A property swap deal between the town of Loveland and local real estate developer Troy McWhinney will net the town nearly 30 acres of open space, a long-sought trail corridor and a donation worth $325,000. But in return, the city could give up a key role in the future development of oil and gas in the region.
Last week, Loveland City Council voted unanimously to approve the deal, despite questions about the timing of the deal and the city’s position afterward.
“That’s really the gem we’re trying to get”
On paper, the swap deal favors the town of Loveland. At its center is a 48.7-acre parcel along the Big Thompson River Corridor valued at $1.3 million. Lying east of the city’s sewage treatment plant on Boise Avenue, the property has been in the crosshairs of the city’s Open Lands division for more than a decade.
“That’s really the gem we’re trying to get,” Division Manager Marilyn Hilgenberg said during a presentation to city council regarding the trade. “It offers scenic views, a wildlife buffer zone and two lined ponds and one unlined pond. …Even going back to the 2004 capital improvement plan, this property has been highly valued. And we tried to get it, but the timing was wrong and we had no funding.
The city plans to use the property exclusively as recreational open space and has $1.7 million in Colorado state transportation grants to help fund the effort. Beginning early next year, the Boise Bend and Old St. Louis Natural Areas trails will be extended east to connect to the future Willow Bend Natural Area, a 79-acre adaptive recreation park whose the opening is scheduled for 2024.
“We’re talking about construction starting next year,” Hilgenberg said. “And it’s really exciting to be able to get to that component on First Street in the next two years. It’s a pretty exciting plan.
The land is currently owned by TCM Thompson River, a private limited company formed in 2021. According to Hilgenberg, the plot is the “personal property” of Troy McWhinney and is not associated with the McWhinney Company.
Efforts to reach McWhinney for comment on this transaction were unsuccessful.
“It’s so good for us”
In exchange for ownership, TCM Thompson River, LLC will receive 20 acres of the former Bonser family ranch, located on the south side of County Road 20E in unincorporated Loveland.
The city bought the rest of the farm plus four buildings for $980,000 in 2019 on the understanding that it would be used for open land.
According to Hilgenberg, that’s still the plan. A small portion (1.55 acres) will also go to the Gustafson family, owners of the four-acre lot between the ranch and I-25. In exchange, the city will get rights to half an acre of land, plus half an acre of slope easements for trail construction.
“It’s a section of a trail corridor that we need to secure in order to access the new underpass that they recently built under I-25,” she explained. “And so we have worked with Mr. Gustafson for the past two years. We want it to be amicable to work together, and what he needs us to do is he trades us a section of this south side and we give him some ownership at 20E on its western border.
The city has also retained a 15-acre conservation easement on the portion going to TCM which will be used for a trailhead and a connecting trail. But the city agreed to hand over the “building shell” containing a small residence and three storage buildings.
According to Hilgenberg, these easement restrictions explain the land’s value differential in 2022. In April, an independent appraiser appraised the parcel at $925,000.
“This deal is so good for us that we’re basically swapping a $1.3 million property for a $925,000 property,” she said. “And the owner exchanges the difference with us as a donation.”
But TCM could get more than what Hilgenberg called a “tax benefit” from the deal. The County Road 20E parcel is located a few hundred feet from the Centerra property that McWhinney’s company plans to develop into an oil and gas well platform and production facility.
Earlier this year, McWhinney announced plans to drill up to 11 horizontal wells at the site starting in January 2023.
By abandoning the home, the City of Loveland loses its ability to object as a residential landlord within the 2,000 foot setback imposed by Colorado Oil and Gas Conservation Commission rules.
During her presentation, Hilgenberg acknowledged that this was a “contentious” part of the transaction and, after consulting with the city attorney’s office, she is also confident that it “in no way precludes case” the City of Loveland to have oversight in the review. process or standing in front of the COGCC.
Nonetheless, she faced questions on the point during the discussion portion of the meeting from Councilor Andrea Samson, who questioned the “sudden” availability of the elusive property along the Big Thompson River.
In response, Hilgenberg insisted the city had worked with Troy McWhinney for many years to secure him.
“Brian stalked them every six months for 10 years” are you ready? are you ready? she said, referring to her co-anchor, city land agent Brian Hayes. “They use it as a personal hunting ground and that sort of thing. And so it’s not that all of a sudden it just came out.
She also added that the city already had a previous conservation easement on the property for the planned trails, but owning the property will make the construction process easier.
Samson also asked Assistant City Attorney Vincent Junglas about oil and gas regulations relevant to the County Road 20E site, and asked to expand on Hilgenberg’s point about Loveland’s position at the COGCC.
Junglas explained that the town of Loveland would still be the “relevant local government” in the process, with an even bigger role in future proceedings. In a follow-up interview, he further explained that the city has a much broader platform when it comes to potential objections to McWhinney’s proposal.
“The interests of the owners are only the right of the owner, only,” he said. “If we act as a competent local government, we try to protect the interests of the whole community.”
This gives the city grounds to object on grounds of “public health, safety and welfare” on behalf of all residents.
“The rights of a landowner are less than those of the relevant local government, in my opinion,” Junglas said.
Other councilors have touted the benefits of the exchange for Loveland residents, who will benefit from additional open space and recreational opportunities, with very little cash outlay.
Councilor Dana Foley also said the swap will help the city with flood mitigation efforts on the Big Thompson and improve “public safety.”
The city council then voted 9-0 to approve the measure. He will face a second vote at the next regular council meeting on August 16.
For now, the debate over oil and gas development on the Centerra property in Loveland awaits further action from McWhinney. The company is also planning a 15-well pad on the east side of I-25 near the new residential development in Kinston, but has not yet filed permits for either site. As development continues, the plans will be subject to review by the City, Larimer County and the COGCC.