At a special meeting on July 25, the Pagosa Springs Town Council clarified a previously approved motion to lease town-owned property to La Plata Electric Association (LPEA) for the purpose of installing a new LPEA substation.
The property is located at 2140 County Road 500 (Trujillo Road) and is currently being used as the Archuleta County transfer station and recycling center.
At a July 2 meeting, council member Mat deGraaf moved to lease a 5.18-acre section of the property to LPEA, “with the revenues generated to be earmarked for community infrastructure investment and economic development for 30 years.”
The motion was seconded and ultimately passed by the council.
However, the motion did not detail if the town or LPEA would own the property at the end of the 30-year lease term.
An agenda document on the matter states that town staff was looking for clarity on the motion from July 2, “regarding direction for staff to negotiate the terms for LPEA’s substation.”
It also states, “LPEA staff did express they would be comfortable with a 30-year lease agreement if they were able to own the property after 30 years of making lease payments.”
But a majority on the council previously expressed a desire for the town to retain ownership of the property at the end of any lease agreement with LPEA.
Community Development Director James Dickhoff, who brought the issue back before the council, said, “We are just making sure that our understanding is correct before the town manager starts to negotiate a lease with La Plata.”
He added they were seeking clarity on what the motion meant for the end of the 30-year lease.
“Is it a lease-purchase agreement, or are we entering into a new lease of 30 years?” he asked.
He added that he wanted to be certain that town staff “understands this,” because he got the impression that LPEA would not “have the tolerance to move forward with extending the lease over and over again.”
Dickhoff continued, “This scenario of 30 years would pretty much be equal to them taking out a loan and buying the property.”
He added they “just wanted to get clarity on the council’s comfort level with them owning the property, or if we are truly looking at extending the lease after 30 years … so at least we have a good idea of what we’re working on” during negotiations with LPEA.
He added that LPEA has already started ordering equipment for the substation, and they want to know whether the property “will be the landing place for them.”
Council member Gary Williams and deGraaf suggested that their intentions were to retain ownership of the property after the lease term.
“When I made that motion, it was my intention to retain ownership of the property … I am certainly open to discussion on that, but that was my intention,” deGraaf said.
But council member Madeline Bergon expressed that she thought that LPEA was under the impression that it would own the land after the lease term expired.
She noted that if the town’s stance is to retain ownership of the land, it would amount to a “bait and switch on La Plata.”
Dickhoff confirmed, reading an email from LPEA received during the meeting stating that LPEA would prefer to own the land at the end of the lease.
But he also noted that the email mentions the possibility of a “perpetual easement,” explaining that in this scenario LPEA would pay a “lump sum” and then would have a perpetual easement to use the property for the purpose of the substation.
Council member Brooks Lindner also expressed a desire to retain ownership, saying he wasn’t worried about the impression of a “bait and switch,” with Williams saying he didn’t like the easement idea.
Mayor Shari Pierce asked Town Manager David Harris, “What parameters do you need to know in a new motion?”
Harris answered that the motion must state that the town wishes to retain ownership and that after the term is up LPEA would be responsible for clean up and making the land ready for usage.
deGraaf made a new motion stating the above and it was seconded and passed.
A role call vote on the matter revealed that Pierce, Lindner, Leonard Martinez, Williams and deGraaf voted in favor of the motion, with Matt DeGuise and Bergon voting against it.
derek@pagosasun.com
