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HomeMy WebLinkAboutcoa.lu.ex.N Mill St-Morse&Pabst.1974 C.. ~,'."m_'".._",,"'.'.""~_'" ""'_'" '~. "_">""~'m_~"~,_,.,,.'" ~_'N"~.,'" ,.. " . . .. EXEMPTION FROM SUBDIVISION WHEREAS, the Muncipal Code of the City of Aspen, more specifically Section 20-10(b) thereof, provides that "Following receipt of a recommendation from the Planning Commission, City Council may exempt a particular division of land from the definition of a subdivision set forth in Section 20-2(a) when, in the judgment of the City Council, such division of land is not within the intent and purpose of this Chapter 20", and WHEREAS, EDWARD W. MORSE and HARALD PABST, have sub- mitted an application for exemption pursuant to Section 20-10(b) for the following tract consisting of approximately 58,000 square feet of land, more particularly described as: A tract or parcel of land within the northwest quarter of the southwest quarter of Section 7, Township 10 South, Range 84 West, Sixth Principal Meridian, at Aspen, in pitkin County, State of Colorado, described as follows: Commencing at the southeast corner of the northwest quarter of the southwest quarter of Section 7, Township 10 South, Range 84 West; thence North 89 degrees 32 minutes West along the south line of said subdivision a distance of 184.4 feet; thence North 53 degrees 35 minutes West 335 feet; thence North 1 degree 15 minutes East 100 feet; thence North 7 degrees 45 minutes West 217 feet to the true point of beginning of the tract of land herein conveyed; then South 82 degrees 15 minutes West a distance of about 303.0 feet to a point 50 feet easterly measured at right angles from the center line of the track of the Aspen branch of The Denver and Rio Grande Western Railroad Company; thence southeasterly along the arc of a curve to left having a radius of 668 feet a distance of 222.1 feet, said arc having a long chord 221.1 feet in length with course South 24 degrees 08 minutes East; thence South 71 degrees 50 minutes East 151 feet; thence North 18 degrees 10 minutes East 240 feet; more or less; thence North 7 degrees 45 minutes West 63 feet to the point of beginning, containing 1.33 acres, more or less, and WHEREAS, the application is made so as to permit convey- ance of parcels of 6,000 square feet and 52,000 square feet , ,~ I to Edward E. Morse and Harald Pabst, respectively, following dissolution of a joint venture entitled "Mill Street & Morse" pursuant to Article of Dissolution dated September 15, 1970, and WHEREAS, the Aspen Planning and Zoning Commission has recommended to the City Council the grant of this exemption at its meeting held October 1, 1974, and such grant of exemption was approved by the City Council at its meeting held October 15, 1974, NOW, THEREFORE, there is hereby made this grant of exemption from definition of subdivision (set forth in Section 20-2(a) of the Aspen Municipal Code) for the conveyance by "Mill Street & Morse", a joint venture, to Edward E. Morse and Harald Pabst of parcels of approximately 6,000 square feet and 52,000 square feet, respectively, from the tract of land herein- above described, which grant of exemption is made under Section 20-10(b) of the Municipal Code subsequent to recommenda- tion of the Planning Commission and pursuant to a motion duly made, seconded, and approved by the Aspen City Council on October 15, 1974'__gg;.~f Date,@j 16 I Wit! ~ t- ~--Stacy tandley III Mayo ~~ ~ I I, Lorraine Graves, duly appoint d and acting CittJ Clerk, do hereby certify that the foregoing Exemption from the Definition of Subdivision was approved by the Aspen City Council at its regular meeting held Tuesday, October 15, 1974. (Seal) ---~~: /t~~C<_j \ _"/"""Lorraine Grave '-.--.-- _!.!gular.. M~~t~n_g Asp~ri City Council October 15, 1974 ._-~._._----'--- -------'---,_._- . ~._.__._-,--'-- -.-, ....--. -- ---- _ ~--- -- ..- --- -.-.---- _ --..- ------ _.--- -. ------------ ---- --.--- ---~-- -------------- -,- Council Walls moved to adopt Resolution $ 33, Series of 1974, Seconded by Council- woman Markalunas. All in favor, motion carried. RESOLUTION # 34, SERIES OF 1974 Councilman Walls moved to read Resolution # 34, Series of 1974. Seconded by Councilwoman Markalunas. All in favor, motion carried. RESOLUTION #34 SERIES OF 1974 ~ WHEREAS, on advice of coun3el the City Council has determined that re- entry as a party protestant in that litigation cOIIUIlonly known as the "Twin Lakes" litigation is appropriate based on the new information supplied to the City's advisors on this matter, NOW, TIlEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF TIlE CITY OF AS PEN, COLORADO , 1. That it does repeal its former directive to withdraw and direct that the CitJ of Aspen be re-instated.as a party litigant in the following civil actions: a. In the Matter of the Application for Change of Water Rights of the Twin Lakes Reservoir and Canal Company, Case Number W-1901, Water Division No.5; and b. In the Matter of the Application for Water Rights of Twin Lakes Reservoir and Canal Company for the New York Collection Canal Supplement for the Independence Pass Trans-Mountain Diversion System, Case Number W-1869, Water Division No.5. 2. That the City Attorney, at her convenience, so advise Vranesch and Musick, attorneys at law. was read in full by the City Attorney. Councilwoman Markalunas moved to adopt Resolution # 34, Series of 1974. Seconded by Councilman Walls. All in favor, motion carried. ORDINANCE #48, SERIES OF 1974 Councilman Breasted moved to read Ordinance #48, Series of 1974 on first reading. Seconded by Councilman Walls. All in favor, motion carried.> ORDINANCE #48, SERIES OF 1974, AN ORDINANCE PROVIDING FOR TIlE ELECTION OF TIlE SUCCESSOR OR SUCCESSORS TO A RECALLED COUNCII}~N OR MAYOR AT TIlE TIME OF SUBMISSION OF TIlE QUESTION OF RECALL ALLAS PERMITtED BY TIlE RECENT AMENDMENT OF SECTION 3.8 OF TIlE ASPEN MUNICIPAL CHARTER was read by title by the City Clerk. Councilman Walls.moved to adopt Ordinance #48, Series of 1974 on first reading. Seconded by Councilman Behrendt. Roll call vote - Council members Wails aye; Behrendt aye; Brea sted aye; Markalunas aye; Pedersen aye; Mayor Standley ayea . Motion carried. ORDINANCE #49, SERIES OF 1974 City/County Planner Stanford suggest Council schedule an additional public hearing for citizen imput. Councilman Walls moved to schedule a public hearing on November 11th for citizen imput on Ordinance #49. Seconded by Councilman Breasted. Councilman Walls request all architects be notified of this meeting. All in favor, motion carried. MAYOR'S DEEDS Co~ncilwoman Pedersen moved to authorize the Mayor and City Clerk to execute deeds to Robert and Judith Smith and a Iso deed .to Grace E. Huffman as presented by the City Attorney. Seconded by Councilman W.lls. All in favor, motion carried. MILL STREET & MORSE SUBDIVISION EXEMPTION City Attorney submitted to Council the complete file. She further stated the question before Council is do you feel the intent of the subdivision regulations are being evaded by this request. P & Z felt it is not in this case. Councilman Walls moved to approve the subdivision exemption agreement as submitted. Seconded by Councilwoman Markalunas. All in favor, motion carried.. f, or: .1 Water litig- ation .r.] · l Ord .1,48 1teoall :; - ~i Ord.#49 Historic Overlay Deeds Pabst & Morse J ""-"~' . TO: FROM: DATE: RE: John MEMORANDUM JOHN STANFORD, PLANNER SANORA M. STULLER, CITY ATTORNEY September 16, 1974 APPLICATION OF HAROLD PABST AND EDWARD MORSE FOR EXEMPTION FROM SUBDIVISION REGULATION Let me make two points initially before I go into the merits of the application. 1. First, John Wendt's letter states that the joint venture is governed by the Uniform Partnership Act, Chapter 104, Article 1, of Colorado Revised Statutes. This is in opposition to a line in Section 4.1 of the Joint Venture Agreement where the parties thereto state: "This agreement in nowise shall limit the operation of either party as an individual or in joint operations with others and it is not the intention of the parties hereto to form ~ partnership." - 2. Secondly, Mr. Wendt closes his letter by saying: "It is understood and agreed that the unimproved Pabst tract would be subject to all of the applicable subdivision and zoning regulations with respect to sub- divisions, building and use." I hope no one on the Commission will be misled by the above so as to anticipate there will be compliance with Chapter 20 without further parceling or condominiumization. Mr. Pabst, in his affidavit, makes clear that without such event occurring Chapter 20 will not be satisfied. He says: "I understand that the lands to which I am entitled upon dissolution and winding up of the joint venture are subject to the zoning code, and if subdivided, to the subdivision code.-- ',"e'_-'^~'^""'i"""_"__~ Memorandum to September 16, Page Two John Stanford 1974 Legal Issue The basic issue is whether the joint venture, by quit- claiming the two parcels to the respective joint ventures, constitutes a subdivision of land and, if so, whether an exemption to the requirements of Chapter 20, pursuant to S20-10 is appropriate. I will not address the latter issue as that is one to be dealt with by the Commission itself. As for the former, the existing Section 20-2 provides in part: "(a) Subdivision. A subdivision or subdivided land is defined as a tract of land which is divided into two (2) or more lots, tracts, parcels, sites, separate interests, . . ., interests in common . . for the purpose, whether lmmediate or future, or transfer of ownership, or for build- ing or other development." It is submitted that, without more, the creation of the joint venture and transfer of the real estate into the venture created an interest in common between Pabst and Morse, and this event constituted a subdivision of land. However, ~the city might very well be estopped at this time (a permit having been issued) to allege a violation of Chapter 20 and (2) I think the following continuation of subsection (a) takes the transaction outside the definition of subdivision: ". . . Unless the method of land disposition is adopted for the purpose of evading this definition, the term subdivision as defined in this section 20-2(a) shall not apply to any of the following divisions of land: . . . (6) The division of land by the acquisition of an interest in land in the name of a husband and wife or other persons in joint tenancy or as tenants in common and any such interest shall~e~eemed for:purposes of this Section 20-2(a) as only one interest." We have no evidence that the joint venturers intend by their agreement to avoid the consequences of Chapter 20 (the affidavits being to the contrary and the history of lack of development of the whole parcel supporting this contention). I do not agree with the policy that those taking as tenants in common should be exempt, but that is the code as it stands (the state regulations, county regulations, and new city regulations having the identical language). The proviso about intention to evade the effects of taking in such manner is designed to deal with a situation like that described in the California case of Pratt v Adams, 229 Cal. App. 2d 602, 40 Cal Rptr. 505. At that time you were permitted to divide . Memorandum to John Stanford September 16, 1974 Page Three a parcel into five tracts, but no more, without going through subdivision. A married couple bought a large tract for the purposes of developing it. They did not want to go through subdivision regulation and they sold the tract to two couples (themselves included) as joint tenants. These four sold their interests to 12 others (themselves included) as joint tenants. All then petitioned to have the land partitioned among themselves, and when completed, each divided his or her share into four lots and sold them off. The Court con- sidered this an obvious attempt to avoid the Subdivision Act and upheld the City's refusal of building permits. Conclusion There is one element in the above I cannot establish to a certainty and that is that joint venturers hold the land as technically tenants in common, but the attributes of ownership are so close that I am not going to dispute the point in the absence of statutory or common law to the contrary. All of the above is noted to support my conclusion that the contention that the partitioning of the land under the circumstances testified to by the applicants does not come under subdivision review is a valid premise, and one that I cannot dispute. SMS:ksh . _,.._ .'_.._.,,_____~,~~..__"~,_h~ - WENDT Be KISTLER LAWYERS DRAW E R 8429 ASPEN, COLORADO 8161 1 JOHN A. F. WENDT, JR BRUCE KISTLER THE PROFESSIONAL BUILDING TELEPHONE: 303-925-4505 August 27, 1974 Spencer Schiffer, Esq. Chairman, City of Aspen Planning and Zoning Commission Aspen, Colorado Re: Harald Pabst and Edward W. Morse, Jr., formerly d/b/a Mill Street & Morse, a joint venture. APPLICATION FOR EXEMPTION FROM THE APPLICATION OF THE DEFINITION OF A SUBDIVISION IN SECTION 20-2(a), MUNICIPAL CODE OF THE CITY OF ASPEN, COLORADO, OR IN THE ALTERNATIVE, EXCEPTION FROM THE STRICT APPLICATION OF CHAPTER 20, MUNICIPAL CODE OF THE CITY OF ASPEN, COLORADO. 1. LAND DESCRIPTION: The are described on the survey lands which are the sUbject of this application in Exhibit "A", attached hereto and as shown map shown as Exhibit "B", attached hereto. 2. HISTORY: A. On May 9, 1969, Harald Pabst purchased the unimproved lands from Vesta Ione Cate and Helen Elizabeth Herman of Grand Junction, Colorado. B. On May 22, 1969, Messrs. Morse and Pabst entered into a joint venture agreement affecting the lands. A copy of this agreement is attached as Exhibit "e". Pursuant to the agreement, Mr. Pabst conveyed the lands to "Mill Street & Morse". C. Mill Street & Morse obtained a building permit in the Spring of 1970 and constructed the building known as the "Mason & Morse House Care Building" during the 1970 building season. It was occupied in the fall of 1970 upon its completion. '^'''~----~'~-'-'-"''~-~'-'''-~.~'""",-"-,>------,_",-",, August 27, 1974 Spencer Schiffer, Esq. Page Two D. Messrs. Pabst and Morse on September 15, 1970 entered into Articles of Dissolution of "Mill Street & Morse". Pursuant to the terms of the joint venture agreement, Reese Henry, C.P.A. was consulted with respect to the distribution of assets (paragraph 2.6, p.3, of the Joint Venture Agreement). A copy is attached as Exhibit "F". E. The requisite quit claim deeds required by paragraph 2.4 of the Articles of Dissolution were not prepared or executed due to the" advertence and neglect of counsel. However, the parties have, between themselves, effectuated its provisions in that each party has treated his respective interest as his own; ~.[., Mr. Morse has used the building for the operation of House Care. Mr. Pabst leased his portion to the City of Aspen for the use of the car impound lot. 3. APPLICABLE LAW: A. C.R.S. 1963, Cha~ter 104, Article 1, "Uniform Partnership Law". The JOInt venture agreement is governed by the provIsIons of this Article. Accordingly, application can be made to Court for dissolution pursuant to 104-l-32(g). B. S20-2(a)(1) Municiaal Code of the City of As~en, Colorado provides that the efinition of a sub- dIvisIon shall not apply to "the division of land by order of any court in this state or by operation of law." (emphasis added) It is the applicants' positIon that the dissolution of a joint venture (partnership) with its attendant winding up qualifies as an "operation of law". It appears illogical to require that the parties resort to a judicial decree in order to qualify for the exemption. C. In the event that the Commission rejects the applicants' claim for exemption, the applicants pray for an exception pursuant to Section 20-10 of the Aspen Code. Applicants submit that undue hardship would result from strict compliance with the requirements and other provisions of Chapter 20. Each applicant has a substantial property right which cannot be preserved and enjoyed individually; granting an exception will not be detrimental to the public welfare or injurious to the property in the area in which the subject property is located. '. August 27, 1974 Spencer Schiffer, Esq. Page Three 4. NO INTENTION TO EVADE: Counsel states that at no time in the chronology of the 1969 and 1970 events was there any intention to evade the application of Chapter 20 of the Code. Each of the applicants make this statement in their affidavits attached hereto as Exhibits "D" and "E". 5. END RESULT: In the event that the relief sought is granted the end result will be the division of the lands into a tract of 6,000 square feet, more or less, and a tract of approximately 52,000 square feet, with ownership of the 6,000 square foot tract which is improved vested in Edward W. Morse, Jr. and the unimproved 52,000 square feet vested in Harald Pabst. No additional improvements, sUbdivision, etc. are possible upon the Morse tract. It is understood and agreed that the unimproved Pabst tract would be subject to all of the applicable sub- division and zoning regulations with respect to sUbdivision, building and use. Respectfully submitted, \ "---.J1 r-'.. I ! L--....- .--- ,,0 John A.F. Wendt Attorney for the Applicants cc: Ms. Sandra Stuller, City Attorney The City of Aspen Planning Department JAFW/sf August 27, 1974 Spencer Schiffer, Esq. Page Four VERIFICATION STATE OF COLORADO ss. County of Pitkin Edward W. Morse, Jr. and Harald Pabst, being first duly sworn upon their oaths, say that each of them has read the foregoing Application, knows the contents thereof and that the matters stated therein are true. ~!,' , / ~ M"!/;;//~> Harald Pabst Subscribed and sworn to before me this ~~ay of August, 1974, by Edward W. Morse, Jr. and Harald Pabst. Witness my hand and offical seal. My commission expires: .;2-/,,1-')7 ~m.< f X'4... i/J.,...} Nota Public -'.-, EXHIBIT "A" A tract or parcel of land within the northwest quarter of the southwest quarter of Section 7., Township 10 South, Range 84 West, .Sixth Principal Meridian, at Aspen, in Pitkin County, State of Colorado, described as follows: Commencing at the southeast corner of the northwest quarter of the southwest quarter of Section 7, Township 10 South, Range 84 West; thence North 89 degrees 32 minutes West along the south line of said subdivision a distance of 184.4 feet; thence North 53 degrees 35 minutes W~st 335 feet; thence North 1 degree 15 minutes East 100 feet; thence North 7 degrees 45 minutes West 217 feet-to the true point of beginning of the tract of land herein conveyed; thence South 82 degrees 15 minutes West a distance of about 303.0 feet to a point 50 feet easterly measured at right angles from the center line of the track of the Aspen branch of The Denver and Rio Grande Western Railroad Company; .thence southeasterly along the arc of a curve to left having a radius of 668 feet a distance of 222.1 feet, said arc having a long chord 221.1 feet in length with course South 24 degrees 08 minutes East; thence South 71 degrees 50 minutes East 151 feet; thence North 18 degrees 10 minutes East 240 feet, more or less; thence North 7 degrees 45 minutes West 63 feet to the point of beginning, containing 1.33 acres, more or less. < ( ~" '-', . EXHIBIT "c" JOINT VENTURE AGREEMEN'T THIS JOINT VENTURE AGREEMEN'T made and entered into by and between EDWARD W. MORSE (hereafter referred to as "Morse") and HARII.LD PABST (hereafter referred to as "Pabst"), both of Pitkin County, Colorado, WITNESSETH: I RECITALS 1.1 Property: The real property which is the subject of this agreement is approximately 58,000 square feet of land described as follows: A tract or parcel of land within the northwest quarter of the southwest quarter of Section 7, Township 10 South, Range 84 West, Sixth Princi- pal Meridian, at Aspen, in Pitkin County, State of Colorado, described as follows: Commencing at the southeast corner of the north- west quarter of the southwest quarter of Section 7, Township 10 South, Range 84 West; thence North 89 degrees 32 minutes West along the south line of said subdivision a distance of 184.4 feet; thence North 53 degrees 35 minutes West 335 feet; thence North 1 degree 15 minutes East 100 feet; thence North 7 degrees 45 minutes ~est 217 feet to the true point of beginning of the tract of land herein conveyed; thence South 82 degrees 15 minutes West a distance of about 303.0 feet to a point 50 feet easterly measured at right angles from the center line of the track of the Aspen branch of The Denver and Rio ~rande Western Rail- road Company; thence southeasterly along the arc of a curve to left having a radius of 668 feet a distance of 222.1 feet, said arc having a long chord 221.1 feet in length with course South 24 degrees 08 minutes East; thence South 71 degrees 50 minutes East 151 feet; thence North 18 degrees 10 minutes East 240 feet, more or less;thence North 7 degrees 45 minutes West 63 feet to the point of beginning, containing 1.33 acres, more or less. Hereafter, for convenience, the above-described real property may be referred to as the "property" or the "lands". 1.2 Ownership: The lands are owned by Pabst but con- currently with the execution of this Agreement Pabst shall convey the lands by special warranty deed to the joint venture. -" \ ,,'" ~, 1.3 Purpose: The parties desire to and do enter into this joint venture for the purpose of planning for (a) the orderly use of the lands whether by way of sale to third parties and/or ground lease; and (b) such business future for the lands as will realize the maximum return on the property consonant with the best interests of the parties. 1.4 Consideration: The consideration for this agree- ment shall be the benefits each party shall derive from the performance of its covenants and other good and valuable con- sideration, the receipt of which is acknowledged. II GENERAL PROVISIONS 2.1 Joint Venture Name: This joint venture shall be entitled" Mill Street & Morse " and may operate under such name to facilitate the carrying out of the purpose of the joint venture. 2.2 Term: The joint venture shall be for a term of ten (10) years unless sooner terminated by (a) sale of the real property to a third party; or (b) mutual consent of the parties; or (c) death, bankruptcy or insanity of either party; or (d) sale of one party's interest to the other party pursuant to paragraph 2.8. , 2.3 Initial Contribution: The initial contribution of each party is as follows: a. Pabst - the lands at an agreed value of $63,500. b. Morse - services with respect to acquisition of the lands and expertise in the field of real estate sales and land management. Division of Profits and Losses: 2.4 (a) Profits and losses shall be determined according to sound accounting principles but without regard to the initial contributions of the parties as detailed in paragraph 2.3. -2- (,......., \,.,/ ( \ '-' (b) The profits and losses of the joint venture shall be divided by the parties upon the following bases: (1) Pabst - 32/58ths (2) Morse - 26/58ths. (c) Contributions of working capital and/or advances to meet current expenses made by the parties subsequent to the effective date of this agreement shall be made in the same ratio as above specified in subparagraph (b) for the division of profits or losses. (d) Subsequent contributions and/or advances shall be made only by mutual consent of the parties. 2.5 Lack of Authority of Individual Member: No party to this agreement shall have any authority to bind or obligate the joint venture for any sum whatsoever except in case of a bona fide emergency affecting the joint venture property. Neither shall either party create or impose any contractual or other liability on the joint venture or the other party without written consent of the other party first obtained. Any third person, firm or corporation dealing with the joint venture does so at its peril unless the transaction con- templated is under one hundred dollars ($100.00) en toto or is executed by both members of the joint venture or the sole member , of the joint venture dealing with the third party produces a written, executed and acknowledged consent to the transaction by the other member of the joint venture. 2.6 Winding Up: (a) Upon termination of the joint venture for any reason, a certified public accountant (C.P.A.), licensed in Colorado, shall be employed by the joint venture to make an audit of the books, records and accounts of the joint venture. (b) Distribution to the parties upon liquidation shall be in cash or in kind or in cash and in kind as the C.P.A. making the audit pursuant to subparagraph (a) shall recommend. -3- "'"" i \ ....., '., ,j (c) Winding up shall be accomplished within six (6) months of the date of termination of the joint venture. 2.7 Non-assignability of Interest: The interest of each party shall be non-assignable by way of unconditional transfer, except as provided in paragraph 2.8, but any profits attributable to the party's interest may be assigned by way of pledge or mortgage. 2.8 First Right of Refusal or Sale to Other Party: (a) (1) In the event that one Ilarty has received a bona fide offer from a third party for his interest; or (2) the joint venture has received a bona fide offer for its property and only one party desires to sell his interest or the joint venture property, the non-selling party shall have a period of ten (10) days (including Sundays) in which to elect to meet the bona fide offer upon said offer's identical terms and conditions. If the non-selling party fails to exercise his election in the manner provided in paragraph b, then it shall be deemed con- clusively that he does not desire to meet such bona fide offer. Thereupon the selling party shall be free to sell and assign his interest to such third party upon the exact same terms as were contained in the offer. The joint venture will thereupon , be terminated and its affairs wound up. PROVIDED. HOWEVER, such transfer may be set aside by the non-selling party if, in fact the selling party closes the transaction upon different terms than those specified in the offer. (b) In the event that one of the parties desires to sell his interest, then he shall give notice to the other party of the terms and conditions under which he will sell. The non-selling party shall have a period of thirty (30) days in which to elect to buy the interest upon the terms and conditions so specified. During such term the selling party may not solicit offers from third parties. If the non-selling -4- i \ I"'" '-" i \ /-.., party does not elect to meet such terms and conditions then the party desiring to sell may do so but the right of refusal set forth in subparagraph (a) of this paragraph 2.8 shall become applicable to any offer subsequently received by the third party. If the party desiring to sell does not sell his interest within six months of the date of the notice given under this subparagraph (b) then the procedure outlined in this subparagraph (b) shall, at the expiration of said six months period, once more become effective. (c) If a party desires to buyout the other party's interest he shall give notice of that fact specifying the purchase price, terms and conditions of the offer. The non-selling party shall have thirty (30) days in which to accept the offer. In the event that the offer is not accepted, then the provisions of subparagraphs (a) and (b) of this paragraph 2.8 shall become effective with respect to the non-selling party's interest. III ADMINISTRATIVE PROCEDURES 3.1 Meetings: Meetings of the joint venture shall be held quarterly at the office of Mason & Morse Real Estate in Aspen, Colorado or at any other agree a upon place on the first Monday of April, July, October and January of each calendar year. Special meetings may be called on three (3) days notice by either party. Minutes shall be kept of the meetings. 3.2 Consent: Consent shall be unanimous with respect to any joint venture matter as between the parties only. In the event that the parties cannot agree, each party shall select a representative and the two repre~entatives so selected shall themselves select a third representative. The parties and the three representatives shall then vote upon the matter and the vote of the majority of those present shall govern. -5- ( ,-.. "-+-,,.- ( "''-'', , . .' A quorum for voting when representatives have been selected shall be four (4) persons. In the event that either party refuses to select a representative, then for purposes of resolving the deadlock E. H. Deming, of Aspen, Colorado shall be Morse's repre- sentative and John A.F. Wendt of Aspen, Colorado shall be deemed Pabst's representative. The reasonable charges of the three representatives shall be an expense of the joint venture. 3.3 Manager: The joint venture may select, from year to year, a resident manager who may, or may not, be a member of the joint venture. The resident manager shall be responsible for the maintenance of proper books, records and accounts and shall pre- pare for the members a monthly itemized statement of income and disbursements. The resident manager shall have and perform administrative and ministerial functions only. He may not incur an expenditure in excess of one hundred dollars ($100.00) without the consent of the joint venture. 3.4 Bank Account: The joint venture shall maintain a checking account in its name at The Bank of Aspen, Aspen, , Colorado. All checks drawn on the checking account shall be signed by both members of the joint venture. 3.5 Notices: All notices shall be in writing and sent by certified U. S. mail. The effective date of the notice shall be its postmarked date. Notices shall be addressed as follows: Morse: Mr. Edward W. Morse Box Q Aspen, Colorado 81611 Pabst: Mr. Harald Pabst Box 35 Aspen, Colorado 81611 or such other address as one party shall furnish the other in writing, as contemplated by this paragraph 3.5 -6- ( - ( r'~~ ,,,_..... IV MISCELLANEOUS 4.1 Limitation of Joint Venturer's Operations: It is the purpose of this agreement to limit the joint operations of the parties hereto to the operation herein set forth. This agreement in nowise shall limit the operations of either party as an individual or in joint operations with others and it is ~-- not the intention of the parties hereto to form a partnership. -'------"^,.._,, "' ....-._--~--, ~..~'"------~~._,'-'--_.'"....~'-_..-~,,~ -, -,. 4.2 Choice of Law: In all matters relating to the interpretation or enforcement of this agreement the laws of the State of Colorado shall govern. 4.3 Attorney's Fees: In the event that this agreement or the matters contemplated by it become the subject of disagree- ment and/or litigation, the party prevailing shall, as a part of his settlement, award or judgment, be entitled to the award of his reasonable attorney's fees. 4.4 No Oral Agreements: This agreement constitutes the sole joint venture agreement between the parties and each party represents that there is no oral agreement or represent- ation upon which he is relying. Any amendment to this agreement shall be in writing and mutually consented to by the parties. , 4.5 Section Headings: The section and paragraph headings employed herein are for convenience only and in nowise shall be construed as proscribing or enlarging the meaning of any portion hereof. 4.6 Gender: Throughout this agreement the masculine, feminine and neuter genders may be utilized interchangeably to suit the sense of the expression. 4.7 Succession: This agreement shall extend to and be binding upon the heirs, personal representatives, successors and assigns of the parties hereto. -7- ~CL ( - ( --- '-' -.....-, ment is 4.8 1~ The effective date of this agree- Effective '2..2- , U, 1969. Date: ~.. ;---'\.~./7 ...J ~/ /!~ ( eit/{_,.,' 1'_ ::./(,<i'" ;::)-1 "'--<-- 'Edwar;d 'w. 17e / ! /i/.) <J./;?{./J.i {''i-- Harald Pa st STATE OF COLORADO ) ) ss. ) County of Pitkin The foregoing instrument was acknowledged before me this 11M day of ~( 1969 by Edward W. Morse and Harald " Pabst. Witness my hand and official seal: My commission expires: fl,y Co.)lrr.i~.s;;:.!-, CX~:;-'~5 /A3r. 14, i'l'i.3 : ,~ j I> ? t"Y'Y'----<'-- Ii~r Notary Publl.c r -8- ""'""'_0_.0""_,.'" '''__.'"'~__~_''''_''''_'_''~'_'_'.. ....... ',/ "" '<""", EXHIBIT "D" AFFIDAVIT OF EDWARD W. MORSE, JR. STATE OF COLORADO ) ) ss. ) County of pitkin Edward W. Morse, Jr., being first duly sworn upon his oath, says that: 1. He formed with Harald Pabst the joint venture known as "Mill Street & Morse" for the development of the 1.33 acres of land on North Mill Street. This joint venture was formed in the Spring of 1969. 2. During the balance of 1969, affiant and Mr. Pabst had numerous discussions as to what to do with the land. As a result of these discussions it was agreed that the joint venture should build a building. on the lands to be rented to House Care, Inc. 3. The House Care building was started in the Spring of 1970 and completed in the fall of 1970. 4. During the summer of 1970 affiant and Mr. Pabst continued their discussions of what use to make of the balance of the land. There was no agreement so it was decided that the joint venture should terminate and each party go his separate way. Accordingly, the Articles of Dissolution of Mill Street & Morse were executed by us. For tax reasons the venture's C.P.A., Reese Henry, recommended that upon dissoultion and winding up that the assets be distributed in kind. 5. An appraisal of the assets determined that if I were to receive the House Care Building and 6,000 square feet of land, the minimum lot size, that would be equivalent in value to 52,000 square feet of unimproved land. . - .....", ""',> (EXHIBIT "D" continued) 6. Since September 1970, I have treated as my separate property the House Care Building with 6,000 quare feet of underlying land and regarded the balance of the land as belonging to Mr. Pabst. 7. In the winter of 1974 we discovered that all the land was still in the joint venture's name, ~.~., Mill Street & Morse. 8. At no time was it ever contemplated that the joint venture would be formed and then dissolved for the purpose of evading the impact of the City of Aspen's subdivision regulations. When we entered into the joint venture I feel certain that both Mr. Pabst and myself felt that it would be a long-term, beneficial relationship. Further affiant says not. Subscribed and sworn to before me this 0'8~ day of August, 1974, by Edward W. Morse, Jr. My commission expires: .;2 -/1./-77 r--..-I/~ [7L, (J. Y ~_I U.. NO~PubliC cr -2- ......, '''''", , EXHIBIT "E" AFFIDAVIT OF HARALD PABST STATE OF COLORADO ) ) ss. County of Pitkin ) Harald Pabst being first duly sworn upon his oath says that: 1. In the Spring of 1969, I bought approximately 1.33 acres of land on North Mill Street from two sisters, Mrs. Cate and Mrs. Herman of Grand Junction, Colorado. Edward W. (Wendy) Morse, Jr. and I had been friends for a long time and I respected his real estate expertise. We discussed my use of the lands and we decided to form a joint venture whereby I would convey the lands to "Mill Street & Morse" and Wendy would contribute his services. 2. During the balance of 1969, Mr. Morse and I discussed various ideas for the lands. Wendy wanted to build a building that would adequately house his House Care operations and I agreed that the venture should do so. 3. I have never been a developer but rather an investor. My practice has been to buy land, improved or unimproved, and either hold it for a long term or resell it. 4. It appeared to me in the summer of 1970 that it would be in my best interests, both tax-wise and philosophically, not to be involved in any further development of the Mill Street & Morse venture land. Accordingly, Mr. Morse and I agreed to terminate our partnership in the venture. Our accountant, Reese Henry, advised that distribution of assets should be in kind in order to negate any then present tax consequences. We signed Articles of Dissolution in September 1970 and since that time have regarded the land as partitioned. ~ . - ,. . (EXHIBIT "E" continued) 5. In the winter of 1974 I received an offer to sell my Mill Street land. At this time it was discovered that title to the land was still in "Mill Street & Morse" 6. At no time did I or have I contemplated any use of the joint venture as a vehicle for escape from the force of the City's subdivision regulations. I understand that the lands to which I am entitled upon dissolution and winding up of the joint venture are subject to the zoning code and, if subdivided, to the subdivision code. Further affiant says not. Subscribed and sworn to before me this ~8~ day of August, 1974, by Harald Pabst. My commission expires: ~-/~-71 ~(~ ?~ ~A.u,.J Notary Publl.c -2- \" ,-.. '- .--" EXHIBIT "F" AHTICLES OF DISSOLUTION of Mill Street & Morse THESE ARTICLES OF DISSOLUTION made and entered into by and between HARi\LD PABST (hereafter referred to as "Pabst") and EDWARD W. MORSE (hereafter referred to as "Morse"), WITNESSETH: I RECITALS 1. 1 Joint Venture: The parties hereto entered into a Joint Venture named "lVIill Street & Morse'pursuant to a written agreement with effective date of ]\IIay 22, 1969. ~ 1. 2 Joint Venture Property: The lands owned by Mill Street & Morse consist of approximately 58,000 square feet of land which is described as follows: Commencing at the southeast corner of the northwest quarter of the southwest quarter of Section 7, Township 10 South, Range 84 West; thence North 89 degrees 32 minutes West along the south line of said subdivision a distance of 184.4 feet; thence North 53 degrees 35 minutes West 335 feet; thence North 1 degree 15 minutes East 100 feet; thence North 7 degrees 45 minutes West 217 feet to the true point of beginning of the tract of land herein conveyed; thence South 82 degrees 15 minutes West a distance of about 303. 0 feet to a point 50 feet easterly measured at right angles from the center line of the track of the Aspen branch of the Denver and Rio Gra..'lde Western Railroad Company; thence southeasterly along the arc of a curve to left having a radius of 668 feet a distance of 222.1 feet, saW arc having a long chord , 221. 1 feet in length with course South 24 degrees 08 minu tes . East; thence South 71 degrees 50 minutes East 151 feet; thence North 18 degrees 10 minutes East 240 feet, more or less; thence North 7 degrees 45 minutes West 63 feet to the point of beginning, containing 1. 33 acres, more or less. A commercial building was constructed by Mill Street & Morse on the land during the summer of 1970, which will be ready for occupancy in late September, 1970. 1. 3 Oral Agreement to Dissolve: Pabst and Morse are the sole members of the Joint Venture. Each has a2,Teed orally with the other that it would be in the best interests of the Joint Venture and themselves to dissolve the Joint Venture a..'ld divide the Joint Venture assets after making provision for any Joint Venture debts. i , , i -~,~-.~>-".~,-~~-' , \ ,.... '- I \ ..-"'. 1. 4 Consideration: The consideration for these Articles of Dissolution shall be the performances of the covenants hereafter set forth and other cons ideration, the sufficiency of which each party aclmowledges. 1. 5 C. P.A. 's Recommendations: Reese Hen/.ly, Public Accountant of )'//l- !di1 Aspen, Colorado, has been retained pursuant to paragraph 2.6 "Windin?;!:!E:' of the Joint Venture Agreement. He has recommended distribution in kind of the Joint Venture assets. II MECHANICS OF DISSOLUTION 2.1 Statement of Dissolution: The Joint Venture doing business as Mill Street & Morse is terminated with effective date of September 15, 1970 and shall proceed immediately to wind up its affairs. 2.2 Transfer of Property: The real property which constitutes the sole assets of the Joint Venture shall be distributed to the parties as follows: A. ~--Pabst shall receive 52,000 square feet of ~/ f(yJ B. Morse.- Morse shall receive 6,000 square feet of the ~proved land from the land described in paragraph numbered 1. 2. paragraph 1. 2 land, which distribution shall include the improvements erected in 1970. The parties agree that the distribution described in this paragraph 2.2 are equivalent in value to a 32/58th interest as to Pabst and a 26/58th interest as to Morse. 2.3 Survey: The Joint Venture shall cause a survey to be made so as to properly describe the 52,000 square feet of land to be received by Pabst and 6,000 square feet of improved land to be received by Morse. The results of said survey shall be shown as an addendum to these Articles of Dissolution and become a part hereof by this reference. 2.4 Deeds: The Joint Venture shall give its quit claim deeds to Pabst and Morse. The Pabst lands may be referred to as Tract A and the Morse lands as Tract B in the paragraph 2.3 addendwn. -2- n._"_.~._.., ,,'_.. ~ -, '-' "-t.,..... , . 2.5 Payment of Indebtedness: The Joint Venture shall make provision for the payment of any existing indebtedness as well as that which it will incur in effecting dissolution including survey costs, accoWltir,g and legal fees. If contributions by the parties become necessary to effectuate this paragraph 2.5, they shall be made pursuant to paragraph 2.4 of the Joint Venture Agreement. 2.6 Dissolution Accomplished By: The winding-up requisite to accomplish complete liquidation and dissolution shall be h.tlished by December 31, 1970. 2.7 Indemnification: Upon h'ansfer of this Joint Venture property pursuant to liquidation, the parties each agree to indemnify and hold harmless the other for any and all liability which may be incurred by reason of use of the property so transferred. This indemnification does not extend to (a) liability incurred by the Joint Venture but where third party redress is sought after liquidation is complete and (b) liability which either party might incur by reason of the act of termination of the Joint Venture and liquidation of its assets pursuant to these Articles. III MISCELLANEOUS 3.1 Choice of Law: In all matters relating to the interpretation or enforcement of these Articles, the laws of the State of Colorado shall govern. 3.2 No Oral Agreements: These Articles supersede all previous oral agreements between the parties. Each party represent that there is no oral agreement , or representation upon which he is relying. Any amendment to these Articles shall be in writing and executed by both parties. 3.3 Section Headings: The section and paragraph headings employed herein are for convenience only and shall in nowise be employed as definitive of any portion hereof. 3.4 Succession: This agreement shall extend to and be binding upon the heirs, personal representatives, successors and assigns of the parties hereto. -;}. ~".... - - . . 3.5 Attorney's Fees: The provisions of paragraph 4.3 of the Joint Venture Agreement shall be applicable. 3.6 Effective Date: The effective date of these Articles is September 15, 1970. MILL STREET & MORSE II ~/ J/;! lh4/ .~ Harold Pabst by \ n ; ~d)1~ by Edward W. M rse < -4- g,. f;;... _1:;.7~ ) 1/ . .~~ .rvr-. ~Cl C/ MEMORANDUM TO: MEMBERS OF THE CITY COUNCIL FROM: SANDRA M. STULLER, CITY ATTORNEY DATE: October 2, 1974 RE: REQUEST FOR EXEMPTION FROM DEFINITION OF SUBDIVISION Harold Pabst and Edward W. Morse, formerly doing business as "Mill Street & Morse", a joint venture, have applied for an exemption from the definition of subdivision, which applica- tion received a positive recommendation from the P & Z at its meeting Tuesday, October 1st. The applicable code provision is Section 20-10(b) which reads: "Following receipt of a recommendation from the planning commission, City Council may exempt a particular division of land from the definition of a subdivision set forth in Section 20-2(a) when, in the judgment of the City Council, such division is not within the intent and purpose of Chapter ~ (subdivision regulations)." The lands affected are those on which the House Care building sits and east of that parcel to Mill Street, constituting 1.33 acres, approximately. History The history of the ownership of the tract is as follows: A. On May 9, 1969, Harold Pabst purchased the unimproved lands from Vesta Ione Cate and Helen Elizabeth Herman of Grand Junction, Colorado. B. On May 22, 1969, Messrs. Morse and Pabst entered into a joint venture agreement affecting the lands. A copy of this agreement is attached as Exhibit "Cu. Pursuant to the agreement, Mr. Pabst conveyed the lands to "Mill Street & Morse". _ ,"o._"_,~~,_,..,__~~,_,,""~..,~_.~,,,_.,~~.._~_x,.____w_,_. ' Memorandum to City Council October 2, 1974 Page Two C. Mill Street & Morse obtained a building permit in the spring of 1970 and constructed the building known as the "Mason & Morse House Care Building" during the 1970 building season. It was occupied in the fall of 1970 upon its completion. D. Messrs. Pabst and Morse on September 15, 1970, entered into Articles of Dissolution of "Mill Street & Morse". Pursuant to the terms of the joint venture agreement, Reese Henry, C.P.A. was consulted with respect to the distribution of assets (paragraph 2.6, p.3, of the Joint Venture Agree- ment). A copy is attached is Exhibit "F". E. The requisite quit claim deeds required by para- graph 2.4 of the Articles of Dissolution were not prepared or executed due to the advertence and neglect of counsel. However, the parties have, between themselves, effectuated its provisions in that each party has treated his respective interest as his own; e.g., Mr. Morse has used the building for the operation of House Care. Mr. Pabst leased his portion to the City of Aspen for the use of the car impound lot. conclusion Morse and Pabst insist that at no time in the chronology of events of 1969 and 1970 was there any intention to evade the application of Chapter 20 of the Code. Each of the appli- cants makes this statement in his affidavit attached as exhibits "D" and "E". In the event the exemption sought is granted, the end result will be the division of the land into a tract of 6,000 square feet, more or less, and a tract of approximately 52,000 square feet, with ownership of the 6,000 square feet tract which is improved vested in Edward Morse and the unimproved 52,000square feet vested in Harold Pabst. No additional improvements are possible on the Morse tract, and the applicants understand and agree that the unimproved Pabst tract will remain subject to all of the applicable subdivision and zoning regulations in the event of future development in the tract. Additional Attachments In addition to the exhibits referred to above, there is included my memo to John Stanford dated September 16, and an "Exemption from Subdivison" for execution by Stacy for recordation if the application for exemption is approved by the city council. SMS:ksh TO: FROM: DATE: RE: John . . )^' MEMORANDUM 1 j I I , I JOHN STANFORD, PLANNER SANDRA M. STULLER, CITY ATTORNEY September 16, 1974 APPLICATION OF HAROLD PABST AND EDWARD MORSE FOR EXEMPTION FROM SUBDIVISION REGULATION Let me make two points initially before I go into the merits of the application. 1. First, John Wendt's letter states that the joint venture is governed by the Uniform Partnership Act, Chapter 104, Article 1, of Colorado Revised Statutes. This is in opposition to a line in Section 4.1 of the Joint Venture Agreement where the parties thereto state) "This agreement in nowise shall limit the operation of either party as an individual or in joint operations with others and it is not the intention of the parties hereto to form a partnership." --- \ \ , 2. Secondly, Mr. Wendt closes his letter by saying: "It is understood and agreed that the unimproved Pabst tract would be subject to all of the applicable subdivision and zoning regulations with respect to sub- divisions, building and use." I hope no one on the Commission will be misled by the above so as to anticipate there will be compliance with Chapter 20 without further parceling or condominiumization. Mr. Pabst, in his affidavit, makes clear that without such event occurring Chapter 20 will not be satisfied. He says: "I understand that the lands to which I am entitled upon dissolution and winding up of the joint venture are subject to the zoning code, and if subdivided, to the subdivision code.-- , . f I ; ! ! ! , .~ ." . Memorandum to John Stanford September 16, 1974 Page Two i I I Legal Issue The basic issue is whether the joint venture, by quit- claiming the two parcels to the respective joint ventures, constitutes a subdivision of land and, if so, whether an exemption to the requirements of Chapter 20, pursuant to S20-10 is appropriate, I will not address the latter issue as that is one to be dealt with by the commission itself. As for the former, the existing Section 20-2 provides in part: "(a) Subdivision. A subdivision or subdivided land is defined as a tract of land which is divided' into two (2) or more lots, tracts, parcels, sites, separate interests, . . ., interests in common . . . for the purpose, whether immediate or future~r transfer of ownership, or for build- ing ~ other development." ! I I I . It is submitted that, without more, the creation of the joint venture and transfer of the real estate into the venture created an interest in common between Pabst .and Morse, and this event constituted a subdivision of land. However, ~the city might very well be estopped at this time (a permit having been issued) to allege a violation of Chapter 20 and (2) I think the following continuation of subsection (a) takes the transaction outside the definition of subdivision: ". . . Unless the method of land disposition is adopted ~ the purpose of evading this definition, the term subdivision as defined in this section 20-2(a) shall not apply to any of the following divisions of iand: . . . (6) The division of land by the acquisition of an interest in land in the name of a husband and wife or other persons in joint tenancy or as tenants in common and any such interest shall~e~eemed for-Purposes of this Section 20-2(a) as only one interest." We have no evidence that the joint venturers intend by their agreement to avoid the consequences of Chapter 20 (the affidavits being to the contrary and the history of lack of development of the whole parcel supporting this contention). I do not agree with the policy that those taking as tenants in common should be exempt, but that is the code as it stands (the state regulations, county regulations, and new city regulations having the identical language). The proviso about intention to evade the effects of taking in such manner is designed to deal with a situation like that described in the California case of Pratt v Adams, 229 Cal. App. 2d 602, 40 Cal Rptr. 505. At that time you were permitted to divide . r . I Memorandum to John Stanford September 16, 1974 Page Three a parcel into five tracts, but no more, without going through subdivision. A married couple bought a large tract for the purposes of developing it. They did not want to go through subdi,ision regulation and they sold the tract to two couples (themselves included) as joint tenants. These four sold their interests to 12 others (themselves included) as joint tenants. All then petitioned to have the land partitioned among themselves, and when completed, each divided his or her share into four lots and sold them off. The Court con- sidered this an obvious attempt to avoid the Subdivision Act and upheld the city's refusal of building permits. Conclusion There is one element in the above I cannot establish to a certainty and that is that joint venturers hold the land as technically tenants in common, but the attributes of ownership are so close that I am not going to dispute the point in the absence of statutory or common law to the contrary. All of the above is noted to support my conclusion that the contention that the partitioning of the land under the circumstances testified to by the applicants does not come under subdivision review is a valid premise, and one that I cannot dispute. SMS:ksh , J j i 1 t . j . 1 i t I , , \ I . , t ~ I , i I -., f I