Judge denies McWhinney request for restraining order against Loveland, sets hearing date
Pat Ferrier, Fort Collins Coloradoan
Updated 4 min read
A Larimer District Court Judge judge on Friday denied Loveland developer McWhinney's request for a temporary restraining order that would have prevented Loveland from taking further action toward reversing the approval of Centerra South and its master financing agreement.
Judge Michelle Brinegar did not close the door on McWhinney, however, and scheduled a preliminary injunction hearing at 1:30 p.m. on Dec. 18, at which time the parties will discuss setting a trial date on McWhinney's request for a declaratory judgment. A case management conference will be held on Dec. 12.
The court ruled McWhinney's attorneys did not meet the burden for a temporary restraining order but recognized "the need for a preliminary injunction hearing to be set."
Centerra developer McWhinney, Inc. on Tuesday filed a lawsuit against the city of Loveland after City Council rescinded approval of its Centerra South development and the master financing agreement last week.
McWhinney said it has spent $10 million on Centerra South thus far after the Loveland Urban Renewal Authority and City Council approved the 140-acre project in May and the master financing agreement in October, prior to the November election.
The lawsuit alleges the reversal was an illegal and unconstitutional political move engineered by Loveland Mayor Jacki Marsh and three newly elected council members.
"After apparently conferring with these new members off the record and believing she now had five votes in hand, Mayor Marsh added two motions to the next City Council agenda to repeal the May resolutions that enabled the Centerra South development," the lawsuit states.
This architectural rendering shows developers' vision for the potential $1 billion Centerra South commercial and residential development southwest of the Interstate 25 and U.S. Highway 34 interchange in Loveland.
Procedurally, council did not provide the required 30-day public notice of a substantial amendment to an urban renewal plan, nor did it submit the motions for voter approval as required by the newly adopted ballot question 301, according to the lawsuit.
"Only immediate relief from the City Council's improperly adopted motions will allow McWhinney to proceed with the lawfully approved plans for Centerra South," the lawsuit states. "To be clear, absent a temporary restraining order and injunctive relief from the court, the City Council's unlawful abuse of political power will torpedo the Centerra South development as currently planned."
Council member Dana Foley, who chairs the Loveland Urban Renewal Authority Board, walked out of the meeting in the middle of the first vote after calling the process illegal.
Last week, Marsh said she welcomed a lawsuit so the courts could rule on whether including farmland for new development in an urban renewal area was the proper use of URA regulations.
"I recognize by rescinding this we may find ourselves in breach of contract," Marsh said last week. "It is far better to get out of it now versus 25 years of diverted taxes."
As the master developer, McWhinney has spent years preparing for the development of Centerra South, which is an approximately $1 billion development, according to the lawsuit. In 2022, Whole Foods agreed to be part of the project and recently, a Fortune 1,000 company looking to relocate its world headquarters signed on the join the project as well, according to the lawsuit.
Centerra South's site plan, which is in the early stages of development and may change.
"Assured of the city's approval of the plan and the master financing agreement, McWhinney ramped up preparations to break ground on Centerra South," including hiring engineers, architects, parking consultants and others and made payments to the city to begin design of a sewer lift station at the project, the lawsuit contends.
It alleges that under the state's urban renewal law, once a plan is approved and the city takes on debt to help fund it, the plan and its financing agreement are irrevocable. "If governing bodies could unilaterally rescind urban renewal plans whenever the balance of political power shifts, there would be immense risk to any of the governing bodies' business partners. Through the plan and master financing agreement, the city irrevocably pledged to assist in funding the plan."
Voting to rescind the plan and master financing agreement "was not reasonable and necessary because it absurdly wiped out the promise of the City Council to assist in financing significant public improvements," the lawsuit states. "Further, the ability of City Council to nullify its prior contracts for no purpose other than political maneuvering is not justifiable."
If the city is allowed to rescind the agreement, "McWhinney will be immediately and irreparably harmed," the lawsuit states. "McWhinney is commencing development on Centerra south and any uncertainty or delay on this project over the coming weeks may jeopardize the entire development plan."
