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Home My WebLink Aboutresolution.council.046-24RESOLUTION #046 (Series of 2024) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO, APPROVING A SETTLEMENT AGREEMENT AND MUTUAL RELEASE BY AND BETWEEN THE CITY OF ASPEN AND FOREST LOOKOUT II LLC, A COLORADO LIMITED LIABILITY COMPANY, ASPEN FOREST 8TH STREET LLC, A NEVADA LIMITED LIABILITY COMPANY AND DR 24F 16, LLC, A COLORADO LIMITED LIABILITY COMPANY AND AUTHORIZING THE CITY MANAGER TO EXECUTE SAID SETTLEMENT AGREEMENT AND MUTUAL RELEASE ON BEHALF OF THE CITY OF ASPEN, COLORADO. WHEREAS, there has been submitted to the City Council a Settlement Agreement and Mutual Release by and between the City Of Aspen and Forest Lookout II LLC, Aspen Forest 8th Street LLC and DR24F 16, LLC, a true and accurate copy of which is attached hereto as Exhibit "A". NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO, That the City Council of the City of Aspen hereby approves the Settlement Agreement and Mutual Release by and between the City of Aspen and Forest Lookout II LLC, Aspen Forest 8th Street LLC and DR24F 16, LLC, and hereby authorizes the City Manager to execute such Settlement Agreement and Mutual Release, a copy of which are annexed hereto and incorporated herein, on behalf of the City of Aspen. INTRODUCED, READ AND ADOPTED by the City Council of the City of Aspen on the 26th day of March 2024. Torre, Mayor I, Nicole Henning, duly appointed and acting City Clerk do certify that the foregoing is a true and accurate copy of that resolution adopted by the City Council of the City of Aspen, Colorado, at a meeting held on the 26th day of March 2024. j Nicole Henning, City Clerk DocuSign Envelope ID: ABA7384F-BB84-45B6-B75D-5A028D8C69DD 1,4 AGREEMENT AND MUTUAL RELEASE This Settlement Agreement dated March 9WO24 (the "Agreement") is entered into by and among (1) the City of Aspen and the City of Aspen City Council (collectively, the "City Defendants") (2) Forest Lookout II LLC a Colorado limited liability company ("Forest Lookout II") (3) Aspen Forest 8th Street LLC, a Nevada limited liability company ("Aspen Forest 8th Street") and (4) DR 241716, LLC, a Colorado limited liability company (Forest Lookout II, Aspen Forest 8th Street and DR 24F 16 shall be collectively referred to as the "Forest Service Lot Plaintiffs"). The parties to the Settlement Agreement shall be collectively referred to as the "Parties" or individually as a "Party." I. RECITALS 1. Around 1940, the United States Forest Service ("USFS") acquired the real property contained in the Ranger Station Subdivision, Township 10 South, Range 85 West, 6th P.M., Section 12, Block 9 and 10, Aspen Townsite, Pitkin County, Colorado as depicted on the Ranger Station Subdivision Survey attached as Exhibit I (the "USFS Property"). 2. The USFS Property is located in the West End of Aspen and is comprised of multiple lots and blocks as well as portions of alleys and W. Francis Street that were never improved. 3. The USFS Property was originally platted as part of the Aspen Townsite Map of 1880. 4. In 2012, officials from the USFS and the City of Aspen met to discuss the USFS' desire to redevelop the USFS Property and sell a portion of it to a third party. 5. The USFS asserted that, because it was an agency of the United States government, it was not subject to the City of Aspen's jurisdiction or review and that it did not need to comply with the City of Aspen's Land Use Code regarding subdivisions. 6. On May 22, 2013, the United States Forest Service recorded the Ranger Station Subdivision Survey ("Survey") with the Pitkin County Clerk and Recorder at Book 103, Page 1 and IA. 7. The City of Aspen did not approve or sign off on the Survey. 8. The separate lots subdivided from the USFS Property are now known as Lots 1, 2, 3, 4, and 5 of the Ranger Station Subdivision. 0 . The USFS auctioned off the five lots to private buyers. DocuSign Envelope ID: ABA7384F-BB84-45B6-B75D-5A028D8C69DD 10. Because the USFS did not go through the City of Aspen's subdivision review process, the City of Aspen claimed that the individual buyers of the lots of the Ranger Station Subdivision bought the lots without any development rights. 11. All of the lots of the Ranger Station Subdivision are located within I of Aspen's Medium -Density Residential (R-6) zone district. 12. Plaintiff Forest Lookout II was the owner of Lot 4 of the Ranger Stations Subdivision when a building permit application was submitted and approved and when the employee mitigation impact fee was imposed and paid as a condition to the issuance of the approved building permit. 13. Plaintiff Aspen Forest 8th Street was the owner of Lot 5 of the Ranger Stations Subdivision when a building permit application was submitted and approved and when the employee mitigation impact fee was imposed and paid as a condition to the issuance of the approved building permit. 14. On January 25, 2021, the City of Aspen Building Department approved the building plans for Lot 4 but conditioned the issuance of the required building permit on the payment of an "inclusionary" employee cash -in -lieu mitigation impact fee of $755,278.34, 15. On January 25, 2021, Plaintiff Forest Lookout II paid the City of Aspen the required "inclusionary" employee cash -in -lieu mitigation impact fee in the amount of $755,278.34 as a condition of obtaining the issuance of the building permits necessary to commence construction of the single-family residence on Lot 4 of the Ranger Station Subdivision, 16. Plaintiff Forest Lookout II assigned part of its rights to contest the cash -in -lieu fee connected to Lot 4 to DR 24F 16 LLC. 17. On April 22, 2021, the City of Aspen Building Department approved the building plans for Lot 5 but conditioned the issuance of the required building permit on the payment of an "inclusionary" employee cash -in -lieu mitigation impact fee of $543,539.06. 18. On April 22, 2021, Plaintiff Aspen Forest 8th Street paid the City of Aspen the required "inclusionary" employee cash -in -lieu mitigation impact fee in the amount of $543,539.06 as a condition of obtaining the issuance of the building permits necessary to commence construction of the single-family residence on Lot 5 of the Ranger Station Subdivision. 19. The Forest Service Lot Plaintiffs have filed a Complaint against the City Defendants in the case titled Forest Lookout II LLC and Aspen Forest 8th Street a The City of Aspen and The City of Aspen City Council and in a case titled DR 24F16 LLC v. The City of Aspen and the City of Aspen City Council (the "Forest Service Lots Development Impact Fee DocuSign Envelope ID: ABA7384F-BB84-45B6-B75D-5A028D8C69DD Litigation") alleging that the imposition of the "inclusionary" employee housing mitigation impact fee did not comply with Colorado's Development Impact Fee Statute and seeking a refund of the amount of the affordable housing mitigation impact fees paid by the Forest Service Lot Plaintiffs in the total amount of $1,298,817.40 which the Forest Service Lot Plaintiffs allege were wrongfully imposed and collected, together with 8% statutory interest thereon from the date collected which they allege equals $303,057.16 through January 31, 2024. 20. The Forest Service Lot Plaintiffs allege that the total employee housing mitigation impact fees based on the fees schedule normally charged for residential development on Aspen city lots adopted by the City of Aspen based on the "Aspen Residential Employment Generation Study" performed by RRC in 2015 should have only been $3 87,136.99. Therefore, the Forest Service Lot Plaintiffs' allege they were charged $911,678.41 more than other owners and developers of residential structures on City lots. - 21. The City Defendants assert that the "inclusionary" employee mitigation impact fees comply with the Colorado's Development Impact Fee Statute to the extent they are impact fees covered by that Statute. They further assert that the "inclusionary" employee housing mitigation impact fees were validly imposed as a condition of the issuance of a building permit under Colorado's Development Impact Fee Statute. Therefore, the City Defendants deny that it is liable for refunding any portion of the "inclusionary" employee housing mitigation fees paid by the Forest Service Lot Plaintiffs. 22. The City Defendants also assert that the Forest Service Lot Plaintiffs' predecessors -in -interest voluntarily agreed to the imposition of the formula for the "inclusionary" employee housing mitigation fees later paid by the Forest Service Lot Plaintiffs in consideration of the City of Aspen granting the Forest Service Lot Plaintiffs' predecessors-in- interest's valuable development rights to construct residential structures on Lots 4 and 5 of the Ranger Subdivision ultimately relied on by the Forest Service Lot Plaintiffs in submitting their building plans for approval and obtaining their building permits and, therefore, waived or are estopped from any future challenges to the imposition of the "inclusionary" employee housing mitigation fee paid by the predecessors -in -interest or any future owner, including the Forest Service Lot Plaintiffs. 23. The Forest Service Lot Plaintiffs deny their predecessors -in -interest voluntarily agreed to the "inclusionary" employee housing mitigation fee and deny they waived any rights to challenge the fee but instead expressly reserved all rights to challenge the imposition of the "inclusionary" employee housing mitigation impact fees under Colorado's Development Impact Fee Statute, 24. The Parties now desire to settle, compromise, and/or release any and all right, claim, debt, demand, liability, cost, expense, damages, claims for attorneys' fees and costs and all causes of action whatsoever, accrued or contingent, known or unknown, whether in equity or in law, pending or potential, that any Party hereto has or may have against another Party hereto, including but not limited to those relating to and arising out of the Forest Service Lots Development Fee Litigation, as further set forth and as may be limited by the terms of this Agreement. 3 DocuSign Envelope ID: ABA7384F-BB84-45B6-B75D-5A028D8C69DD Paid the Forest Service Lot Plaintiffs. The City Defendants shall retain 100% of the employee mitigation impact fees paid by the Forest Service Lot Plaintiffs as a condition of the issuance of a building permit for the residential structures constructed on Lots 4 and 5 of the Ranger Stations Subdivision, together with accrued 8% statutory prejudgment interest. Specifically, the City of Aspen shall retain 100% of the (1) employee mitigation impact fee of $755,278.34 paid by Forest Lookout II for Lot 4 and (2) the employee mitigation fee of $543,539.06 paid by Plaintiff Aspen Forest 8th Street for Lot 5 and (3) Plaintiff waives the right to assert claims for 8% statutory prejudgment interest of $303,057.16 through January 31, 2024 and (4) any additional prejudgment interest accruing after January 31, 2024. (Total retained employee mitigation impact fee plus 8% statutory interest: $101,874.56.) 4. The Conveyance by the City of Aspen of Two (2) Affordable Housing Certificates. Within seven (7) days after the expiration of the 454jay Termination Period as defined in paragraph 8 below, the City Defendants shall issue and convey to DR 24F 16, LLC, , a Certificate of Affordable Housing Credit for two (2) Category 2 Affordable Housing Credits (the "AH Certificate") as consideration for (1) the settling and dismissal of the Forest Service Lots Development Impact Fee Litigation and (2) the Forest Service Lot Plaintiffs paying an "inclusionary" employee housing mitigation fee greater than the employee housing mitigation impact fees normally required to mitigate the number of employees generated by the development of the residential structures on Lots 4 and 5. 5. Dismissal with Prejudice of the Forest Service Lc II. AGREEMENT NOW, THEREFORE, for mutual consideration, the receipt and sufficiency of which is hereby acknowledged by each Party, the Parties stipulate and agree as follows: 1. Incorporation of Recitals. The foregoing Recitals are hereby incorporated by reference as though set forth in full herein. 2. Effective Date. Unless one or more Parties terminate this Agreement pursuant to Paragraph 8 below, the effective date of this Agreement shall be the date when (1) all parties execute this Agreement and (2) the resolution of the Aspen City Council approving the Agreement becomes effective and enforceable under the Aspen Home Rule Charter and the Aspen Municipal Code. 3. _The City of Aspen Shall Retain 100% of the Emnlovee Miti�ati ent Impact Fee Liti anon. Within seven (7) days of DR 24F 16, LLC's receipt of the AH Certificate, the Parties will cause to be filed with the Court a Stipulation of Dismissal With Prejudice and a Proposed Order in the form annexed hereto as Exhibit 2, whereby the Forest Service Lots Plaintiffs will dismiss with prejudice all claims asserted against the City Defendants in the Forest Service Lots Development Impact Fee Litigation, with each party to bear his, hers, or its own fees (including attorneys' fees), costs and expenses incurred in connection therewith. 6. General Relea itv Defendants by._ the Fc ice Lot Plaintiffs. Effective upon DR 24F 16, LLC's receipt of the AH Certificate from the City, each Plaintiff, for itself and its respective officers, directors, members, managers, board members, heirs, employees, agents, representatives, parents, subsidiaries, affiliates, successors, and assigns 2 DocuSign Envelope ID: ABA7384F-BB84-45B6-B75D-5A028D8C69DD hereby fully release and discharge all City Defendants and their respective officers, directors, members, employees, agents, consultants, independent contractors, representatives, , successors, insurers and assigns from each and every claim or cause of action, whether accrued or contingent, known or unknown, pending or potential, whether in equity or in law, that they have or may have against each City Defendant arising out of or relating to the imposition, charging, payment or collecting of the employee mitigation impact fees paid by the Forest Service Lots Plaintiffs as a condition of the issuance of a building permit for Lots 4 and 5 of the Ranger Station Subdivision, including but not limited to those relating to the Forest Service Lots Development Impact Fee Litigation. 7. General Relea ice Lots Plaintiffs ity Defendants. Effective upon DR 24F 16, LLC's receipt of the AH Certificate from the City, and the dismissal with prejudice of the Forest Service Lots Development Impact Fee Litigation, each City Defendant for itself and its respective officers, members, managers, , , agents, representatives, successors, and assigns hereby fully release and discharge all Forest Service Lots Plaintiffs and their respective officers, directors, members, managers, heirs, employees, agents, consultants, independent contractors, representatives, parents, subsidiaries, affiliates, successors, and assigns from each and every claim or cause of action, whether accrued or contingent, known or unknown, pending or potential, whether in equity or in law, that they have or may have against each Forest Service Lots Plaintiffs Defendant arising out of or relating to the imposition, charging, payment or collecting of the employee mitigation impact fees paid by the Forest Service Lots Plaintiffs as a condition of the issuance of a building permit for Lots 4 and 5 of the Ranger Station Subdivision, including but not limited to those relating to the Forest Service Lots Development Impact Fee Litigation. 8. Right to Terminate. Either Party shall have the right to terminate this Agreement upon written notice to the other parties if any person files an appeal, petition for certiorari, petition for referendum, petition for initiative, or any other pleadings, petitions, or filings appealing or otherwise challenging the adoption of the Resolution attached hereto as Exhibit 3 within 45 days after the adoption of the Resolution (the "45-Day Termination Period") by the Aspen City Counsel. If any Party timely provides notice that it is exercising its right to terminate this Agreement within the 45-Day Termination Period, the Agreement shall be null and void and unenforceable and no Party shall have any obligation to comply and perform any of the provisions of the Agreement, including the Forest Service Lots Plaintiffs' obligation to dismiss the Forest Service Lot Development Fee Litigation, the City Defendants' obligation to issue and convey the AH Certificate to DR 24F 16, LLC and the Parties mutual release of the other Parties for any claims arising out of or relating to the payment by Forest Service Lots Plaintiffs of the employee housing mitigation fees for Lots 4 and 5. 9. Notice. Any notice, demand, or document that any Party is required or may desire to give, deliver, or make to another Party concerning this Agreement shall be in writing and may be personally delivered, or given by overnight courier, or given by United States certified mail, postage pre -paid, return receipt requested, addressed as follows: 5 DocuSign Envelope ID: ABA7384F-BB84-45B6-B75D-5A028D8C69DD City Defendants: Forest Service Lot Plaintiffs: Josh A. Marks, Esq, BERG HILL GREENLEAF RUSCIM LLP 1712 Pearl Street Boulder, CO 80302 Telephone: (303) 4024600 jam cc bhgrlaw.com Jim True Esq., Esq. —City Attorney City of Aspen 130 S. Galena Street Aspen, CO 81611 Email: jim.trueAcityofaspen.com David L. Lenyo, Esq. Macklin J. Henderson, Esq. Garfield & Hecht, P.C. 625 East Hyman Avenue, Suite 201 Aspen, Colorado 81611 Telephone: (970) 9254936 E-mail: dlenyo(2cgarfieldhecht.com E-mail: mhendersonna garfieldhecht.com 10. No Admission of Liability. It is expressly understood and agreed the Parties enter into MIS Agreement to compromise and settle claims. The terms of this Agreement do not constitute an admission of liability by any of Party, nor shall this Agreement or any proceeding hereunder, , be deemed to be evidence of or an admission of any liability or wrongdoing by any Party. 11. Assi;;nment of Rights. Each of the Parties represents and warrants that he, she, or it has not sold, assigned, conveyed, or otherwise transferred, prior to the final execution of this Agreement, any interest in the Litigation. 12. Captions. The captions or headings of the Sections or Paragraphs of this Agreement are for convenience of reference only and in no way define, limit or affect the scope or substance of any Section or Paragraph of this Agreement. 13. Scope of Promises, Representations, and Inducements. The Parties acknowledge, warrant and represent that no promises, representations or inducements, except as set forth in this Agreement have been offered or made by any of the Parties to secure the execution of this Agreement, and that this Agreement is executed without reliance on any statements or any representations not contained herein. Each of the Parties knowingly waives: (1) any claim that this Agreement was induced by any misrepresentation or nondisclosure, and (2) any right to rescind or avoid this Agreement based on any mistake or upon presently existing facts, known or unknown. G'! DocuSign Envelope ID: ABA7384F-BB84-45B6-B75D-5A028D8C69DD 14. voluntaryAgreement. The Parties agree and understand that this Agreement has been freely and voluntarily entered into, and that no representations or promises of any kind other than those contained in this Agreement have been made by either Party to induce the other Party to enter into this Agreement. The Parties have read and understand this Agreement in its entirety. The Parties acknowledge that each of them has been represented by counsel in connection with the negotiation, drafting, and execution of this Agreement. 15. Authority to Enter A;;reement/Non Assi ng ment. Each person and entity executing this Agreement warrants that he, she, or it is the duly authorized representative of the person or entity for which he or she acts and is fully and legally empowered to execute and deliver this Agreement. Each person and entity represents that it has not further assigned or conveyed its claims or potential claims to any third party and agreed to defend, indemnify and hold harmless any other party who is subjected to a claim covered by this Agreement asserted by a third party under a purported assignment or conveyance. 16. Interpretation of Agreement. Each Party acknowledges and agrees that this Agreement shall not be deemed prepared or drafted by any one Party. In the event of any dispute between the Parties concerning this Agreement, the Parties agree that any rule of construction, to the effect that any ambiguity in the language of the Agreement is to be resolved against the drafting Party, shall not apply. 17. Entire A;reement. The Parties agree that this Agreement constitutes the final and entire agreement among the Parties and hereby supersedes and voids any and all prior agreements, letters, or understandings, whether written or oral, which may have existed regarding the subject matter of this Agreement. 18. Severability. In the event any portion of this Agreement is determined to be void or voidable by a Court of competent jurisdiction, all other portions of this Agreement shall remain in effect. 19. Modification of Agreement. amended, modified, revoked, supplemented, instrument duly executed by the Parties. No provision or term of this Agreement may be waived, or otherwise changed except by written 20. Applicable Law. This Agreement shall be interpreted and construed in accordance with the laws of the State of Colorado. 21. Counterparts. This Agreement may be signed and executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one agreement. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or email shall be effective as delivery of an originally executed counterpart of this Agreement. The Parties hereto further acknowledge and agree that this Agreement may be signed and/or transmitted by using electronic signature technology (e.g., via DocuSign, Adobesign, or other electronic signature technology), and that such signed electronic record shall be valid and as effective to bind the Party so signing as a paper copy bearing such Party's handwritten signature. The Parties further consent and agree that (1) to the extent a Party signs this Agreement using electronic signature technology, by clicking "SIGN", such Party is signing 7 DocuSign Envelope ID: ABA7384F-BB84-45B6-B75D-5A028D8C69DD this Agreement electronically; and (ii) the electronic signatures appearing on this Agreement shall be treated, for purposes of validity, enforceability and admissibility, the same as handwritten signatures. 22. Enforcement. In the event any litigation is initiated by any Party against another Party to enforce, interpret or otherwise obtain judicial or quasi judicial relief in connection with this Agreement, the prevailing Party in such litigation shall be entitled to recover from the non -prevailing Party all costs, expenses, reasonable attorneys' fees and expert witness' fees, relating to or arising out of (1) such litigation (whether or not such litigation proceeds to judgment), and (ii) any post judgment or post -award proceeding including without limitation one to enforce any judgment or award resulting from any such litigation. 23. Fees and Costs. The Parties agree to bear their own attorneys' fees and costs incurred in connection with the Litigation and with preparation and completion of this Agreement. 24. Further Assurances. The Parties agree to cooperate fully and execute any and ali supplementary documents, including, but not limited to, appropriate pleadings, and to take all additional actions which may be necessary or appropriate to give full force and effect to the basic terms and intent of this Agreement. 25. Acknowledgment of Understanding. The Parties acknowledge that they have read the Agreement, have discussed the force and legal effect of this document with legal counsel, that they understand the terms and provisions of this Agreement, and that they sign this Agreement as a voluntary act and deed. [Signature Blocks orr Following Page] DocuSign Envelope ID: ABA7384F-BB84-45B6-B75D-5A028D8C69DD CITY DEFENDANTS: Clty Tgked by: By• 37C89S Print Name: T1 ' Fitle Scott Miller public works Di rector City of Aspen City Council : By:LLI 33[1Ff Print Name: Title: Mayo r Torre Approved by City Defendants'Atto�neys DocuSigned by: Josh A. Marks, Esq., # 16953 BERG HILL GREENLEAF RUSCITTI LLP DocuSigned by: ,�aw►ts 11�. James R. True Esq., Esq. City Attorney City of Aspen 3/27/2024 12049:15 PM PDT Dated: March , 2024 3/27/2024 � 1:21:15 PM PDT Dated: March , 2024 3/28/2024 � 9:02:58 AM MDT Dated: March , 2024 3/27/2024 � 3:40:30 PM MDT Dated: March , 2024 DocuSign Envelope ID: ABA7384F-BB84-45B6-B75D-5A028D8C69DD FOREST SERVICE LOT PLAINTIFFS: Forest Lookout II LLC a Colorado limited liability company By: Print Name: Title: Aspen Forest 8th Street LLC, a Nevada limited liability company By: Print Name: Title: DR 24F16, LLC a Colorado limited liability company By: Print Name: Title: Approved by Forest Service Lot Plaintiffs Attorneys David L. Lenyo, Esq. #14178 GARFIELD & HECHT, P.C. 10 Dated: March 2024 Dated: March 2024 Dated: March 2024 Dated: March 2024 DocuSign Envelope ID: F9B39D81-6AAF-4204-852C-C85E9EA974DD FOREST SERVICE LOT PLAINTIFFS: Forest Lookout II LLC a Colorado limited liability company DocuSigned by: By• �n Print Name: Bart Johnson Title: Authorized Representative Aspen Forest 8th Street LLC, a Nevada limited liability company By: L�Do-{c�tu,Signed I DCF4B4976C' Print Name: Bart 7ohnson Title: Authorized Representative DR 24F16, LLC a Colorado limited liability company sy: DocuSigned by: DCF4B4976C944E9... Print Name: Bart Johnson Title: Authorized Representative Approved by Forest Service Lot Plaintiffs Attofneys C� David L. Lenyo, Esq. #141 GARFIELD & HECHT, P.C. 10 Dated: March 21 2024 Dated: March 21 2024 Dated: March 21 2024 Dated: March .�� 2024