County takes lawsuit against Timnath to higher state court

By Dan MacArthur
Fossil Creek Current

Larimer County is upping the ante by appealing the dismissal of its lawsuit challenging Timnath's creation of an urban renewal authority.

"It's an important case to the county. The stakes are pretty high," said County Attorney George Hass. If successful in forming the URA, he estimated Timnath's actions could cost the county $22 million in property tax revenues over the next 25 years.

"This is a classic, 'Does development pay its own way?' case," said Hass.

Timnath Attorney Stan Garnett said he believes the county's arguments are weak and expects the town to prevail in the appeal. And even if it doesn't, "We would go to trial where I think we would win on the merits," he said.

The county is challenging the Aug. 26 ruling by Larimer County District Court Judge Dave Williams. He found that the county had no legal standing to bring the lawsuit challenging the town's action as an abuse of the state's urban renewal authority.

In its notice of appeal, the county asks the Colorado Court of Appeals to determine whether the county in fact has standing to pursue the lawsuit.

It also asks the appeals court to determine whether legal precedents prohibit the county from challenging an urban renewal plan "where the plan is alleged to be fundamentally beyond statutory authority because it designates large acreages of undeveloped farm ground as a 'blighted area.'"

Such a designation increases the financial burden on the county and results in the loss of "substantial property tax revenue," according to the appeal notice, by diverting such tax revenue from new development to the urban renewal authority through tax- increment financing.

Finally, the appeal asks the court to resolve a constitutional question of whether it's proper to prevent interested parties such as the county from seeking judicial review of actions such as Timnath's.

"This is unprecedented what Timnath has done. It's never been litigated," said Hass.

The question, he said, is whether urban rather than vacant land can be designated as a URA.

"This is vacant land; it's going to develop anyway," Hass said, unlike URAs encompassing Estes Park and North College Avenue where blight actually existed and redevelopment would not otherwise have occurred. Even the Centerra URA designation in Loveland was not as broad and was more carefully defined, Hass said.

"It was pretty obvious in his (the district court judge's) findings there were impacts," said Larimer County Commissioner Kathay Rennels. "The only way to get to that is taking it to the court of appeals. I think it can finally bring an answer to those impacts."

Also at issue is whether such a designation can be applied to residential development, which requires more county services as opposed to commercial development, which instead generates income and requires few county services.

The appeals court, Hass said, is not bound by precedents as the trial court is and can determine whether such precedents were wrongly applied or decided. He estimated the appeal process would take about a year.

If the county wins the appeal, the case would be returned to the trial court to determine whether Timnath abused its authority by designating as a URA some 2,000 acres of farmland slated for residential development.

"The county knows that standing is a big issue and they didn't seem to put a whole lot of thought into the claim they have pled in the complaint," Garnett stated in an e-mail. "It is a pretty vague claim and, if the standing determination were to get reversed, we would have other arguments that we would raise about how their complaint doesn't really state any clear relief that the court can grant."