Town of Fraser declares Cornerstone in default
Sky-Hi Daily News
Fraser’s board of trustees passed a resolution last night declaring a default on Cornerstone Winter Park Holdings, prohibiting the real estate developer from selling any lots or homes within the Cozens Meadow Subdivision, and withholding any further building permits for the development.
The default is due to a subdivision improvement agreement (SIA) that Cornerstone failed to maintain, the board said. Under the SIA with the town, Cornerstone was expected to maintain a financial surety ” basically a letter of credit or financial guarantee to the town ” of $316,181 until all improvements to the subdivision have been accepted. The surety expired, and Cornerstone failed to renew it, according to a town staff report.
When Rod McGowan, Fraser’s town attorney, saw that Cornerstone was not upholding its financial surety, he sent a letter in October stating Cornerstone was in violation of its SIA, with a 15-day window to respond. Cornerstone did not take any action to reinstate the financial surety, McGowan said.
Letters earlier this month stated Cornerstone had requested to reduce the amount of the financial surety for Cozens Meadow at Grand Park to $53,714 because it felt it had fulfilled the requirements listed under the SIA, which was recorded in Dec. 2005. But the board of trustees never approved the request.
Because of Cornerstone’s failure to renew the original amount of the financial surety, McGowan recommended to the board a default on the development. Mayor Pro-Tem Steve Sumrall asked if there was still a possibility of pursuing a negotiation with Cornerstone.
“Apparently there’s issues. The developer offered $53,000 … my concern is this is a drastic move,” Sumrall said. “And do we really want to go there at this point in time?”
Trustee David Pratt’s thoughts on the matter were clear as he turned to face Vice President for Cornerstone Real Estate Holdings Clark Lipscomb in the audience.
“Why wasn’t (the financial surety) renewed? We don’t have a letter of credit, we have nothing. We’re sitting here as a board unprotected,” Pratt said. “He can’t make the decision, ‘I’m not going to follow the agreement.’ It’s a signed agreement.”
Lipscomb said Cornerstone likes to follow its agreements but also expects the town to do the same.
“(The subdivision) is built and completed. It has been for two years,” Lipscomb said. “The town is responsible to follow through just as much as we are.”
McGowan pointed out that Cornerstone’s issues with the town’s acceptances had nothing to do with the letter of credit.
“If there are notes of contention on your part, they need to be brought to our table too,” said Mayor Fran Cook. “But what’s on the table now is . . . do we have surety? We are told we do not.”
Lipscomb said if the town puts sales restrictions on his development, “There’ll be big problems.”
After some back-and-forth, Cook was firm.
“It’s not a matter of discussion, Clark. Whether it’s a marble or a million dollars, the SIA requires it, and we don’t have it.”
After the board approved the default, Lipscomb stood up and briskly left the room.
Fraser recommends that Grand County approve special use permit for new tubing hill
The Fraser board of trustees made a recommendation stating it supports the approval of a special use permit by Grand County Commissioners for the tubing hill being proposed by Byers Peak Properties.
Since the property is currently in receipt of annexation into the town of Fraser (the public hearing is Feb. 6), the recommendation was based on conditions to be met during the annexation process, and with the understanding the applicant will comply with the Corps of Engineers 404 regulations.
Plans for the tubing hill include a concessions area, a barn, and a magic carpet. Since the land is still considered part of Grand County, a special use permit was needed from the county to use the hill for commercial purposes.
The decision for the special use permit was tabled due to a possibility of jurisdictional wetlands being located at the parking area of the proposed tubing hill. County Commissioner James Newberry wanted Fraser to comment because of the proximity of the area’s location to the town’s boundaries, and the issue with the wetlands.
The Corps of Engineers is currently in the investigatory stages to see if a portion of the property is naturally occurring wetlands, but has not made any official findings. A true determination won’t be available until spring.
Trustee Adam Cwiklin expressed some concern about making recommendations when the Corps of Engineers hadn’t verified there were no jurisdictional wetlands. Sumrall, however, favored the recommendation.
“If there are issues (with the wetlands), they can be mitigated,” Sumrall added. “We’re faced with the Fraser Valley Parkway . . . same kind of issues. If we let the slightest little thing like this (stop us) . . . The Corps won’t let him off the hook. He’s willing to take the risk, so let him take the risk.”
Cook added that the piece of property that could potentially be a jurisdictional wetland ” one-tenth of an acre or less, Lipscomb said ” won’t be impacted during the winter anyway.
“To me (the tubing hill) is a great venue,” Sumrall added. “We need this kind of thing. The old tubing hill, let’s face it . . .”
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