Judge grants Vail immediate possession of Vail Resorts’ owned site in East Vail
The District Court issued an order on Friday, determining that the town had the right, public purpose and need to acquire the site via condemnation
On Friday, June 30, Eagle County District Court Chief Judge Paul Dunkelman issued an order, ruling in favor of the town of Vail in the immediate possession hearing against Vail Resorts.
The order punctuates a long dispute between the town of Vail and Vail Resorts over a 23-acre parcel in East Vail. Vail Resorts owns the property and began planning to bring workforce housing to 5.4 acres of the site. However, the town — citing concerns over the critical role it plays as a winter habitat for the area’s bighorn sheep herd — voted to condemn the site last May. Ultimately in October, unable to reach an agreement or purchase the site, the town filed a motion for immediate possession in the Eagle County District Court.
The judge’s order grants the town’s motion for immediate possession, determining that the town had the authority to condemn the East Vail site, that the town is taking the site for a public use and purpose and that there is a necessity for the town to acquire the property.
In his order, Dunkelman writes that this case has been “pitted as the critical need for workforce housing versus the critical need to protect wildlife habitat,” with both parties acknowledging the importance of both needs as well as their obligation to address these needs.
“Despite these acknowledgments, the Town and Vail Resorts have been unable to work together to jointly focus on addressing these needs and meeting these obligations, at least as to the Subject Property,” Dunkelman wrote.
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“Instead of meeting their responsibilities and addressing workforce housing and protection of wildlife habitat in a responsible fashion, the Town and Vail Resorts have chosen to defer this decision to the Court. While this is their right, it is also a failure on the part of the Town and Vail Resorts.”
In a statement, Vail Resorts’ spokesperson John Plack said that the company respects the “Court’s decision and appreciate the Court highlighting issues that made this a challenging process.”
However, he added that Vail Resorts is “disappointed in this outcome and that the Town of Vail chose to take this action, to condemn our private land, and eliminate an approved affordable workforce housing project after collaborating with our company for years to get this project approved.”
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“This community desperately needs affordable housing options. While having the Town fully reverse its position on this collaboration presents challenges, we will continue to advocate for our employees and seek housing solutions through community collaboration,” Plack wrote.
The order comes down over a month after the three-day immediate possession hearing took place in May.
During the trial, the town of Vail sought to prove its authority to condemn the land. It argued that it is taking the land to serve a public purpose, that the site is necessary for the area’s bighorn sheep herd as “critical” habitat, and that it acted in good faith to acquire the property but failed.
Vail Resorts argued that the town acted in bad faith, that it treated this site differently than other developments in the area, that the site is “poor habitat” for the sheep, and that it did not seek to acquire the site for the sheep, but rather, had ulterior motives to attempt to acquire the land.
What the order says
The court’s 27-page order addresses numerous components of both sides’ arguments throughout the May hearing. In total, Dunkleman acknowledges that there were five factors for the court to address during the immediate possession hearing. However, the issues that were disputed were “narrower,” he added.
“The primary issue that this Court must address is whether the Town intends the use of the Subject Property to be for a public use or purpose and whether there is a necessity to acquire the Subject Property for that public use or purpose,” Dunkelman wrote.
“Even more specifically, the issue before the Court is whether the Town acted in bad faith and had an ulterior motive for the condemnation. The motive not being for the preservation of the Subject Property to protect the bighorn sheep herd, but to block a development which was argued to be unpopular with neighbors and influential residents of the Vail community.”
Not disputed, according to the order, was the town’s legal authority to condemn the parcel as a home rule municipality; the amount of a deposit should the court rule in favor of the town; and the fact that the two entities attempted to negotiate but failed to agree on the compensation.
This negotiation primarily refers to the period of time last year between when the Vail Town Council voted to condemn the site in May 2022 and Oct. 14, 2022, when the town filed the official “motion for immediate possession” and a “petition in condemnation” in the District court.
During those intermediary months, the two entities attempted to reach an agreement out of court. While the town urged the corporation to consider alternative land and housing projects, Vail Resorts remained firm in its plans to build on the East Vail site. Following their failure to reach an agreement, the town offered Vail Resorts $12 million to purchase the site, which the corporation rejected. It was then the matter was taken to the district court.
“The Court concludes that prior to filing the condemnation action, the parties failed to agree on the compensation owing for the Subject Property and that the Town satisfied its good faith negotiations obligation by a preponderance of the evidence,” the order reads.
While there was “little dispute” on the fact that the entities did attempt to negotiate but failed to reach an agreement on compensation, according to Dunkelman’s order, the town’s negotiation tactics as well as the town’s intent were at the center of the hearing.
With regard to the case’s “primary issue” of the purpose and necessity for the town’s desired acquisition of the East Vail parcel, Dunkelman ruled that Vail proved it was intending to acquire the site for the purpose of preserving the bighorn sheep’s winter habitat and that the site was necessary for that purpose.
In addition to citing that this purpose “is as stated by the town,” Dunkelman also wrote that “there is significant evidence that the Subject Property is critical winter range for the lambs and ewes which are necessary for the preservation of the herd.”
During the trial, Vail Resorts’ raised the argument that this “could be an incidental public purpose,” and that the town’s actual motivation was “to block an unpopular development,” as referenced in the court order.
“While the Court stated it would not analyze this case as habitat protection versus workforce housing, the fact that this condemnation will effectively block a workforce development does have significance,” Dunkelman wrote, adding that the town has also invested in and supported workforce housing.
“In this instance, the Town made a policy decision to prioritize the preservation of wildlife habitat over the development of workforce housing. It is local government that makes policy decisions, not a trial court.”
Further, Dunkelman wrote that the “post-hoc justification” argument was “one interpretation of the facts in this case.”
“The Court has interpreted the evidence and made factual findings that the survival of the bighorn sheep herd has been a focus of the town and that this was not a post-hoc justification. It may have increased in priority with the changing of the Town Council but was not created as justification for the condemnation. It existed before and after the Petition for Condemnation was filed,” Dunkelman wrote.
The order also acknowledged that Vail Resorts “sufficiently raised a bad faith argument” with regard to the town’s stated purpose and necessity for condemnation.
To support this argument, Vail Resorts pointed to “the conduct of the town related to the Triumph deals, the Timber Ridge Master Lease, and the changing position of the town,” the order reads.
More specifically, during the hearing, Vail Resorts presented evidence that in late 2020 and early 2021 the town granted two no-bid contracts — for the new Residences at Main Vail and the redevelopment of Timber Ridge — to Triumph Development.
It was presented that these were granted “in exchange for Triumph abandoning the project” in East Vail with Vail Resorts, on which Triumph was the development partner, as the order summarizes it. It was also presented that the town required Triumph to claim ownership over the property’s plans, that the town attempted to require the property’s entitlements and reverse the prior entitlement extensions.
Regarding the Timber Ridge Master leases, the facts as presented in the order, were that the town sent Vail Resorts two letters a few weeks after the Triumph negotiations. These letters tied Vail Resorts’ renewal of its master leases at Timber Ridge with “Vail Resorts’ willingness to ‘re-engage with the town in discussions regarding the alternate housing sites initiative,'” the order presents.
Ultimately, these master leases were extended, but only for 75% of the units previously leased to the corporation.
With regard to the third point on the “changing position,” Dunkelman wrote it was “less of a concern to the court,” and pointed to the town’s processes through the development approvals and ultimate condemnation.
Dunkelman acknowledges that with regard to the Triumph deal and Timber Ridge master leases, it was “not a proper approach for a condemning authority to take.”
He calls these tactics a “governmental overstep,” but notes they are “not illegal by statute or case law.”
“The Town should never have attempted to coerce Vail Resorts as part of the process to obtain the Subject Property. The condemning power is significant and so is the responsibility,” he wrote.
“However, this action does not lead to a finding of pretextual conduct. Rather, it actually supports the urgency that the Town gave to the acquisition of the Subject Property and the protection of the herd.”
Dunkelman notes that the town’s ultimate $12 million offer was made based on objective criteria and that the town “satisfied its good faith negotiations obligation by a preponderance of the evidence.”
Ultimately, it was the court’s opinion that “there was legitimate and primary public purpose for the condemnation.”
Counter action
The order also addresses a question raised by Vail Resorts in a cross-petition the company filed on Aug. 30, 2022. The complaint accused the town of improper use of the emergency ordinance process in denying permits to the company. This complaint referred to an ordinance the Town Council passed on Aug. 2, 2022, which banned new permits on the site.
In this complaint, Vail Resorts alleged that this action “resulted in a temporary taking of Vail Resorts’ use and enjoyment of the Subject Property which requires compensation,” according to the latest order from Dunkelman.
In the order, Dunkelman wrote that while this ordinance did impact the development, it doesn’t mean that “Vail Resorts is entitled to additional compensation for this time period or even part of this time period.”
Next steps
Following this order, the next steps are for the town to deposit $12 million “for the town of Vail to take possession of the subject property until compensation is finally ascertained for the taking of the subject property.”
Then, in September, the district court will hold a valuation hearing to determine the compensation owed to Vail Resorts for the Booth Heights parcel.
While the Vail Town Council does not have a regular meeting this week due to the Fourth of July holiday, it does have an executive session scheduled for Wednesday, July 5, at 11 a.m. to discuss the case.
The Vail Daily reached out to the town for comment on the case and order, but it has not responded at this time.