As one of Denver’s first real estate barons, George W. Clayton owned vast amounts of land when he died in the 1899 without any heirs. His estate was transferred to the George W. Clayton Trust (“the Trust”), and from 1899 to 1984 the City of Denver (“the City”) was the Trustee of the Trust. One of the many parcels of real estate was the farmland that later became the Park Hill Golf Course (“PHGC”) in 1930. The Trust still owns the beautiful Clayton Early Learning Campus on the northwest corner of Martin Luther King Boulevard and Colorado Boulevard. In 1984, Clayton Early Learning replaced the City as Trustee of the Trust.
In 1989, the Trust and the City talked about the possibility of having the City purchase the PHGC land. These discussions resulted in the City including $2 million in a 1989 bond issue earmarked for the City to purchase the land. Nothing then happened until 1997 when, during the Wellington Webb administration and after a few years of further discussions between the Trust and the City about the Trust’s financial needs, the Trust and the City reached an agreement with the City whereby the Trust forever relinquished its development rights for the PHGC land. In this agreement, the City paid the Trust $2 million in exchange for the Trust granting a perpetual open space conservation easement to the City protecting the PHGC land foever from development. This easement was granted pursuant to the Colorado conservation easement statute.
At the same time as the Trust granted the conservation easement, it also entered into a 30-year lease with a golf course operator to run the golf course. The lease had two five-year renewal options. After a couple of years, the Trust realized that the golf course lease was causing it indirectly to pay real estate taxes on the Park Hill Golf Course land that it didn’t expect to pay because it was a non-profit organization. This realization caused the Trust and the City to negotiate a new agreement to avoid this taxation. The “agency agreement” had the following terms: (1) the Trust transferred title to the PHGC land to the City to hold in trust for the benefit of Denver citizens; (2) the Trust and the City terminated the 1997 conservation easement; and (3) if the Trust would later decide to sell the PHGC land, the City would re-transfer the title to the Trust and the Trust would grant a new conservation easement to the City before the sale.
As part of the City’s “Platte to Park Hill” stormwater drainage project that impacted the City Park Golf Course in a similar manner, the City decided that it wanted to install a stormwater detention facility in the northeast 25 acres of the PHGC land. This led to the City and the Trust entering into an agreement resulting in the temporary closing of the PHGC at the beginning of 2019 so that the City could install the detention facility. The City was legally required to compensate both the Trust and indirectly the golf course operator for the closure and to provide the money necessary to restore the land to a golf course at the end of the project. The City is now nearing completion of the project. As the result of these actions and others, the golf course operator filed two lawsuits against the Trust and the City claiming that its rights had been violated.
In mid-2019, the Trust notified the City that it intended to sell the PHGC land and on July 11, 2019 the following occurred in the following order: (1) the City and the Trust terminated the 2000 agency agreement; (2) the Trust granted the City a new conservation easement protecting the PHGC land; (3) real estate developer Westside Investment Properties, Inc. (“Westside”), through a subsidiary company, purchased the PHGC land subject to the new conservation easement; and (4) the Trust assigned Westside the claims that it had against the City related to closure of the PHGC and installation of the stormwater detention facility on the PHGC land. In a transaction separate but related to its purchase of the PHGC land, Westside bought out the golf course operator’s lease and the golf course operator assigned Westside all of the claims that it was asserting in its lawsuits against the Trust and the City.
The conservation purposes of the 2019 conservation easement are “for the conservation of the [the land] as open space” and “to maintain [the land’s] scenic and open condition and to preserve [the land] for recreational use.” Operation of a golf course is one of the “permitted uses” that is consistent with the conservation purposes. Other “permitted uses” are identified as “ball fields, tennis courts, etc.” Contrary to the arguments of Westside and the City, the existence of the conservation easement does not mandate that there shall always be a golf course use on the land. If Westside doesn’t want to operate a golf course, it and the City could modify the conservation easement to add other permitted uses as long at those uses would be consistent with the conservation purposes of the conservation easement. Alternatively, if the City purchases the land for a dedicated park, the City could turn the land into a regional park and open space with access for all Denver citizens in many ways including from RTD’s 40th and Colorado A-Line Station.
Notwithstanding the conservation easement protections from development, the administration of Mayor Michael Hancock has been supporting development of the PHGC land for several years. Consistent with that support, the City and Westside entered into a “settlement agreement” in November 2019. The settlement agreement states that the City acknowledges that Westside wants “to pursue a process to explore community support” for future uses of the PHGC land that would require Westside to secure various land use approvals including approvals related to the existence of the conservation easement. Among other things, the settlement agreement included the following provisions: (1) Westside settled all its claims against the City related to closure of the PHGC and installation of the stormwater detention facility on the PHGC land; (2) the City paid Westside $6 million; (3) the City agreed that for at least three years it would forebear taking any action to enforce the 2019 conservation easement; and (4) if Westside fails to secure the necessary land use approvals in the three-year “forbearance” period, Westside will be obligated fully to restore the PHGC land to a golf course.
The City is now actively facilitating Westside’s development plans by having the Community Planning and Development Department initiate a “small area plan” process for the PHGC land. The City is doing so despite the fact that the Colorado conservation easement statute prevents termination of the PHGC conservation easement unless a court has determined that—based on changed conditions on or surrounding the PHGC land—it has become “impossible” to fulfill the conservation purposes of the easement. There are no known facts that would support such a judicial determination.