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Home My WebLink About20180720.tiffRESOLUTION RE: ACCEPT REQUEST OF D&C FARMS, DONALD HOWARD, JOHN HOWARD, AND MARLA HOWARD, C/O DISCOVERY DJ SERVICES, LLC, TO WITHDRAW APPLICATION FOR A SITE SPECIFIC DEVELOPMENT PLAN AND USE BY SPECIAL REVIEW PERMIT, USR17-0079, FOR MINERAL RESOURCE DEVELOPMENT, OIL AND GAS SUPPORT AND SERVICE INCLUDING OIL AND GAS PROCESSING FACILITIES (FOUR (4) GAS COMPRESSORS) AND RELATED EQUIPMENT IN THE A (AGRICULTURAL) ZONE DISTRICT WHEREAS, the Board of County Commissioners of Weld County, Colorado, pursuant to Colorado statute and the Weld County Home Rule Charter, is vested with the authority of administering the affairs of Weld County, Colorado, and WHEREAS, on March 21, 2018, the Board was presented with a letter, dated March 2, 2018, from the applicant requesting the withdrawal of the application of D&C Farms, Donald Howard, John Howard, and Marla Howard, do Discovery DJ Services, LLC, 7859 Walnut Hill Lane, Suite 335, Dallas, TX 75230, for a Site Specific Development Plan and Use by Special Review Permit, USR17-0079, for Mineral Resource Development, Oil and Gas Support and Service including oil and gas processing facilities (four (4) gas compressors) and related equipment in the A (Agricultural) Zone District on the following described real estate, to -wit, and: Subdivision Exemption, SUBX17-0029; being part of the SE1/4 of Section 28, Township 1 North, Range 67 West of the 6th P.M., Weld County, Colorado WHEREAS, the Board of County Commissioners heard all of the testimony and statements of those present, studied the request of the applicant and all of the exhibits and evidence presented in this matter and, having been fully informed, deems it advisable to grant the applicant's request and thereby accept the withdrawal of the aforementioned application. NOW, THEREFORE, BE IT RESOLVED by the Board of County Commissioners of Weld County, Colorado, that the request of D&C Farms, Donald Howard, John Howard, and Marla Howard, do Discovery DJ Services, LLC, to withdraw the application for a Site Specific Development Plan and Use by Special Review Permit, USR17-0079, for Mineral Resource Development, Oil and Gas Support and Service including oil and gas processing facilities (four (4) gas compressors) and related equipment in the A (Agricultural) Zone District on the parcel of land described above be, and hereby is, accepted. C.C c PLC co/rncn), PW C 8P/HB), £HCer), crB( -rj), ca c 6c), aePL R£.P O5/15/1E' 2018-0720 PL2533 ACCEPT WITHDRAW REQUEST OF USR APPLICATION - D&C FARMS, DONALD HOWARD, JOHN HOWARD, AND MARLA HOWARD, C/O DISCOVERY DJ SERVICES, LLC - (USR17-0079) PAGE 2 The above and foregoing Resolution was, on motion duly made and seconded, adopted by the following vote on the 21st day of March, A.D., 2018. BOARD OF COUNTY COMMISSIONERS WELD COUNTY, COLORADO ATTEST: ditif.d4) v• J,C,uo;eA Weld County Clerk to the Board BY: UU Deputy Clerk to the Bo AS County Attorney Date of signature: LD`/8 Steve Moreno, Chair, arbara Kirkmeye Sean P. Conway EXCUSED Mike Freeman Pro -Tern Julie A. Cozad 2018-0720 PL2533 DISCOVERY P A PAP PT N EPS Discovery DJ Services, LLC 7859 Walnut Hill Lane, Suite 335 Dallas TX 75230 March 2, 2018 Weld County Planning Department C/O Kim Ogle 4555 N. 17th Avenue Greeley, CO 80631 To Whom It May Concern: Discovery DJ Services LLC, "the Company", has decided to withdraw its application for USR17-0079 and pursue a USR pertaining to a site approximately 500 feet to the east that is outside the Dry Creek RUA. The decision is a difficult one due to many factors that will be outlined in a letter from our legal counsel, Amy E. Seneshen addressed to Bob Choate. However, we feel with the cooperation of Weld County this site would further benefit all impacted parties outside of the Company. Please remove our application that is scheduled to be heard on March 6, 2018 by the Planning Commission and on March 21, 2018 with the BOCC. Respectfully, Cory Jordan EVP of Discovery DJ Services, LLC cory@discoveryrnidstream.com 7859 Walnut Hilt Lane I Suite 3351 Dallas, Texas 752301214.414.19801 discovervmiclstream.com WELBORN SULLIVAN MECK & TQOLEY P.C. ATTORNEYS AT LAW March 5, 2018 Via E-mail (bchoatcr&vveldgov.com) Followed by U.S. Mail Robert Choate, Esq. Assistant Weld County Attorney 1150 "O" Street P.O. Box 758 Greeley, Colorado 80632 Re: Case Number USR17-0079 Dear Mr. Choate: 1125 17th Street, Suite 2200 Denver, CO 80202 AX: 303/830-2500 303/832-2366 159 N. Wolcott, Suite 220 Casper, WY 82601 MAIN 307/234-6907 FAX 307/234-6908 As you know, this firm represents Discovery DJ Services, LLC ("Discoveiy") in connection with the above -referenced Use by Special Review ("USR") application for a proposed compressor station site. Discovery's USR application was scheduled for hearing with the Weld County Planning Commission on Tuesday, March 6, 2018. Discovery withdrew this application, however, on Friday, March 2, 2018. We certainly appreciate your meeting with us last Friday and taking our phone call earlier this week to discuss the USR application. You stated that your preliminary recommendation is that the Planning Commission deny Discovery's USR application. You also encouraged Discovery to provide a letter setting forth the reasons why we disagree. Although Discovery withdrew its USR, application, we wanted to take this opportunity to provide the following: (1) a brief outline of the factual background of this compressor station site and Discovery's USR application; and (2) the legal authority and analysis supporting approval of Discovery's U S R application, had Discovery continued with its application, I. Factual Background A. The Discovery Pipeline and Corresponding USR Application From March through November of 2017, Discovery spent considerable funds to secure the rights from a landowner to construct a compressor station and commenced the permit process with Weld County to obtain the USR permit for the compressor station. When several neighbors objected to the site at a community meeting on June 6, 2017, Discovery solicited input from the neighbors on an acceptable location in an effort to be a good community partner, despite having incurred significant costs in connection with securing surface rights to the location. Discovery then voluntarily moved the project one mile away to the currently proposed site. Because Discovery was then forced to obtain new surface rights and redesign its pipeline route in connection with the current location, Discovery's project was delayed by approximately three months. Discovery also incurred at least $150,000 in engineering and related labor costs alone, plus substantial additional costs to acquire the new site as the result of this move. Discovery endeavored to accommodate the landowners' interests in the area in light of its substantial business in Weld County. The USR. application for the pipeline, which will eventually connect to the proposed compressor station, was approved by the Board of County Commissioners on October 4, 2017 as USR 17-0032. The resolution of the Board of County Commissioners approving the USR stated that the USR permit for the pipeline was in compliance with the Weld County Code ("'ode"), that Discovery worked with property owners to accommodate their preferences, that the pipeline would not have an undue adverse effect on development, and that the pipeline was consistent with the best interests of the people of Weld County and represented a balanced use of resources in the affected area. As reflected in the Board's resolution, wsmtlaw.com LAW OF T H E LAND. Robert Choate, Esq. Assistant Weld County Attorney March 5, 2018 Page 2 the Weld County Planning Department was aware that Discovery had undertaken great effort and expense to relocate the proposed site as early as October of 2017. B. The Discovery Compressor Station and Corresponding USR Application On December 5, 2017, after months of discussions with neighboring landowners and the planners of the Weld County Planning Commission and after incurring significant expense to relocate the pipeline route and associated compressor station, Discovery submitted its USR application (USR 17-0079) for the proposed compressor site to the Weld County Planning Department. The Weld County Planning Department then distributed the application to the appropriate individuals and departments for review. Discovery's USR application received approval from all of the agencies to which it was submitted for comment. The Department then scheduled a hearing before the Planning Commission for March 6, 2018, to be followed by consideration before the Board of County Commissioners on March 21, 2018. Discovery received verbal and written support from surrounding landowners who planned to attend both meetings. C. The County's Novel Position Despite being fully aware of the proposed compressor site and the location of the associated pipeline for months, the office of the Planning Department, on February 13, 2018, only 3 weeks before the Planning Commission hearing, adopted an entirely contrary position. The County planning staff notified Discovery by e-mail that the proposed compressor station site was within the Dry Creek Regional Urbanization Area ("RUA"), and oil and gas activity was restricted in the area because "Limiting Site Factors," as defined in the Code, purportedly limited the proposed development. Discovery immediately retained counsel and expended significant resources to investigate the grounds for the Planning Department's changed position. Discovery then met with you and others in the Planning Department to clarify the Department's position on February 23, 2018. At this meeting, the Planning Department once again changed its position and stated that the "Limiting Site Factors" initially referenced by the Planning Department were not the real reason for the asserted limitation on the development. Instead, the Planning Department raised the following issues with the proposed compressor station's location: First, the County claimed that Discovery had to comply with the PUD process, in addition to the USR process it had already been engaged in with the County for many months, because the County now asserted that the PUD provisions set forth in the Code apply to any development within the RUA. Second, the County asserted that the proposed site is located in an area designated on the RUA Structural Land Use Map as "Residential — Suburban." The County claims that an oil and gas compressor station is not within the allowable land use categories of "Suburban Neighborhoods" as defined in 26-4- 50.D► of the Code necessitating an amendment of the Structural Land Use Map. Further, the County now invokes §26-1-30, which provides that amendments to the land use map can only occur on February 1 and August 1 of each year, making the next opportunity to amend the map August of 2018, nearly six months away. In the February 23, 2018 meeting, Discovery highlighted the Planning Department's inconsistent positions. First, Discovery noted that the Board of County Commissioners did not require the owner of an extremely large saltwater injection facility to undergo the PUD process, even though that facility also is Robert Choate, Esq. Assistant Weld County Attorney March 5, 2018 Page 3 located within the RUA, less than 1,000 feet away from Discovery's proposed compressor facility. The USR application for the injection facility was approved on March 14, 2017, and the location of that facility sits within an area identified on the Dry Creek RUA Map as the "Community Park." Similarly, Discovery emphasized that the Board of County Commissioners also did not require Discovery to undergo the PUD process in connection with its pipeline even though it was also located within the RUA. II. Legal Authority for Granting Discovery's USR Application The County appears to be taking one of two approaches; it either is enforcing the PUD and land use map requirements arbitrarily or acknowledging, through its course of conduct, that the Code is subject to multiple interpretations depending on the desired result and therefore fatally vague. As discussed below, the County's novel position regarding the pending USR application is contrary to the County's previous approvals of similar applications. Moreover, as reinforced by the County's representations over the past 6 months, approval is warranted based on a plain reading of the Code as written and enacted by the County. A. The Proposed Compressor Station is Not Subject to the PUD Provisions Because it is Not a "Development." The Code states that "The PUD provisions shall be applied to all proposals for commercial, industrial and residential developments." §26-1-50(A) (emphasis added). You indicated that since the term "development" is not capitalized, the definition of "Development" in §23-1-90 (which expressly excludes "Oil and Gas Facilities" from such term) is inapplicable. If that is the case, since the Code fails to define "development," a court would resort to the County's interpretation of that term as demonstrated by its prior actions as well as Colorado case law discussing this term and the commonly understood meaning of "development." Of the three types of "development" referenced in the Code, Discovery's intended use is closest to an "industrial development." In common usage, "development" means constructing infrastructure and multiple buildings on a number of land parcels. Similarly, a "development" is defined by Dictionary.com as "a large group of private houses or of apartment houses, often of similar design, constructed as a unified community, especially by a real-estate developer or government organization." Section 22-2-70 of the Code discusses industrial development and contemplates large scale projects such as transportation infrastructure and major transportation corridors, offering incentives for such developments. Colorado courts use the term "development" in the same way. For example, in Higby '. Board of County Commissioners of El Paso county, 689 P.2d 635, 637 (Colo. App. 1984), the Colorado Court of Appeals referred to applications for rezoning of three contiguous properties covering 1,700 acres in the Palmer Lake Areas as a "residential and industrial development," Under no definition is the small, approximately 2 -acre compressor site proposed by Discovery an "industrial development." As discussed above, the County's prior actions indicate that it agrees with this interpretation. The County did not require the owner of the nearby injection facility to undergo the PUD process in connection with its much larger installation located within the same RUA less than 1,000 feet away from Discovery's proposed compressor station. Neither did the County require Discovery to undergo the PUD process in connection with its recently approved pipeline, also lying within the RUA. Accordingly, based on the plain meaning of the term and the County's prior Code interpretation, Discovery's proposed compressor station is not a "development" and therefore the PUD process is inapplicable. Robert Choate, Esq. Assistant Weld County Attorney March 5, 2018 Page 4 B. The Proposed Compressor Site Does Not Require an Amendment to the Structural Land Use Map. You also indicated that the proposed site is located within the area of the RUA structural land use map designated as "Residential — Suburban" with associated land use category policies located in 26-4- 50.D of the Code. In your opinion, an oil and gas compressor station does not fall within those categories and the structural land use map would have to be amended before the application could be approved. According to §26-1-30 of the Code, amendments can occur only twice per year and the next update opportunity is not until August of 2018, nearly six months away. Again, the plain language of the Code provides otherwise. Section 26 -5 -SOD of the Code, addressing allowable land uses within the Suburban designation, states, "Generally Residential Uses occurring in the Neighborhood Mixed Use should meet the requirements set in Section 23-3-130 and Section 23-3-140." First, the Code only says that these requirements must be met "generally" — i.e., not always. Second, Paragraph D of both Section 23-3-130 and 23-3-140 states that Uses by Special Review include those listed as USRs for the R-1 Zone District, which include "Oil and Gas Production Facilities." §23-3-110(D)(6). The Code defines "Oil and Gas Facilities" and "Oil and Gas Support and Service" but nowhere does it define "Oil and Gas Production Facilities" and, again, an applicant is left to guess at its meaning. A reasonable interpretation of "Oil and Gas Production Facilities" would include a compressor station. The regulations of the Colorado Oil and Gas Conservation Commission support this conclusion in that they include "compression" in the definition of a "Production Facility," placing it directly within the purview of the County's definition of "Oil and Gas Production Facilities." COGCC Rule §404-1100. C. The County is Estopped from Taking a Position Contrary to Its Prior Representations. The County's past actions in approving similar facilities without POD approval or structural land use map amendments and in processing Discovery's recent USR application raise significant impediments to the County's ability to backtrack on Discovery's application. There are numerous cases in Colorado supporting the proposition that a Court would prevent the County from denying Discovery's application under these circumstances. In Miller v. Board of Trustees ofPairner Lake, 534 P.2d 1232 (Colo. App. 1975), the town granted a building permit for a commercial building contrary to the property's residential zoning. After the owner spent money in reliance on the permit, the court held the owner could assert a claim to estop the town from enforcing the zoning regulation and stopping construction. See also, Kruse v. Town of Castle Rock, 192 P.3d 591, 603 (Colo. App. 2008) ("The doctrine of equitable estoppel is premised upon principles of fair dealing and is designed to prevent manifest injustice. In the context of municipalities, the doctrine of equitable estoppel bars a city from enforcing some obligation by taking a position contrary to a previous representation reasonably relied upon by the party dealing with the city to his detriment.") (internal citations and quotations omitted); Tarco, Inc. v. Conifer Metro. Dist., 2013 COA 60, It 39, 316 P.3d 82, 90 ("In the context of municipalities, the doctrine of equitable estoppel bars a city from enforcing some obligation by taking a position contrary to a previous representation reasonably relied upon by the party dealing with the city to his detriment. The doctrine of equitable estoppel has been invoked to cut off rights or privileges conferred by statute. A party asserting equitable estoppel must establish that (1) the party to be estopped knew the facts and either intended the conduct to be acted on or so acted that the party asserting estoppel must have been ignorant of the true facts, and (2) the party asserting estoppel must have reasonably relied on the other party's conduct with resulting injury.") (internal citations and quotations omitted). Robert Choate, Esq. Assistant Weld County Attorney March 5, 2018 Page 4 B. The Proposed Compressor Site Does Not Require an Amendment to the Structural Land Use Map. You also indicated that the proposed site is located within the area of the RUA structural land use map designated as "Residential — Suburban" with associated land use category policies located in §26-4- 50.D of the Code. In your opinion, an oil and gas compressor station does not fall within those categories and the structural land use map would have to be amended before the application could be approved. According to §26-1-30 of the Code, amendments can occur only twice per year and the next update opportunity is not until August of 2018, nearly six months away. Again, the plain language of the Code provides otherwise. Section 26-5-50D of the Code, addressing allowable land uses within the Suburban designation, states, "Generally Residential Uses occurring in the Neighborhood Mixed Use should meet the requirements set in Section 23-3-130 and Section 23-3-140." First, the Code only says that these requirements must be met "generally" — i.e., not always. Second, Paragraph D of both Section 23-3-130 and 23-3-140 states that Uses by Special Review include those listed as USRs for the R-1 Zone District, which include "Oil and Gas Production Facilities." §23-3-110(D)(6), The Code defines "Oil and Gas Facilities" and "Oil and Gas Support and Service" but nowhere does it define "Oil and Gas Production Facilities" and, again, an applicant is left to guess at its meaning. A reasonable interpretation of "Oil and Gas Production Facilities" would include a compressor station. The regulations of the Colorado Oil and Gas Conservation Commission support this conclusion in that they include "compression" in the definition of a "Production Facility," placing it directly within the purview of the County's definition of "Oil and Gas Production Facilities." COGCC Rule §404-1100. C. The County is Estopped from Taking a Position Contrary to Its Prior Representations. The County's past actions in approving similar facilities without PUD approval or structural land use map amendments and in processing Discovery's recent USR application raise significant impediments to the County's ability to backtrack on Discovery's application. There are numerous cases in Colorado supporting the proposition that a Court would prevent the County from denying Discovery's application under these circumstances. In Miller v. Board of Trustees of Palmer Lake, 534 P.2d 1232 (Colo. App. 1975), the town granted a building permit for a commercial building contrary to the property's residential zoning. After the owner spent money in reliance on the permit, the court held the owner could assert a claim to estop the town from enforcing the zoning regulation and stopping construction.. See also, Kruse v. Town of Castle Rock, 192 P.3d 591, 603 (Colo. App. 2008) ("The doctrine of equitable estoppel is premised upon principles of fair dealing and is designed to prevent manifest injustice. In the context of municipalities, the doctrine of equitable estoppel bars a city from enforcing some obligation by taking a position contrary to a previous representation reasonably relied upon by the party dealing with the city to his detriment.") (internal citations and quotations omitted); Tared, Inc. v. Conifer Metro. Dist., 2013 COA 60, 'I 39, 316 P.3d 82, 90 ("In the context of municipalities, the doctrine of equitable estoppel bars a city from enforcing some obligation by taking a position contrary to a previous representation reasonably relied upon by the party dealing with the city to his detriment. The doctrine of equitable estoppel has been invoked to cut off rights or privileges conferred by statute. A party asserting equitable estoppel must establish that (1) the party to be estopped knew the facts and either intended the conduct to be acted on or so acted that the party asserting estoppel must have been ignorant of the true facts, and (2) the party asserting estoppel must have reasonably relied on the other party's conduct with resulting injury..") (internal citations and quotations omitted). Robert Choate, Esq. Assistant Weld County Attorney March 5, 2018 Page 5 In the case at hand, Discovery reasonably relied to its significant detriment on (1) the County's past actions in approving USRs i s for facilities within the RUA without requiring the applicant to undergo the P D process (even when other applicants had much larger facilities than what Discovery is proposing), and (2) the County's representations over the past 6 months that the USR permit was the proper way to obtain the County's approval for the compressor site. III. Conclusion Again, we appreciate your time and efforts in discussing the permitting process with us over the last couple of weeks. While the arguments set forth above strongly support the approval of Discovery's application for its compressor station and it is undisputed that Discovery has expended significant funds in connection with this application and moving the site once before, Discovery values its relationship with the Weld County Planning Commission and Board of County Commissioners. As a result, Discovery has decided to withdraw its application for USR17-0079 and pursue a USR pertaining to a site approximately 500 feet to the east that is outside the RUA. In an effort to continue to be a good community partner, Discovery will relocate the site yet again even though it will cost Discovery significant funds and delay in order to do so. Based on our conversations, we are hopeful that there will be limited, if any, review of any necessary alterations to Discovery's pipeline as a result of the relocation of the compressor site. Discovery looks forward to working with the County to permit the new compressor site. Very truly yours, Amy E. Seneshen Hello