Tough sale

Neighborhood association's tactics border on eminent domain

Liz Richards

Published September 30, 2006 at midnight

Text size

More More Business

As a real estate agent, I was thrilled when asked to sell an 1880s Victorian home on four city lots at West 32nd Avenue and Osceola Street in the heart of an inviting pocket of restaurants, bars, boutiques and restaurants in trendy northwest Denver.

The home was zoned for residential and commercial uses. A developer quickly put it under contract for the full asking price of $719,000. My clients were elated, and so was I.

The developer thought that the 125-year-old house was in such disrepair that he would exercise his right as the property owner and tear it down to start his new project from scratch.

Unfortunately, this didn't sit very well with some neighbors.

Evidently, it doesn't take much to get the ball rolling to have a property designated "historically significant," which is what the West Highlands Neighborhood Association moved to do. I learned it only takes one person to ask the Landmark Commission to look into designating any property as a historically significant building, which makes it very difficult to raze.

Interestingly, not once in the 13 years my clients lived in this house did any of these civic-minded individuals step up to offer money or anything else to help maintain this "historical gem." Also, the property was on the market for three months before the listing came to me, which was plenty of time for someone who wanted to preserve the house to buy it.

But I suppose that would require someone to put their money where their mouth is. Why do that when you can just use the system to bully the owners into getting what you want without any out-of-pocket expense to yourself or your organization? Smells like eminent domain to me.

In any case, the landmark designation process is long and drawn out, and involves multiple community meetings and stifling bureaucratic entanglements. The developer backed out of the deal and the property went back on the market. Eventually, we were able to come to a compromise with the neighborhood association. They would stop pursuing having the property designated a landmark if we and, whoever bought the house, legally agreed not to demolish it for two years.

Five months went by as we dropped the price and dropped the price until we found buyers willing to put up with all this nonsense and purchase it for $575,000, a 20 percent drop from the original price. To put it another way, the $144,000 difference is the cost of an Ivy League education.

I don't believe what happened to my clients was right. I can understand why some people believe preservation is in everyone's common interest and it should come before progress, but I think this viewpoint is somewhat naive and shortsighted.

Progress is inevitable, like it or not. And if they didn't like it, the West Highlands Neighborhood Association, or anyone else, could have saved the house by buying it at fair market value of $719,000. But it chose much more subversive tactics.

I was disturbed to discover how easy it is to blur the line between what is mine and what is ours. The U.S. is a democracy, which embraces everything both good and bad about capitalism. I'm certain that most Americans agree that capitalism, although flawed, is far superior to communism, so why are some people moving in that direction?

The way the system is set up gives anyone the right to reach into anyone else's pocket and essentially steal money from them without any repercussions. If they were able to do it to my clients, they can do it to you, too.

It seems nobody's property is truly their own.

The way the system is set up gives anyone the right to reach right into anyone else's pocket and essentially steal money from them without any repercussions. If they were able to do it to my clients, they can do it to you, too.

Liz Richards is a real estate agent with Leonard Leonard and Associates, which specializes in Denver neighborhoods.

Subscribe to the Rocky Mountain News