LETTER: Setting the Record Straight on the Vandaveer Ranch Giveaway
This letter is intended to set the record straight about who really lost the city owned Vandaveer Ranch property. In that effort, I’m offering a brief history in 500 words or less. Therefore, gentle reader, please bear with me as we digest this convoluted odyssey of the relationship between the City of Salida and what really was, itself.
Eight years ago the Salida city government formed the Salida Natural Resource Center Development Corporation (SNRCDC), a 63-20 not-for-profit entity to construct an office building and shop for the U.S. Forest Service on part of the Vandaveer Ranch in the hope of establishing Colorado’s first-ever “Natural Resource Center, a campus consisting of numerous governmental agencies.
While citizens of Salida were assured that the SNRCDC was ‘separate and independent’ from the city, the SNRCDC was never operated as an independent “63-20” corporation. Instead, it has always been controlled, funded, and supported by the city government. “63-20 corporations” are based on an IRS ruling allowing private corporations to sell tax-free bonds to help fund government-sponsored construction projects.
Yet the SNRCDC never sold any tax-free bonds and never filed for the 63-20 designation. Instead, it used the City’s Vandaveer Ranch property to collateralize a conventional construction loan at a hefty 6.25% interest rate and then refinanced that loan increasing the debt to $4.7 million.
Former Mayor Chuck Rose signed the Special Warranty Deed, dated July 7, 2011, transferring Parcel A of Vandaveer Ranch land to the SNRCDC and former mayor Don Stevens signed another Special Warranty Deed, dated February 23, 2012, transferring the remaining Parcels B, C, D, E and F to the SNRCDC. Subsequently, the former city finance director wrote the land off the city’s books as a $2.2 million loss.
Former NRCDC board president Salida city councilman Keith Baker and former board member councilman Tom Yerkey continued to assert that the SNRCDC was ‘separate and independent’ of the city, thus ignoring laws, including the Colorado Constitution, which apply to Colorado municipal governments.
In 2016 the Colorado State Auditor found the SNRCDC to be a component unit of the city and should have been included in the city’s financial statements since 2010 and must be included in Salida’s future financial statements as long as it is a component unit of the city.
These are some but not all of the facts showing that the SNRCDC was indistinguishable from the city itself. One might say it was government getting into the development business under cover of a “private” not-for-profit corporation operated solely with city resources until it had taxpayer purchased Vandaveer Ranch land to secure a loan to fund this poorly planned and amateurishly executed project.
What was as dismaying as the transfer of the Vandaveer Ranch to the SNRCDC and loss of $2.2 million of public money, is the vilification that supporters of those responsible for this fiasco have heaped upon current council members, mayor and city attorney – all of whom have shouldered the onerous task of cleaning up a mess they did not make.