Loveland council to vote on Centerra audit, Krenning recall

LOVELAND — The Loveland City Council on Tuesday will consider a pair of hot-button, quarter-million-dollar questions: whether to give final approval to a $249,000 forensic audit of the 20-year-old plan that financed the original Centerra development, and whether to spend an estimated $250,000 on a special election involving the recall of council member Troy Krenning or save the money by accepting his announced May resignation and appoint a replacement until the next scheduled election.

A sharply divided Loveland Urban Renewal Authority board voted 7-5 on Dec. 10 to execute an intergovernmental agreement between the LURA and the city to contract with Ernst and Young LLP for the audit, then voted to approve the contract itself. The City Council had approved the appropriation on first reading Dec. 3.

The original master financing agreement for Centerra, officially known as the “U.S. 34-Crossroads” urban-renewal plan, was approved in 2004, along with a 25-year agreement that pays for construction of infrastructure for the project by diverting sales and property tax revenue from the city, Larimer County and the Thompson School District until 2029.

Loveland mayor Jacki Marsh, who serves on the LURA board, has since last spring expressed concern over the financial implications of the Centerra agreements. In April, citing what she called “inconsistencies” in the records of the five metropolitan taxing districts established for Centerra, Marsh called for a deeper-dive independent examination “of monies spent” and to audit not only the metro districts and finance agreements but also the developer itself, McWhinney Real Estate Services Inc., and all its related companies.

After Marsh detailed her concerns at an Oct. 29 LURA meeting, Alan Pogue, a partner at the Denver-based law firm of Icenogle Seaver Pogue PC, sent a letter on Nov. 22 to Loveland City Attorney Vince Junglas, representing Centerra Metropolitan District 1 rebutting or explaining what he called the “inaccurate comments and representations” made at the meeting. Marsh responded with a lengthy point-by-point rebuttal of Pogue’s explanations, and both letters are contained in the packet provided for Tuesday’s meeting.

If the audit, which Ernst and Young estimates will take around 723 hours, turns up material violations of the urban-renewal agreements, the contract could force McWhinney and the metro districts to reimburse the city for the auditor’s fee.

The recall of Krenning was triggered when former Loveland City Council member Dave Clark and two other Ward 1 residents in June launched a successful petition drive in an attempt to recall him. In September, a hearing officer appointed by the City Council denied Krenning’s protest of the recall petition, but Krenning pursued the case in district court, and the city couldn’t place the recall question on the Nov. 5 ballot or schedule a special election until his appeals were exhausted.

However, on Dec. 4, Krenning withdrew his appeal of the recall petition and announced that he will resign his Ward 1 council seat in May.

The question before the Loveland City Council on Tuesday night will be whether to schedule a special recall election on March 4, which the city’s staff estimates would cost $250,000, or accept Krenning’s resignation and appoint a temporary replacement until the next regularly scheduled municipal election, scheduled for Nov. 4, 2025.

Interviewed after he withdrew his appeal, Krenning told BizWest that his resignation date is “fluid” and that if a recall election were scheduled before his resignation date, he would have the option to resign before that date to save the city the money of holding the special election.

Krenning has drawn continued fire from development and other business interests in Loveland since taking office in November 2023. Two weeks after he was elected, he led the drive to rescind the Centerra South agreements, a decision that subsequently was reversed after McWhinney sued the council alleging breach of contract. Krenning also led a push to investigate the four-member council minority over alleged open-meetings violations before the Centerra South agreements were originally approved by the previous council.

Clark was also a plaintiff along with seven others including former City Council members Don Overcash, Richard Ball, John Fogle and Chauncey Taylor who sued the current City Council, seeking the ouster of Marsh, Mayor Pro Tem Jon Mallo and council members Krenning, Erin Black and Laura Light-Kovacs, alleging that they violated the city charter on Nov. 21, 2023, by not calling for a public vote before their vote to rescind the urban-renewal and financing agreements for McWhinney’s proposed Centerra South development that the previous council had approved in April and May 2023.In October, a Larimer District Court judge dismissed that lawsuit as well as another targeting the council majority, and Krenning has pushed the city attorney’s office to demand that the plaintiffs compensate the city for the money it has spent to defend itself. Last week, the Loveland-based attorney in both cases, Russell Sinnett, filed responses that contested the city’s demand for remuneration.

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