October 1, 2004

Sun sinks on Sunset
By Lora Abcarian

DENVER -- U.S. Bankruptcy Court Judge Elizabeth Brown issued an order of dismissal in the bankruptcy case of Villages of Sunset developer Larry Kanne on Sept. 20.

"I was stunned when I opened the mail and saw [the order]," stated Park County Attorney Stephen Groome of this development.

The order clears the way for the Board of County Commissioners to hold a public hearing, formally voiding the Subdivision Improvement Agreement executed with Kanne.

Although not scheduled at press time, the hearing is expected to occur on Oct. 7.

"It's pretty much perfunctory," stated Park County Attorney Stephen Groome of this hearing.

The judge's order came after Kanne was unable to find a buyer for the planned unit development.

On Dec. 5, 2003, Kanne was to have filed a $2 million irrevocable letter of credit with Park County to ensure construction of a grade separated intersection at the proposed Sunset Parkway and U.S. 285. Instead, Kanne filed for bankruptcy. The filing automatically suspended any effort by Park County to force Kanne's compliance with the agreement.

Groome said lien holder Peak National Bank is negotiating with several parties interested in purchasing the parcel. The key question, stated Groome, is what would a potential buyer be purchasing?

The property was originally zoned PUD in 1982 under previous ownership and allowed for construction of nearly 800 single- and multi-family units. A total of 20 acres were slated for commercial development as part of the project.

Kanne purchased the property in the early 1990s.

While previous zoning remains in place, Groome said the property carries no site development plans. Groome expects this aspect of the land purchase may ultimately be decided in court.

"This will be one of the biggest challenges for Park County," noted Groome.

Groome indicated any new project would be subject to Park County's current Land Use Regulations. According to Groome, any new purchaser will be required to participate in a pre-application conference to discuss a new PUD. A future developer must go through appropriate processes with the Park County Building and Planning departments as well as the Park County Planning Commission and BOCC.

Groome also expects a new applicant will have to file an application for a 1041 wildlife permit.

Groome anticipates a total of seven public hearings on any new application once the formal process begins.

Kanne had also executed several agreements with the Will- O-Wisp Metropolitan District for water delivery, sanitation services/improvements and road paving with the Will-O- Wisp subdivision. Groome said he is unsure how Kanne's failure to fulfill these contractual arrangements will impact infrastructure for a future development.

Groome said these infrastructure needs will determine the complexion of any future project. "I think everyone agrees 700 units is too much for that part of the county," he commented.

If the project is planned around well and septic systems, Groome said this would change the minimum lot size to at least one acre. Under the former Sunset plan, houses could be constructed using central water and sewer on quarter-acre parcels.

Groome was asked how much money Park County has expended in the process of dealing with Kanne over the past three years. He did not have a final figure, but ballparked direct legal fees alone to be approximately $50,000.

Although Peak National Bank is moving forward with the foreclosure, Groome said Kanne still retains ownership of the land and could exercise his right of redemption.

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