Elected city officials in Longmont, acting as the Longmont Urban Renewal Authority, have asked the court to allow them to take title of the department store. The Longmont Urban Renewal Authority vs. Dillard’s Properties Inc. eminent domain case is slated for 9 a.m. Thursday, July 25, in Boulder District Court.
Eminent domain is the term used to describe a government’s legal right to take private property for public use after compensating a property owner. The urban renewal authority previously offered Dillard’s $3.6 million for the store and the land on which it sits.
City officials filed eminent-domain documents against Dillard’s Properties LLC and DSS Uniter Inc., another property owner, in May, after more than a year of negotiations between development company NewMark Merrill Mountain States and Dillard’s.
In 2008, an independent study concluded that the mall met nine of 11 conditions of blight outlined by Colorado’s urban-renewal law.
Dillard’s lawyers wrote in a document filed with the court, that the move to condemn the Longmont store is not to “eradicate blight, but rather to obtain certain redevelopment control rights (Dillard’s) have over the redevelopment of the Twin Peaks Mall property,” according to a court document. In addition, the Longmont Urban Renewal Authority “has not negotiated in good faith with (Dillard’s) for the acquisition of the property,” according to the document.
In another court document, Dillard’s lawyers wrote that Colorado’s statutes are unconstitutional in regards to vesting in eminent-domain cases. Dillard’s lawyers also wrote that the property only can be taken for urban renewal purposes based on “valid blight determination and not for economic development purposes.”
The court document cites an urban renewal case in Arvada in 2004, which showed that “takings” for economic purposes violate Colorado law.
The city of Longmont does not comment on pending litigation, spokesman Rigo Leal said in an email. Dillard’s spokeswoman Julie Bull was not available for comment Wednesday.
Dillard’s would lay off 44 employees working at the Longmont store and would lose millions of dollars in retail inventory, trade fixtures and personal property if the eminent domain proceedings are decided in favor of the Longmont Urban Renewal Authority, according to the second court document. Dillard’s has owned and operated a retail store in Longmont since 1997.
Dillard’s holds legal veto power over any redevelopment of the property. The 94,000-square-foot building and land were valued at $3.03 million in a city appraisal conducted in November. A Boulder County Assessor’s Office appraisal assessed the property at $2.935 million for a two-year period ending in June 2012.
The shopping center has been renamed Village at the Peaks and is slated to open in early 2015. A 100,000-square-foot Sam’s Club discount store and a 30,000-square-foot Whole Foods Market (Nasdaq: WFM) grocery store have signed on to anchor the new shopping center, along with a Regal Entertainment Group 12-screen, 2,500-seat movie theater.
NewMark Merrill paid $8.5 million for the existing 550,000-square-foot mall in February 2012.