HomeMy WebLinkAboutComplaint for Declaratory Judgment and Permanent InjunctionDfSTRICT COURT, COUNTY OF JEFFERSON,
COLORADO
I 00 Jefferson County Parkway
Golden, CO 8040 I
Plaintiff:
QUADRANT WHEAT RJDGE CORNERS, LLC, a
Missouri limited liability company,
v.
Defendant:
CITY OF WI lEA T RlDGE, a home rule municipality; and
WHEAT RIDGE URBAN RENEWAL AUTHORITY
dfbla RENEWAL WHEAT RIDGE
Attorneys for Plaintiff:
HUSCH BLACKWELL LLP
Jeffrey D. Whitney, #35938
Jonathan M. Allen, #4 14 15
1700 Lincoln, Suite 4700
Denver, CO 80203
Phone: 303-749-7200
Fax: 303-749-7272
E-mail: jeff.whitney@huschblackwell.com
jonathan.allen@huschblackwell.com
DA'I E FlLED: January 12, 2016 II 33 AM
FlUNG 10· 3506529C76C92
CASE NUMBER. 2016CV30040
A A
COURT USE ONLY
Case Number:
Di vision:
COMPLAINT FOR DECLARATORY JUDGMENT AND PERMANENT
INJUNCTION
Plaintiff, Quadrant Wheat Ridge Corners, LLC, formerly known as TKG Wheat Ridge,
LLC, by and through undersigned counsel, hereby submits the following Complaint for
Declaratol) Judgment and Permanent Injunction pursuant to C.R.C.P. 57, and as grounds
therefore, states as follows:
PARTIES, JURISDICTION, AND VENUE
I. Quadrant Wheat Ridge Corners, LLC ("Quadrant") is a Missouri limited
liab ility company authorized to do business in the State of Colorado. Quadrant was formerly
known as TKG Wheat Ridge, LLC e'TKG"). TKG changed its name to Quadrant on January
II, 20 16.
DEN-81225·5
., The City of Wheat Ridge ("Wheat Ridge") is a home rule municipality and
political subdivision of the State of Colorado organized and existing under a home rule charter
pursuant to Article XX ofthe Constitution of the State of Colorado.
3. The Wheat Ridge Urban Renewal Authorit} d/b/a Renewal Wheat Ridge (the
"Authority") is an urban renewal authority and a body corporate and politic of the State of
Colorado authorized pursuant to C.R.S. § 31-25-10 I. et seq
FACTUAL BACKGROUND
4. In October 200 I, the Wheat Ridge City Council adopted a resolution approving of
The Wadsworth Boulevard Corridor Redevelopment Plan (the "Plan") to address blight in the
vicinity of the Wadsworth Boulevard corridor between 35th Avenue and 44th Avenue in Wheat
Ridge, Colorado. A true and correct copy of the Plan, as amended, is attached as Exhibit 1.
5. The Plan is an urban renewal plan adopted in accordance with Colorado's Urban
Renewal Law, C.R.S. § 31-25-101 et seq.
6. The Plan granted the Authority the power to take all actions consistent \vith
C.R.S. § 31-25-10 I et seq. to carry out and implement the Cit) Council's legislative policies as
expressed in the Plan.
7. The Plan contemplated the use of tax increment financing, but did not authorize
the same at the time of its adoption. Rather, the use of tax increment financing would be
··considered at an appropriate time when redevelopment projects or market factors necessitate or
justify same or promote the use of tax increment financing as appropriate. Modification of the
Plan may then be necessary to implement tax increment financing." [Plan, p.3, § 2.]
8. On February 9, 2015, by a vote of 7-1, the Wheat Ridge City Council approved of
a modification to the Plan to allow the use of tax increment financing relating to property tax and
sales tax for certain property located with the Plan's defined territory. which includes the
Property, defined infra. The Authority remained vested with the power to take the necessary acts
to carry out and implement the Plan.
9. On June 22, 2015, as pan of the implementation of the Plan, and after years of
planning and negotiation and the expenditure of hundreds of thousands of dollars, Quadrant and
the Authority executed a Redevelopment Agreement (the "Agreement") concerning 14-acres of
blighted property located at the southwest comer of West 38th Avenue and Wadsworth
Boulevard (the "Property"). A true and correct copy of the Agreement is attached as Exhibit 2.
I 0. The Property is comprised of empty parking lot space, abandoned buildings, and
vacant land. Quadrant intends to develop the Property into a high-qualit). mixed use
developmem within the urban renewal authority district with numerous shops. restaurants, and
retailers at a cost in excess of $20,000,000.
DCN-81225-S 2
II. The Agreement provides that Quadrant will be reimbursed for the construction of
certain public infrastructure improvements at the Property, up to a maximum amount of
$6,250,000. Funds for reimbursement arc to come from a portion of the incremental sales tax
revenue. a public improvement fee. and incremental property tax revenues generated in the
future from businesses located at the redeveloped Property. The reimbursement obligations are
solely the Authority's and are not an obligation of the City of Wheat Ridge.
12. Pursuant to the Agreement, on June 16. 2015, the Authority executed and
delivered to Quadrant a promissory note in the maximum amount of $6,250,000 (the "Note"),
memorializing its reimbursement obligations to Quadrant. A true and correct copy of the Note is
attached as Exhibit 3.
13. The Agreement and the Note are valid contractual obligations between Quadrant
and the Authority.
14. Quadrant's rights under the Agreement and the Note are vested.
15. Following execution of the Agreement and the Note, Quadrant took additional
steps in furtherance of the redevelopment of the Property, including but not limited to paying
landowners money to extend Quadrant's options to purchase the land, working with and paying
architects and other professionals to move forward with development plans, and entering into a
lease with the anchor tenant of the future development. These and other actions were undertaken
with the understanding and expectation that the Agreement would be enforceable and binding on
the Authority.
16. On Tuesday, November 3, 2015, Wheat Ridge voters were presented with Ballot
Question 300, which asked:
DF.N-81225-5
Shall the Wheat Ridge City Charter be amended as follows? Any action
by an agency, agent. authority. commission, comminee, City Council.
department, employee or official of the City of Wheat Ridge, approving
or changing a sales or property tax increment financing (TIF), revenue
sharing or cost sharing arrangement pursuant to Part I of the Colorado
Urban Renewal Law, must be ratified by the Wheat Ridge City Council
via a vote on a formal agenda item, at a regularly scheduled business
meeting, that is advertised as a public hearing. If the value of the said
sales or property tax increment financing (TIF), revenue sharing or cost
sharing exceeds $2.5 million, the City Council action of approval must
be ratified by the regiStered electors of the City of Wheat Ridge at a
special or regular election. The base amount for voter approval of any
sales or property tax increment financing (TIF) will be any financing
exceeding $2.5 million. To account for inflation and/or increased
construction costs, every third year after March I. 20 15, the base amount
will be increased by 5%. Effective Date: This amendment will take effect
and apply to all actions undertaken by an agency, agent. authority,
3
votes.
herein.
commission, committee. City Council, department. employee or Official
of the City of Wheat Ridge subsequent to March I. 2015 and thereafter?
I 7. Ballot Question 300 passed by a narrov. 51.8% to 48. I% margin-a mere 358
COUNT 1
(Declaratory Judgment -C.RC.P. 57 -Applicability of Ballot Question 300)
18. Quadrant incorporates by reference the preceding allegations as if fully set forth
19. Ballot Question 300 purports to require voter approval of any tax increment
financing, revenue sharing, or cost sharing in excess of $2.5 million, retroactive to any such tax
increment financing agreed to after March I. 2015.
20. Under Colorado law. the powers of voter referenda and initiatives do not extend
to the electorate the right to petition for elections on administrative matters. Rather, voter
initiative must be a valid exercise of legislative pov.er.
21. The adoption of the Plan occurred prior to March I, 2015.
22. Similarly, the adoption of the modification of the Plan to allov. fo r tax increment
financing occurred prior to March I. 2015.
23. The adoption of the Plan and the modification thereof were legislative acts. But
Ballot Question 300 on its face does not apply to actions taken prior to March I, 20 I 5.
24. The execution of the Agreement and the Note are not legislative acts, but are
instead administrative acts performed for the purpose of carrying out and implementing the Plan.
Accordingly, Ballot Question 300 cannot modify. invalidate, or otherwise impact the Agreement,
the Note, and all rights and obligations arising thereunder.
25. Accordingly, Quadrant seeks a declaration that Ballot Question 300 has no impact
on the Agreement. the Note. and all rightS and obligations arising thereunder and/or entered into
to facilitate and implement the transactions contemplated by the Agreement.
COUNT2
(Declaratory Judgment-C.RC.P. 57 -Unconstitutionality of Ballot Question 300)
26. Quadrant incorporates by reference the preceding allegations as if fully set forth
herein.
27. The Colorado Constitution, Article II, Section II provides: ··No ex post facto law,
nor law impairing the obligation of contracts. or retrospective in its operation, or making any
DEN·8122S-S 4
irrevocable grant of special privileges, franchises or immunities, shall be passed by the general
assembly."
28. This constitutional prohibition against retrospective laws at the state level applies
equally to local governments, including home-rule municipalities, and to voter-passed initiatives.
29. Ballot Question 300 by its express terms was intended to operate retroactively.
30. To the extent Ballot Question 300 does modify, invalidate, or otherwise impact
the Agreement and the Note. then Ballot Question 300 impairs Quadrant's vested rights in the
Agreement and the Note by retarding the public interest, defeating Quadrant's bona fide
intentions and reasonable expectations, and surprising Quadrant. which had relied on the
Authority's legal right to enter into the Agreement.
31. Accordingly, to the extent Ballot Question 300 does modify. invalidate, or
otherwise impact the Agreement and the Note, Quadrant seeks a declaration from this Court that
Ballot Question 300 is unconstitutionally retrospective as applied to the Agreement, the Note,
and all rights and obligations arising thereunder and/or entered into to facilitate and implement
the transactions contemplated by the Agreement.
32. Furthermore, Ballot Question 300 substantially and unconstitutionally impairs the
contractual relationships between Quadrant and the Authority.
33. Therefore, Quadrant also seeks a declaration that that Ballot Question 300 is an
unconstitutional impairment of the contractual relationship between Quadrant and the Authority.
PRAYER FOR RELIEF
WHEREFORE, Quadrant respectfully requests that the Court issue orders:
(a) declaring Ballot Question 300 inapplicable to the Agreement, the Note, and all
rights and obligations arising thereunder and/or entered into to facilitate and implement the
transactions contemplated by the Agreement;
(b) declaring Ballot Question 300 to be unconstitutionally retrospective and to be an
unconstitutional impairment of contractual obligations and permanently enjoining its application
with respect to the Agreement, the Note, and all rights and obligations arising thereunder and/or
entered into to facilitate and implement the transactions contemplated by the Agreement;
(c) permanently enjoining any party from asserting the invalidity of the Agreement,
the Note, and all rights and obligations arising thereunder and/or entered into to facilitate and
implement the transactions contemplated by the Agreement on the basis of Ballot Question 300;
(d)
(e)
DEN·81225-5
awarding Quadrant its costs and attorney fees as allowed by contract or law; and
for such other rei ief as the Court deems just and proper.
5
Respectfull} submitted this I 2th day of January, 20 I 6.
Plaintifrs Address:
211 North Stadium Blvd., Suite 201
Columbia, MO 65203
OEN-81225·5
HUSCH BLACKWELL LLP
By: sl Jeffrey D. Whitnev
Jeffrey D. Whitney, #35938
Jonathan M. Allen, #4 I 415
Attorneys for Plaintiff
6
CERTIFICATE OF SERVICE
I hereby certify that on this I 2th day of January 20 I 5, a true and correct copy of the
foregoing COMPLAINT FOR DECLARATORY JUDGMENT AND PERMANENT
lNJUNCTlON was served via certified mail , return receipt requested, on the following:
Cynthia Coffman
Colorado Attorney General
Ralph L. Carr Colorado Judicial Center
1300 Broadway, I Oth Floor
Denver, Colorado 80203
sl Mischelle Maver
Legal Support Team Specialist
Thts documt nt has brtnstn ·ed\'IO /CCES m accordance""), C RC.I' Ill§ 1-16(7), tht ongmal documMt and s1gnaturt an mamtamed on
file.
DEN-81225-5 7