[BoulderCouncilHotline] CU South; Draft of August 6, 2021

[Wallach, Mark]

I am writing today to provide some initial comments and to ask questions with respect to the new draft Annexation Agreement dated August 6, 2021.

Each successive draft of the Annexation Agreement has been superior to its predecessors and has resolved a number of key issues and concerns. This latest draft is no exception and has narrowed down the list of outstanding issues to a few issues of consequence, at least to me. Those issues are set forth below, but I have to begin with a procedural comment. It would have been very helpful to have received a redline copy of the revised document. There is a “Where’s Waldo?” quality to tracking language that has been moved, renumbered, edited and deleted without any indication of those changes. I have read the document several times and I am still trying to track the changes. Please provide such a document. Having said that, my comments on the August 6 draft are as follows:

1) Sections 3, 5  and 52 appear to have closed the gap in terms of my concerns relating to the potential transfer of the property, which has been of paramount concern to many in the community who view this project as being negotiated with, and for, the benefit of CU, in exchange for the flood mitigation project. I say this despite the fact that the language of Section 5,  Acknowledgment of Intent, while wholly appropriate and welcome, appears to have no binding effect upon CU or represent an enforceable obligation. But better is better and the improvement must be recognized. I will, however,  note the incongruity between CU’s repeated protestations of their intent never to sell the property and the vigorous, strenuous efforts to which they have gone to preserve their right to do so. The more CU attempts to preserve their rights to transfer, the more it is appropriate to question their motivations and longer-term intent with respect to this property. To steal shamelessly from the Bard, “The University doth protest too much, methinks”.

2) On a more general level, can someone please specify which obligations survive a transfer and  which do not? I still await a clear, cogent response to this concern. For example, based on the language of Sections 3, 5 and 52 cited above, I would assume that the commitment of Section 21(i), that “Housing will be the predominant use of the site in the Development Zone, although the site may contain a mix of residential and non-residential facilities” would be an obligation binding upon CU and thus binding upon a transferee of the property. Is it? Or, to  put it another way, how could it not be? If CU were to eliminate housing from its plans we would certainly view this as a breach of the Annexation Agreement, and the City would act accordingly. So if this is a clear obligation of CU, and if CU’s obligations are binding upon a subsequent owner, it must follow that this is an obligation of any subsequent transferee. If this is not correct, please let me know why, and if so, what other apparent obligations would not survive a transfer?

3) The key point is as follows: if almost all of the obligations of the Annexation Agreement are indeed imposed upon a transferee, then Sections 3, 5 and 52 have done their job, and the community can be comfortable that it is unlikely that we will experience the unintended consequences of a transfer that many fear. If many of them simply do not apply if a transfer occurs those concerns have greater validity. Can we get some clarity on this?

4) On a related issue, most of the provisions dealing with a transfer of the property envision a full transfer of the entire property. What if only a part is transferred? There are a vast number of obligations to which CU has agreed, many of which involve expenditures of funds. How will these obligations be parceled out between the two (or more) ownership entities? On the basis of acreage conveyed? Will CU continue to pick up those expenses in full? Or will the transferee be responsible? For example: with respect to Section 21(h), does the 750,000 sf cap on non-residential space apply to a transferee? What if the transferee only acquires 10 acres; would they be able to build that much non-residential space or a pro rata portion of that space? What happens to the obligation to develop 2 feet of residential space for every foot of non-residential space? Does that disappear with respect to the parcel transferred? The document is silent on these considerations, and they should be addressed.

5) Which leads us to Section 19, providing that the initial zoning for the property will be Public. I assume – and if this assumption is incorrect, I hope that staff will correct me – that the City is free to accept or deny any subsequent application for a rezoning in its sole discretion without incurring any legal liability to the applicant. If this is incorrect, please instruct me, as it might necessitate further language in the Annexation Agreement. On the same Section 19, is  office use a permitted use under the Public zoning and associated use table? If so, this should be addressed in the Prohibited Uses.

6) A fuller articulation of Prohibited Uses in Section 21(b) is important. My concern is that we not end up with a Class A Office park, or a giant technology firm campus, which is antithetical to the intent of this transaction, and which I believe would be very poorly received by the community. While residential with a 45% affordability requirement (and ancillary commercial uses, including small office spaces serving the residential community) should be permitted, a campus for one of the tech giants would be seen in a very different light. One more point: if we are requiring 45% affordability, can we not require the affordable housing to be on site? There is space for this, and this is much more desirable than a cash-in-lieu payment, however substantial that might be.

7) Going back to Section 13(b), the July 12 draft stated (in Section 7(b)) that the City would acquire the 2 acres for a public safety facility by sale or lease, and seemed to imply that the conveyance terms had not been set by CU. This latest draft seems to say that the conveyance or lease will not require consideration to be paid by the City. Is this interpretation correct, and, if so, can we make this clear? If not, can we specify the purchase price or lease rate?

8) Section 14 remains obscure. Can we see what the impact of these provisions looks like in dollars and cents? What is the value of the 140 acre-feet of water we are providing? Making reasonable assumptions, what is the amount of the Plant Investment Fees (“PIFs”) against which the value of the water rights will be deducted? Inquiring minds want to know.

9) With respect to Section 17(b) and the use of the City’s Outdoor Lighting Standards, do those standards contemplate the appropriate lighting for sports venues adjacent to a sensitive wetlands area? If not, what would be the appropriate standard for dealing with the wildlife in this area? I would raise the same question with respect to the City’s Noise Standards. Do they contemplate the high noise production that will accompany the contemplated uses in proximity to this area?

10) May I assume that CU’s contribution to the Open Space mitigation program specified in Section 23(a)(i) will be determined prior to execution of the document? If not, how will this be handled?

11) With respect to Section 25(c) if, for any reason, CDOT denies CU the right to install a light on State Highway 93 what would the practical impact of that be on either CU or the community?

12) The Right of First Offer (“ROFO”) provisions of Section 44 are vastly improved and at least provide Boulder with some possibility of acquiring the property in the event of a sale (which, of course, CU suggests will not happen). Is it perfect? Not hardly, but the expectation of perfection is not the world in which I live. It is improved. My only comment is with respect to the phrase in Section 44(a): “Provided University has determined in its sole discretion to offer City the ROFO Option…” which I find confusing. I thought that the ROFO Option is required to be offered to the City in the event that it wishes to sell, whether or not it has received a third party offer. I am sure that I am misreading this provision, but can this be clarified?

I may have more comments further on, but these are my initial responses to the latest draft Annexation Agreement.

As is clear from these comments, my concerns with respect to the Annexation Agreement are now less the absence of critical conditions and protections than the interpretation of the language that we do have. In order to bring this process to a conclusion, I hope that these clarifications will be made available to us as we consider this draft and move the process forward. Many thanks, Mark


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