HomeMy WebLinkAbout2015-075-08/18/2015-AUTHORIZING THE EXECUTION OF A MINERAL NON-DEVELOPMENT LEASE AT SOAPSTONE PRAIRIE NATURAL AREA WITH RESOLUTION 2015-075
OF THE COUNCIL OF THE CITY OF FORT COLLINS
AUTHORIZING THE EXECUTION OF A MINERAL NON-DEVELOPMENT LEASE
AT SOAPSTONE PRAIRIE NATURAL AREA WITH THE STATE LAND BOARD
WHEREAS, the City is the owner of properties located in northern Latimer County
known as Soapstone Prairie Natural Area("Soapstone"); and
WHEREAS, the City generally does not own the mineral rights associated with
Soapstone; and
WHEREAS, approximately one-third of the mineral rights under Soapstone are owned by
the State of Colorado's State Land Board, which reserved the mineral rights when it conveyed
surface ownership of portions of Soapstone to the City over ten years ago; and
WHEREAS, the State Land Board owns land and mineral rights around the state that it
manages for the financial support of Colorado's schools and other public institutions; and
WHEREAS, to protect the natural and cultural resources at Soapstone from unwanted
mineral development, in particular oil and gas drilling, City Natural Areas staff has been
negotiating with the State Land Board to acquire a non-development lease for 3,800 acres of
state-owned minerals on Soapstone; and
WHEREAS, a draft of the proposed Mineral Non-Development Lease between the City
and the State Land Board is attached as Exhibit "A" and incorporated herein by reference (the
"Lease"); and
WHEREAS, under the terms of the Lease the City would pay the State Land Board
$387,226 over a period of five years in exchange for the state agreeing not to develop its mineral
rights on Soapstone for the next twenty years; and
WHEREAS, the Land Conservation and Stewardship Board considered the Lease at its
regular meeting on August 12 and recommended that the City Council authorize it; and
WHEREAS, Section 29-1-203 of the Colorado Revised Statutes allows governments to
cooperate or contract with one another to provide any function, service or facility lawfully
authorized to each of the cooperating or contracting units; and
WHEREAS, under Section 1-22 of the City code, intergovernmental agreements and
other cooperative arrangements between the City and other governmental entities are to be
submitted to the City Council for review, unless they fit within one of the exceptions that permit
authorization by the City Manager.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF
FORT COLLINS, that the City Manager is hereby authorized to enter into the Mineral Non-
Development Lease between the City and the State Land Board in substantially the form attached
hereto as Exhibit "A", with such modifications, additional terms and conditions, or future
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amendments as the City Manager, in consultation with the City Attorney, determines are
necessary or appropriate to protect the interests of the City or to effectuate the purposes of this
Resolution.
Passed and adopted at a regular meeting of the Council of the City of Fort Collins this
18th day of August, A.D. 2015.
OF FORrc
+SEAL`N
Mayor
ATTE,S,T: °Oao°
City Clerk
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oe_co�' STATE OF COLORADO
STATE BOARD OF LAND COMMISSIONERS
„ems o 1127 Sherman Street, Suite#300, Denver,CO 80203
MINERAL NON-DEVELOPMENT LEASE
NO. LT,
THIS AGREEMENT (Agreement), dated this day of - 2015 (the Effective Date)made
and entered into by and between the STATE OF COLORADO, acting by and through the STATE BOARD OF
LAND COMMISSIONERS, whose address is 1127 Sherman Street, Room 300, Denver, CO 80202, hereinafter
called the State, and THE CITY OF FORT COLLINS, COLORADO, a Municipal Corporation, whose address is 300
LaPorte Avenue, P. 0. Box 580, Fort Collins, CO 80522, hereinafter called the Surface Owner:
WITNESSETH
WHEREAS, the Surface Owner has applied for a mineral development restriction covering all minerals
underlying the land described below and has paid a filing fee in the amount of$0.00; and,
WHEREAS, said application has been approved by the State; and,
WHEREAS, the Surface Owner is the record owner of the surface interest of the land covered hereby, or
is the designated agent or trustee for the record owner or owners (proof of said ownership to be furnished at
the State's request); and,
WHEREAS, to protect the surface, the Surface Owner desires to acquire from the State an agreement
to restrict the development of the mineral estate owned by the State; and,
THEREFORE, for and in consideration of the premises and subject to any existing mineral leases in effect
at the time this Agreement is executed, the State covenants and agrees that it wit( not lease, or cause to be
developed, any and all minerals owned by the State, except as described herein, in the following land (the
Subject Lands), situated in the County of Larimer, State of Colorado, more particularly described as follows:
ACRES SUBDIVISION SEC.TWP.RGE. PATENTS
410.78 Lots 1,2 3 4 S2N2 N2S2 SESE 20- 12N-68W Yes
440 E2NE NWNW S2NW SW S2SE 28- 12N- 68W Yes
474.88 NE S2 30- 12N-68W Yes
640 ALL 32- 12N-68W Yes
640 ALL 36- 12N-69W Yes
636.40 ALL 4- 11 N-68W Yes
630.70 ALL 16- 11N-68W Yes
Containing 3,872.7 acres, more or less.
FUND: School
(NOTE: The State assumes no responsibility for the accuracy of the legal descriptions to the extent that such
descriptions were furnished by the Surface Owner nor does it admit any liability for loss or damage due to
inaccuracy on the Surface Owner's part in describing the land subject to this Agreement.) -
Subject to the following existing mineral leases: None
1. TERM--The term of this Agreement shall be twenty (20)years from the hour of twelve o'clock noon
on the date hereof, to the hour of twelve o'clock noon on , 2035.
2. RENTS -- The Surface Owner shall pay to the State total compensation of$387,226.00, payable in five
equal installments of$77,445.20 each, commencing on the date that this Agreement is signed by the
Surface Owner and continuing annually on or before each of the next four anniversary dates of the
Effective Date of this Agreement.
SLB 241 4 Revised 08/2015
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3. PENALTIES--A penalty shall be imposed for, but not limited to, late payments, improper payments,
violation of any covenant of this lease,or false statements made to the State. Penalties shalt be
determined by the State and may be in the form of, but not limited to, interest, fees, and fines.
4. SURRENDER --The Surface Owner may at any time surrender and cancel this Agreement insofar as the
same covers all or any portion of the land herein, provided that this surrender clause shall become
inoperative immediately and concurrently with the institution of any suit in any court of law by the
Surface Owner, the State, or any assignee of either to enforce this Agreement or any of its terms,
express or implied. If this Agreement is terminated for any reason, no rental or bonus refund shall be
made, nor will rental or bonus be transferred or credited in any way to another account. All paid up
rental and bonus shall be forfeited unless otherwise agreed to by the State.
5. RECEIPT FOR PAYMENTS--This Agreement shalt not be in effect until the State has received cash or
the cash proceeds of any check tendered in payment for fees, bonus, or rental. All payments shalt be
made on or before the date due and any default may subject this Agreement to cancellation as set out
in Paragraph 13.
6. TRANSFER AND ASSIGNMENT--The parties expressly agree that the mineral development restrictions set
forth in this Agreement run with the land,and shalt be binding upon all subsequent owners of all or any
portion of the land covered hereby. -
If a portion of the subject surface estate is sold or transferred and an assignment of the mineral
development restriction for that parcel is approved, a new agreement shalt be issued to the assignee
covering the assigned land, containing the same terms and conditions as this Agreement and limited
as to term as this Agreement is limited, and the assignor shall be released and discharged from all
further obligations and liabilities as to that portion so assigned. An assignment shall not extend the
term of this Agreement.
7. PROTECTION FROM OFFSET DRAINAGE-- In case of offset drainage from the Subject Lands, the Surface
Owner will be offered an oil and gas lease or will allow the State to offer an oil and gas lease to a third
party lessee, allowing development of oil or gas owned by the State underlying this surface or, in lieu of
leasing,Surface Owner may pay an in-lieu royalty based on technical information and set by the State.
Offset drainage is defined as a producing oil and gas well dritled on a spacing unit or legal location
where any portion of the spacing unit or legal location is adjoining the Subject Lands.
B. NO RIGHT TO DEVELOP MINERALS-- Except as expressly set forth herein, this Agreement does not
give the Surface Owner any authority to explore for, prospect, develop, extract or use any minerals
owned by the State.
9. UNIT AGREEMENTS-- In the event the State permits the Subject Lands herein to be unitized or pooled
with other lands, the terms of this Agreement shalt be modified to conform to such unit agreement.
10. GOVERNMENT CONTROL--Any matter over which the United States Government assumes exclusive
control is exempted from any of the provisions of this Agreement.
11. EXTENSION --Any request for an extension of the term of this Agreement will not be considered prior
to the last year of the Agreement term. All requests must be in writing. The granting of an extension
will be at the option of the State.
12. COMPLIANCE WITH LAW-- Nothing in this Agreement shall be construed as a waiver by the State of
any right or remedy given to it by law for the administration of State-owned minerals, or construed in
a manner that requires either party to violate applicable federal, state or local laws.
13. FORFEITURE--Upon failure or default of the Surface Owner or its assignee to comply with any of the
provisions or covenants hereof, the State is hereby authorized to cancel this Agreement, and such
cancellation shalt extend to, and include, all rights hereunder as to the whole of the tract so claimed or
possessed by the Surface Owner or its assignee so defaulting, but shalt not extend to nor affect the rights
of any surface owner or approved assignee claiming land separated from this Agreement by assignment:
provided, that in the event of any such default or failure to comply With any of the terms and conditions
hereof,the State shall, before any such cancellation may be made, send by certified mail to the Surface
Owner or assignee so defaulting, to the post office address of the Surface Owner or assignee, as shown by
the records of the State, a notice of intention to cancel for such default, specifying the same,and if
Within thirty(30)days from the date of mailing said notice, the Surface Owner or assignee shall have paid
all rents or bonuses in default, and shall have begun in good faith to correct such other default as may
have been specified, and shall thereafter diligently prosecute the correction of such default,there shall
not be a cancellation therefor. If such default is not corrected,or correction thereof is not begun in good
faith as hereinabove required,within thirty(30)days after the mailing of such notice, this Agreement will
SLB 241 4 Revised 08/2015
Page 2 of 4
terminate and be cancelled by operation of this paragraph without further action by the State,or further
notice to the Surface Owner,
14. FALSE STATEMENTS-- Misrepresentation or false statements on the part of the applicant or Surface
Owner,or failure to comply with any of the conditions set out in this Agreement or in the application
which is a part hereof, may subject this Agreement to cancellation by the State.
15. CONDEMNATION -- If the State's mineral estate shall be taken in any condemnation proceeding, this
Agreement shall automatically terminate as of the date of taking. The award for such condemnation
shall be paid to the State. If only a portion of the mineral estate is taken by condemnation, the State
may, at its option, terminate this Agreement or terminate only that portion of the Agreement
covering the mineral estate so taken.
16. SUCCESSORS CLAUSE --The benefits and obligations of this Agreement shall inure to and be binding
upon the heirs, legal representatives, successors or assigns of the Surface Owner.
17. APPROPRIATION -- Surface owner obligations hereunder are subject to annual appropriation of funds
sufficient and intended therefor by Surface Owner's City Council, in its sole discretion, however,
failure to pay the Paragraph 2 - Rents obligations will result in termination of this Agreement as set
out in Paragraph 13 of this Agreement.
IN WITNESS WHEREOF, The parties hereto have executed the foregoing, the same to be effective as of
the day and year first above written.
STATE:
COLORADO STATE BOARD OF LAND COMMISSIONERS
Pete Mllonas, Minerals Director
ATTEST
State of COLORADO
County of
The foregoing instrument was acknowledged before me this_day of
, 2015 by Pete Milonas, in his capacity as Minerals Director of Colorado State Board of Land
Commissioners,as being authorized to execute same.
(SEAL) Notary Public
My Commission Expires
SLg 241-4 Revised 08/2015
Page 3 of 4
SURFACE OWNER:
CITY OF FORT COLLINS, COLORADO,
A Municipal Corporation
By:
Darin A. Atteberry, City Manager
ATTEST: APPROVED AS TO FORM:
City Clerk Assistant City Attorney
State of COLORADO
County of Larimer
The foregoing instrument was acknowledged before me this day of 2015, by
Darin A. Atteberry as City Manager for the City of Fort Collins, Colorado, as being authorized to execute same.
(SEAL)
Notary Public
My Commission Expires
SL8241-4 - Revised 08/2015
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