January 16, 2004

Kanne's request denied
By Lora Abcarian

FAIRPLAY, Colo. -- The Park County Planning Commission voted on Jan. 13 to deny a request for amendment of a Subdivision Improvement Agreement requested by Villages at Sunset developer Larry Kanne. Kanne was represented by attorney Marc Musyl at the proceeding.

Prior to public testimony, Planning Commissioner Briggs Cunningham recused himself from the proceeding upon the advice of Park County Stephen Groome. He was temporarily replaced by alternate John Schmidt, who was given full voting rights.

Musyl argued that two sections of the 1996 Park County Land Use Regulations -- which govern the processing of the Sunset planned unit development -- were in conflict. These sections relate to the public infrastructure and the construction of a grade separated intersection at U.S. 285 and the proposed Sunset Parkway.

Kanne, who has filed for Chapter 11 bankruptcy, was given a two-month stay to file a $2 million irrevocable letter of credit with Park County effective Dec. 5. Musyl characterized the discrepancy as a "minor technical correction" and asked that the SIA be amended to require the filing of the letter of credit after the 156th lot in the PUD was sold.

The SIA currently states Kanne must file the letter of credit at the time of recordation of the final plat with the Park County Clerk's Office.

According to Musyl, this requirement should not have been imposed on Kanne, and it is causing difficulty bringing the project to fruition. Musyl told Planning Commissioners lending institutions will not provide letters of credit for unplatted projects. The requirement created "an unanticipated outcome" and is a "Catch-22," Musyl indicated.

"It's been impossible to proceed with the development of this project."

In concluding his testimony, Musyl stated, "It's a no-lose situation for the county to make this minor correction to the SIA."

Planning Commissioner William Gordon asked Musyl whether he had a letter from financial lenders documenting his assertion. Musyl replied he did not, but had been provided this information verbally. Gordon stated the inclusion of the language addressing the letter of credit was not an oversight on Park County's part, and that economic conditions have changed sufficiently enough that the county might have to revisit the $2 million bond amount to determine whether it needs to be raised. Musyl indicated this would be unacceptable to his client.

Four opposers presented testimony. Richard Mueller, a member of United Mountain Communities, testified that the 1996 LURs state that conflicts or overlaps with the LURs and other codes are to be decided in favor of the more restrictive language. He also stated Colorado Revised Statutes do not confer special benefits upon individuals which are not in the public interest. Mueller asked whether Park County would be liable for performance if Kanne did not construct the grade separated intersection.

Jean Wagner, also a member of UMC, briefly stated the sections of the LURs in question do not conflict, and she urged the Planning Commission to deny Kanne's request.

Robert Nevadomski, who lives in the Woodside subdivision, asked whether the Planning Commission could proceed with its deliberations in light of Kanne's bankruptcy proceeding.

He told the Planning Commission Kanne had been an active participant in the SIA development process.

Steve Zellner, also a resident of Woodside and a unit president, asked whether Kanne's refusal to meet the Dec. 5 filing deadline nullified the current proceedings.

The Planning Commission briefly retired to executive discussion with Groome to discuss a number of legal questions. When they reconvened the public hearing, Groome stated the Planning Commission could proceed with its work, as Park County is the largest creditor in the bankruptcy proceeding. Groome stated there is no conflict in the 1996 LURs. "I see the agreement is clear as any can be along these lines," he told the Planning Commissioners.

Groome also indicated the SIA takes precedence over the LURs in the event of ambiguous language.

Before calling the vote, Planning Commission Chairman Kent Kalb said he agreed with Groome that the sections do not conflict and they stand independently. Kalb stated the $2 million irrevocable letter of credit was clearly written and tied to the plat filing to secure Park County's position in the matter.

"The county chose to make it a part of the general guarantee," Kalb concluded.

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