Colorado-Real-Estate-Journal_525596

Page 26 - May 6-19, 2026 www.crej.com Spencer Fane LLP | spencerfane.com 1700 Lincoln Street, Suite 2000 Denver, CO 80203 © 2024 Spencer Fane LLP. The choice of a lawyer is an important decision and should not be based solely on advertisements. Structuring a wide variety of real estate transactions nationwide , our Real Estate Transactions team advises on everything from standard purchases and sales and commercial leases to sophisticated like-kind exchanges under Section 1031 of the tax code and opportunity zone projects. Our attorneys help individuals and companies across a spectrum of industries to understand and manage risk as they decide whether to proceed with a transaction opportunity related to the purchase, sale, development, and exchange of real estate. Closing deals as smoothly and ef ciently as possible. 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Law & Accounting T he developer of a large residential community in Grand County suffered a comprehensive defeat at the hands of the town of Fraser, with a district court judge find- ing the developer was required to honor a 23-year-old annex- ation agreement and grant a conservation easement over undeveloped land, despite the agreement failing to identify the size or location of the ease- ment. The ruling highlights the tools available to municipali- ties to protect open space and the challenges high country developers face when seeking to meet growing demand for housing and other amenities in resort communities. The dispute, Cornerstone Winter Park Holdings v. Town of Fraser, traces back to an annexation agreement between the town of Fraser and a prior developer in 2003. In that agreement, the town approved annexing more than 1,300 acres for a residential develop- ment known as Grand Park in exchange for, among other things, the developer’s agree- ment to place two meadows into a conservation easement. However, the conservation easement was never cre- ated. Instead, according to the developer, the annexation was modified to remove the d e v e l o p e r ’ s requirement to impose an ease- ment. Years later, in late 2019, a developer sought to establish a conservation easement over one of the two meadows, while being permitted to develop the other meadow. The mayor signed a deed confirming the developer’s right to do so, but the town’s board of trustees overruled the mayor seven months later. The court agreed and declared the deed void. The dispute boiled over in 2021 when the town said the developer was in default of the 2003 annexation agreement for failing to impose conser- vation easements over the meadows. A lawsuit followed. After an 11-day trial, the judge concluded that the developer was required to establish a con- servation easement over both meadows, which was a “con- tinuing and unfulfilled require- ment,” and the developer’s failure to do so justified the town’s refusal to issue permits and other approvals. The trial was a complete victory for the Town, but the dispute is not yet over. The town now seeks $1.2 million in attorneys’ fees, and a second trial is scheduled for early 2027. The town of Fraser case high- lights the power and durabil- ity of annexation agreements and how municipalities can use and enforce them – even decades later – to achieve their goals. Annexation agreements are a common way of negoti- ating and setting expectations and obligations for all parties to an annexation. Municipali- ties retain significant discretion in how they craft them – for instance, demanding conserva- tion easements in exchange for agreeing to certain develop- ment rights and extensions of municipal services. The case also illustrates the myriad challenges high coun- try developers face when meeting increasing demand for housing and other amenities in resort towns. Preserving open space is often a key goal for policymakers. Indeed, it was specifically negotiated in the Fraser annexation agreement. However, with increasing land acquisition prices, developers may only be able to dedicate so much land before the project is no longer profitable. Afford- able housing requirements further weigh on a develop- ment’s financial metrics. Ris- ing material costs, labor and supply chain challenges, tariffs and litigation risk all add more complexity. Some risks can be addressed with robust contracts that con- tain price escalation clauses and other liability protections. Other risks are financial and must be weighed against the need for every development to pencil out. However, regard- less of what any pro forma shows, adequate due diligence is essential. It can unearth all potential requirements (and therefore costs) for develop- ment, whether they arise from code, development agreements or, as in the town of Fraser case, an annexation agreement. Evaluating and understanding those costs will best arm a high country developer to proceed with a project. s ryan.sugden@huschblackwell.com Ruling highlights high country development challenges Ryan Sugden Partner, Husch Blackwell The town of Fraser case highlights the power and durability of annexation agreements and how municipalities can use and enforce them – even decades later – to achieve their goals.