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Thornton’s fight for water spurs home builders to warn of further trouble

After nearly four years of lawsuits, court decisions and recriminations between Larimer County and Thornton over the city’s efforts to pipe water from the Cache la Poudre River to fuel future growth, Colorado’s home builders are now weighing in with a warning that the ongoing standoff risks worsening the state’s affordable housing crisis.

In a letter sent to Larimer County officials on Oct. 31, the Home Builders Association of Metro Denver and the Colorado Association of Home Builders wrote that the county’s February 2019 denial of a permit for a portion of a 72-mile pipeline Thornton needs to move its Poudre River shares continues to reverberate.

“The ongoing delays associated with Larimer County’s denial and refusal to work something out with Thornton are only increasing these costs and adding needless delays — carelessly pricing thousands of aspiring homeowners in Colorado out of the market in the process,” the letter reads.

According to the National Association of Home Builders, the letter said, a $1,000 increase in the cost of a median-cost new home bumps more than 2,300 Colorado households out of the market.

Thornton says without its Poudre water shares, its growth will grind to a halt before 2030 at a population of 160,000. It has long-term plans for 240,000 residents but available water for only another 5,000 housing permits.

“We could add another 90,000 people and we have the resources to do it, but we just don’t have access to the resources,” said Jason O’Shea, Thornton’s development director. “Five to six years from now, we won’t have permits to sell.”

But Gary Wockner, director of the non-profit Save The Poudre, accused the home builders last week of “spewing false information.” Wockner and others who have spent the last few years fighting the $423 million pipeline say Thornton could easily send its water down the Poudre to a point much closer to the city, like Windsor, before taking it out.

That would bolster the health of the river and spare county residents the disruption of laying a 42-inch diameter pipe through neighborhoods, he said. Had it done so, Wockner argued, “Thornton would not have even needed a permit in Larimer County and Thornton would’ve had its water 10 years ago.”

The city counters that sending its water down the Poudre through Fort Collins — shares it purchased 40 years ago — would degrade its quality to an unacceptable level.

So far, Thornton has been unable to get the relief it wants in the courts. A Larimer County judge upheld the county’s decision to deny the pipeline permit and that ruling was affirmed by the Colorado Court of Appeals in September.

Thornton recently announced that it won’t seek a ruling from the state’s high court, opting instead to try and negotiate a resolution with Larimer County.

More people, less water

Clarke Carlson, vice president of Carlson Associates, has been building homes in Thornton for more than 30 years, including the Cherrywood Park and Fallbrook Farm neighborhoods. His company has around five projects, covering 600 to 700 acres, going through the entitlement process with the city.

“It is beginning to cause a big concern among developers and builders in the city,” he said of the water standoff. “We’re at risk. Without water, you don’t have anything.”

That premise is nothing new for Colorado, which has seen its share of water fights over the decades. But now those disputes are playing out amid a severe drought that has persisted for 20 years, and as millions more people have moved to the American West since the turn of the millennium.

Last week, the U.S. Bureau of Reclamation issued a report that found that conditions on the Colorado River are deteriorating faster than anticipated, and federal officials are considering whether to release less water next year from the country’s two largest reservoirs downstream to Arizona, California and Nevada.

That has put a spotlight on big water storage projects like the expansion of Gross Reservoir, southwest of Boulder, which draws water from the headwaters of the Colorado River in Grand County through the Moffat Tunnel to serve Denver Water’s 1.5 million customers.

It was only a year ago that Boulder County officials, who oppose raising the height of the Gross Dam to store an additional 120,000 acre-feet of water, settled a lawsuit with Denver Water that will allow the project to go forward.

Earlier this year, Douglas County made headlines — and drew criticism — with a plan to explore buying and moving 22,000 acre-feet of water from the San Luis Valley 200 miles away to the fast-growing county south of Denver.

But Carlson said the battle between Thornton and Larimer County is different, because Thornton lawfully bought its water rights decades ago in anticipation of rapid growth, only to find itself unable to access those rights.

Still, he holds out hope that the city and county will come to an agreement. He points to the $825 million Southern Delivery System, a pipeline that started moving water to Colorado Springs from the Arkansas River in Pueblo six years ago, as an example of much-needed regional cooperation.

“I believe that as elected leaders exercise their judgment and wisdom, that resolution will be obtained,” Carlson said.

Chad Murphy, managing director of real estate development company Hines, also hopes cooler heads prevail. Hines purchased 765 acres in Thornton four years ago for a 4,000-unit mixed-use project dubbed Parterre, which Murphy hopes to break ground on soon.

“On the Front Range, water availability is the most critical — and effectively the first — entitlement for development to occur,” Murphy said. “Municipalities must work cooperatively to allow for growth to continue or else the Colorado economy will suffer.”

Colorado remains 127,000 homes and apartments short of what is needed to comfortably house its population, ratcheting up home prices into the stratosphere. In a recent study of home prices, metro Denver ranked 10th among 187 metros with an average gain in home prices of $94 a day from 2011 to 2021 — as the price for a home shot up from $231,400 to $607,100.

Morgan Cullen, government affairs director for the Home Builders Association of Metro Denver, said denying water to a fast-growing city like Thornton, which is projected to overtake Lakewood as Colorado’s fifth-largest city in the coming years, will only make it harder for people to buy a home here.

“We have a housing attainability crisis,” Cullen said. “Thornton is a key piece of the housing attainability puzzle here in metro Denver. If we’re going to tackle this issue, which is at a breaking point right now, we have to provide more housing — it’s as simple as that.”

Entrenched positions

But what isn’t simple is getting to a resolution in the long-standing dispute, which has cost Thornton nearly $3.5 million to date in both planning and legal bills.

Thornton has drawn a red line on sending its water down the Poudre through Fort Collins. In a letter written last month, City Manager Kevin Woods said “multiple courts have made it clear that Thornton cannot be required or expected to put its drinking water down the Cache La Poudre River and Thornton is unwilling to revisit that proposed solution.”

But the city wants to keep talking with Larimer County, he said. County spokeswoman Michelle Bird said her side is ready to listen.

“As of today, Thornton has not submitted a new application for a 1041 permit for its project,” she said, referring to the land use permit that big infrastructure projects are required to obtain. “Any talks between the County and Thornton would need to be happening at the staff level and only related to processing a 1041 permit application.”

Meanwhile, Thornton could see a big source of revenue dry up after 2028 if no additional water can be obtained and home-building stops in the city of 145,000. O’Shea, the city’s development director, said Thornton expects to collect approximately $170 million in water connection fees and $60 million in building permit fees over the next five years.

But, he said, the damage from the water fight could hit earlier, with builders hesitant to “either start or continue to spend money to go through the development process, which from pre-application to building permit can take several years.”

“When we can’t give them certainty, that gives pause to people who want to invest in the city,” O’Shea said.

But Karen Wagner, a former Larimer County commissioner who heads the No Pipe Dream group opposing Thornton’s plan, isn’t buying it.

“Thornton can rant about its ‘red line,’ but the Larimer County commissioners are charged with protecting residents’ property values and ensuring that 1041 projects benefit Larimer County, not just the applicant,” she said. “No Pipe Dream will be there when Thornton returns.”

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