Jefferson County’s Board of County Commissioners voted 2-1 on Sept. 30 to deny the service plan to form the Observatory Metropolitan District, a proposed special district intended to fund public infrastructure for a commercial project north of U.S. 40 in Evergreen.

The vote came at the end of a three-hour public hearing that included detailed staff analysis, a presentation by the applicant’s development and financial team and more than 30 public speakers for and against the district. Commissioner Kerr moved to deny the plan; Commissioner Dahlkemper joined the motion and Commissioner Zenzinger voted no, resulting in a 2-to-1 decision to deny the applicant’s request.

County planning staff presented the service plan and financial materials and concluded that several mandatory criteria under state statute had been met — that there is a public need, that services were not adequate in the immediate area and that a district could provide the proposed services. Planner Nick Nelson told the board staff found the proposal met “the first 4 set of criteria from the state statute” but also flagged uncertainty about whether creation of the district would be “in the best interest of the area to be served” because alternative funding mechanisms exist and because the packet lacked some of the detail staff would prefer for a commercial district.

The applicant, Observatory Holdings LLC, and its counsel Alicia Corley and financial adviser Tim Morzel told commissioners the district would allow the property owner to fund and construct public improvements and later dedicate them to existing providers, such as West Jeff Metro and Foothills Fire Protection. Jack Buchanan, a principal with the applicant, said the project is intended to be an upgraded gateway to Evergreen and that the applicant has signed a franchise agreement for a Marriott-branded hotel and preliminary commitments from national restaurant tenants. “We’re not doing this on spec,” Buchanan said, adding the team had revised cost estimates and removed a planned parking garage to reduce estimated improvement costs.

A recurring focus of the hearing was the reliability of the financial plan and supporting market analysis. Staff and multiple public commenters flagged recent changes in the applicant’s numbers: planned commercial square footage was reduced from 77,000 to about 40,000 square feet, estimated public improvement costs fell from about $28 million to roughly $17 million, and the applicant lowered its maximum bonded indebtedness proposal from $35 million to $21 million. Staff told the board it had not had time to fully factor the latest submittal into its referral analysis.

The applicant proposed multiple revenue sources, including a 3 percent public improvement fee (PIF) on retail sales within the district, a 6 percent lodging PIF on a proposed 120-room hotel and a maximum combined mill levy of up to 40 mills for debt service and operations. Several speakers, and some commissioners, questioned the assumptions used to model specific ownership tax and sales forecasts. Alan Pogue, counsel to the applicant, disagreed with staff’s earlier characterization of specific ownership tax calculations and explained how the countywide approach to that tax works when apportioned to a taxing entity.

Public testimony dominated the hearing. Supporters — including representatives from Evergreen Bicycle Outfitters, who are under contract to acquire and operate the relocated El Rancho building — said the district is essential to finance costly infrastructure and to preserve and repurpose the historic restaurant building. “This is not a PR stunt. This is 100 percent happening if there’s a Metro District approval,” Jake Signet of Evergreen Bicycle Outfitters said.

Opponents questioned the timing and completeness of the application and highlighted missing land‑use approvals and engineering plans. Several neighbors and land‑use professionals urged the commissioners to deny or at least continue the application until the applicant files a coordinated land‑use application (plat/site development plan) and more detailed engineering and financial documentation. Concerns included the scale of earthwork proposed, uncertain stormwater and fire-suppression requirements, and whether the estimated tax and fee revenues would be sufficient to repay bonds.

After public testimony concluded commissioners deliberated. Commissioner Dahlkemper said she was wrestling with two criteria in particular: whether the district could reasonably discharge the proposed indebtedness, and whether forming the district was in the best interest of the area to be served given the outstanding gaps in documentation. Commissioner Kerr moved to deny the service plan; the motion carried 2-1.

Ending: The denial ends this particular service plan application, but does not foreclose the applicant from submitting revised materials or alternate land‑use proposals. Because the planning commission had previously recommended denial, applicants and staff will evaluate next steps, which could include resubmittal with additional engineering, more detailed market and financial analysis, or pursuing alternative financing mechanisms. The transcript of the hearing and the county’s staff report are on file with Jefferson County planning and zoning.