Spaced Out

In the mid-Eighties, investors from around the country began pouring money into a proposed real estate development just outside the town of Morrison. Over the next few years they wrote checks for tens of millions of dollars; one Pennsylvania bank alone injected close to $50 million into the project, called the Mount Carbon Metropolitan District.

But in July, after ten years of bad luck, management blunders, a savings-and-loan crisis and a few instances of suspect money handling, the venture finally crashed, filing for protection from its creditors in federal bankruptcy court. Despite the massive amount of money that went into the development, there is precious little to show for it. A few cracked roads wind into the rolling hills and then end. The rest of the 1,000-acre site remains vacant.

And that's fine with Craig Lis. Although Mount Carbon's failure decimated some of the original investors, it has brought a measure of personal bliss to the 36-year-old Lis.

Lis lives on the eastern edge of the site, in a four-year-old neighborhood called Green Mountain Village. Since moving there, he has greatly enjoyed the wide open space. When he gets home from his job as a Denver water engineer, or on the weekends, he slips through a neighbor's fence, walks a few steps through the backyard, and is greeted by sweeping fields and stunning views south along the foothills, north to Green Mountain and west to Red Rocks Amphitheater.

It couldn't last forever, and last year the view started to look cloudy. A California developer, Tom Rielly, purchased 385 Mount Carbon acres for about $4 million. Soon after that, Rielly announced his intention to develop the land, with up to five homes per acre, in accordance with zoning approved long ago.

But by 1996, Lis had gotten used to the solitary walks and quiet evenings. "This is called Coyote Gulch," he says, noting a small depression in a vast field of tall grass and wildflowers. "The development would take place just over that ridge." He nods to the west, where, beyond the ridge and on the other side of C-470, slabs of red rock rise out of the foothills' first swells.

So early this year, Lis began passing petitions, asking neighbors and friends to help him place an initiative on Lakewood's November ballot to change how the land could be used. If the citizens of Lakewood approve Lis's initiative, the area will be rezoned to the point that it might not even be feasible to develop. At least that's Lis's fervent hope.

The move infuriated Rielly. He has pointed out that the Mount Carbon land has been zoned for development for years: Plans were reviewed and approved by a number of task forces and government bureaucrats. Moreover, both Lakewood and Jefferson County at one time or another passed on the chance to buy the acreage as open space. Rielly has made it clear that if the initiative passes, he intends to sue the City of Lakewood, within whose limits the land falls, for the millions of dollars he has already invested and the millions more he would lose in potential profit.

Lis could not care less. "If you act out of fear of lawsuits, then where does that get you?" he asks. "We're seeing development occur too quickly. It's eliminating the reason we moved here. This just seems a way we can affect government without going down to city council meetings, explaining our concerns and then getting the brushoff. Well, now they've got 5,500 signatures in their in-box telling them to listen to us."

Fed up with a government that seemed to be growing out of control, in 1992 Colorado residents struck back, voting in favor of Amendment 1. Also known as the Taxpayer's Bill of Rights, the initiative aimed to slim down government bureaucracy by reining in the amount of taxes it could collect. Now Coloradans are starting to use the same grassroots approach to check the state's phenomenal growth.

It's a big target. Since 1990, Colorado's population has spurted by nearly 600,000 people. That increase has set off a development chain reaction: New residents need new homes, new places to shop, new services. In 1990, local governments issued 11,400 building permits. By 1995 the number was more than triple that, up to nearly 37,000.

In survey after survey, Colorado residents have targeted the state's astounding growth--too fast, too much, too ugly--as their primary worry. Yet despite that anxiety, nothing seems to stop growth or even slow it down.

"There is a bigger discrepancy between public opinion on growth and the ability of the political system to do anything about it than any other issue I've seen in thirty years of government," complains former governor Dick Lamm. "Growth is the number-one concern of Colorado residents, and we've still lost the battle all the way down to Castle Rock; the Boulder Turnpike, which used to be the most beautiful inner-urban highway in the United States, is lost, too."

A few Colorado towns have tried to restrain their own growth. Mead, a small town north of Longmont, and Greenwood Village now require a majority of their residents to approve new developments through a vote before the towns can tack land onto existing boundaries.

Most towns and cities don't make developers pass that test, though. Outside of zoning regulations, local officials are reluctant to further restrict development for fear of being accused of violating the rights of private-property owners. So increasingly, residents are taking it upon themselves to tackle each new proposed development. Suddenly, anti-growth initiatives are popping up all over the state. And they're getting local government's attention.

This year, residents of Colorado Springs and Silverthorne voted on whether to stop development projects that had already successfully gone through the normal government planning processes but were still opposed by some citizens. Prisons, another barometer of growth, have been the topic of three more initiatives in the past two years. Boulder came within a court decision of putting a proposed Safeway store to a vote of city residents.

Some of the activism is a recent luxury, made possible by Colorado's healthy economy. Land now being fought over--by developers wanting to build and neighbors demanding no buildings--often was zoned for huge developments ten or twenty years ago by communities desperate to shake their tired economies.

It was in that spirit that Fraser, in Grand County, approved a massive development plan in 1986 on the outskirts of town. The land had been bequeathed to Regis University in the 1930s by an old Fraser family. Fifty years later the university, hoping to cash in, hired a land-planning firm to draw up some blueprints. The design called for 5,500 housing units, 2,000 hotel rooms and 630,000 square feet of commercial development--all to be tacked onto a mountain town of 800 permanent residents. At the time, though, so much activity seemed like a pleasant dream, and none of it materialized.

In 1994, however, a group of Denver lawyers bought the 700-acre property from Regis, and they're now talking about developing it. Although their project is somewhat smaller than the original vision--2,700 residential units versus 5,500--the proposed Maryvale development has alarmed Fraser inhabitants no longer eager to see the town double or triple in size. Residents there are discussing whether to put an initiative on the ballot to limit the size of the project.

Lamm guesses that anti-growth initiatives--and referendums forced by public outcry--are the last resort of citizens frustrated by their elected officials' inability, or unwillingness, to hear their pleas to slow down growth. "It's a symptom of a problem that's bigger," he says.

But, Lamm adds, "it's no way to make thoughtful land-use decisions. It's using a blunt instrument. There's got to be something better than this."

Dr. Frank Houck passed away in 1977, leaving behind a medium-sized estate. Part of it was a dramatic piece of real estate in the center of Colorado Springs called the Austin Bluffs. Houck left the 670-acre property in a trust; proceeds from the sale were to go to the Johns Hopkins Medical School in Baltimore. Last year, after nearly two decades, the trust sold the land to Classic Homes.

The land had always been targeted by Colorado Springs for residential development, first in a 1984 master plan, and then again in a 1996 revision. So it was no surprise when the city planning staff, the planning commission and, finally, the city council itself approved development of an 84-acre portion of the Bluffs.

But neighbors of the property had become accustomed to using the land as open space, a quiet respite from downtown Colorado Springs. Hoping to preserve parts of their private park, they collected signatures for an initiative that would down-zone the land to require more space per home than was necessary under current regulations. Many of the supporters lived on a forty-acre section of the Bluffs sold off and developed only in the mid-Eighties.

Colorado Springs residents voted on the slower-growth initiative on July 22. The nature-loving neighbors of the Bluffs got creamed: About 60 percent of Colorado Springs voters gave the thumbs-up to the development. As is the case with most real estate sales, location was instrumental in the vote's outcome. "This is Colorado Springs, after all," points out senior city planner Steve Tuck. "Many people here are in favor of development simply for the sake of development."

But, he adds, there were other factors that skewed the vote. Money, for one: Tuck says the developer outspent opponents of the project 13 to 1.

Beyond that, the issue just wasn't relevant for many voters. "You're asking the entire city to make a decision on a specific piece of property," says Tuck. "Most people have no idea what the issues are or even where the property is."

Indeed, a good argument against using initiatives as a tool to slow growth is that they don't always work. Because the residents of an entire town or county must vote on a land-use decision that may be miles away, generating anti-growth sympathy for a single development can be an uphill battle.

In the mid-1980s, Estes Park annexed 35 acres of land to be developed as an office park. But that project never materialized, and in 1995 the land was put on the market. The new owner proposed building condos--a use allowed by the commercial zoning already in place. Ralph Nicholas was opposed.

A native of Minnesota, in 1992 Nicholas moved to Estes Park, next to the proposed development. "The land had just been open land," he says. "We enjoyed the view of the ridge and were afraid that would be gone."

So Nicholas got busy and began collecting signatures to place an inititive on a city-wide ballot that would change the zoning for the area to single-family homes on larger plots of land. The vote was held in April 1996; Nicholas was slammed by a 2-to-1 margin. "The only property rights people consider are the people coming in, not the people already living here," he complains today.

But even longtime residents of an area may be reluctant to pick up the cost of not developing land. In 1995 a group of Lakewood citizens gathered enough signatures to place an initiative on that city's ballot that would assess a half-cent-on-the-dollar sales tax to purchase a fifty-acre piece of undeveloped land next to City Hall. The land, on the southwest corner of Alameda Avenue and Wadsworth Boulevard, had been used by neighbors for recreation for years. Flocks of geese still landed on it. But it remained privately owned and zoned for commercial development.

Once again, the initiative, voted on in November 1995, went down--not just in smoke, but in flames: 4,293 in favor, 24,000 against. "People wanted the open space, but they didn't want to pay for it," explains Joni Inman, Lakewood's citizen-outreach manager. A developer recently made an offer to buy the property; he plans to build a mixture of offices and homes.

Which, if the project ever comes to pass, may inspire some Lakewood citizens to push another initiative whose outcome will be just as unpredictable. "The whole nature of zoning by referendum is very difficult for the voting public," concludes Colorado Springs's Tuck.

That's something Silverthorne town officials learned firsthand. Early last year the owners of the mountain town's only supermarket, City Market, announced their intention to move to next-door Dillon, also in Summit County. Although the move wouldn't mean much for shoppers--the store basically is relocating across the street--it meant a great deal for the government of Silverthorne.

That's because each year when the town adds up its $5.4 million in sales-tax receipts, about 15 percent, or $800,000, comes from City Market. When the grocery moves in a year, that money will go with it.

In a panic, town officials began looking for a way to replace the revenue. When Wal-Mart announced it was looking to expand beyond the size of its store in nearby Frisco, they thought they saw a solution to their problem. Silverthorne's council and Wal-Mart started talking.

The fit seemed a natural. Not only were they about to be short of cash, but Silverthorne officials also thought they had a perfect site for a giant store--a piece of land below the dam and southwest of the well-traveled factory outlet stores. It was high visibility with good access to I-70. Besides, explains planner Richard Dawson, it was not exactly a place of great architectural significance. "It was a nice area before the current businesses got there," he says. "Now it's kind of an industrial mess. Most places would probably call it 'urban blight.'"

But town officials were overeager. "We didn't do our homework well," Dawson admits. "We didn't involve the citizens enough. Yes, we were desperate for revenue, and yes, this was an obvious release. But it backfired."

Last April Silverthorne's citizens shot down the Wal-Mart project by ten votes. While a victory for direct democracy, the win wasn't so clear-cut for the still-divided town. "In a way, we're all losers," Dawson says. "Citizens are frustrated, the town is frustrated, and we can't move forward." And where will Silverthorne make up the lost $800,000? "Beats me," he says.

Even when citizens manage to deliver their slow-growth message, it might not matter: Living in an area with no clear picture of how it wants to look twenty years in the future provides little promise that the vote for restraint will actually work. A trip north to fast-growing Weld County demonstrates that.

The Olson family has farmed wheat northeast of Mead for generations. But, says Gary Olson, who runs an electronics manufacturing company, "My dad is elderly, and neither me or my brother has any interest in farming. And it's getting harder to attract tenants-- partly because of the growth around the fields."

The Olson brothers also saw an opportunity in that growth. The family farm includes a mile of frontage on busy I-25 between Longmont and Fort Collins--a prime spot for a real estate speculator to cash in. So two years ago the Olsons proposed developing about 600 acres of the land--mixed-use, about two units per acre. When the public responded with intense opposition, they withdrew their plan.

Now they're trying again--and there's every reason to believe they'll lose a second time. In 1995 Mead voters passed an ordinance requiring that all new annexations to the town be approved by a popular vote. The law was used for the first time in April 1996, when residents were asked to decide on a proposed ninety-home development northwest of the town called North Creek II. The proposal, says town clerk Kelly Smith, "was highly defeated."

"The town had annexed several acres over the years," she explains, "and people felt we were moving too fast; they'd had enough." Although the developer sued, saying the annexation law was unconstitutional, he lost. The case is on appeal.

This November the Olsons, who are proposing a much larger development, will face the same stingy voters. Gary says he knows he is in for a battle: Adding 600 acres of new development to a town of 800 residents is no small matter. Besides, he says, "Traditionally, people only come out to vote if they have an ax to grind. That puts the burden on the developer to educate the public. It's going to make it real difficult for us."

This time, however, the Olson brothers have an escape route. One exit to the north of Mead on I-25 is the town of Johnstown. Through annexations, the two towns have grown closer and closer together. Unlike in Mead, though, Johnstown's voters don't have to approve new annexations, and Olson says that town officials there have indicated they would be interested in annexing the Olson land and reaping the tax benefits of the huge development.

"If we don't pass this election in Mead, we'll go back to Johnstown," Gary Olson vows. "This will be developed. It's just a matter of whether Mead will have any control over it."

Yet even control--deliberate planning with plenty of opportunity for citizens to make their wishes known--is no guarantee of a development's success. Weld County recently learned that lesson, and at a steep cost to taxpayers.

In December 1993, the Villa at Greeley, a private corrections company, earned county approval to build a "pre-parole" facility at the del Camino region of unincorporated Weld County, just east of Longmont. The usefulness of such a program, which trains and counsels prisoners who are less than ninety days from release, has been noted by the state legislature. And Colorado's booming prison population indicates there is a need.

So with county approval in hand, Villa tried to move forward with the project. Then opponents raised new hurdles. Although the land was zoned for commercial use, some argued that a prison facility didn't fit that definition--but a Weld County District Court and the state Court of Appeals concluded the project fell within a suitable use for the zoning. With that objection out of the way, Weld County promised Villa that government approval for the project would not be revoked.

The project's opponents, however, were just getting started. They soon gathered enough signatures to place a county-wide initiative on the ballot to amend the county's charter to state that any new correctional facility must be approved by a popular vote. In June 1995, Weld County residents passed that measure overwhelmingly.

Villa fought back, arguing that its pre-parole facility wasn't affected by the new law because it had been approved before the initiative passed. But the company lost that argument in court, and in November 1996 the project was put to a county-wide vote. It lost.

The prison company filed a legal action charging Weld County with essentially reneging on its guaranteed approval of the project. A district court judge agreed, and four months ago he ordered Weld County to pay Villa $300,000 in damages--a sum that came directly out of taxpayers' pockets.

And more bills could come due. An architect who worked on designing the pre-parole facility has claimed that he still is owed $240,000 by Villa for his work. If his claim is found valid, that debt, too, will likely be passed along to Weld County taxpayers.

None of these stories discourage Craig Lis. As he strolls through the open fields outside his house, wearing Dockers, shirt and tie, he looks as out of place as the empty space around him would if it were covered in driveways. "Actually, we're probably trespassing here," he says.

The Lises--Craig and Rhonda--live on a quiet cul-de-sac in Green Mountain Village. It is a neighborhood of thick, geometrical lawns and houses with three-car garages in the front. When they moved in, in the fall of 1993, the house was brand-new, part of the most recent development to lap up against the foothills in an incoming tide of roofs and asphalt.

If things had gone according to plan more than a decade ago, Craig Lis might never have enjoyed his view. In a way, his peace of mind can be traced to the spectacular real estate collapses and savings-and-loan scandals of the 1980s, in which the Mount Carbon Metropolitan District played a part.

Rooney Valley, which spreads roughly from Alameda Parkway south to Morrison Road and bumps up against C-470 along the foothills to the west, was homesteaded by the Rooney family more than a hundred years ago. In the early 1980s, Richard Rossmiller and Gary Vose envisioned turning about 1,000 acres of the valley into a sprawling complex of residential subdivisions, shopping centers and office parks. They convinced local landowners to form a metropolitan district, which can collect taxes and levy fees on those within its boundaries. And they borrowed more than $100 million for the project.

Some was from private individuals, like Mary Calhoun of Estes Park, who with her husband purchased $50,000 in bonds for the Mount Carbon Metropolitan District. "We had a broker who wasn't that great," Calhoun says. "He made us think that this was the safest investment in the world." The biggest lender was Pennsylvania's Hill Financial Savings, which devoted over $52 million to the project.

The development lurched forward. Some sewer and water lines were put in, and a few roads were graded and built. Today a solitary water tank still perches on a hilltop.

But events conspired against the district's success. A poor economy slowed demand for new homes and office space. And the developers ran into problems of their own: Rossmiller was convicted of bank fraud on another real estate deal. Although the FBI also investigated the financing of the Mount Carbon Metropolitan District, no charges were ever filed in connection with the Lakewood project.

Burdened in part by its huge loans to Mount Carbon, Hill Financial eventually collapsed. The bulk of the Mount Carbon property was taken over by the Resolution Trust Corporation, the federal agency charged with mopping up the S&L crisis. While the agency managed to sell many properties and developments quickly, it never made much progress on the project in the foothills.

"The RTC moved beyond slow on Mount Carbon," complains Dick Plastino, Lakewood's director of public works. "It was a glacial pace." A deal to sell the development to a Florida company came close but fell apart at the last minute.

When the RTC was disbanded in 1995, the Mount Carbon property still hadn't been sold. So it was inherited by another federal bureaucracy, the Federal Deposit Insurance Corporation. But Plastino says potential investors were scared off by the project's huge debts, and the FDIC didn't find many takers, either.

Although the land was available, Lakewood's Joni Inman says that the city never really considered making a bid to buy it as open space. With Bear Creek Lake Park to the south, Green Mountain Park to the north and the publicly owned Hogback to the west, she points out that the neighborhood already had plenty of property to play on. "We have a limited amount of money to buy open space," she says. "What we really need is park land on the east side of Lakewood."

Finally, in December 1996, Tom Rielly, a California homebuilder who has developed land in Silverthorne, purchased nearly 400 acres of the project for a reported $4.3 million. That sale made him the largest single landowner in the Mount Carbon Metropolitan District.

On July 14, in an effort to get some relief from its $50 million-plus in outstanding debts, the district filed for bankruptcy protection. Some of the 200 remaining bondholders have already protested the filing. The Calhouns have written off their investment as one of life's more punishing lessons.

When he heard about Rielly's plans to finally develop his backyard, Craig Lis started investigating the idea of a citizens' initiative that would prevent it. He says he learned the concept of zoning by popular vote from a neighbor who, coincidentally, had tried to prevent the houses in Lis's subdivision from being built.

Intrigued, Lis began looking up state and local laws at the library. He also made a trip to City Hall, where he copied the wording of the petition on the failed 1995 initiative to preserve the land next door to Lakewood's official offices.

In February he drafted his own petition, which proposed two things: permitting Rielly to build only one house per acre--a restriction Lis hopes will actually prevent any development on the land; and a requirement that the City of Lakewood formally express its interest in acquiring the land as open space.

Lis and other neighborhood volunteers began gathering signatures. They stood outside Safeways and King Soopers in west Lakewood, debating and convincing shoppers to sign on to their vision. The work paid off. On August 12 Lis drove to City Hall and handed Lakewood's city clerk petitions supporting a citizen vote to down-zone the Mount Carbon project. He needed 3,704 signatures to get the initiative on the November ballot; he had collected 5,395.

As a result, on November 4 every voter in Lakewood--from Mount Carbon's next-door neighbors to people living across town on Sheridan Boulevard and Colfax Avenue--will get the chance to vote on Lis's initiative.

If it passes, Lakewood officials say, Rielly has promised he will sue the City of Lakewood for up to $40 million. (One of Rielly's local representatives, Kevin Sheldon, declines to comment for this story; another, Charlie Foster, did not return phone calls.) To pay off a judgment that size, those officials point out, either Lakewood property taxes would have to increase 1,000 percent, or the city's budget would have to be reduced 80 percent.

And Lis's petition could cost more than money: It could backfire and cost the city control. If Rielly's proposed development is down-zoned in accordance with Lis's wishes, Lakewood will lose much of its power over the project. With denser developments, city planners legally can make demands of developers--more public open space, buffer zones and parks--to ensure livable neighborhoods. With less dense projects, they can't.

Which means that Lis's initiative, if successful, might actually permit Rielly to keep all of his property private and off-limits to the public--the opposite of what Lis wants. Muses Barbara Green, an attorney who has worked on development issues in the Rooney Valley, "Would I rather be looking at clusters of houses with lots and lots of open space I can use, or one house every acre on land I can't use?"

The Lises aren't losing sleep over such questions. For them, the anti-growth campaign has been inspirational. Rhonda is now running for a spot on the Lakewood City Council. Part of her campaign, she says, will focus on the need to slow growth. Naturally, she will support her husband's initiative to keep Mount Carbon undeveloped.

"It's a transition time," Craig Lis explains. "We're going from a time where everyone thought growth is good. If you look at city councils across the state, you're looking at bankers and builders and plumbers and electricians and real estate agents--people who have experience with growth. But now people are saying maybe it's time to slow down. Maybe all growth isn't good.


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