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Recent September 2019

Colorado Supreme Court Affirms Special Districts’ Eminent Domain Authority

In a recent decision, the Colorado Supreme Court confirmed that the exercise of condemnation authority by a developer-formed metropolitan district constitutes public use, so long as the purpose of the taking is for some public benefit. Under the Colorado and U.S. constitutions, private parties generally cannot exercise the power of eminent domain. For years, using metropolitan districts, real estate developers effectively exercised the power to condemn private property for public uses such as streets, parks, and utilities in connection with new development projects. In late 2017, however, in the case of Carousel Farms Metropolitan District v. Woodcrest Homes, Inc., a division of the Colorado Court of Appeals invalidated a developer-formed metropolitan district’s exercise of condemnation authority, finding that metropolitan districts could not condemn private property when the immediate purpose served only to satisfy the developer’s contractual obligation to the local government. The uncertainty created by the Colorado Court of Appeals’ decision proved detrimental to many developers’ public improvement plans.

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