Agreement goes out window as Canyons development comes in

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A high plateau of undeveloped grassland, 3,300 acres just east of Interstate 25 and Castle Pines, is expected to soon start turning into something else — “one of the best master-planned communities not only within the state but within the region,” in the words of Mark Nickless, general manager of The Canyons development.

“We're excited about the possibility of getting this going,” he said of a plan that allows for 250 acres of commercial area and 2,500 homes. “The Alperts (landowners) have been working on this for a number of years.”

But his excitement isn't shared by homeowners nearby who had agreed in 2000 to a much small development.

Years ago, Douglas County planners designated the area as a “special high plateau,” a place to restrict development and create a visually beautiful northern Douglas County gateway. Real estate developer Lee Alpert ultimately got the OK from Douglas County commissioners to develop the land, but nearby homeowners with acreages in Happy Canyon subdivision were OK with it — because of an agreement, attorney and Happy Canyon resident John Goutell said recently.

Goutell said that in 2000, Alpert agreed to leave 500 acres as open space from Castle Pines Parkway to Happy Canyon Road along I-25 and call it “The Preserve.” And on the remainder, there was to be a limit of 25 acres of commercial area and about 1,500 homes as well as a golf course and other amenities. And Happy Canyon wouldn't have to worry about its water wells because the developer was going to help with water issues.

It was considered a “reasonable use” of land, Goutell said about the agreement.

But as of Sept. 27, the 2000 agreement is no more, Goutell said.

He said the developer used two law firms working full-time, spending more than $600,000 in legal costs, to plead their case to an arbitrator about why the agreement should be terminated.

The Happy Canyon homeowners association — with about a $10,000 legal budget and no legal help at first until Goutell moved into Happy Canyon and heard about the already underway arbitration — lost. Everything.

“It was the big developer against the little HOA,” Goutell said. “(Happy Canyon) doesn't get anything. … It's such a tragedy.”

Goutell said Happy Canyon, a development of about 500 acres, made up mainly of two-acre lots but some as large as 35 acres, is now entitled to nothing — no control over densities, no help with water, traffic or other impacts. He was told Alpert would be a good neighbor, but when he asked for that assurance on paper, he was refused.

And now a much bigger project is in the works.

With arbitration behind the developer, there now can be an even bigger development — with 10 times the commercial area allowed in the Happy Canyon agreement - now about 250 acres instead of 25 acres — and up to 2,500 homes.

The developer can now have those higher densities because in 2009 Castle Pines annexed the property into the city and OK'd that heavier zoning to be allowed if and when the Happy Canyon agreement was ever terminated, Goutell said.

There is no plan for a golf course now — and no 500 acres of open space. About 100 acres along I-25, just south of Castle Pines Parkway exit, is designated for mixed uses. The rest, 400 acres, south of the 100 mixed-use acres, is no longer open space, but is being called “farm zoning,” which allows for barns, storage and other things. But that farm zoning isn't necessarily permanent.

“Situations can change,” Nickless said.

But he said the intention is to “develop the plan within the confines of our current zoning.”

“I don't have the impression that the developer is going to reach out to us,” said Michael Anderson, president of the Happy Canyon Homeowners Association, who saw the situation as a David and Goliath scenario, with the giant winning. “I certainly welcome that contact.”

Goutell said both sides won't ever know the reasons for why the arbitrator, a former dean of the University of Denver's law school, ruled the way he did because the homeowners association could only afford to pay for the cheaper “yes or no” decision and not the more expensive “reasoned decision,” which would have given a written explanation about the decision.

Goutell said the developer's legal team somehow successfully argued at the arbitration hearing that because 146 acres of The Canyons had been condemned during the past development of the Rueter-Hess Reservoir, the 2000 agreement could be terminated. Goutell said their position was that a section in the agreement addressed allowing termination of the agreement if a court invalidated the property's zoning. And they said the taking of land for the dam created “a domino effect that effectively invalidated their zoning,” Goutell said.

Goutell said courts have invalidated zoning at times, but his position in this case is that the eminent-domain condemnation of a “tiny percentage” of land didn't constitute an invalidation of The Canyons' zoning. Also, he said the Alpert family received $5 million in compensation for that condemned land, more than they could have made from the dozen housing lots.

Nickless commented that the arbitration “was a private matter, agreed upon. We want to respect it was a private matter.”

Castle Pines Councilmember James Einolf told the News-Press he thinks “this is a sad day for homeowners in Colorado. Apparently, covenants that `run with the land in perpetuity' actually last only until someone with enough time and money comes along and takes you to court.

“I'm ashamed that the City of Castle Pines ever entered into this pact with The Canyons, and that we now stand to profit — or at least, to appear to profit — from the misfortune of the homeowners of Happy Canyon,” he said, referring to the million dollars the city is to receive from the developer to lessen the city's impacts as it has to maintain the development's streets, among other responsibilities.