After heated public comment, commissioners approve Sundown Oaks metro district service plan with limits on eminent domain and fees

Douglas County commissioners on Sept. 23 approved a service plan that would allow creation of the Sundown Oaks Metropolitan District, a contested proposal that would finance public improvements for a planned 37‑lot residential development in the Franktown area. The Board's approval followed renewed Planning Commission consideration and substantial public testimony both for and against formation of the district.

Why it matters: The district would enable the developer to use tax‑exempt financing to spread the cost of infrastructure — most notably a required Highway 86 turn lane and other on‑site public improvements — instead of paying those costs up front and raising lot prices. Opponents said the district would saddle future homeowners with large mill levies, raise transparency and eminent‑domain concerns, and that other nearby developments were built without metro districts.

Applicant and planning history: Planning staff said the district would cover about 173 acres and 37 residential lots with estimated build‑out population of 111; the requested debt limit was reduced from $10 million to $6 million during the review. Planning Commission recommended denial at an Aug. 4 hearing but, after the applicant submitted revised materials, reconsidered and recommended approval Sept. 22 by a 5‑2 vote with conditions limiting eminent domain and restricting payment of developer construction management fees from district revenues.

What the service plan allows and the changes made: The plan caps an initial debt‑service mill levy at 50 mills (maximum authorized debt‑service cap at 70 mills) and imposes a 40‑year limit on debt‑service mill‑levy imposition once debt service begins. The applicant agreed to language limiting eminent domain: the district would not exercise the power without prior written approval from the Board of County Commissioners. The applicant also agreed to a prohibition on using district revenue to pay developer construction‑management fees. The applicant told the Board it intends to wait to issue any bonds until public improvements exist and lot contracts are executed to provide greater financial certainty.

Public testimony: More than a dozen residents spoke in opposition at the meeting; planning staff provided the board with a petition of over 700 signatures opposing the district. Speakers raised water‑quality and augmentation concerns regarding use of the Upper Dawson and Laramie‑Fox Hills aquifers, argued the district was unnecessary because surrounding developments did not require metro districts, and warned of eminent‑domain risks. Diana Love, representing the Franktown Citizens Coalition, urged denial and cited open‑meeting concerns with a Planning Commission reconsideration hearing. Developer/builder Steven Gage and counsel Nicole Paykoff said the district is needed so the project can finance the Highway 86 improvements required by CDOT and the county and argued that tax‑exempt financing lowers lot costs for buyers.

Board discussion and vote: Commissioners discussed the statutory approval criteria in Title 32, including need, financial feasibility and best interest of the area to be served. Commissioners who favored approval said the turn lane and other required improvements impose costs that are most reasonably financed through a metropolitan district, and noted the applicant reduced the debt limit and agreed to planning commission conditions on eminent domain and developer fees. One commissioner dissented, citing the large number of petition signatures and concerns about local impacts. The motion to approve passed 2‑1.

Implementation and next steps: The adopted service plan will be the controlling plan for the district formation process; the district must comply with Colorado requirements on disclosure and annual reporting. The board's conditions require the applicant to record limitations and the service plan revision language limiting eminent domain and construction‑management reimbursements. The applicant stated it expects to construct public improvements before issuing bonds, and staff's financial consultant reviewed the market study and found the plan reasonable given the assumptions.

Ending: The approval sets conditions intended to limit some of the most contentious powers available to metropolitan districts, while allowing the developer to pursue tax‑exempt financing to construct required public improvements. The decision is likely to prompt continued interest and monitoring in the Franktown area.