Businessman loses lawsuit against city

An El Paso County jury has ruled against a businessman who sued Colorado Springs claiming the city had improperly backed out of a contract to sell him a 1.8-acre parcel it owns in the middle of one of The Broadmoor hotel's golf courses.

Attorneys for the city argued during the weeklong trial that Ted Rubley never had a final contract, but only a preliminary agreement to buy the land for $850,000. The City Council has the final word on all government land deals, and council members rejected the deal in February 2006, citing a need to keep the land for potential future water storage.

The six-person jury reached its verdict late Friday, rejecting Rubley's request for $3.7 million from the city to compensate him for profit he claims he would have made by building six luxury condominiums on the site. City Attorney Patricia Kelly said Monday she was pleased with the verdict.

Greg Walta, who represented Rubley in the suit, said Monday: "I believe in the jury system, so that's about all I have."

Walta said Rubley is considering an appeal.

The case exposed divisions among some of the city's top officials over policies for handling land transactions. The land was controlled by Colorado Springs Utilities, a city-owned enterprise, and former Utilities Chief Executive Phil Tollefson testified that he had authority to approve land deals without City Council approval. Tollefson said he had done so on multiple occasions. The city's former real estate services manager, Betty Clark-Wine, also testified that she had the authority to sign land-sale contracts on behalf of the city.

But Mayor Lionel Rivera testified that only he has authority to complete the final step in a land deal, signing the title to convey the property to a new owner. Rivera said he can take that step only with authorization of the City Council.

The City Council in September 2007 adopted new real estate policies that explicitly give final authority over land deals to the nine elected officials who make up the panel, Kelly said.

The Rubley deal had several complicating factors. Rubley signed a contract to buy the land in 2005, which included a provision saying the deal was contingent on City Council approval. He argued that provision was removed in a subsequent version of the contract, but city attorneys said that part always remained in force. Rubley was the only bidder on the land when city workers identified it as surplus property in 2005. The Broadmoor did not file a bid, claiming that the city's $730,000 appraisal was too high because the hotel controls access to the site. Rubley said he believed he could ensure his condo buyers would have access to the land, even if it meant crossing part of a golf course, and he was ready to proceed with the deal despite that dispute.

The city bought the land from the Old Broadmoor Water Co. in 1973, and the two water tanks on it were used for years afterward. The tanks remain on the property, but they haven't been used in years.

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Contact the writer: 636-0187 or perry.swanson@gazette.com