City of Lakewood Sued by Developer Over Controversial New Open Space Law

As members of Lakewood City Council predicted when they passed a controversial new open-space law last November, the City of Lakewood has been named in a suit claiming that the law is illegal and being applied unfairly to a planned development next to Belmar Park.

In September, Lakewood residents successfully petitioned to eliminate the city’s option to allow developers to pay a fee to build parks instead of dedicating parkland for each development; the council had no choice but to either send the issue to a special election or turn the petition into law. As a result, every project must now dedicate 10.5 acres of parkland for every 1,000 people expected to live at a new Lakewood development.

Kairoi Properties filed the lawsuit in Jefferson County District Court on December 20, asking the court to rule that the law is void when properties cannot meet the new land dedication requirements, since they no longer have the option of paying a fee instead. The real estate company is arguing that its properties in Lakewood are so small that the ordinance makes development impossible.

Additionally, Kairoi cites a section of the citizen petition that, rather than simply applying the new rule to all future developments, targets current projects that don’t yet have all of their building permits approved; the suit claims that the action was intended specifically to prevent the proposed Belmar Park development.

Save Open Space Lakewood pushed its petition after members of the group vocally opposed the Kairoi project, which will add 400 units of housing next to Belmar Park. When Kairoi was directed by the city to pay a fee rather than dedicating land, citizens concerned that the project would disturb both the nature of the park and their own peace began objecting to to Lakewood's overall fee-in-lieu policy.

In Lakewood, citizen petition rules dictate that a proposal with enough valid signatures must either be passed into law by city council or referred to voters for a special election. So while most councilmembers said they believed the new rule would be illegal and impractical, council still passed the ordinance into law, with the expectation that the city would soon be sued.

"It feels like the choice we have tonight is to either pass an illegal ordinance or send an illegal ordinance to the voters,” Councilwoman Rebekah Stewart (who is now a representative in the Colorado Legislature) said at the November 4 council meeting. “It feels incredibly irresponsible to spend money on a special election and send a matter with such really significant legal concerns to the voters.”

Councilmembers suggested that the petition conflicts with a law passed last session by the state legislature that requires cities to offer a developer fee-in-lieu option for housing in certain areas. And that is exactly what Jason Dunn and Neil Sandhu of Brownstein Hyatt Farber Schreck argued on behalf of Kairoi in the lawsuit.

“The new law proposed by a small number of activists is nonsensical, makes much-needed housing development nearly impossible and violates both the U.S. Constitution and state law,” Dunn says in a statement. “We look forward to untangling the unlawful and ill-advised law in court.”

Additionally, the lawsuit contends that the City of Lakewood had already indicated in writing to Kairoi that the company would be allowed to pay such a fee, so to walk that back now is not legal. In fact, Kairoi argues, the company wouldn’t have even purchased the land if it hadn’t been led to believe it could pay the fee rather than dedicate parkland.

Kairoi further argues that it should only have to pay the lower fee-in-lieu that existed before June 2024, when the City of Lakewood increased the fee, since Kairoi first submitted plans for the development in April 2022.

Not only does the lawsuit call the new rule illegal, but it claims that it makes development impossible. The Belmar project would be required to dedicate 6.47 acres of parkland under the ordinance, but the west portion of the property is only 5.25 acres. The east portion of the property, where another apartment building would be constructed, is only 3.7 acres and would be required to dedicate 5.51 acres of land.

The Lakewood city attorney is representing the city in the lawsuit, which has open-space advocates concerned.

“The city is now in the position of defending the ordinance that they said that they never wanted to begin with, so I think the petitioners, and myself, are very concerned that the ordinance will not get a true, adequate defense,” says Cathy Kentner, a Save Open Space member and former Lakewood mayoral candidate. “We feel very strongly that if the ordinance were to get a true defense, it would be upheld, as these things have always been matters of local control and not state control.”

According to Stacie Oulton, manager of public information for the city, Lakewood will “respond as needed through the legal process.”

Regardless of the outcome of that legal process, Kentner says it's clear that the city isn’t listening to citizens. But she adds that Save Open Space Lakewood might not be able to replicate the hundreds of volunteer hours needed to put forth another petition. “It seems that one of the points from council is, ‘Don't do this; we know better,’” Kentner says. “They do seem to be sending a message that they don't want initiative petitions.”

After the ordinance was approved, however, Mayor Wendi Storm issued a statement saying that she and her fellow councilmembers respect and value the concerns of residents and their engagement on the issue of parklands and open space.

“I also want residents to know that we are listening to them,” Storm said. “The city has been working all year to revise the parkland dedication requirements because of their concerns. The fee in lieu nearly doubled starting in June to $432,727 per acre, and additional revisions are also in the works.”

The new ordinance may be put on pause soon, as Kairoi and the City of Lakewood have agreed that a preliminary injunction is appropriate until the lawsuit is resolved. In the meantime, Lakewood's fee-in-lieu policy that existed until the new law was passed in November would be restored.

“In order to obtain a speedy resolution to this matter, and in the interests of judicial economy and conserving taxpayer resources, the city does not oppose the issuance of a preliminary injunction with the understanding that it does not admit or concede any of the underlying legal arguments on the merits,” Dunn and Sandhu wrote in a motion for injunction on January 3.

Kairoi asked the judge to rule on the injunction request by January 24, before the Lakewood Planning Commission discusses the latest Belmar Park development.