Money & the Law: Request for reorganization leads to complicated legal web

Affordable housing is not just a problem for people of limited means looking for a place to live. It is also a problem, it seems, for wealthy people who do not want an affordable housing project in their neighborhood.

This scenario is playing out in Telluride, where a lower-cost development first proposed in 2019 recently prompted a Colorado Court of Appeals ruling.

The story begins in 1995, when a developer, Brighton Properties, succeeded in converting 100 acres in Telluride into a planned unit development. (A planned unit development is a zoning designation that allows for a mix of lot sizes and uses, offering more flexibility than other, more restrictive zoning codes.) The development was named Butcher Creek after a nearby creek.

The Butcher Creek PUD allowed for 13 residential lots and 37 acres of open space. The 13 have long since been sold and converted into multimillion-dollar homes. The open space parcel, however, is still open space and is still owned by Brighton.

In 2019, 24 years after the Butcher Creek PUD was approved, Brighton proposed an amendment to the PUD that would allow the 37 acres of open space to be converted into 95 affordable housing units (affordable, at least by Telluride’s standards).

Not surprisingly, this proposal was met with resistance from Telluride’s open-space-loving constituencies. It quickly became clear to Brighton that there was no way the Telluride City Council would agree to what it wanted.

Brighton therefore came up with a plan to bypass Telluride’s city council: making the neighborhood rezoning proposal a citizen initiative and thus a matter for Telluride voters to decide.

Telluride, through its city attorney and city clerk, took the position that zoning changes were not an appropriate subject for a citizen initiative. This, the city (and others) argued, was a matter left to the city’s land use regulations and procedures.

So Brighton filed a declaratory judgment, asking the San Miguel County District Court to rule that the proposed zoning amendment could in fact be put to the vote of the eligible voters of Telluride. The first defendant in this lawsuit was the clerk of the town of Telluride.

The owners of existing homes in Butcher Creek were subsequently joined as additional defendants in the lawsuit.

The district court agreed with the city and the homeowners. However, Brighton appealed and the Court of Appeals reversed the verdict.

The Court of Appeals began its opinion by noting that the Colorado Constitution gives the people the power to propose laws and to adopt or reject those laws by vote.

The Court of Appeal subsequently concluded, based on a large body of precedent, that if the zoning plan amendment was a “legislative” matter, a citizen initiative and vote on the issue was permissible.

However, if the zoning plan change were an ‘administrative’ matter, a citizen initiative and a vote would not be appropriate.

The Court of Appeal then went on to consider at length what constitutes a legislative matter and what constitutes an administrative matter, concluding that the zoning (and rezoning) was legislative in nature. Brighton was therefore able to proceed with its plan to put its rezoning proposal to a citizen vote, and presumably that is what Brighton is now doing.

The homeowners also sought a ruling from the Court of Appeals that Brighton’s zoning plan, even if approved by Telluride voters, could not be implemented without the consent of all homeowners in the Butcher Creek PUD.

Otherwise, they argued, their property rights would be taken away without due process, which would be unconstitutional.

However, the Court of Appeal sidestepped the issue, saying it was premature. After all, if voters rejected Brighton’s rezoning plan, the issue would disappear, and appeal courts are not in the business of giving advisory opinions.

If voters approve the plan, it appears the trial has only just begun.

Jim Flynn is a business columnist. He works for the Colorado Springs firm of Flynn & Wright. Contact him at [email protected].