Carousel Farms Metropolitan District, a quasi-municipal corporation and political subdivision of the State of Colorado, Petitioner
Woodcrest Homes, Inc., a Colorado corporation, Respondent
Certiorari to the Colorado Court of Appeals Court of Appeals
Case No. 15CA1956
Attorneys for Petitioner: Alderman Bernstein LLC Jody Harper
Alderman Carrie S. Bernstein Amanda E. Bradley Steven M. Nagy
Attorneys for Respondent: Dymond Reagor, PLLC David D.
Schlachter Greenwood Village, Colorado Attorneys for Amicus
Curiae Institute for Justice: Diana Simpson Jeffrey Redfern
A subdivision development contemplated by Woodcrest Homes
seems to have been yet another casualty of the 2007-2008
financial crisis. Before the economic downturn, Woodcrest was
poised to construct the new development adjacent to the town
of Parker. But with the economy in dire straits, Woodcrest
secured only a small parcel-known as Parcel C-stuck between
two larger parcels that were necessary for completion of the
project. Now, over a decade after the failed development, a
special metropolitan district controlled by a competitor,
Century Communities, seeks to condemn Parcel C and finish
what Woodcrest started.
But Woodcrest objects. It claims that the entire condemnation
proceeding is really a sham designed to benefit Century.
Woodcrest maintains that the condemnation violates both the
public use protections of the Colorado Constitution and the
statutory prohibition on economic development takings.
According to Woodcrest, the purpose of the taking, at the
time it occurred, was to satisfy contractual obligations
between Century and Parker. Because the public would not be
the beneficiary at the time of the taking, Woodcrest
contends that this condemnation violates the Colorado
Constitution. Moreover, it argues, the taking effectively
transfers the condemned land to Century, which violates
section 38-1-101(1)(b)(I), C.R.S. (2018), the state's
anti-economic development takings statute.
We disagree. The centerpiece of our jurisprudence on takings
and public use is that the taking must, at its core, benefit
the public. The condemnation of Parcel C will do just that,
with the intended construction of various utilities, public
rights of way, and sidewalks. There is nothing in the
Colorado Constitution that prohibits private parties from
incidentally benefiting from any particular condemnation.
Additionally, Colorado's prohibition on economic
development takings has no bearing on the condemnation at
issue here: The plain language of section 38-1-101(1)(b)(I)
prevents public entities from transferring condemned land to
private entities. But there was no transfer, and the only
entity involved was a public one, the special district.
Before reaching any of those issues, however, the parties ask
us to clarify whether clear error or de novo review applies
to a trial court's public use determination. Because
public use is ultimately a legal question, we review it de
novo, while deferring to the trial court on underlying
Therefore, we hold as follows. First, takings questions
present mixed issues of law and fact, with public use being a
question of law that is reviewed de novo. Second, takings
that essentially benefit the public will survive
constitutional scrutiny, even if, at the time of the taking,
there is an incidental private benefit. As a result, the
taking here is valid. Third, the plain language of section
38-1-101(1)(b) only limits the transfer of condemned land to
a private entity and, because there was no transfer and no
private entity involved here, that section is inapplicable.
Facts and Procedural History
In 2006, the respondent, Woodcrest Homes, began the process
of securing three parcels to build a new development that
would be annexed into the town of Parker. Woodcrest purchased
Parcel C, a small parcel around twenty feet wide that totaled
about 0.65 acres, sandwiched between two approximately
twenty-acre parcels known as Parcels A and B. This sliver of
land offered Woodcrest an opportunity to plan utilities for
its development, as Parcel C already contained a sewer line,
a water line easement, and a natural drainage system with
culverts. Although Woodcrest was under contract to purchase
Parcels A and B, the "weak housing market" left
Woodcrest unable to move ahead.
Fast forward to 2012, when Century acquired Parcels A and B.
In 2013, Century offered to purchase Parcel C from Woodcrest,
tendering nearly $45, 000. Woodcrest rebuffed the offer,
remarking that it subsidized, at great cost, Century's
ability to complete the development, given that Century
intended to use Woodcrest's plans for the development.
Undeterred, Century told Woodcrest that it would continue to
pursue development and that, if Woodcrest didn't accept
some offer, Century would condemn Parcel C with the
"Town Council's support." Then, using
nearly identical plans to Woodcrest's-which included
using an already encumbered Parcel C for sewage, roads, and
other public improvements-Century approached Parker. Century
asked for the same deal that Woodcrest had in 2006, and
Parker agreed that it would annex the development and approve
the development's plat, if Century owned all three
Century then created a metropolitan district called Carousel
Farms (the District). This quasi-municipal structure
empowered the District to raise revenue through municipal
bonds and, more importantly, condemn property through eminent
domain. The District was run solely by Century employees and
officers. The District made a final offer to Woodcrest, which
Woodcrest rejected. Then, the District sought to condemn
Parcel C. But, before it could do so, the District needed to
amend the agreement with Parker so that it was the
District's possession of Parcel C, not Century's,
that was the prerequisite for plat approval and annexation.
Parker obliged, and the District initiated condemnation
At the immediate possession hearing in district court,
Woodcrest argued that the District was acting as a puppet for
Century. To Woodcrest, the District was a mere façade
designed to empower Century to acquire Parcel C and complete
the development, making the taking not for a public use but
for a private one. The district court disagreed, holding that
the taking was indeed for public use. The court subsequently
adopted the District's proposed findings of fact and
conclusions of law, verbatim or almost verbatim.
A division of the court of appeals disagreed and reversed.
First, it concluded that, in condemnation proceedings, the
district court's findings of fact were reviewed for clear
error and its legal conclusions reviewed de novo.
Carousel Farms Metro. Dist. v. Woodcrest Homes,
Inc., 2017 COA 149, ¶ 32, P.3d . However, it
reasoned that the district court's findings were subject
to heightened scrutiny because the district court adopted the
prevailing party's proposed findings of fact and
conclusions of law verbatim. Id.
Second, the division held that the taking was not for public
use, as the taking "itself" was to satisfy the
District's contractual obligations, which were, under any
metric, not a public use. Id. at ¶¶ 36-38.
The eventual dedication for utilities and roads was a
"step removed" and couldn't save the taking
from infirmity. Id. at ¶ 37.
Third, the division concluded that the taking was not
necessary to accomplish a public use, as there was no public
use even in play. Id. at ¶ 41. Moreover, the
division reasoned that, because the District was composed of
Century employees only, formed after Century couldn't
privately acquire Parcel C, and only initiated to meet
contractual obligations, the taking was done in bad faith.
Id. at ¶¶ 43-44.
Finally, the division held that the taking also violated
section 38-1-101(1)(b)(I), which prohibits takings that
transfer property to private entities for the purpose of
economic development. Id. at ¶ 48. To the
division, the taking effectively transferred the land to the
developer, violating the spirit of section 38-1-101(1)(b)(I)
and the rule that the "law may not be used to permit one
to accomplish indirectly what he may not achieve
directly." Id. at ¶ 52 (quoting Salle
v. Howe, 793 P.2d 628, 631 (Colo.App. 1990)).
The District petitioned this court for review and we granted
We begin by addressing the appropriate standard for appellate
review of takings questions. While Colorado caselaw has been
somewhat muddled on this subject, we conclude that takings
questions present mixed issues of law and fact. We therefore
defer to a trial court's factual determinations, but we
review de novo the legal determination of whether something
is for a public use. Next, we analyze the District's
taking and determine that, because the taking was essentially
for public benefit, it meets the public use requirements of
the state constitution and the relevant statutes. Finally, we
examine section 38-1-101(1)(b)(I). Because (1) the plain
language of the statute only covers transfers from public
entities to private entities and (2) the District is a public
entity that never initiated any sort of transfer, this
statutory provision doesn't apply.
Public Use and the Standard of Review
Our takings cases have sown confusion as to the appropriate
standard to review a trial court's public use
determination. Sometimes, we have intimated that the standard
is clear error-essentially holding that public use is a fact
question left to the trial court. See, e.g.,
City & Cty. of Denver v. Block 173 Assocs., 814
P.2d 824, 828-29 (Colo. 1991) ("In examining the stated
public purpose for a condemnation, we look to whether the
stated public purpose is supported by the record. If so, our
inquiry ends."); Pub. Serv. Co. of Colo. v.
Shaklee, 784 P.2d 314, 318 (Colo. 1989)
("[A]lthough conflicting evidence was presented at
trial, the evidence supports the trial court's conclusion
that the condemnation was for a public use . . . .").
Other times, we have stated that the inquiry involves a mixed
question of law and fact. See, e.g., Glenelk
Ass'n, Inc. v. Lewis, 260 P.3d 1117, 1120 (Colo.
2011) (citing Fowler Irrevocable Tr. 1992-1 v. City of
Boulder, 17 P.3d 797, 802 (Colo. 2001)) (stating that
the court of appeals defers to findings of fact "unless
they are . . . clearly erroneous" but ...