Danny Nunn, Pueblo’s director of finance, briefed the city council on Dec. 22 about a dispute over invoices the Pueblo Development Foundation (PDF) has submitted totaling about $1.4 million related to tenant-improvement work at 200 Greenhorn.

Nunn traced the project history: in 2020 the council appropriated $5 million from half-cent sales tax for project ED2005 to construct a shell building; PDF purchased land and completed the shell, which was deeded to the city in April 2022. The final shell construction costs were reported at about $3.84 million, under the $5 million appropriation. In 2023 the city approved a separate tenant-finish package (project ED2303) with a $6.5 million budget and a 5% PDF administration fee; that contract, Nunn said, explicitly required PDF to pay any costs exceeding the stated amount.

PDF has since submitted invoices it considers reimbursement for cost overruns. Nunn said his review found the city has paid the amounts the council approved and that the additional invoices are not contractually valid. He described his discussions with PDF and with PDF’s and city attorneys, and said an attorney for PDF agreed reimbursements would require formal council action and a contract amendment. Nunn said he was told by PDF that individuals had given verbal authorization for overruns; he said his follow-up with a deputy city attorney, Bob Jagger, produced a denial that any such authorization had been granted.

Councilor Gomez — who said he sits on PDF’s board — said he had submitted a letter raising the issue and requested a special meeting and fuller documentation on outstanding liabilities, interest and legal exposure. Gomez argued councilors had insufficient background papers and financial analysis to assess the claim at the work session.

Mayor and other council members countered that the contract language had been followed and that the city had paid its contractual obligations; several council members recommended handling any legal or contract disputes in a forum outside the work session (executive session or special meeting). Nunn reiterated that, under city attorneys’ analysis and contract language, there is no current legal obligation for the city to pay the $1.4 million without a council-approved amendment.

Next steps: Councilors suggested convening a separate session for legal review and directed staff to provide requested documentation to the council. The work session then paused and planned to reconvene later in the evening.