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Loveland City Council approves property exchange near proposed oil and gas development – Loveland Reporter-Herald


A property exchange agreement between the city of Loveland and local real estate developer Troy McWhinney will net the city nearly 30 acres of open space, a long-sought trail corridor, and a donation worth $325,000.  But in return, the city could be relinquishing a key role in future oil and gas development in the area.

Last week, Loveland City Council voted unanimously to approve the deal, despite questions about timing of the transaction and the city’s standing in the aftermath.

“This is really the gem we’re trying to get”

On paper, the exchange agreement favors the city of Loveland. At its center is a 48.7-acre parcel along the Big Thompson River corridor valued at $1.3 million. Stretching east from the city’s wastewater treatment plant on Boise Avenue, the property has been in the sights of the city’s Open Lands Division for more than a decade.

“This is really the gem we’re trying to get,” division manager Marilyn Hilgenberg said during a presentation to City Council regarding the exchange. “It has scenic views, a buffer for wildlife, and two ponds that are lined and one pond that’s unlined. …Even back as far as the 2004 capital improvement plan, this property has been highly valued. And we’ve been trying to get it, but the timing wasn’t correct and we didn’t have funding.”

The city plans to use the property exclusively as recreational open space, and has $1.7 million in state of Colorado transportation grants to help fund the effort. Starting early next year, trails at Boise Bend and Old Saint Louis Natural areas will be extended eastward to connect with the future Willow Bend Natural Area, a 79-acre adaptive recreation park that is scheduled to open in 2024.

“We’re talking construction starting next year,” Hilgenberg said. “And that’s really exciting to be able to get all the way to that component on First Street within the next two years. That’s a pretty exciting plan.”

The land is currently owned by TCM Thompson River, a private limited liability company formed in 2021. According to Hilgenberg, the parcel is “personal property” of Troy McWhinney and not associated with the McWhinney company.

Efforts to reach McWhinney for comment on this transaction were not successful.

“This is so good for us”

In return for the property, TCM Thompson River, LLC will receive 20 acres of the former Bonser family ranch, located on the south side of County Road 20E in unincorporated Loveland.

The city purchased the remainder of the homestead plus four buildings for $980,000 in 2019, with the understanding that it would be used for open lands space.

According to Hilgenberg, that’s still the plan. A small portion of it (1.55 acres) will also be going to the Gustafson family, owners of the four-acre lot between the ranch and I-25. In exchange, the city will gain rights to half an acre of land, plus half an acre of slope easements for trail construction.

“That’s a section of a trail corridor that we need to secure in order to get to the new underpass that they’ve recently constructed under I-25,” she explained. “And so we’ve been working with Mr. Gustafson over the last couple years. We want it to be amicable to work together, and what he needs for us to do is he’s going to exchange us a section on that south side and we’re giving him a little bit of the property at 20E on his western border.”

The city also retained a 15-acre conservation easement on the portion going to TCM that will be used for a trailhead and connector trail. But the city agreed to surrender the “building envelope” containing a small residence and three storage buildings.

According to Hilgenberg, those easement restrictions explain the differential in the land’s value in 2022. In April, an independent appraiser assessed the parcel at $925,000.

“This deal is so good for us that we’re basically exchanging a $1.3 million property for a $925,000 property,” she said. “And the property owner is exchanging the difference for us in the form of a donation.”

Questions

But TCM could be getting more than what Hilgenberg characterized as a “tax advantage” from the transaction. The County Road 20E parcel is located within a few hundred feet of Centerra property that McWhinney’s company plans to develop into an oil and gas well pad and production facility.

Earlier this year, McWhinney announced its intention to drill up to 11 horizontal wells on the site starting in January 2023.

By relinquishing the house, the city of Loveland loses its standing to object as a residential property owner within the 2,000 foot setback mandated by Colorado Oil and Gas Conservation Commission rules.

During her presentation, Hilgenberg acknowledged that this is a “contentious” part of the transaction, and, after consulting with the city attorney’s office, she is also confident that it “in no way precludes” the city of Loveland from having oversight in the review process or standing before the COGCC.

Nonetheless, she faced questions on this point during the discussion portion of the meeting from Councilor Andrea Samson, who wondered about the “sudden” availability of the elusive property along the Big Thompson River.

In response, Hilgenberg was adamant that the city has been working with Troy McWhinney for many years to secure it.

“Brian has hounded them every six months for 10 years ‘are you ready? are you ready?’,” she said, referring to her co-presenter, city land agent Brian Hayes. “They use it as a personal hunting ground and that sort of thing. And so it wasn’t that all of a sudden it just came out.”

She also added that the city already had a prior conservation easement on the property for the planned trails, but owning the property will make the construction process easier.

Samson also questioned assistant city attorney Vincent Junglas about the relevant oil and gas regulations for the County Road 20E site, and asked to elaborate on Hilgenberg’s point about Loveland’s standing at the COGCC.

Junglas explained that the city of Loveland would still be the “relevant local government” in the process, with an even stronger role in the future proceedings. In a follow-up interview, he further explained that the city has a much broader platform when it comes to potential objections to the McWhinney proposal.

“The property owners’ interests are just the property owner’s, solely, right,” he said. “If we’re acting in the capacity as relevant local government, we’re attempting to protect the interests of the entire community.”

That gives the city grounds to object on “public health, safety and welfare” grounds on behalf of all residents.

“The rights of a property owner are less than that of the relevant local government, in my view,” Junglas said.

Other councilors touted the benefits of the exchange to Loveland residents, who will be getting additional open space and recreational opportunities, with very little cash outlay.

Councilor Dana Foley also pointed out that the exchange will help the city with flood mitigation efforts on the Big Thompson, and enhance “public safety.”

City Council went on to vote 9-0 to approve the measure. It will face a second vote at council’s next regular meeting on August 16.

For now, the debate over the oil and gas development on Centerra property in Loveland is pending further action from McWhinney. The company is also planning a 15-well pad on the east side of I-25 near the new Kinston residential development, but has yet to file for permits for either site. When development proceeds, the plans will be subject to review from city, Larimer County, and the COGCC.



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