GERALNES BV v. City of Greenwood Village, Colo.

• Decision Date: 13 February 1986
• Docket Number: Civ. A. No. 83-K-1132.
• Citation: 630 F. Supp. 644
• Parties: GERALNES B.V., a Netherlands corporation; Manikin Investments B.V., a Netherlands corporation; and Dolbos B.V., a Netherlands corporation, Plaintiffs, v. CITY OF GREENWOOD VILLAGE, COLORADO, a municipal corporation; The City Council of the City of Green-wood Village, Colorado; Frederick C. Fisher, individually and as Mayor of the City of Greenwood Village, Colorado; Peter Durante, Charles Harmon, Paul McMath, Natli Malloy, Baiba Sarkans, Jerold Slocum, James Talman and Dorothy Wilson, as Members of the City Council of the City of Greenwood Village, Colorado; Paul McMath, individually; Diane Writer, as Chairman of the Planning and Zoning Commission of the City of Greenwood Village, Colorado; Steven L. Schroder, individually and as Director of the Department of Community Development of the City of Greenwood Village, Colorado; Tech Center Building Co., a Colorado partnership; Columbia Savings and Loan Association, a Colorado corporation; United Air Lines, Inc., a Delaware corporation; Rosenberg Real Estate Equity Fund-I, Inc., a Delaware corporation; The Great-West Life Assurance Company, a Canadian corporation; I.T.C. Orchard Plaza Corporation, a Colorado corporation; Block Five Partnership, a Colorado partnership; John R. Elkins; Bruce Johnson; Denver Colorado Associates, a New York general partnership; Country Land Corporation, a New York Corporation; The Aremel Company, a New York general partnership; and The Romarlin Co., a New York general partnership; Defendants.
• Court: U.S. District Court — District of Colorado

630 F. Supp. 644

GERALNES B.V., a Netherlands corporation; Manikin Investments B.V., a Netherlands corporation; and Dolbos B.V., a Netherlands corporation, Plaintiffs, v. CITY OF GREENWOOD VILLAGE, COLORADO, a municipal corporation; The City Council of the City of Green-wood Village, Colorado; Frederick C. Fisher, individually and as Mayor of the City of Greenwood Village, Colorado; Peter Durante, Charles Harmon, Paul McMath, Natli Malloy, Baiba Sarkans, Jerold Slocum, James Talman and Dorothy Wilson, as Members of the City Council of the City of Greenwood Village, Colorado; Paul McMath, individually; Diane Writer, as Chairman of the Planning and Zoning Commission of the City of Greenwood Village, Colorado; Steven L. Schroder, individually and as Director of the Department of Community Development of the City of Greenwood Village, Colorado; Tech Center Building Co., a Colorado partnership; Columbia Savings and Loan Association, a Colorado corporation; United Air Lines, Inc., a Delaware corporation; Rosenberg Real Estate Equity Fund-I, Inc., a Delaware corporation; The Great-West Life Assurance Company, a Canadian corporation; I.T.C. Orchard Plaza Corporation, a Colorado corporation; Block Five Partnership, a Colorado partnership; John R. Elkins; Bruce Johnson; Denver Colorado Associates, a New York general partnership; Country Land Corporation, a New York Corporation; The Aremel Company, a New York general partnership; and The Romarlin Co., a New York general partnership; Defendants.

Civ. A. No. 83-K-1132.

United States District Court, D. Colorado.

February 13, 1986.

David G. Palmer, William W. Maywhort, Holland & Hart, Denver, Colo., for plaintiffs.

Harris D. Sherman, James E. Scarboro, Arnold & Porter, Denver, Colo., and J. Mark Hannen, Banta, Hoyt, Banta, Greene, Hannen & Everall, Englewood, Colo., for the City of Greenwood Village defendants.

James J. Morrato, Morrato, Bieging, Burrus & Colantuno, P.C., Englewood, Colo., for Tech Center Building Co.

Alan M. Loeb, Davis, Graham & Stubbs, Denver, Colo., for Rosenberg Real Estate Equity Fund-I, Inc., John R. Elkins and Bruce Johnson.

Richard O. Campbell, Montgomery, Little, Young, Campbell & McGrew, P.C., Denver, Colo., for United Airlines, Inc.

Vicki Fowler, Gorsuch, Kirgis, Campbell, Walker & Grover, Denver, Colo., for the Great-West Life Assur. Co.

H. Thomas Coghill, Coghill & Goodspeed, Denver, Colo., for Block Five Partnership.

Stanley A. Doten, Morrison & Foerster, Denver, Colo., for I.T.C. Orchard Plaza Corp.

Patrick F. Kenney, Christina N. Beaton, Fairfield & Woods, Denver, Colo., for Columbia Sav. & Loan Assoc., Romarlin Co., Aremel Co., Denver Colorado Associates and Country Land Corp.

MEMORANDUM OPINION AND ORDER

KANE, District Judge.

The plaintiffs in this action are three Dutch Corporations which are successors in interest to DTC-South, a property located in the Denver Technological Center and once owned by Denver Technological Center, Inc., a Colorado corporation.¹ Plaintiffs allege that defendant City of Greenwood Village has engaged in a course of conduct since September of 1981 which has had the result of frustrating the development of DTC-South as afforded plaintiffs under the parties' 1975 Memorandum Agreement and Ordinance No. 6, Series of 1976. All told, plaintiffs have asserted 15 claims for relief.² This matter is now before me on plaintiffs' and city defendants' cross motions for summary judgment.

BACKGROUND³

On September 22, 1975, in Johnston v. City Council of the City of Greenwood Village, 189 Colo. 345, 540 P.2d 1081, 1082 (1975), the Colorado Supreme Court invalidated the city's annexation of DTC-South under Ordinance No. 3, Series of 1967. DTC-South, then, became a property without a government. As a result, numerous citizens and landowners affected by the Johnston decision promptly petitioned the city for re-annexation. DTC, however, declined to join in these petitions.

The DTC-South property consists of more than 200 acres and was valued in excess of $200,000.00. As such, its consent was a legal pre-requisite to re-annexation by the city. See Pomponio v. City of Westminster, 178 Colo. 80, 496 P.2d 999 (1972); Adams v. City of Colorado Springs, 178 Colo. 241, 496 P.2d 1005 (1972); Colo.Rev.Stat. § 31-12-105 (1973). Desiring DTC's tax revenue and a contiguous land mass within its city limits, the city sought DTC's consent to its proposed re-annexation. DTC refused to consent, but did enter into a pre-annexation memorandum agreement on December 1, 1975. The enforceability of this agreement, the construction of which is sought to be resolved by the instant motions, was upheld by my earlier decision in this case, Geralnes B. V. v. City of Greenwood Village, Colorado, 583 F.Supp. 830 (D.Colo.1984).

Under the contract, DTC agreed to forbear any action challenging the validity of the contemplated re-annexation of the Tech Center until the outcome of the requisite re-annexation election. The city agreed to the following: a) to share with DTC certain cost obligations associated with road improvements on and adjacent to DTC-South; b) to validate the then existing streamlined subdivision procedure for DTC-South, which permitted the property to be divided into "superblocks"⁴ without specifying each and every lot contained therein; c) to consent to the inclusion of DTC-South within the service area of the Castlewood Water District; d) to seek and obtain the approval of DTC before including DTC-South within any special assessment district before a specified date; e) to incorporate the Master Development Plan for DTC-South, attached to the contract as Exhibit A⁵, into the city's overall Master Plan; and, f) to repeal in its entirety Ordinance No 2, Series of 1975, (the "old" Town Center District Zoning ordinance), and to enact in its place a less restrictive "new" Town Center District zoning ordinance, attached to the contract as Exhibit B, which would promptly and continuously attach without modification to DTC-South. The contract's attached Exhibit B provided that the new Town Center District zoning ordinance would reflect the following changes from the provisions of the old Town Center District zoning ordinance: a) the deletion of all restrictions on building heights; b) the deletion of requirements pertaining to the number of residential dwelling units; c) the deletion of certain landscaping requirements; d) the deletion of all requirements pertaining to semi-annual review and approval by the city of the Master Development Plan and "general plans" of DTC concerning DTC-South; e) the deletion of the requirement that the city must approve any land use not specified in the MDP; and f) the deletion of all provisions concerning the involvement of the city's Planning and Zoning Commission in planning and development matters affecting DTC-South.

The city also agreed that the new Town Center District zoning ordinance would retain the concept of the land use "bank account".⁶ Thus, each site within DTC-South but not then under the ownership or control of DTC, would receive a pro-rata share of the overall available density, determined according to the ratio of the site area to the total area of the district. DTC retained the right freely to transfer and allocate densities among the sites it owned, as long as the overall densities did not exceed the limits set forth in the contract. Exhibit B of the contract, which was to become the new Town Center District zoning ordinance, Ordinance No. 6, Series of 1976, retained the same formula for calculating the "bank account" as specified in the old Town Center District zoning ordinance. The old as well as the new Town Center District zoning ordinances provide that: a) building ground coverage shall not exceed 40% of the gross acreage within the district; b) parking surface and the surface area of structured parking shall not exceed 40% of the gross acreage within the district; c) a minimum of 30% of the gross acreage within the district shall be reserved for and used as "open space"; and, d) the gross floor area shall not exceed three times the maximum building ground coverage. Thus, as applied to the DTC-South property, the new Town Center District zoning ordinance established a maximum building ground coverage of 7,418,771 square feet, a maximum surface area parking coverage of 7,418,771 square feet, a minimum amount of open space of 5,564,078 square feet, and a maximum gross floor area for the entire zone of 22,256,313 square feet.

On December 9, 1975 the citizens of Greenwood Village voted by a margin of more than 15 to 1 to reannex the Tech Center. The city officially approved the annexation by passing Ordinance No. 18, Series of 1975. As a result, DTC commenced litigation against the city in Arapahoe County District Court (Civil Action No. 35435) asking the court to declare Ordinance No. 18, Series of 1975 null and void insofar as that ordinance sought to annex DTC-South or in the alternative that the entire annexation was null and void.

On March 2, 1976, pursuant to the contract, the city passed Exhibit B of the contract, the new Town Center District zoning ordinance, as Ordinance No. 6, Series of 1976. The city council simultaneously amended the ordinance to apply Town Center District zoning to DTC-South pursuant to Ordinance No. 7, Series of 1976. DTC-South thereby became subject to the provisions in Ordinance No. 6. On March 8, 1976 the city passed Resolution No. 7, adopting the Master Development Plan of DTC-South as part of the city's overall Master Plan. The plan had been prepared by James Bowers and Associates on behalf of DTC.

DTC voluntarily dismissed without prejudice its lawsuit challenging the annexation ordinance on March 22, 1976. Soon after that date, DTC and its successors commenced development of DTC-South pursuant to the then most current amended MDP.

The gravamen of plaintiffs' complaint is that since 1981 the city has engaged in conduct in derogation of ...