Gypsum, biomass officials remain at loggerheads
October 1, 2016
GYPSUM — The town of Gypsum and the owners/operators of the Eagle Valley Clean Energy biomass plant continue to be at loggerheads, with their disagreements covering everything from water rights at the biomass plant property to whether or not substantive attempts to negotiate a property purchase have even occurred.
The issues stem from a July Gypsum Town Council approval of an ordinance to "acquire or condemn" property belonging to Clearwater Ventures LLC, the entity that owns the land where the Eagle Valley Clean Energy biomass plant is located. Town officials have stated it is their intention is to launch a negotiation process that will determine a fair market price for 69 acres located along the Eagle River. Once that price is determined, the town will either proceed with a purchase or walk away from a deal, Gypsum officials said.
Clearwater representatives are equally adamant that the town is proceeding with an eminent domain taking of their property. In late August, Clearwater Ventures filed a lawsuit in Eagle County District Court arguing the town council's action should be overturned because members did not follow regulations for consideration and approval of a new ordinance. The lawsuit argues that, except for emergency ordinances and ordinances making general codification of existing ordinances, Gypsum requires that ordinances shall be "read in full or in cases where copies of the ordinance are available to the public, said ordinance may be read by title only." The lawsuit maintains that copies of the ordinance were not available to the public and the text of the ordinance was not read at the meeting.
Attempts to purchase
“If they can’t negotiate with themselves, it’s not really too surprising the town hasn’t been able to negotiate with them.”Bob ColeGypsum Town Attorney
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In a September report to the Gypsum Town Council, Gypsum Town Attorney Bob Cole detailed a trail of email correspondence and attempted phone contacts with representatives from Clearwater Ventures LLC to negotiate the property purchase.
"At the public meetings, they (Clearwater Ventures representatives) indicated they wanted to negotiate a transaction," said Cole.
Cole noted on July 1, the town originally offered to pay $506,000 for the property based on appraisal information. That was the first item of contention between the two entities. Dean Rostrom, of Clearwater Ventures, said that appraisal applied a per-acre value of $7,600 to the land when Gypsum required Clearwater Ventures to pay a public land dedication fee that reflected a per acre value of $22,500. By applying the higher per acre figure to the proposed purchase, the town would have to pay more than $1.5 million for the land.
Town officials say the difference is the property they are seeking is largely wetlands and land that cannot be used for development, while the town's public land dedication requirement is for usable property.
After its initial offer was rejected, Cole said on Aug. 1 the town sent a second notice offering $600,000 for the land. "That didn't generate any response," said Cole.
On Aug. 10, Cole said the town sent a third notice, offering to pay $800,000 for the property. "Again, that has not generated any real response," said Cole.
Cole detailed a list of email contacts dated during July and August between Clearwater's attorney and Gypsum, including communication from Don Ostrander, the town's representative for the attempted negotiations.
After his repeated attempts to negotiate a purchase, Cole said Ostrander concluded that Gypsum had gone to great lengths to initiate a purchase negotiation and had acted in good faith, but Clearwater's team was not responsive to the town's efforts.
"Since the first town council meeting on the condemnation action, held on July 1, nobody at the town (or its representatives) has ever called me or my business partner, Kendric Wait," said Rostrom. "The only communication with the town has been a few emails of little substance between myself and Jeff Shroll and the several emails between our attorney and the town's broker and lawyers."
"No real negotiation has occurred, largely because the town is unwilling to have a substantive discussion on protecting the access rights needed by the biomass plant to get its water from the property," Rostrum continued. "Any sale of the property has to come with assurances that the biomass plant has continuing access to the water it needs, and the town's unwillingness to concede that access is an ongoing stumbling block."
"Through this action (the town) does not seek to acquire water rights," said Cole in his statement to the town council. He noted that detailed language in its petition clearly states that position. Cole also noted that the water counsel representing Clearwater Ventures has withdrawn from the case, further complicating negotiations.
Cole also informed Gypsum officials that Eagle Valley Clean Energy has filed its own condemnation action against Clearwater Ventures.
"The same people who came before you arguing that condemnation was not a legitimate form of action have filed their own condemnation action," said Cole.
Rostrom said the action was taken "in order to protect its access to water on Clearwater Ventures' property."
"Eagle Valley Clean Energy filed a condemnation action in Eagle County District Court on Aug. 1, seeking to acquire property rights from Clearwater necessary for its continuing operations."
Rostrom's statements also noted that Eagle Valley Clean Energy company officials have stated, "Reliable and continuing access to property and water is essential to the biomass plant's operations, so we have taken this extraordinary action to protect our interests and to ensure our future security."
But because of the overlap between Clearwater Ventures and Eagle Valley Clean Energy, town officials have noted the action appears as though a company is suing itself.
"If they can't negotiate with themselves, it's not really too surprising the town hasn't been able to negotiate with them," said Cole.
When questioned on that point, Rostrom said the companies are not one and the same.
"They are entirely different companies with different lines of business and different ownership groups, and share only a limited amount of management overlap," said Rostrom. "The relationship between the companies is that Clearwater owns the property in Gypsum and leases 18 acres to Eagle Valley Clean Energy for the biomass plant, and conveys easements to it for water access."