Colorado’s trust fund statutes (CRS § 38-22-127 and CRS § 38-26-109) require that all funds paid to any contractor or subcontractor “shall be held in trust for the payment of the subcontractors, laborers, or material suppliers” who have worked on a project. The trust fund also provides that such funds may be comingled in an account with other funds, so long as separate records of account for the project are maintained. Violation of the trust fund statute may be prosecuted as criminal theft under CRS § 18-4-401, and as civil theft under CRS § 18-4-405. Civil theft, if proven, entitles the claimant to three times the amount of actual damages, plus reasonable attorneys’ fees.
By: Jim Borgel
In November’s general election, Denver voters approved the so-called green roof ordinance, which goes into effect on January 1, 2018. Under the ordinance, all new buildings in the City and County of Denver that are 25,000 square feet or larger, any additions to existing buildings that cause the building to equal or exceed 25,000 square feet, or a roof replacement on a building in that is 25,000 square feet or larger, must incorporate green roof technology into their design. A “green roof” is one that incorporates growing vegetation, and the percentage of the roof that must be green will vary depending on the size of the building. Buildings between 25,000 and 49,999 square feet will be required to have twenty percent of their roof surface green, while that percentage will increase to 60 percent on buildings over 200,000 square feet. The initiative will also allow a portion of the green roof requirement to be satisfied by the installation of solar panels, as long as at least 30 percent of the roof continues to be “green.” Residential buildings with a height of less than four stories or fifty feet are exempt from the green roof requirement, and in some instances the Denver Planning Board may approve exemptions to this requirement, although a cash-in-lieu payment equal to $25.00 per square foot the roof area that would otherwise need to be green must be paid by the applicant.
By: Anna Eberlin
Commercial Real Estate Women Network, or CREW, is an organization that supports women’s advancement in the commercial real estate industry. CREW has been conducting research and developing industry white papers since 2007 to promote diversity in the real estate industry. The latest white paper, Diversity: The Business Advantage – Best Practices for Gender Equity and Inclusion in Commercial Real Estate (2017), is a great compilation of research and case studies that demonstrates why it is important to promote and maintain diversity in the workplace.
By: Dora Lane
Senate Bill (SB) 253
The bill created the Nevada Pregnant Workers’ Fairness Act, which applies to employers with 15 or more employees (for at least 20 weeks in the current or preceding year). The bill makes it unlawful for an employer to do any of the following (except for where the action is taken based upon a bona fide occupational qualification):
By: Timothy Gordon
The Supreme Court of Colorado has held that a contractual provision that gives a non-breaching party the option of choosing between recovery of liquidated damages and pursuing actual damages is enforceable so long as the two remedies are exclusive. Ravenstar v. One Ski Hill Place, 2017 CO 83. The dispute in Ravenstar was over the failure of certain buyers to close on the purchase of condominium units. After the buyers breached, the developer/seller, kept their deposits as liquidated damages as permitted by the purchase and sale agreements.
Denver’s housing market was recently named as one of the top four overvalued markets in the nation by CoreLogic (a leading provider of consumer, financial and property information), due to rising home prices as a result of a lack of inventory of homes for sale. The median sales price of a single-family home in Denver reached a record $407,000 in May, and statewide it topped $365,000. Experts have argued that in Denver alone, 16,000 to 18,000 new homes a year are needed to meet demand. Last year, only 11,038 homes were built in Denver according to MetroStudy. In Lakewood, the current median selling price for homes is $494,000 according to Lakewood realtors. Corelogic has predicted that the small supply of existing homes for sale and insufficient single-family construction will continue to put upward pressure on home prices.
Despite the reported need for more residential housing, on July 28, 2017, a group named Lakewood Strategic Growth submitted petitions with more than 7,500 signatures supporting a proposed ordinance to impose a 1% annual limit on residential growth in Lakewood, Colorado, and to require Lakewood City Council approval of any projects containing 40 or more residential units. Only 5,165 signatures are required from registered voters to submit the proposed ordinance for a vote. The Lakewood City Council has until August 28th to review the validity of the submitted petitions. If the signatures are valid and sufficient, the City Council may adopt the anti-growth ordinance or if the City Council does not adopt the ordinance, it will be placed on the November 7th ballot to be decided by the Lakewood voters. The proposed ordinance is 14 pages long, contains 4,800 words, and includes a complex formula for setting allocations for construction of new residential homes. Under the proposed ordinance, only 650 housing units would be built in 2018 in Lakewood. A 300-unit apartment building would count as 300 housing units of the total 650 allowed.
The backers of the Lakewood anti-growth ordinance contend that it is not a “no growth” initiative and is intended to manage growth in an effective manner. Lakewood Mayor, Adam Paul, recently published a letter in the Denver Post outlining his opposition to the anti-growth measure stating that it is “rife with unintended consequences” and that it will “make life more expensive for people already living in Lakewood”. Mayor Paul has said that restricting housing “will drive prices higher. . .and make Lakewood too expensive for teachers, police officers, firefighters”. The Denver Post recently reported that “the [Lakewood] proposal comes at a time when rents in the Denver area – especially in areas within and just beyond the city limits – are soaring and developers are working to keep up with the demand. A massive shortage of construction workers is making things worse.”
A larger concern for Colorado developers and builders is that a statewide anti-growth measure, entitled “Limit on Local Housing Growth” (Initiative #4) may appear on the statewide ballot in Colorado as an initiated state statute or constitutional amendment in 2018. This statewide measure would establish a constitutional right to limit housing growth through countywide initiatives and referendums. Initiative #4 specifies that no permits to build new privately owned residential housing units would be issued beginning with the declaration of voter approval of Initiative #4 until January 1, 2019; and thereafter would limit annual private housing growth to 1% in the cities and counties of Broomfield and Denver and in the counties of Adams, Arapahoe, Boulder, Douglas, El Paso, Jefferson, Larimer and Weld for 2019 and 2020. Thereafter, limits in those cities and counties would continue unless local voters overturn them by ballot measures.
A proponent of the statewide antigrowth Initiative #4 has been reported as stating that the growth in Colorado is “completely out of control. Excessive growth will bankrupt the state. There is already no money for highways.” (Denver Business Journal, December 1, 2016). The title of Initiative #4 was challenged, and the title was affirmed by the Colorado Supreme Court in May 2017. The form of the petition was approved on August 7th. The Colorado Secretary of State’s Office has a deadline of November 30, 2017, for the petition. Due to the passage of Amendment 71 in November 2016, signatures equal to at least 2% of the registered electors who reside in the state’s 35 Senate districts must be part of the total. In 2018, the number of signatures required for an initiated constitutional amendment/state statute is estimated to be 98,492. If sufficient signatures are gathered, Initiative #4 will appear on the ballot for the November 2018 general election.
According to the nonpartisan Director of Research of the Colorado Legislative Council, the initial fiscal impact of Initiative #4 will be that the “value of existing housing units may increase in communities where there are binding growth limits, impacting homeowners and landlords. For Colorado residents that would like to move into communities with binding housing limits, this measure may make it more expensive to find homes to buy or rent. Limits on housing permits will also impact the distribution of construction employment, retail trade, and population within Colorado.” The fiscal impact estimate clearly predicts that if Initiative #4 is passed, the housing crisis in Colorado would worsen and home prices would increase in an already “overvalued” market.
By: Clay Karwisch
A recent Idaho Supreme Court case has important lessons for drafting force majeure clauses in development agreements. In Burns Concrete v. Teton County, the Idaho Supreme Court held that a force majeure clause in a development agreement was broad enough to apply to Teton County’s failure to grant appropriate approvals for the construction of a concrete plant contemplated by the development agreement. In the case, Burns Concrete (the Developer) acquired property zoned for commercial use, and successfully applied to have the zoning changed to industrial. Under the applicable zoning ordinance, buildings in the industrial zone could not exceed 45 feet in height unless approved by a conditional use permit. The Developer made a timely application for a conditional use permit to exceed the height limitation, which the planning and zoning office recommended for approval.
There are a few basic rules that any contractor needs to be aware of before bidding a project in Colorado, including rules related to licensing, bonding, bid preferences for local contractors, local employment rules, bid shopping rules, bid mistakes, and bid protest issues. No article can cover these topics with the specificity needed to determine whether to bid a project in Colorado, and what steps need to be accomplished to do so (those are issues that should be discussed with a lawyer) but at a very high level, we lay out some of the basic requirements under Colorado Law in this post.
By: Sean Hanlon
Denver’s first Stock Show took place in 1906. As an emerging city, Denver was often referred to as a “Cow Town.” A lot has changed since 1906. The National Western Stock Show continues to thrive, buts its National Western Complex is showing its age.
Enter the National Western Stock Show Project. The Stock Show Project is focused on creating a global agribusiness epicenter that will attract private companies and public organizations to collaborate on solving long developing problems associated with food, animal health, and water. A global think tank of sorts. The expanding complex will also have a new livestock center, a new equestrian center (with 1,000 permanent stalls), a new expo hall, and a new arena. The Stock Show Project—expected to cost more than $1 billion—will result in a 250-acre campus containing a unique cross-pollination of industries. Expected to span a decade, the Stock Show Project will be completed in phases, and will not interrupt the annual Stock Show event which will continue during the renovations.
By: Rebecca Dow
Construction defect litigation reform will take a small step forward this week when Gov. John Hickenlooper signs HB 1279 on May 23, 2017. HB 1279 will go into effect immediately after signature by the Governor, and developers and residential builders will need to be aware of certain aspects of the law. HB 1279 has been much touted as a bipartisan effort toward addressing the housing squeeze in Colorado, as reflected by just 3.4 percent of new housing starts in 2016 being for sale condominiums in the Denver metro area. HB 1279 passed unanimously by both the House and the Senate on May 4, 2107. This is the first piece of legislation passed in the last several years to address any aspect of construction defect litigation reform, although during that time more robust construction defect reform ordinances have been passed by approximately 12 cities and counties in Colorado. HB 1279 offers some pluses to developers/builders, but also contains some pitfalls, as discussed below. Finally, this article will provide some practical pointers for residential construction under HB 1279.