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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 10/18/2016 - SECOND READING OF ORDINANCE NO. 112, 2016, AUTHORIAgenda Item 2 Item # 2 Page 1 AGENDA ITEM SUMMARY October 18, 2016 City Council STAFF Justin Scharton, Environmental Planner John Stokes, Natural Resources Director SUBJECT Second Reading of Ordinance No. 112, 2016, Authorizing Execution of the Cribari-Gheen/Schuman Amended and Restated Deed of Conservation Easement. EXECUTIVE SUMMARY This Ordinance, unanimously adopted on First Reading on October 4, 2016, authorizes the execution of the amended and restated Cribari/Gheen/Schuman conservation easement. The Cribari property was a 72 +/- acre property south of Timnath in unincorporated Larimer County that was conserved by the City with a conservation easement in 2005 with Chris Cribari. Cribari subdivided the parcel, then sold the subsequent two parcels to Ken and Deborah Gheen and Michael and Taryn Schuman. After the Gheens placed their parcel on the market, ambiguities were identified in the original conservation easement deed, including lack of clarity on residential development potential and approved land uses and activities for each parcel, in addition to a shared liability for each other’s parcels. This amended and restated conservation easement has addressed and clarified all the issues presented with no net-loss to the conservation value of the parcels. STAFF RECOMMENDATION Staff recommends adoption of the Ordinance on Second Reading. ATTACHMENTS 1. First Reading Agenda Item Summary, October 4, 2016 (w/o attachments) (PDF) 2. Ordinance No. 112, 2016 (PDF) Agenda Item 4 Item # 4 Page 1 AGENDA ITEM SUMMARY October 4, 2016 City Council STAFF Justin Scharton, Environmental Planner John Stokes, Natural Resources Director SUBJECT First Reading of Ordinance No. 112, 2016, Authorizing Execution of the Cribari-Gheen/Schuman Amended and Restated Deed of Conservation Easement. EXECUTIVE SUMMARY The purpose of this item is to authorize the execution of the amended and restated Cribari/Gheen/Schuman conservation easement. The Cribari property was a 72 +/- acre property south of Timnath in unincorporated Larimer County that was conserved by the City with a conservation easement in 2005 with Chris Cribari. Cribari subdivided the parcel, then sold the subsequent two parcels to Ken and Deborah Gheen and Michael and Taryn Schuman. After the Gheens placed their parcel on the market, ambiguities were identified in the original conservation easement deed, including lack of clarity on residential development potential and approved land uses and activities for each parcel, in addition to a shared liability for each other’s parcels. This amended and restated conservation easement has addressed and clarified all the issues presented with no net-loss to the conservation value of the parcels. STAFF RECOMMENDATION Staff recommends adoption of the Ordinance on First Reading. BACKGROUND / DISCUSSION The Cribari parcel, an approximately 72 acre property south of Timnath in unincorporated Larimer County, was conserved by the City of Fort Collins with a conservation easement (CE) in 2005 (Attachment 1). Chris Cribari exercised the reserved right in the original conservation deed to subdivide the property into two parcels of at least 35 acres each, resulting in one developed parcel and one undeveloped parcel, both subject to the 2005 CE (Attachment 2). In 2006 Cribari sold the northern parcel subject to the 2005 CE to Ken and Deborah Gheen and the southern parcel to Michael and Taryn Schuman. The Schuman parcel was previously developed and includes a residence, numerous outbuildings and stables. The Gheen parcel is farmed by the Gheens but remains undeveloped to present day. Issues with the existing CE deed In 2013 the Gheens placed their parcel for sale and the City was contacted by several realtors and potential buyers with questions about whether their specific development plans and land use activities would be allowed by the CE deed. It became evident to staff that there was some ambiguity in the language in the original CE deed and that the CE could better address some of the legal consequences of two separate landowners under the existing CE deed. ATTACHMENT 1 Agenda Item 4 Item # 4 Page 2 Amending the CE deed The Conservation Easement Amendment Policy and Procedure (2011) provides guidance to the Natural Areas Department (NAD) on amending conservation easements. Further, the Policy outlines under what scenarios an amendment to an existing CE is appropriate. The overall philosophy of the Policy is to maintain the conservation value which was identified in the original CE (i.e., net-neutral conservation value). Amending the CE deed in this case would clarify:  what type of activities could take place on the parcels;  the extent and location of where the reserved residential development could take place; and  the shared liability each landowner had for the other’s parcel in the current deed. Staff determined these reasons met the standards of the amendment policy and began working with the Gheens and Schumans on the amendments. Amendment Details The significant amendments to the new CE deed include clarification on location and extent of development within the parcels. The available square footage of residential development remains the same for both parcels as in the original deed, with the amended version providing more detail. Additionally, there has been clarification about the types of land use activities that can take place on the parcels, specifically agricultural uses, that were unclear in the original deed. Sections related to oil and gas royalties, commercial and industrial use, granting of utilities, and hunting were also updated to current City standards as defined by the City Attorney’s Office. Finally, language was added to provide clarification regarding the City’s interest in the parcels’ value and the structure of the document was changed slightly to reflect the current nature of two landowners instead of one. CITY FINANCIAL IMPACTS The goal of the amendment to the Cribari-Gheen/Schuman CE is to lessen enforcement efforts by the City caused by ambiguous language in the conservation deed. Over time this should result in less staff time spent enforcing the terms of the CE on these parcels and therefore a modest cost savings to the City. BOARD / COMMISSION RECOMMENDATION At its September 14, 2016 meeting, the Land Conservation Stewardship Board unanimously recommended this item to City Council. ATTACHMENTS 1. Location Map (PDF) 2. Cribari-Gheen-Schuman Parcels (PDF) 3. Land Conservation & Stewardship Board minutes, September 14, 2016 (PDF) -1- ORDINANCE NO. 112, 2016 OF THE COUNCIL OF THE CITY OF FORT COLLINS AUTHORIZING EXECUTION OF THE CRIBARI-GHEEN/SCHUMAN AMENDED AND RESTATED DEED OF CONSERVATION EASEMENT WHEREAS, in 2005 Chris Cribari (“Cribari”) granted the City a conservation easement (the “Conservation Easement”) on a parcel of property he owned south of Timnath (the “Property”); and WHEREAS, the Conservation Easement is managed by the City’s Natural Areas Department; and WHEREAS, in 2006, Cribari divided the Property into two parcels and sold one parcel (“Parcel I”) to Paradise Ranch, LLC, a company owned by Alex Schuman (“Schuman”), and the other parcel (“Parcel II”) to Kenneth and Deborah Gheen (“Gheens”), with both sales being subject to the Conservation Easement; and WHEREAS, in 2013, the Gheens put Parcel II up for sale, and through that process the City and the Gheens became aware that some aspects of the Conservation Easement were unclear as they related to the management issues and consequences of the Property being owned by two separate parties instead of just one owner; and WHEREAS, Natural Areas staff has been working with Schuman and the Gheens to revise the Conservation Easement to clarify the activities permitted on each parcel; the extent and location of where residential development could occur on each parcel; and to clarify that each parcel can be managed separately, rather than having either parcel owner responsible or liable to the City for actions or activities of the other parcel owner; and WHEREAS, a copy of the proposed Amended and Restated Deed of Conservation Easement for the Property is attached as Exhibit “A” and incorporated herein by reference (the “Amended Conservation Easement”); and WHEREAS, the Natural Areas Department’s Conservation Easement Amendment Policy and Procedure requires that proposed amendments to City-owned conservation easements receive formal review and a recommendation by the Land Conservation and Stewardship Board and approval by the City Council by ordinance after a public hearing; and WHEREAS, at its regular meeting on September 14, 2016, the Land Conservation and Stewardship Board voted unanimously to recommend that the City Council approve the Amended Conservation Easement. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: -2- Section 1. That the City Council hereby makes and adopts the determinations and findings contained in the recitals set forth above. Section 2. That the City Manager is hereby authorized to execute the Amended Conservation Easement in substantially the form attached as Exhibit A, along with such additional terms and conditions as the City Manager, in consultation with the City Attorney, determines to be necessary or appropriate to protect the interests of the City or effectuate the purposes of this Ordinance, including, but not limited to, any necessary changes to the legal description of the parcels conserved by the Amended Conservation Easement, as long as such changes do not materially reduce the size or change the character of the property. Introduced, considered favorably on first reading, and ordered published this 4th day of October, A.D. 2016, and to be presented for final passage on the 18th day of October, A.D. 2016. __________________________________ Mayor ATTEST: _______________________________ City Clerk Passed and adopted on final reading on the 18th day of October, A.D. 2016. __________________________________ Mayor ATTEST: _______________________________ City Clerk DRAFT October 4, 2016 1 AMENDED AND RESTATED DEED OF CONSERVATION EASEMENT “Cribari Property” THIS AMENDED AND RESTATED DEED OF CONSERVATION EASEMENT (“Amended Conservation Easement” or “Deed”)) is made this _____ day of _____________, 2016, by PARADISE RANCH, LLC, a Colorado Limited Liability Company (“Paradise”) as to Parcel I, and KENNETH M. GHEEN AND DEBORAH F. GHEEN (“Gheen”) as to Parcel II (collectively, “Owners”), in favor of the CITY OF FORT COLLINS, COLORADO, a municipal corporation (“City”). R E C I T A L S : WHEREAS, Paradise is the sole owner in fee simple of certain real property in Larimer County more particularly described as Parcel I in Exhibit “A” attached hereto and incorporated herein by this reference, and Gheen is the sole owner in fee simple of certain real property in Larimer County, more particularly described in Exhibit “A” as Parcel II. Parcel I and Parcel II are hereafter referred to collectively as “Parcels” or the “Property”; and WHEREAS, the Property possesses scenic, open space, agricultural and natural values (collectively, "Conservation Values") of great importance to the City and to the people of Fort Collins and the State of Colorado; and WHEREAS,; the total acreage protected by this Conservation Easement is 76 acres; and WHEREAS, by a deed of Conservation Easement dated March 16, 2005 and recorded in the records of the Larimer County Clerk and Recorder on March 21, 2005 at Reception No. 2005-0021923, CHRIS CRIBARI, the Owners’ predecessor in title to the Property, (“Cribari”) conveyed to the City the right to preserve and protect the Conservation Values of the Property in perpetuity in accordance with the provisions of C.R.S. §38-30.5-101, et seq. (the "Easement"); and WHEREAS, the Property was subsequently divided into Parcel I and Parcel II via the Jack Hahn M.R.D. S-6-87 plat recorded July 21, 2006; and WHEREAS, Paradise took ownership of Parcel I by Quit Claim Deed dated June 11, 2013 and Gheen took ownership of Parcel II by Warranty Deed dated April 19, 2006; and WHEREAS, the Owners intend that the Conservation Values of the Property be preserved and maintained in perpetuity by continuing the land use patterns of agriculture and existing or lower density residential use on the Property; and EXHIBIT A DRAFT October 4, 2016 2 WHEREAS, the Owners and the City intend by this Deed to serve the governmental, conservation and agricultural policies set forth in 7 U.S.C. §4201 et seq., C.R.S. §35-1-101, et seq., C.R.S. §38-30.5.101, et seq., and C.R.S. 33-1-101, et seq.; and WHEREAS, the parties have agreed to amend the Easement in order to clarify and refine certain terms within the Easement including but not limited to: the location of and allowable types of structures within the second building envelope, updating the Exhibits, the process of termination and extinguishment, the terms of subdivision, the oil and gas provisions and facilitate management of the Easement on each of the Parcels by treating the Parcels separately for purposes of the Easement; and WHEREAS, Section 22.J. of the Easement permits the parties to amend the Easement as long as the amendment does not affect the qualifications of the Easement under any applicable laws, is consistent with the conservation purposes in the Easement, and does not affect its perpetual duration. NOW, THEREFORE, in consideration of the above and the mutual covenants, terms, conditions, and restrictions contained herein, and pursuant to the laws of the State of Colorado, and in particular C.R.S. §38-30.5-101, et seq., the parties hereby agree that the terms of the Easement are hereby amended and restated to read as follows: 1. Purposes. A. The purposes of this Easement are to ensure that the Property will be retained predominately in its scenic, open space, and agricultural use and to prevent any use of the Property that will significantly impair or interfere with the Conservation Values of the Property. The Owners intend that this Deed will confine the use of the Property to activities that are not inconsistent with these purposes of this Easement. This Easement is intended to preserve the Property so as to maintain the Conservation Values of the Property. The Property shall not be used for activities that significantly diminish the Conservation Values or which significantly impair the ability of the Property to be used for cropland, animal grazing, or restoration to native vegetation. B. The specific Conservation Values of the Property, as generally described above, are documented in an inventory of relevant features of the Property to be kept on file in the offices of the City and incorporated by this reference (“Baseline Documentation”), which consists of a report, maps, photographs, and other documentation that Cribari and the City agreed provided, collectively, an accurate representation of the condition of the Property at the time of the original grant of the Easement and which is intended to serve as an objective, thorough nonexclusive, information baseline for monitoring compliance with terms of this Easement. DRAFT October 4, 2016 3 2. Rights of the City. To accomplish the purposes of the Easement, the following rights are conveyed to the City by this Deed: A. To preserve and protect the Conservation Values of the Property; B. To enter upon the Property at reasonable times in order to monitor the Owners’ compliance with and otherwise enforce the terms of this Deed. Such entry shall be upon prior reasonable notice to the Owners except when the City has a reasonable basis to believe that a use of or activity on the Property constitutes a violation of any of the terms of this Easement Agreement, in which case the City may gain immediate access to the Property without notice to document or prevent such violation. The City shall not interfere with the Owners’ use and quiet enjoyment of the Property except as reasonably necessary to enforce this Easement Agreement and exercise the City’s rights hereunder; and C. To prevent any activity on or use of the Property that is significantly inconsistent with the purposes of the Easement and to require the restoration of such areas or features of the Property that may be damaged by inconsistent activity or use pursuant to paragraph 4 below; and D. To require the restoration of such areas or features of the Property that may be damaged by any inconsistent use or activity; and E. To consult with the Owners regarding the negotiations of any and all agreements between either or both of the Owners and third parties that may impact or disturb any portion of the surface of the Property including, but not limited to, easement agreements, utility easements, rights-of-way agreements, surface use agreements, and lease agreements, but not including agreements for services specifically related to the agricultural and recreational operations of the Property. The Owners shall be responsible for ensuring that any lessees comply with all terms of this Easement while on the Property. Owners agree that the City shall have the right to approve any such agreement described in the preceding sentence prior to such agreement being executed. Nothing herein is intended to require the City to approve any action or agreement that is inconsistent with the terms of this Easement Agreement. 3. Land Management. Each Parcel of the Property shall be operated and managed in accordance with a Land Management Plan for such Parcel prepared and accepted with the mutual consent of the Owner of such Parcel and the City, which plan shall be updated as necessary to reflect improved knowledge of conservation of land and the Conservation Values and substantial DRAFT October 4, 2016 4 new or changed conditions. Each Owner shall provide to the City each year a Land Management update describing the status of operations and management of such Owner’s Parcel in relation to the approved plan, and advising the City of any changes in the management of such Parcel or issues that the Owner has identified or anticipates may reasonably arise with regard to such Parcel and the preservation of the Conservation Values. If nothing has changed since an Owner’s prior report, in lieu of providing the update, such Owner may notify the City that nothing has changed with regard to the management of such Owner’s Parcel and that no new issues have arisen or are anticipated to arise with regard to such Parcel and preservation of the Conservation Values. 4. Use and Management of the Property. Any activity on or use of the Property significantly inconsistent with any of the purposes of the Easement is prohibited. Without limiting the generality of the foregoing, the following activities and uses are expressly prohibited: A. Construction of Buildings and Other Structures – Parcel I. i. Single-Family Residential Dwellings. There is one existing primary single-family residential dwelling with an attached garage on Parcel I, located within a six (6)-acre building envelope in the northwest corner of Parcel I and described on Exhibit “B”, attached to and incorporated herein (the "Parcel I Building Area"). There is one existing secondary residential dwelling on the Parcel. No additional residential dwellings are permitted. Infrastructure normally associated with a single- family residence may also be constructed within the Parcel I Building Area, including but not limited to the following: driveway, sewage disposal system, water supply, electric and phone transmission, propane, and other similar residential services. Wherever practical, existing roadways shall be used, and new roadways shall be limited to the minimum reasonably necessary to serve the Parcel I Building Area, and shall be located so as to preserve scenic views, protect natural resources, minimize negative impact on agricultural operations, and prevent erosion. ii. Repair and Replacement of Single Family Residential Dwelling. The existing residential buildings described in Paragraph 4.A.i. may be repaired and replaced at their permitted location without further permission from the City. Owner shall have the right to expand the existing primary and secondary residential dwellings on the Parcel to a total square footage of no more than 3,720 square feet combined. The total square footage limit of the residences does not include any basement area or attached garages. .Permitted single-family residential dwellings may also be relocated anywhere within the boundaries of the Parcel I Building Area without further permission of the City. Prior to any such relocation of DRAFT October 4, 2016 5 a single-family residential dwelling, the Owner shall notify City of such relocation and provide the City with written plans describing the relocation so that the City can update its records with at least thirty (30) day advance notice prior to planned construction. iii. Agricultural Structures and Improvements. a. Major Agricultural Buildings. All existing major agricultural buildings and structures (the “Agricultural Improvements”) are located within the Parcel I Building Area. There are six agricultural buildings, including: a stable/horse barn, horse arena/large barn, hay shed, and three garage/shops/outbuildings. Construction, maintenance, and replacement of the Agricultural Improvements are permitted according to the Land Management Plan, or upon prior written approval of the City. The Agricultural Improvements are only permitted within the Parcel I Building Area. The Owner will notify the City prior to any construction within the Parcel I Building Area. Examples of Major Agricultural Buildings include barns, greenhouses, arenas, shops, large sheds, grain and feed storage facilities, etc. b. Minor Agricultural Buildings. Construction of minor agricultural structures solely designed for management or protection of livestock or reasonably advantageous for agricultural operations on Parcel I (such as small loafing sheds, water lines, water tanks, pumps and/or well houses and other minor agricultural structures and improvements) is permitted, provided that any such agricultural structure requiring a building permit or exceeding 1,000 square feet in total floor area and not expressly provided for in the Land Management Plan shall require prior written approval by the City, in its reasonable discretion. B. Construction of Buildings and Other Structures – Parcel II. i. Single-Family Residential Dwellings. There is no existing single- family residential dwelling on Parcel II. Not more than one (1) new primary and one (1) secondary single-family residential dwellings may be built on Parcel II within a four (4)-acre building envelope in the northern half of Parcel II and described on Exhibit “C”, attached to and incorporated herein (the "Parcel II Building Area"). Until any structure is constructed within the Parcel II Building Area, its location may be moved, with approval by the Grantee, but must be located primarily on the northern DRAFT October 4, 2016 6 half of the parcel. One primary residence and one secondary residence can be built within the Parcel II Building Area with the total square footage of the footprint for the residences not exceeding 6,000 square feet. The total square footage limit of the residences does not include any basement area or attached garage. The two residential dwellings may be one-story or two- story structures. No additional residential dwellings are permitted. Infrastructure normally associated with a single-family residence may also be constructed within the Parcel II Building Area, including but not limited to the following: Driveway, sewage disposal system, water supply, electric and phone transmission, propane, and other similar residential services. Wherever practical, existing roadways shall be used, and new roadways shall be limited to the minimum reasonably necessary to serve the Parcel II Building Area, and shall be located so as to preserve scenic views, protect natural resources, minimize negative impact on agricultural operations, and prevent erosion, and shall not be paved except as allowed in Paragraph E below. ii. Agricultural Structures and Improvements. a. Major Agricultural Buildings. There are no existing major agricultural buildings and structures (the “Agricultural Improvements”) located on Parcel II. Examples of Major Agricultural Buildings include barns, greenhouses, shops, large sheds, grain and feed storage facilities, detached garage, etc. Construction, maintenance, and replacement of Agricultural Improvements are permitted according to the Land Management Plan, or upon prior written approval of the City. The Agricultural Improvements are only permitted within the Parcel II Building Area. The Owner will notify the City prior to any construction within the Parcel II Building Area. b. Minor Agricultural Buildings. Construction of minor agricultural structures solely designed for management or protection of livestock or reasonably advantageous for agricultural operations on Parcel II (such as small loafing sheds, water lines, water tanks, pumps and/or well houses and other minor agricultural structures and improvements) is permitted, provided that any such agricultural structure requiring a building permit or exceeding 1,000 square feet in total floor area and not expressly provided for in the Land Management Plan shall require prior written approval by the City, in its reasonable discretion. DRAFT October 4, 2016 7 c. Water feature. Development of a water source for cattle and other livestock, such as a small pond, is permitted outside the Building Areas. C. Grazing. Livestock grazing shall be conducted in accordance with sound stewardship and management practices. Grazing shall be managed so that the overall condition of the Property is preserved at its baseline condition or better and in accordance with the Natural Resources Conservation Service (NRCS) Field Office Technical Guide. For the purposes of this Easement, “livestock” shall mean cattle, horses, sheep, goats, llamas, alpaca, poultry and bison. The raising of other livestock and/or game animals shall not be permitted unless specifically approved by the City and described in the Land Management Plan. Domestic pets such as dogs and cats are allowed on the Property. The City reserves the right to limit the stocking rate and/or grazing rotation on the Property, including removing grazing livestock from the pastures, if the range condition is below a “fair” rating, until such time as the range condition is returned to an acceptable condition. As necessary, grazing rotation, monitoring methods and requirements, and stocking rates will be detailed in the Land Management Plan. In times of drought or other natural disasters, City and the Owners will work together to manage the range to the best of their ability, even if the condition would be rated below “fair”. D. Fences. The Owners may repair or replace existing fences, and new fences may be built for purposes of reasonable and customary management of cropland, livestock, and wildlife. Gates wide enough for emergency access may be installed where necessary for cropland, pastureland, and wildlife habitat maintenance vehicles. Construction of wildlife friendly fencing is preferable whenever possible. E. Paving and Road Construction. No portion of the Parcels shall be paved or otherwise covered with concrete, asphalt, or any other permanent paving material, except; within the defined building envelopes and to provide one access drive from the nearest County Road to each building envelope; and for such public improvements as may be placed on the Property in accordance with Paragraph 4.O. Unimproved access entrances off County Road 5 for farm and emergency vehicles may remain in the location and general form and condition as in the past; new internal dirt roads for cropland management may be created or converted to cropland as necessary, provided that such internal roads are only for the use of the Owners, residents and their guests. Said internal roads shall be minimized in combination with any roads or access entrances otherwise constructed on the Parcels, whether by the Owners or as public roads. DRAFT October 4, 2016 8 F. Subdivision. Any further division or subdivision of title to the Parcels is prohibited, other than conveyances to public entities for public roads or other public improvements consistent with this Conservation Easement. Nothing in this subparagraph shall be construed to prohibit joint ownership of the Parcels or ownership of the Parcel(s) by an entity consisting of more than one member. G. Timber Harvesting. Trees may be cut to control insects and disease, to control invasive non-native species, and as necessary to prevent personal injury and property damage. Commercial timber harvesting, except with regard to a tree farm or tree nursery operation, on the Property shall be prohibited. Any tree farm or tree nursery operation shall be permitted but shall not exceed five (5) acres in land usage per Parcel without the prior approval of City, which approval shall not be unreasonably withheld. H. Mining. The mining or extraction of soil, sand, gravel, rock, or any other mineral substance (including moss rock and flagstone) using any surface mining method is prohibited, except for limited mining to the extent that the materials mined for are used for agricultural operations on the Property, and except for oil and gas exploration and extraction as permitted in paragraph I below. Where extraction is permitted, the method of extraction must have a limited, localized impact on the Property that will not substantially impair or impact the Conservation Values of the Property, whether on a temporary or permanent basis. No extraction permitted pursuant to this paragraph shall occur without prior written notice to and approval of the City, which notice shall include a description of the type of extraction, the areas within which such extraction shall occur, and the anticipated impact thereof. Any agreement of the Owners with a third party related to mining on the Property subsequent to the date of recording of this Easement Agreement shall be expressly subject to the restrictions of this Easement Agreement and shall contain terms consistent with the provisions of this Easement Agreement, and any such agreement shall be provided to the City in advance for the City’s review and approval. This paragraph shall in any event be interpreted so as to be no less restrictive than required by Section 170(h) of the United States Internal Revenue Code and the Treasury Regulations adopted pursuant thereto. I. Oil and Gas. Oil and gas exploration and extraction is allowed if the method of extraction is from another parcel, or is limited to the amount of disturbance associated with such well, including access roads, does not exceed one (1) acre of permanent disturbance and three (3) acres of temporary disturbance, and thus has minimal impact on the Property. The Owners must consult with the City on negotiation of any surface use agreement between the Owners and any owner or lessee of mineral rights. For any oil and gas leases in effect as of the date of this Easement, the Owners shall notify the City when DRAFT October 4, 2016 9 beginning negotiations of surface use agreements or any other agreements with the lessee regarding any new oil and gas operations on the Parcels, primarily so that the City may help ensure that none of the Parcel’s Conservation Values are substantially diminished, materially impaired, or adversely impacted by the operations, but also so that the City may share in surface impact payments to be made by the lessee for its operations on the Parcel, since any operations by the lessee will impair the Parcel’s Conservation Values that are protected by this Easement, regardless of whether any such payments are due and payable by the lessee pursuant to an agreement or pursuant to an award of damages resulting from the lessee’s use of the Parcel. (Note: The City does not receive a share of any royalty payments from the production of oil or gas on the Property, only those payments made as a result of damages to the surface or for any permanent/semi- permanent impacts to the surface such as new roads or wellpads. The portion of these applicable payments due to the City shall be proportionate to the City’s real property interest in the property, detailed in Paragraph 17.) Any drilling plan and restoration plan must be acceptable to the City. Any future oil and gas leases by the Owners or severed ownership interests must be subordinated to and made subject to the requirements of this Easement. J. Trash. The dumping or uncontained accumulation of any kind of trash or refuse on the Property is prohibited. This subparagraph shall not be construed to preclude the storage or disposal of agricultural products and byproducts on the Property, provided such storage or disposal is performed in accordance with all applicable governmental laws and regulations. K. Commercial or Industrial Activity. No industrial or commercial uses shall be allowed on the Property, except for agricultural related activities that don’t negatively impact the Conservation Values, all in accordance with all local and federal regulations. Residences on the Property may be used for single-family residential use only. Nothing in this Deed shall be construed to prohibit the Owners from engaging in agricultural related activities or leasing a portion of the Property for crop production, training and boarding of horses, or for the grazing of animals owned by others. The Owners or residents of the Property may carry out in-home business activities on the Property provided that such activities are contained within the existing buildings on the Property and provided that any home business is in compliance with applicable governmental regulations. L. Hunting. Commercial hunting, shooting and trapping are prohibited. Owners and their invited guests are permitted to engage in non-commercial hunting, shooting or trapping that is in compliance with Federal, state and local law, or hunting or trapping as required and conducted by Colorado Parks and Wildlife for nuisance, dangerous, or diseased animals. Owners retain the right to DRAFT October 4, 2016 10 maintain and use on the Property a non-commercial shooting range or target practice area in compliance with Federal, state and local law. M. Pest and Weed Control; Signage. Requirements for the control and eradication of weeds, prairie dogs, and other pests, and for the placement of signage on the Parcels, shall be in accordance with all applicable laws and regulations of Larimer County, except as expressly set forth herein. Only billboards or advertisements identifying the agricultural operation and consistent with the character of other signage in the area are allowed on the property. A sign identifying the site as a Conservation Easement is required and will be supplied by the City. Noxious weeds will be controlled on the property through various techniques, which may include herbicides, mowing, or introduction of biological control measures (e.g., thistle-eating insects) subject to the requirements of the Colorado Noxious Weed Act and Larimer County Noxious Weed regulations. The use of chemicals for weed and pest control shall be addressed in the Land Management Plans for the Property, and Owners agree to cooperate with the City in order to investigate and consider the use of possible mutually beneficial alternatives for control of weeds and pests on the Property, taking into account the environmental impacts as well as effectiveness of such alternatives. In any event, the application of any fungicide, insecticide, herbicide, rodenticide, or other chemicals shall be conducted strictly in accordance with any applicable local, state, or federal laws. N. Granting of Easements for Utilities and Roads. There are existing easements on the Property as of the date of execution, and except as provided in subparagraph O below, granting of easements on the Parcels for utilities or roads is prohibited if the utility or road will materially impact, impair or interfere in an adverse manner with, the Conservation Values of the Parcel(s), including the use of the Parcels for agriculture. Pursuant to paragraph 18 below, the City must be notified in writing not less than thirty (30) days in advance of the proposed conveyance of any easement on the Parcel. All such conveyances are subject to the City's approval, which will not be unreasonably withheld. O. Public Roads and Other Public Improvements. The installation or construction of public road or street improvements, storm drainage culverts, swales or other drainageways, or underground public utility improvements are not prohibited by this Easement, provided that any such improvements are designed and constructed in accordance with the adopted plans and policies for such improvements of a governmental entity with the related jurisdiction and authority over the Parcel and further provided that City is provided notice of such installation or construction in accordance with the notice procedures set out in Paragraph 6. DRAFT October 4, 2016 11 P. Seeding and Planting. The parties acknowledge and agree that seeding and planting on the Property with other than native grasses or other native plants, shall be prohibited with the exception of crop plantings, wildlife plantings (non- native tree and shrub species must be approved by the City). The Owners shall be required to maintain the cropland and range condition of their respective Parcels in a manner consistent with the Land Management Plan for such parcel and otherwise consistent with generally accepted management practices for conservation and sustenance of agricultural or grazing land. 5. Reserved Rights. The Owners reserve unto themselves and to their beneficiaries, trustees, successors and assigns, all rights accruing from their ownership of the Property, including the right to engage in or permit or invite others to engage in all uses of the Property that are permitted hereunder and are not inconsistent with any of the purposes of the Easement or with the conditions, restrictions or other terms of this Easement. Owners shall be and hereby are permitted to engage in agricultural related activities that don’t negatively impact the Conservation Values of the Property. 6. Notice of Intention to Undertake Certain Permitted Actions. The purpose of requiring the Owners to notify the City prior to undertaking certain permitted activities is to afford the City an opportunity to ensure that the activities in question are designed and carried out in a manner consistent with all the terms and purposes of the Easement and the Conservation Values of the Property. Except as otherwise expressly provided, whenever notice is required, an Owner shall notify the City in writing not less than thirty (30) days prior to the date such Owner intends to undertake the activity in question. The notice shall describe the nature, scope, design, location, timetable, and any other material aspect of the proposed activity in sufficient detail to permit City to make an informed judgment as to its consistency with the purposes of the Easement. 7. City's Approval. Where the City's approval is required hereunder, the City shall grant or withhold its approval in writing within twenty-one (21) days of receipt of an Owner’s written notice therefor. The City's approval may be withheld upon a reasonable determination by the City that the action as proposed would be inconsistent with any term or purpose of the Easement. 8. Enforcement. The City shall have the right to prevent and correct or require correction of violations of the terms of this Deed and the purposes of the Easement. The Owner of one (1) Parcel will not be held liable for violations located entirely on the other Parcel, so long as such violations were not caused by the non-occupying Owner. The City may enter either or both Parcels for the purpose of inspecting for violations. If the City finds what it believes is a violation, the City shall notify, in writing, the Owner of each Parcel upon which the violation is located of the nature of the alleged violation. Upon receipt of this written notice, the Owner shall either: (a) restore the Parcel to its condition prior to the violation; or (b) provide a written explanation to the City of the reason why the alleged violation should be permitted. In the event DRAFT October 4, 2016 12 that the parties are in dispute as to the actions required of an Owner hereunder, the Owner and City will meet as soon as possible to resolve the difference. If either the City or the Owner(s) determines that mediation would be advantageous in connection with such meeting, or if a resolution of this difference cannot be achieved at the meeting, both parties agree to make a reasonable effort to work through and with a mutually acceptable mediator to attempt to resolve the dispute. Notwithstanding the foregoing, when, in the City's opinion, an ongoing or imminent violation could irreversibly diminish or impair the Conservation Values of the Property or will not otherwise be resolved in a sufficiently prompt and effective manner, the City may, at its discretion, take such legal action and seek such legal or equitable remedies as it determines to be appropriate or necessary. Such remedies may include, without limitation, an injunction to stop an alleged violation, temporarily or permanently, or an order requiring the Owner to restore its Parcel to its condition prior to the alleged violation. Such Owner shall discontinue any activity which could increase or expand the alleged violation during any mediation process or any legal proceeding pertaining to the alleged violation. 9. Costs of Enforcement. Any costs incurred by the City in enforcing a breach of the terms of this Deed against an Owner, including, without limitation, costs of suit and reasonable attorneys' fees, and any costs of restoration necessitated by such Owner’s violation of the terms of this Deed, shall be borne by such Owner. If the Owner prevails in any action to enforce an alleged breach of the terms of this Deed, the Owner’s costs of suit, including, without limitation, reasonable attorneys' fees, shall be borne by the City. 10. City's Discretion. Enforcement of the terms of this Deed shall be at the discretion of the City, and any forbearance by the City to exercise its rights under this Deed in the event of any breach of any term of this Deed by either Owner shall not be deemed or construed to be a waiver by the City of such term or of any subsequent breach of the same or any other term of this Deed of any of the City's rights under this Deed. No delay or omission by the City in the exercise of any right or remedy upon any breach by either Owner shall impair such right or remedy or be construed as a waiver with respect to either Owner. 11. Waiver of Certain Defenses. Each of the Owners hereby waives any defense of laches or prescription. 12. Acts Beyond Owners’ Control. Nothing contained in this Deed shall be construed to entitle the City to bring any action against the Owners for any injury to or change in the Property resulting from causes beyond the Owners’ control, including, without limitation, fire, flood, drought, storm, landslides and seismic activity, or from any prudent action taken by the Owners under emergency conditions to prevent, abate, or mitigate significant injury to the Parcel resulting from such causes. 13. Access. No right of access by the general public to any portion of the Property is conveyed by this Deed. DRAFT October 4, 2016 13 14. Costs and Liabilities. The Owners retain all responsibilities and shall bear all costs and liabilities of any kind related to the ownership, operation, upkeep, repair, and maintenance of their respective Parcels, including the maintenance of adequate comprehensive general liability insurance coverage. The Owners shall keep their respective Parcels free of any liens arising out of any work performed for, materials furnished to, or obligations incurred by the Owners (not including mortgages made subject and subordinate to this Deed.) 15. Taxes. Each Owner shall pay before delinquency all taxes, assessments, fees, and charges of whatever description levied on or assessed against their respective Parcels by competent authority. 16. Liability. A. General Indemnification. Each Owner shall hold harmless, indemnify, and defend the City and its members, directors, officers, employees, agents, and contractors and the heirs, personal representatives, successors and assigns of each of them (collectively “Indemnified Parties”) from and against all liabilities, penalties, costs, losses, damages, expenses, causes of action, claims, demands, or judgments, including, without limitation, legal costs and reasonable attorneys' fees, arising from or in any way connected with: (1) injury to or the death of any person, or physical damage to any property, resulting from any act, omission, condition, or other matter related to or occurring on or about such Owner’s Parcel, regardless of cause when the indemnified party performs a duty under this Easement Agreement, unless and only to the extent the negligence of any of the Indemnified Parties was a proximate cause; (2) the obligations specified in paragraph 14, Costs and Liabilities, and paragraph 8, Enforcement, herein; and (3) the presence or release of hazardous or toxic substances on, under or about such Owner’s Parcel, unless caused or released by the Indemnified Parties. For the purpose of this paragraph, hazardous or toxic substances shall mean any hazardous or toxic substance that is regulated under any federal, state or local law. Without limiting the foregoing, nothing in this Deed shall be construed as giving rise to any right or ability in the City, nor shall the City have any right or ability to exercise physical or managerial control over the day-to-day operations of the Property, or otherwise to become an operator with respect to the Property within the meaning of The Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended. B. No Waiver of Governmental Immunity. Anything else in this Easement Agreement to the contrary notwithstanding, no term or condition of this Easement Agreement shall be construed or interpreted as a waiver, either express or implied, of any of the immunities, rights, benefits or protection provided to the City under the Colorado Governmental Immunity Act, C.R.S. §24-10-101, et seq., as amended or as may be amended in the future (including, without limitation, any DRAFT October 4, 2016 14 amendments to such statute, or under any similar statute which is subsequently enacted) (“CGIA”), subject to any applicable provisions of the Colorado Constitution and applicable laws. The City acknowledges that liability for claims for injury to persons or property arising out of the negligence of the City, its members, officials, agents and employees may be controlled and/or limited by the provisions of the CGIA. The parties agree that no provision of this Easement Agreement shall be construed in such a manner as to reduce the extent to which the CGIA limits the liability of any governmental party, its members, officers, agents and employees. C. Environmental Warranty and Indemnification. Each Owner warrants that it is in compliance with, and shall at all times remain in compliance with, all applicable Environmental Laws. Each Owner hereby promises to hold harmless and indemnify the City against all litigation, claims, demands, penalties and damages, including reasonable attorneys’ fees, arising from or connected with the release or threatened release of any Hazardous Materials on, at, beneath or from their respective Parcel, or arising from or connected with a violation of any Environmental Laws by such Owner or any party authorized or permitted on their respective Parcel by or through such Owner. “Environmental Law” or “Environmental Laws” means any and all Federal, state, local or municipal laws, rules, orders, regulations, statutes, ordinances, codes, guidelines, policies or requirements of any governmental authority regulating or imposing standards of liability or standards of conduct (including common law) concerning air, water, solid waste, hazardous materials, worker and community right-to-know, hazard communication, noise, radioactive material, resource protection, subdivision, inland wetlands and watercourses, health protection and similar environmental health, safety, building and land use as may now or at any time hereafter be in effect. “Hazardous Materials” means any petroleum, petroleum products, fuel oil, waste oils, explosives, reactive materials, ignitable materials, corrosive materials, hazardous chemicals, hazardous wastes, hazardous substances, extremely hazardous substances, toxic substances, toxic chemicals, radioactive materials, infectious materials and any other element, compound, mixture, solution or substance which may pose a present or potential hazard to human health or the environment. 17. Real Property Interest. This Easement constitutes a real property interest vested in the Grantee. The parties stipulate that this Easement has a fair market value equal to Seventy One percent (71%) of the full fair market value of the Property (not including building improvements), as unencumbered by the Easement, as of the Effective Date. (Note: The fair DRAFT October 4, 2016 15 market value of the Easement was established by an independent third party appraisal at the time the original conservation easement was granted and did not include valuation of any existing structures on the property.) For the purposes of this Easement Agreement, the ratio of the value of the Easement to the value of the Property as unencumbered by the Easement shall remain constant. 18. Subsequent Transfer, Condemnation and Extinguishment. A. Subsequent Transfer. An Owner shall notify the City in writing at least thirty (30) days in advance of the proposed conveyance of any interest in all or any portion of their Parcel, including any conveyance under threat of condemnation, and shall incorporate the terms and conditions of this Easement Agreement in any deed or other legal instrument by which an Owner divests itself of any interest in all or a portion of their Parcel, except conveyance of a leasehold interest that is no longer than one year in duration or an agricultural lease and is otherwise consistent in all respects with the terms of this Easement Agreement. The failure of an Owner to perform any act required by this paragraph shall not impair the validity of the Easement or limit its enforceability in any way. B. Condemnation. If condemnation of a part of the Property or of the entire Property by public authority will render it impossible to fulfill any of the purposes of this Easement, the Easement may be terminated through condemnation proceedings, or by action of the City if the condemnation proceeding is resolved through a conveyance or stipulated settlement that includes the City. Owners and the City shall act jointly to recover the full fair market value of the affected portion of the Property and all damages resulting from the condemnation. All expenses reasonably incurred by the Owners and the City in connection with the condemnation shall be paid out of the total amount recovered prior to the allocation of such damages award between the Owners and the City, as described in paragraph 18.D. C. Extinguishment. If circumstances arise in the future that render the purpose of the Easement impossible or undesirable to accomplish on all or a portion of the Property, the Easement can be terminated or extinguished, whether in whole or in part, by judicial proceedings in a court of competent jurisdiction, or by action of the City. A party that learns of any such circumstances shall promptly notify the other party. D. Compensation to the City. The City shall be entitled to compensation in accordance with applicable law, after the satisfaction of prior claims, from the proceeds of any sale, exchange, condemnation, extinguishment, termination, or other involuntary or voluntary conversion of all or any portion of the Property that DRAFT October 4, 2016 16 is not made subject to and in accordance with the terms of this Easement or that reduces the scope or value of the Easement. The City’s compensation shall be an amount equal to the Easement value percentage listed in paragraph 17 above, multiplied by the full amount of the proceeds from any sale, exchange, condemnation, or other involuntary or voluntary conversion of all or a portion of the Property (not including the value of any building improvements) or, in the case of extinguishment or termination, the full fair market value of the Easement calculated as described below. E. Calculation of Fair Market Value. Should the parties agree to terminate the Easement as to all or a portion of the Property, and if the parties cannot agree on the fair market value (FMV) at the time of termination, then the parties shall make a good faith effort to select an appraiser that is acceptable to all parties to determine the FMV. If the parties cannot agree on one appraiser, then the FMV shall be calculated as follows: each Owner and the City shall obtain an independent written appraisal, at their own cost and expense, from the appraisers of their choice, subject to the requirements of the next sentence. Each person designated to participate in the appraisal of the Easement shall (a) be a professional appraiser with at least five (5) years’ experience and prior experience appraising conservation easements; (b) be a member of the American Institute of Real Estate Appraisers; and (c) have no other material, financial or other business interest in common with a party to this Easement. If the parties still cannot agree on a purchase price within thirty (30) days after the receipt of the last of the written appraisals, the parties shall cause their respective appraisers to select another appraiser within ten (10) days thereafter. This additional appraiser shall provide a written appraisal within thirty (30) days of appointment (“Final Appraisal”), the cost of which shall be split by the parties. The fair market value of the Easement will be deemed to be the average of the Final Appraisal with the previous appraisal that is closest to the Final Appraisal, and the appraisal(s) being the furthest away from the Final Appraisal will be disregarded. The determination as to purchase price (as determined by averaging the two appraisals as provided above) shall be final and binding on the parties, absent fraud or gross error. 19. Assignment. The Easement is transferable, but the City may assign its rights and obligations under this Deed only to an organization that is: (a) a qualified organization at the time of transfer under Section 170(h) of the Internal Revenue Code of 1954, as amended (or any successor provision then applicable), and the applicable regulations promulgated thereunder; (b) authorized to acquire and hold conservation easements in gross under Colorado law; or (c) a governmental entity. In the event that the City seeks to assign this Easement, City agrees that it will make reasonable efforts to identify two or three potential conservation organizations that meet the requirements of this Paragraph and have a strong basis in Larimer County to receive assignment of the conservation easement, to be presented to the Owners or their successors-in- DRAFT October 4, 2016 17 interest, from which the Owners will select the organization to which City may assign this Easement. If the Owners cannot agree, the City will select such organization. 20. Recordation/Subsequent Transfers. The City shall record this instrument in timely fashion in the official records of each county in which the Property is situated, and may re-record it at any time as maybe required to preserve its rights in this Deed. 21. Notices. Any notice, demand, request, consent, approval, or communication that either party desires or is required to give to the other under this Deed shall be in writing and either served personally or sent by first class mail, postage prepaid, addressed as follows and shall be deemed given when personally served or on the third business day after being so mailed: If to the Owner of Parcel 1: Alex Schuman 2950 S. CR 5 Fort Collins, CO 80525 If to the Owner of Parcel II: Kenneth and Deborah Gheen P.O. Box 270685 Fort Collins, CO 80527 If to the City: Director, Natural Areas Department 1745 Hoffman Mill Road P.O. Box 580 Fort Collins, CO 80522 or to such other address as either party from time to time shall designate by written notice to the other. 22. General Provisions. A. Controlling Law. The interpretation and performance of the Easement and this Deed shall be governed by the laws of the State of Colorado. B. Liberal construction. Any general rule of construction to the contrary notwithstanding, the Easement and this Deed shall be liberally construed in favor of the grant to effect the purpose of the Easement and the policy and purpose of C.R.S. §38-30.5-101, et seq. If any provision in this Deed is found to be ambiguous, an interpretation consistent with the purposes of the Easement that DRAFT October 4, 2016 18 would render the provision valid shall be favored over any interpretation that would render it invalid. C. Severability. If any provision of this Deed or application thereof to any person or circumstance, is found to be invalid, the remainder of the provisions of this Deed, or the application of such provision to persons or circumstances other than those as to which it is found to be invalid, as the case may be, shall not be affected thereby. D. Entire Agreement. This Deed sets forth the entire agreement of the parties with respect to the Easement and supersedes all prior discussions, negotiations, understandings, or agreements relating to the Easement, all of which are merged herein. E. No Forfeiture. Nothing contained herein shall result in a forfeiture or reversion of an Owner’s fee title to its Parcel. F. Joint Obligation. In the event that there is more than one owner of a Parcel at any time, the obligations imposed by this Deed upon the Owners shall be joint and several upon each of the owners of such Parcel. The owners of one Parcel are not liable for the obligations of the owners of the other Parcel. G. Successors: Third Party Beneficiaries. The covenants, terms, conditions, and restrictions of this Deed shall be binding upon, and inure to the benefit of, the parties hereto and their respective personal representatives, heirs, beneficiaries, trustees, successors, and assigns and shall continue as a servitude running in perpetuity with the Property. It is expressly understood and agreed that the enforcement of the terms and conditions of this Deed and all rights of action relating to such enforcement, shall be strictly reserved to the parties. Nothing contained in this Deed shall give or allow any claim or right of action whatsoever by any other third person, or by the Owner of one Parcel against the Owner of the other Parcel. It is the express intention of the Parties that any person or entity, other than the parties, receiving services or benefits under this Deed shall be deemed an incidental beneficiary only, and that the Owner of one Parcel is not a beneficiary of the rights or responsibilities of the Owner of the other Parcel under this Deed. H. Termination of Rights and Obligations. A party's rights and obligations under this Deed terminate upon transfer of the party's interest in the Easement or the Property, except that liability for acts or omissions occurring prior to transfer shall survive transfer. DRAFT October 4, 2016 19 I. Captions. The captions in this instrument have been inserted solely for convenience of reference and are not a part of this instrument and shall have no effect upon construction or interpretation. J. Amendment. If the circumstances arise under which an amendment to or modification of this Deed with respect to either Parcel would be appropriate, the Owner of such Parcel and the City are free to jointly amend this Deed with respect to such Parcel without the consent of the Owner of the other Parcel; however, any amendment or modification affecting the entire Property must be approved in writing by all parties. No amendment shall be allowed that will affect the qualifications of this Deed under any applicable laws. Any amendment must be consistent with the conservation purposes of this Deed and may not affect its perpetual duration. Any amendment must be in writing, signed by the duly authorized officials of each affected party, and recorded in the records of the Clerk and Recorder of the County in which the Property is located. K. Obligations Subject to Annual Appropriation. Any obligations of the Grantee under this Easement Agreement for fiscal years after the year of this Easement Agreement are subject to annual appropriation by the Fort Collins City Council, in its sole discretion, of funds sufficient and intended for such purposes. TO HAVE AND TO HOLD unto the City and its successors and assigns forever. IN WITNESS WHEREOF, the Owners and the City have executed this Amended Deed of Conservation Easement on the day and year first above written. DRAFT October 4, 2016 20 OWNER PARCEL I: PARADISE RANCH, LLC a Colorado Limited Liability Company Date: By: Alex Schuman, Member STATE OF COLORADO ) ) ss COUNTY OF ____________ ) The foregoing instrument was acknowledged before me this day of ____________, 2016, by Alex Schuman, as Member of Paradise Ranch, LLC. Witness my hand and official seal. My Commission expires: ______________ ____ Notary Public DRAFT October 4, 2016 21 OWNER PARCEL II: Date: Kenneth M. Gheen Date:____________________ _________________________________ Deborah F. Gheen STATE OF COLORADO ) ) ss COUNTY OF ____________ ) The foregoing instrument was acknowledged before me this day of _________, 2016, by Kenneth M. Gheen and Deborah F. Gheen. Witness my hand and official seal. My Commission expires: __________________________ Notary Public DRAFT October 4, 2016 22 CITY: THE CITY OF FORT COLLINS, COLORADO a Municipal Corporation Date: By: Darin A. Atteberry, City Manager ATTEST: City Clerk APPROVED AS TO FORM: Assistant City Attorney STATE OF COLORADO ) ) ss COUNTY OF LARIMER ) The foregoing instrument was acknowledged before me this ____ day of ___________, 2016, by Darin A. Atteberry as City Manager of the City of Fort Collins. Witness my hand and official seal. My Commission expires: Notary Public DRAFT October 4, 2016 23 EXHIBIT “A” Legal Description of the Property Parcel I: Parcel II: DRAFT October 4, 2016 24