Glendale Council Okays Using Eminent Domain for Entertainment District

The Glendale City Council on Tuesday night authorized the future use of eminent domain to acquire land within the 42-acre site that the city plans to redevelop into an entertainment district on the banks of Cherry Creek.

But after hearing hours of testimony against eminent domain, city councilors added a provision aimed at making any land deal more fair to the landowners. If the city and a landowner can't agree on a purchase price, the provision requires the city to hire a mediator to try to work out a deal before resorting to eminent domain.

The majority of testimony came from supporters and owners of a single Glendale business, Authentic Persian and Oriental Rugs. They also own 5.4 acres within the footprint of the proposed $175-million entertainment district, called Glendale 180. They say city officials blocked their efforts to develop the land and then declared it blighted so they could take it by eminent domain.

“The blight is a made-up story," said owner Saeed Kholghy. "It's a way to get a project to move forward that the city wants.”

But Mayor Mike Dunafon said that's not true. Between speakers, he told the audience that the situation is "not what you think it is” and said the city wants to collaborate with the landowners. Dunafon's remarks were often met with boos. At one point, someone shouted, "Cut it out, Mike!" 

The small meeting room was packed with people supporting Kholghy and his family. Most of them had marched from the rug shop to city hall, holding signs that read "Eminent Domain Abuse" and "Hands Off My Business." The march was organized by the shop owners, and many of the marchers were longtime customers of the business, which has been in Glendale for 25 years.

The standing-room only crowd was unusual for Glendale, a tiny 369-acre city surrounded on all sides by Denver. The meeting was fairly informal; several speakers called the mayor "Mike" or "Michael," and Dunafon allowed the speakers closest to the issue to talk longer than the allotted three minutes. He also frequently interjected and engaged in a back-and-forth with them.

"Could I ask you a question?" Dunafon said to Saeed Kholghy. "What is the dollar value you place on your property?"

Kholghy protested the question before finally answering that "the value is if somebody decides to sell." 

"Nobody is forcing anybody to sell anything here," Dunafon said. 

The meeting started with attorneys for the city explaining that the council would not be voting to take anyone's land by eminent domain. Instead, it would vote on whether to confer the power to do so in the future to the Glendale Urban Renewal Authority (GURA), a body made up of city council members. Dunafon repeatedly said he doubted that the GURA would ever actually use that power.

"It’s an opportunity to put the tool in the box," he said.

The city attorneys also emphasized that the city would have to pay fair market value for any land it acquired by eminent domain. They reminded attendees that the land within the Glendale 180 footprint had been declared blighted in 2013 to pave way for urban renewal.

But that explanation didn't quell the anger of the landowners' supporters. 

“They have a right to keep what they’ve worked so hard to own," said Phil Applebaum, the activism coordinator for the Institute for Justice, a Virginia-based libertarian law firm fiercely critical of eminent domain, whose staffers came to Colorado to support Kholghy and his family.

“These are good people," said Jimmy O'Connor, who sold the land to Kholghy and his family in 2006. "These are honest people. They should be able to do what they want with their land.” He added that his family had owned the land since the 1960s and the city blocked several of their attempts to redevelop it, giving “silly, asinine” reasons why their ideas wouldn't work.

Longtime rug shop customer Victoria Beck attacked Dunafon personally, quoting from his Twitter account, where he often espouses his views on liberty. “You said, 'Democracy should be more than two wolves and a sheep voting on what to have for dinner,'" she said. "I would like to suggest that’s exactly what two or more wolves are doing here, looking at the Kholghys as if they’re sheep for dinner.”

The family says members worked with the city for years on plans for a riverwalk entertainment district. But they say they were eventually cut out of the project and told their rug shop couldn't be part of it — an allegation that Dunafon denies.

The family is now suing the city. They claim that the GURA rejected their proposal to redevelop the land and instead approved the proposal of a developer with ties to the city. In January, the city invited them and the other landowners within the Glendale 180 footprint to submit plans for redeveloping the entire parcel. The family's proposal was for a 1.6 million-square-foot development made up of retail shops, office space, entertainment venues, a hotel and residential units, with 4,040 parking spaces.

But in March, the city chose another proposal submitted by Wulfe and Company, a developer in Texas whom the family says the city had been working with for months. It calls for 303,225 square feet of restaurants, retail shops and entertainment venues, with 2,270 parking spaces. 

On Tuesday night, Dunafon challenged Saeed Kholghy, asking if he and his family planned to squeeze all 1.6 million square feet of their proposed development onto their 5.4 acres — or whether they'd need the entire parcel, including land owned by other people. Kholghy shot back that the only reason they submitted a plan for the entire parcel was because that's what the city asked for.

"I would hate to condemn anybody," he said. 

Only two city councilors — Paula Bovo and Joseph Giglio — offered their opinions before casting their votes. Both asked whether there was a way to negotiate with the landowners before resorting to eminent domain. The city's attorneys said there was, but they added that if negotiations broke down, the city council would once again have to consider whether to grant the GURA the power to use eminent domain. Repeating Tuesday night's meeting could delay the Glendale 180 project, they said.

“The reason we have everybody in the room tonight is because eminent domain is a scary thing," Bovo said. “If we can add an extra layer of security without compromising the entire project, I would be willing to do that. ... I will do everything in my power to make sure it doesn't come down to the big threat, the big stick of eminent domain.”

Dunafon called for a fifteen-minute break so city attorneys could craft an amendment that would provide that extra layer of security. The attorneys came up with a provision that directs the GURA to negotiate in good faith with landowners and then enter into mediation if the two sides can't agree on a purchase price. Only after mediation could the GURA invoke eminent domain.

The vote, with that provision in place, was unanimous.

But Nasrin Kholghy — Saeed's sister and co-owner of the land — said the provision doesn't provide her any comfort.

"I wasn't surprised that they added an amendment to ease their conscience so they can vote yes," she said.

She doesn't consider its inclusion a victory. "It's a victory that we got our word out," she said.

Below, watch aerial video footage of the family's supporters rallying at their shop before the meeting. (Footage courtesy of Shihan Qu.)

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Melanie Asmar is a staff writer for Westword. She joined the paper in 2009 and has won awards for her stories about education, immigration and epic legal battles. Got a tip? She'd love to hear it.
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