited by law from expressing an opinion on them.
The "law" the city's top legal minds read as allowing uninformed opinions--but barring those actually based on fact--is known around City Hall as "Mount Airy." The name refers to a decision by the Colorado Supreme Court in the 1976 case Corper v. Denver v. Mount Airy Foundation. In that case, the high court held that rezoning hearings before the city council are "quasi-judicial" in nature.
In the past, city attorneys have interpreted the Mount Airy decision to mean that councilmembers should refrain from expressing opinions on zoning applications between the time they're filed and the time the council takes them up in a public hearing. Not anymore.
Two decades after the fact, Muse's office has suddenly turned up the heat on the issue. In its expanded reading of Mount Airy, city councilmembers may be prohibited from uttering a syllable on rezoning questions even before a rezoning application has been filed. Muse's office has even gone so far as to question whether it's proper for councilmembers to gather facts outside of the hearing process. Though Jerry Biehl, the developer who wants to build on the old Elitch's site, hasn't submitted a formal proposal to the city yet, councilmembers have been warned that voicing an opinion about Elitch's could "taint" the rezoning process, expose them to personal liability and subject their ultimate decision to reversal on appeal.
At a "special briefing session" held before the council on July 7, assistant city attorneys Robert E. Kelly and Karen Aviles spent more than an hour trying to explain to visibly flummoxed councilmembers (veterans and newcomers alike) how to serve their constituents without breaking the law. The bottom line, according to Kelly: "If you have information on which to base an opinion, don't say anything. If you don't know anything, go ahead and talk."
It's no wonder the new interpretation of Mount Airy is making some councilmembers uncomfortable. After all, politicians are elected to advocate for their constituents. Judges are expected to remain neutral. Trying to make one into the other is like trying to squeeze a hippopotamus into a Coke bottle: an unnatural fit no matter how hard you push.
In practice, it produces ridiculous results--especially in the case of the Elitch's rezoning.
According to Kelly and Aviles, the Mount Airy ruling requires councilmembers to take no position--and acquire no knowledge that may impair their impartiality--outside of the actual zoning hearing. For Dennis Gallagher, the newly elected councilmember from District 1, that spells trouble. Gallagher, who formerly represented the Elitch's neighborhood as a state senator, knows something about how his constituents feel with regard to the rezoning: His office is receiving the results of a survey that predecessor Bill Scheitler mailed out to 20,000 registered voters in the area asking what they'd like to see in Elitch's place. Completed surveys already have been mailed back by 1,900 residents. And according to those early returns, strip malls are definitely out.
At the Mount Airy briefing before city council, Gallagher was clearly distraught. Red-faced and squirming, he asked Kelly if such information-gathering was considered illegal. Kelly was vague in his response. "If you receive information outside of the actual hearing, you may lose your ability to be impartial to the process," he said. Gallagher appeared dumbfounded. "You mean if you have in-depth information, you can't vote?" he demanded. "Isn't getting in-depth information our job? Aren't we supposed to find out what's going on?"
Kelly backed off in the face of the blustering councilman. "Well, maybe you can read what you know into the record at the hearing so all the councilpeople know, and then it would be okay," he responded. Gallagher looked incredulous; the thought of reading the results of 1,900 surveys into the record was a bit overwhelming, even for the garrulous former state senator.
And that survey information isn't the councilman's only problem. Even before he was elected to city council, Gallagher took part in a press conference in which he, former councilman Scheitler and then-state representative Rob Hernandez sharply criticized developer Biehl for allegedly considering placing a King Soopers and a Hugh M. Woods store on the site. After blasting the idea of large retail development, Gallagher intimated that a citizen's referendum would be forthcoming--hardly judgelike behavior.
The city attorney's office won't say whether Gallagher will be encouraged to recuse himself from the Elitch's proceedings. "I don't know exactly what he said at the press conference," Kelly says. "I don't think he knew enough about the application to prejudice himself at the time...I don't know."
Neither does Gallagher, who is appalled at the notion of being unable to represent his constituency because of issues he raised as a candidate. But he's not taking any chances. "I can't say anything to anybody," he says. "The Mount Airy thing won't let me."
He's not the only one confused by the matter. When asked to give his opinion on Elitch's before the July 7 briefing, veteran councilman Ted Hackworth freely complied, saying, "I wouldn't think running a commercial development all the way to the north would be acceptable."
City council president Deborah Ortega says she's unclear as to whether Mount Airy applies before a zoning application has been filed, but she's pretty sure it doesn't. "I think you're allowed to comment as long as there's not an application on file," she says.
Bob Kelly, meanwhile, says both Gallagher and Ortega are right. "Different people have a different factual involvement," he says. "Like judges. They can talk about issues as long as they don't know the facts. Gallagher knows the facts--that's why he can't talk."
The Mount Airy decision applies to a lot more than just gum-flapping. Kelly and Aviles explained at the briefing that the city council must remain impartial in rezoning matters, a standard the lawyers said could be jeopardized by evidence of a personal, financial or official stake in the matter at hand. In the case of Elitch's, the array of potential council conflicts is as dizzying as a Tilt-a-Whirl.
For starters, the City and County of Denver has long enjoyed a cozy relationship with Sandy Gurtler and his amusement park. In 1989, when the administration of former mayor Federico Pe–a floated a massive municipal-bond package that included $14 million in "infrastructure" for a relocated Elitch's, promotional buttons were distributed that read, "Vote for Elitch's--It's Denver."
That political camaraderie continued during the administration of Mayor Wellington Webb, when the city gave Gurtler an additional $15 million in loans and other bond revenue to finance his move to the Central Platte Valley. Seven million dollars of that care package came in the form of a loan from the Mayor's Office of Economic Development, which raised the money by pledging the city's future federal community-development block grant funds. That $7 million is backed by the old Elitch's as collateral. Which means that the city stands to inherit the property if Gurtler defaults on the loan. And it would theoretically stand a much better chance of recouping its $7 million if the property were rezoned for commercial use--a consideration that gives Denver a direct financial stake in the outcome of the rezoning.
If the same quasi-judicial standard that supposedly requires Dennis Gallagher and his colleagues to remain dumb (in both senses of the word) on zoning issues holds sway, the financial interest the council now holds in the old Elitch's could also be grounds for recusal. Not only Gallagher but every member of the city council would have to throw in the ethical towel in order to vote on the issue.
And the potential conflicts don't stop there. Andy Loewi, developer Biehl's attorney at the high-powered firm of Brownstein, Hyatt, Farber & Strickland, acknowledges that he has personally given money to the campaigns of Susan Barnes-Gelt, Ed Thomas and Cathy Reynolds--and helped raise substantial sums for Polly Flobeck, chairwoman of the council's zoning committee.
But John Bennett, the council's chief of staff, says it wouldn't matter if every councilmember had a conflict of interest. Under another legal rule, he says, they could go ahead and vote anyway. "The Rule of Necessity," Bennett says, "means that if a conflict of interest would make a vote impossible, you can still vote."
In fact, it's happened before. Back in 1986, then-councilman Sam Sandos tried to get the council to pass a "warranty of habitability" that required landlords to make sure their rented property was livable. At the time, eight members of the thirteen-member council were landlords and asked to be excused from voting. Assistant City Attorney Patricia Wells told them to vote anyway, citing the Rule of Necessity. Not surprisingly, Sandos's bill was voted down.
But while a council vote on Elitch's may be guaranteed, similar assurances can't be made about the quality of democratic representation voters will get. The discussions during the July 7 briefing got so absurd that at one point, at-large councilwoman Susan Barnes-Gelt suggested that councilmembers might simply want to recuse themselves from voting on any "contentious [zoning] issues" in their districts.
That would be a far cry from the old days of "courtesy voting," in which members assumed that the councilperson who represented the district in question knew the most about the issue and deferred to him or her. When Polly Flobeck brought up the issue of courtesy voting during the council briefing, Kelly suggested that courtesy voting in and of itself would violate Mount Airy, since councilmembers partial to another councilmember are technically not impartial. Gallagher only got redder.
Strangely enough, under Kelly's interpretation of Mount Airy, councilmembers can be lobbied on zoning issues, even though they can't talk to the public about them. Kelly told councilmembers that "as long as you still retain impartiality," lobbying is acceptable. Ortega agreed, saying, "It's typical for us to receive calls from lobbyists about zoning issues. It's helpful, because we don't all sit on the zoning committee, so we're not as up to speed."
But while Ortega is comfortable with the idea of lobbying, attorney Loewi isn't. "We take the view that any ex parte contact on a quasi-judicial matter is inappropriate," he says. Still, to be on the safe side, Loewi says he plans to register as a lobbyist on the Elitch's issue "when the filing gets closer."
Nobody at City Hall seems to know exactly why Mount Airy has resurfaced with such a vengeance now. Kelly says he can't remember whether it was his office or city council that first asked for the special briefing. Ted Hackworth says he thinks councilmembers raised the issue. "I know some of us [on the council] have expressed to the city attorney our own concern that a particular member expressed an opinion about a zoning issue before it was appropriate," says Hackworth. (He won't say who.) "I don't want to finger anybody," Hackworth says, "but it did occur in the last six months."
There's also the possibility that Mount Airy was introduced into the equation by the lawyers at Brownstein Hyatt. During recent hearings on the fate of the old May D&F paraboloid on the 16th Street Mall, attorney Loewi and his partner Tom Strickland asked the city's Robert Kelly if the hearings were considered quasi-judicial. Loewi says now that he and Strickland didn't care much what the answer was but just wanted to know how to proceed. Kelly, he adds, wouldn't answer them anyway.
Loewi unequivocally denies that his firm invoked Mount Airy in an attempt to stifle Gallagher. But he says he reserves the right to raise the issue of whether councilmembers have spoken out of turn. "Let me tell you, we're certainly going to preserve all our legal rights and remedies in this matter," he says. "If the process appears to be tainted from the start, we'd take action. But we certainly haven't threatened that to anyone."
While all this attention is being focused on preserving an appearance of neutrality for members of city council, no one at the city attorney's office seems the least bit concerned that Ellen Ittelson over at city planning has agreed to handle media relations for Biehl's firm, General Management Company. The Elitch's redevelopment, Ittelson explains, "is an unusual project because the city has a fiduciary interest. It's in the city's interest to retain the value of the property."
That "unusual" state of affairs means Ittelson is faxing out an "Elitch Redevelopment Fact Sheet" as if it were a city document and not a press release drafted by Andy Loewi. In addition, Ittelson says that Biehl is "helping out with background research" for her department's planning committee. The developer is providing helpful information on "things like case studies of other retail projects in cities of similar size," she says.
"Retaining the value" of the old Elitch's may be tricky--there's some dispute over just how much the property is worth. While the land stands as collateral for the $7 million MOED loan, the property has been appraised as being worth only $4 million. And even that figure seems high to some experts.
The $4 million appraisal certainly gave Mike Heitzmann, executive director of the Denver Employees Retirement Plan, some pause. Heitzmann conducted a detailed analysis of the financing deal for the new Elitch's to ascertain whether to invest DERP's considerable wealth in it (the pension fund never did make the loan to Elitch's). "I can certainly say the appraised value [of the old Elitch's land] stunned me," Heitzmann says. "It really seemed high."
Gurtler won't say how much he thinks his property is worth. And he refuses to disclose the purchase price of his contract with Biehl, though he does confirm that the contract is contingent on Biehl getting a rezoning package through city council.
What Gurtler does say is that he's been wrongfully "painted as a bad guy" by a group of familiar foes: the old north Denver political team of Dennis Gallagher, Rob Hernandez and Bill Scheitler. The neighborhood committee formed to advise the city on what to do with the old Elitch's, Gurtler complains, is "just a lot of friends of Dennis Gallagher. I hear you can be a renter and have a say."
It's unclear which "renters" Gurtler is referring to. But it is true that the "Councilman's Committee on the Rezoning of Elitch's" is full of Gallagher supporters--including Gary Sulley, the group's chairman. Sulley is a longtime Democratic district captain and the husband of Gallagher aide (and former Scheitler aide) Dawn Sulley.
The bad blood between Gurtler and the others goes back as long as anyone in the neighborhood can remember. Most recently, Gurtler went ballistic when, just as he was struggling to line up financing for his proposed downtown amusement park last year, Gallagher and Hernandez raised questions about the propriety of city pension funds investing in the project. He also clashed with the two over their suggestion that he had meddled in a local school-board election by pressuring his attorney to withdraw as a candidate because Elitch's hired political consultants, Rick White and David Cole, were running the campaign of a rival candidate. That charge led White to opine that Hernandez had been "smoking bad dope."
Gallagher is tight-lipped about the long-running feud, again citing Mount Airy as proscribing his right to comment on anything even remotely associated with the rezoning. He does say he's willing to meet with Gurtler to discuss the redevelopment. "But then, I'll meet with anyone," he adds.
Gurtler says that if not for the politicking that's been going on, people would realize he's just as protective of the old Elitch's as its neighbors. "Remember, I grew up there," he says.
But Gurtler says he's also realistic about development prospects for the old site. "Thirty-eighth Avenue, I mean, who's kidding who?" he asks. "It's never going to be a quiet street." Adds Gurtler, "The last thing I want to see is an architecturally nice strip mall that doesn't make any money. We need economically viable ventures."
Making development prospects all the more dicey is a movement to get the Elitch Gardens Theater designated as a Denver historic landmark. Gurtler, whose family built the theater in 1889, is against the idea. At a July 11 meeting of the Denver Landmarks Commission, Gurtler spokesman Jack Hoagland argued that because a state-funded study of historic sites at the old amusement park is already under way, any city action would be premature. The commission apparently agreed, postponing consideration until September 19.
Gurtler insists that he wants to save the theater, noting that he has a deal with the Auraria Higher Education Center to move the historic structure to that downtown site. But members of the Colorado Alliance for State Theater (CAST), the group backing the effort to obtain landmark designation for the theater, aren't buying the Auraria deal. CAST spokesman Stuart Bechman says Hoagland "constantly tells us how interested Sandy is. He also says they're in touch with Auraria, but when we call over there, no one at Auraria knows anything about it."
Gurtler bristles at the accusation. "Then they're talking with the wrong people," he says. "Talk to JoAnn Soker." JoAnn Soker, however, has resigned her position as Auraria's executive vice president. And Rosemary Fetter, current spokeswoman for the campus, says, "There are no active plans to move the theater here. There's no money for it, anyhow."
Bechman and CAST member Beki Pineda say there's yet another wrinkle to the theater saga. "Back in 1989 or 1990 Debbie Reynolds actually offered [Gurtler] something like $5 million to save the theater," Bechman claims. "He didn't take it. Probably because it would've made it difficult to sell the package."
Gurtler says the Reynolds story is a longstanding local legend that simply isn't true. "Debbie Reynolds made a statement about it in some book," he says, "but it never happened." Reynolds herself doesn't remember making a statement about it at all. "It's a nice theater, and it should be preserved," she says in a statement relayed by an assistant. "But I never offered 5 million."
Gurtler remains vehement about his dedication to the theater's preservation. "We have no intention of tearing it down," he says. "Not as long as I'm alive. You've got to understand that some people in CAST are ex-employees. They've got their own agendas."
Gurtler insists he's committed to doing right by the neighborhood--not just on the theater but on the entire 26 acres. He claims his contract with Biehl is contingent on his personal satisfaction with whatever plan the developer ultimately comes up with. "If they decide to build a hypermart," Gurtler says, "I take it back."
Biehl says he isn't sure "the provision is that unilateral," but he doesn't seem worried about it. "The spirit of it is that we have an obligation to work with each other in order to come up with a plan the community is going to endorse," Biehl says. And Gurtler, it seems, is the least of Biehl's problems when it comes to the Elitch's site.
"Everybody is an expert and everybody has an opinion," says the developer. "It's all gotten so politicized. Some of the political people went off half-cocked. You know, people like Bill Scheitler. It was an election. They needed issues. I certainly didn't think it was going to get as blasphemous as it got."
If Biehl thinks it's been bad so far, he's in for quite a ride. At a recent meeting of the Councilman's Committee on the Rezoning of Elitch's, the notion of a "formal legal protest" was discussed. In such a protest, if 20 percent of the property owners within 200 feet of a piece of land being rezoned sign a petition and present it to the city council, they can force a supermajority vote on the matter. That means any rezoning would need ten council votes to pass, instead of the usual seven. Ned Burke, a member of the councilman's panel, says "neighborhood people were just studying their options" when they brought up the prospect of a protest. "Nothing's been decided yet."
Gurtler, though, is already playing political hardball, raising the notion that he may sit back and allow the north Denver property to deteriorate if residents impede development efforts. "We're prepared to move as rapidly as the community lets us," he says. "If they stall, the property sits. And we don't have the resources to keep it up. So they get blight. Everybody loses."
The final battle lines won't be drawn until Biehl actually files his rezoning application, which will come in the form of a "planned unit development." According to the planning department's Ittelson, that document, which will have to detail specific plans for the site, probably won't be filed until "sometime in the fall." At that point the planning office will have thirty days to review it before sending it to the planning board. Only then will the issue go to the city council for a public hearing.
Or maybe a not-so-public hearing.
At the July 7 briefing, Bob Kelly brought up yet another nifty new wrinkle in Mount Airy: The council, claimed the attorney, could choose to debate a zoning issue behind closed doors. He justified the concept of shutting out the public entirely by noting that "there are matters such as witness credibility and weighing of the facts that can be construed to require executive session."
The vote itself will presumably still be public. And how the councilmembers will line up is anyone's guess. Neighborhood activist Ned Burke says it's almost impossible to get a consensus on Elitch's. "You can sit in any coffeehouse in northwest Denver and ask what people think of the zoning, and they'll all give you a different answer," he says.
Unless, that is, they're city council members. They'll all say the same thing: