Needing money in 1997 during the Webb administration, the George W. Clayton Trust (“Clayton”) was interested in a transaction with the City involving the Park Hill Golf Course (“PHGC”) land. Clayton hired an appraiser who valued Clayton’s potential development rights for the PHGC land at $2 million. Based upon that valuation, Clayton negotiated with the City for Clayton to receive $2 million in exchange for Clayton’s grant of a perpetual open space conservation easement on the PHGC land to the City. Clayton thereby relinquished its development rights in the property, which is zoned OS-B (Open Space-Recreation). In 2000, for the tax benefit of Clayton, the City and Clayton entered into an agency agreement (“agency agreement”) whereby the conservation easement was released subject to Clayton’s obligation to grant it again in the event that Clayton might terminate the agency agreement.
Since at least 2017, the future of the PHGC land perpetual open space conservation easement has been in jeopardy.
In September 2017, Clayton and Denver negotiated regarding an “Agreement Concerning Park Hill Land (“2017 agreement document”), but this transaction was never approved by City Council. Under the 2017 agreement document, the perpetual open space conservation easement would have been terminated and the City would have acquired the PHGC land for purposes of selling significant portions for real estate development. Arcis, Clayton’s golf course operator lessee, sued Clayton in April 2018 claiming the right of first refusal provisions of its lease gave it the right to purchase the land based on the 2017 agreement document.
In January 2019, the City gave written notice to Clayton that it was still willing to move forward with the 2017 agreement document (“2019 expression of interest”). Clayton forwarded this notice to Arcis and Arcis responded that it wished to purchase the PHGC property under the terms of the 2019 expression of interest (with additional financial incentives for Clayton). The City then notified Arcis that it would not release the conservation easement in any transaction that failed to give the City control over future use of the property in the manner provided in the 2017 agreement document. In April 2019, Arcis filed its second amended complaint joining the City as a co-defendant, and this lawsuit is currently scheduled for trial in October 2019.
The latest development regarding the future of the PHGC land was the joint announcement on June 19, 2019 by Clayton and Westside Investment Partners (“Westside”) that they “are engaged in discussions regarding the Park Hill Golf Course.” Clayton had given the City notice on June 10, 2019 that it was terminating the agency agreement conditioned on Clayton consummating sale of the PHGC land to Westside with a scheduled July 11, 2019 closing. If this transaction closes, Clayton would be required once again to grant the perpetual open space conservation easement to the City based upon the agency agreement.
What’s going on with Clayton, the City, Arcis, and Westside outside of public scrutiny? Citizens who care about protecting the perpetual open space conservation easement are concerned that a backdoor agreement could be in the works that would completely abrogate or at least materially compromise the open space easement protections for the PHGC land and open the land up for development. Any such agreement would require City Council approval.
For further information, visit the Save Open Space Denver website: sosdenver.net