Loveland to mull OK of McWhinney settlement offer

LOVELAND — The Loveland City Council on Tuesday will decide whether to accept the terms of a cease-fire agreement with a local developer over the proposed Centerra South mixed-use project.

The council can either accept the settlement offer, reject it and fight the lawsuit in court, or send the matter back to the city attorney to draft a counter offer.

According to the agenda for Tuesday’s council meeting, “the purpose of the proposed settlement agreement is to consummate settlement negotiations between the parties, conducted through legal counsel, and to avoid the uncertainty, expense and delay associated with protracted litigation.”

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Under the terms of the settlement offer made by McWhinney Real Estate Services Inc., the developer would drop its breach-of-contract lawsuit against the city over the council’s Nov. 21 decision to rescind the Centerra South agreements that a previous city council had approved. McWhinney also would commit to pay Loveland $750,000 to help the city recoup its legal fees and to put toward affordable housing, including $250,000 as soon as the settlement is finalized and the remaining $500,000 within 15 days after the developer receives a final certificate of occupancy for a grocer or other anchor tenant in Centerra South.

In exchange, Loveland would agree to drop any opposition to Centerra South, expedite approvals and other processes to get the project moving, give up any claims it has or might have against Centerra South, cooperate on road and utility rights of way, and agree not to treat McWhinney development proposals any less favorably than similar ones from other developers.

Loveland would have to help defend McWhinney against any other claims that might try to halt or further delay the development, and could be liable for McWhinney’s legal costs, and development costs to date, if it didn’t.

McWhinney had proposed building the $1 billion development on farmland on Loveland’s eastern edge, including an urban-renewal plan and master finance agreement that would use 25 years of tax revenues that the development would generate to pay for Centerra South’s infrastructure, including streets and utility lines.

The council last spring approved the urban-renewal agreement and related master finance agreement over intense opposition from some residents and others. However, two weeks after voters in November elected council members who looked less favorably on the project, the new council voted to rescind the approval.

Mayor Jacki Marsh introduced the resolutions to rescind the agreements based on her belief that the previous council’s votes in May were not valid under state law and had not been done with proper public notice, but also in response to Loveland voters’ 70% approval of citizen-initiated Ballot Issue 301, which amended the city charter to require any development projects proposed or changed under Loveland’s Urban Renewal Authority to be submitted to a public vote. Although it took effect immediately, it was not retroactive and thus didn’t cover the Centerra South agreements, prompting Marsh to recommend that they be rescinded.

 McWhinney promptly filed suit in Larimer County District Court, alleging breach of contract. The two sides filed competing responses and were girding for trial on Feb. 29 and March 1.

McWhinney made its settlement offer on Feb. 20, the date of a regular City Council meeting, and council members and City Attorney Moses Garcia went into executive session to consider it. After meeting behind closed doors for nearly two hours, the council emerged in the wee hours of Feb. 21 and voted 7-2  —  with Marsh and Councilmember Erin Black dissenting — to reverse the vote to rescind the agreements and engage McWhinney in settlement talks.

The case is McWhinney Real Estate Services, et al, versus city of Loveland, case number 2023cv30956 filed in Larimer County District Court..