Residents living near the former home of Lutheran Medical Center in downtown Wheat Ridge were concerned earlier this year after receiving a letter that gave the mistaken impression they could be paying a property tax to help the site redevelop.
The center moved to Clear Creek Crossing on Aug. 3, 2024, and was renamed Lutheran Hospital. The now-vacant, 100-acre campus in downtown Wheat Ridge is for sale.
The misunderstanding occurred when a law firm hired by Intermountain Health, the owners of the Lutheran Legacy Campus, mailed letters to about 80 homeowners near the site. The letter’s goal was to inform them of plans to form a metropolitan district with a property tax mill levy.
Metro districts in Colorado are a common way to pay for the public infrastructure portion of development projects.
Members of the Wheat Ridge Neighbors Facebook group posted several comments. Common among them was a mistaken belief those who received the letters had to opt out of the metro district to avoid paying the property tax.
In a Feb. 10 response posted to the city website, officials explained more details about the purpose of the letter and publicly discussed the issue that night at a city council study session.
Future homeowners would pay property tax
City Manager Patrick Goff noted state statutes required about 80 adjacent homeowners to be notified of a draft service plan that would include the metro district.
After questions were raised, a follow-up letter was sent “to explain they don’t have to do anything or opt out or in” to the metro district, Goff said. They will not be automatically included in the district, he added.
“Their property will not be part of the district and they will not be taxed,” Goff stated. “This only affects future homeowners within the district.”
The city response called the letter “confusing because it appeared to be from the city, and it included information about a metro district service plan, but it did not include explanatory detail,” the response read.
The city-adopted Lutheran Legacy master plan recommends the creation of a metro district.
At the former hospital campus, the existing roads are privately owned and maintained. A metro district would improve, build and maintain all roads and open space. The district may also pay for upgrades and expansions to drainage systems, water lines and sanitary sewer lines.
“In some ways, a metro district is similar to a (homeowners association) in that it affects only owners within the HOA and it raises money to fund and maintain improvements,” the city response continued.
The city also explained the process to create a metro district is required by state law:
• A service plan is written to describe the boundary of the district, the district’s responsibilities and the mill rate they can levy;
• City council reviews and considers approval of the service plan;
• The property owners within the proposed district vote to create the district.
If approved, property owners and residents within the district will pay an additional property tax for the construction and maintenance of improvements within the district.
As the current property owner, Intermountain Health initiated the creation of the district and service plan.
In an email response to an interview request or answers to questions, Intermountain Health wrote in a brief statement that they are “working to create a metro district to enhance development opportunities at the campus. That work is still evolving, so we do not have additional information to share at this time.”
The draft service plan was presented to the city council in the study session and was to be considered for approval on Monday, Feb. 24, after the Gazette’s deadline for this issue. If the council gave the go-ahead, properties within the district will vote in May to form the district.
Max mill levy of 67 to pay for $100 million in infrastructure improvements
A study session memo to the city council said the city received the draft service plan for the district (further divided into a dozen smaller districts) on Jan. 27. It would allow a maximum debt mill levy of 67 mills for up to 40 years.
An intergovernmental agreement “allows local governments to exert significant control over the organization and operation of special districts,” the memo read. “The service plan approval process is the key to exercising that control.”
Service plans must include:
• A financial plan;
• A preliminary engineering or architectural survey showing how the proposed services are to be provided;
• Maps;
• An estimate of the district population and valuation;
• Descriptions of proposed faculties;
• An estimated valuation for assessment of the district;
• Estimated costs of land acquisition, engineering, legal and administrative services;
• Initial proposed indebtedness and estimated proposed maximum interest rates and discounts;
• Other major expenses related to the organization and initial operation of the district; and
• A description of any arrangement or proposed agreement with any political subdivision for any services between the two entities.
Goff said the parcel has around $100 million in infrastructure improvement needs.
Metro district makes property more valuable
Megan Murphy, an attorney with the White Bear Ankele Tanaka & Waldron law firm, represented Intermountain Health. Murphy said her firm also represented two developers who used metro districts to help pay for their projects in Wheat Ridge. An online search found two such districts in Wheat Ridge: the Ward Transportation Oriented Development Metropolitan District No. 1 and the Ridgetop Village Metropolitan District.
“This is not about zoning or density, this is just a service plan,” Murphy added. “The plan and metro district are an added entitlement to this property.”
“In a lot of these cases, things are rushed because (a metro district) is something they want, but if it’s done before development like this it provides more value to the property,” Goff noted.
Two smaller districts in the metro district will include existing buildings, another will be designated for residential housing for sale, two districts will be for multi-family housing and two districts will be set aside for city and civic uses.
“We don’t know if the multi-family will be for rent or sale yet,” Murphy noted.
She also said residents who live in different housing may have different sensitives to tax rates, so the metro district will allow future developers flexibility to split the individual districts into different arrangements.
Each district in a metro district can be sold to different developers, Goff said.
Murphy explained the owner of a $600,000 home in a Lutheran Legacy metro district would pay $3,500 in property taxes with a total 87.6 mill levy, an amount similar to other metro districts in Wheat Ridge.
Intermountain is asking for a $110 million debt limit, Murphy added.
“The developer will have to pay a significant portion of the infrastructure costs,” she said.
City Attorney Jerry Dahl noted since all the property within the metro district is privately owned, if the district dissolves, the city does not have obligations such as helping pay for infrastructure improvements within district boundaries.
Murphy added state statutes require a dissolution plan to be filed with the city.
“So the district can’t just walk away and say they don’t want to take care of these streets anymore,” she said.
