United States District Court, D. Colorado
THE COLORADO COALITION FOR THE HOMELESS, a Colorado Nonprofit Corporation, Plaintiff,
GENERAL SERVICES ADMINISTRATION, and UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendants.
ORDER AFFIRMING AGENCY DECISION
William J. Martinez, United States District Judge.
The Colorado Coalition for the Homeless
(“Coalition”) seeks review under the
Administrative Procedure Act (“APA”), 5 U.S.C.
§§ 701 et seq., of a decision by Defendant
United States Department of Health and Human Services
(“HHS”) denying the Coalition's application
to assume control of a surplus piece of federal property and
convert it into a location providing shelter and other
services to the homeless. The Coalition has also sued the
General Services Administration (“GSA”), which
has some oversight authority over the surplus property.
However, GSA is only a marginal actor here and the Coalition
currently asserts no arguments that GSA acted unlawfully.
Accordingly, the Court will usually refer only to HHS below,
rather than to a group designation such as “the
Government” or “Defendants.”
reasons explained below, the Court finds that HHS did not act
arbitrarily, capriciously, or contrary to law when it denied
the Coalition's application. The Court therefore affirms
empowers a reviewing court to set aside agency action if it
is, inter alia, “arbitrary, capricious, an
abuse of discretion, or otherwise not in accordance with
law.” 5 U.S.C. § 706(2)(A). Generally, an agency
decision will be considered arbitrary and capricious
if the agency has relied on factors which Congress has not
intended it to consider, entirely failed to consider an
important aspect of the problem, offered an explanation for
its decision that runs counter to the evidence before the
agency, or is so implausible that it could not be ascribed to
a difference in view or the product of agency expertise.
Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto.
Ins. Co., 463 U.S. 29, 43 (1983). A reviewing court
should engage in a “thorough, probing, in-depth review,
” Wyoming v. United States, 279 F.3d 1214,
1238 (10th Cir. 2002) (citation omitted), with its review of
the merits “generally limited to . . . the
administrative record, ” Custer Cnty. Action Assoc.
v. Garvey, 256 F.3d 1024, 1027 n.1 (10th Cir. 2001).
“[t]he scope of review under the ‘arbitrary and
capricious' standard is narrow and a court is not to
substitute its judgment for that of the agency.”
Motor Vehicle Mfrs. Ass'n, 463 U.S. at 43;
see also Davis v. Mineta, 302 F.3d 1104, 1111 (10th
Cir. 2002) (stating that the court's review is
“highly deferential”), abrogated on other
grounds by Diné Citizens Against Ruining Our Env't
v. Jewell, 839 F.3d 1276 (10th Cir. 2016). The Court
confines its review “to ascertaining whether the agency
examined the relevant data and articulated a satisfactory
explanation for its decision, including a rational connection
between the facts found and the decision made.”
Colo. Wild v. U.S. Forest Serv., 435 F.3d 1204, 1213
(10th Cir. 2006).
1987, Congress enacted the Stewart B. McKinney Homeless
Assistance Act, Pub. L. No. 100-77, 101 Stat. 482 (codified
at 42 U.S.C. §§ 11301 et seq.)
(“McKinney Act” or
“Act”). Title V of the Act (42 U.S.C. §§
11411-12) requires federal agencies to consider regularly
whether “excess, ” “surplus, ”
“unutilized, ” or “underutilized”
federal properties are “suitable for use to assist the
homeless.” 42 U.S.C. § 11411(a). As amended, the
Act assigns to the Department of Housing and Urban
Development (“HUD”) the responsibility to publish
on its website a list of all excess, surplus, unutilized, and
underutilized properties, and a list identifying which of
those have been designated as suitable for homeless
assistance. Id. § 11411(c)(1)(A).
such publication, a homeless assistance organization has
thirty days to file a “written notice of intent to
apply for such a property for use to assist the
homeless.” Id. § 11411(d)(1)-(2). Or, if
a homeless assistance organization disputes a government
agency's finding that a particular property is
not suitable, the organization may file “for
review of [the unsuitability] determination” within
twenty days. Id. § 11411(d)(3).
properties deemed suitable, the application process (after
submitting a notice of intent) has recently changed. Until
late 2016, the McKinney Act stated that a party seeking to
take over federal property was required to “submit a
complete application” to HHS within ninety days
“after submission of written notice of intent to apply
for a property.” 42 U.S.C. § 11411(e)(2) (2012).
HHS then had “25 days after receipt of a completed
application” to decide whether to approve the
application. Id. § 11411(e)(3).
December 2016, Congress enacted the Federal Assets Sale and
Transfer Act (“FAST Act”), Pub. L. No. 114-287,
130 Stat. 1463. Among other things, the FAST Act amended the
McKinney Act to create a two-step application procedure.
See id. § 22(4). Homeless assistance providers
must now file an “initial application” within
seventy-five days of the notice of intent. 42 U.S.C. §
11411(e)(2)(A). This initial application must focus on
“the services that will be offered, ” “the
need for the services, ” and “the experience of
the applicant that demonstrates the ability to provide the
services.” Id. § 11411(e)(2)(B). HHS must
approve or disapprove the initial application within ten
days. Id. § 11411(e)(3).
approves, the applicant has forty-five days “in which
to provide a final application that sets forth a reasonable
plan to finance the approved program.” Id.
§ 11411(e)(4). “No later than 15 days after
receipt of the final application, ” HHS must
“make a final determination.” Id. §
11411(e)(5). The McKinney Act contains no provision for an
administrative appeal of HHS's final determination.
FACTUAL & PROCEDURAL BACKGROUND
owns and manages a 670-acre site in Lakewood, Colorado, known
as the “Denver Federal Center.” See Colo.
Coal. for Homeless v. Gen. Servs. Admin., 2018 WL
3109087, at *2 (D. Colo. June 25, 2018) (ECF No. 21)
(“§ 705 Order”). “The northwest corner
of the Denver Federal Center comprises a vacant 59-acre
parcel commonly known as Federal Center Station because it is
immediately adjacent to a bus and light rail station also
known as Federal Center Station.” Id. The
Court will refer to the 59-acre parcel simply as “the
The Notice of Intent and the Application Packet
notice dated October 6, 2017, HHS announced that the Property
had been “determined suitable . . . for homeless use,
” and invited McKinney Act applications.
(Administrative Record (ECF No. 27) (“R.”) at
130.) Later that same day, the Coalition's
president, Mr. John Parvensky,  submitted to HHS a letter of
intent to apply for the Property. (R. at 1159.) On October
12, 2017, an HHS representative, Ms. Teresa Ritta, e-mailed
Parvensky to acknowledge the Coalition's letter of
intent, to provide application forms and instructions, and to
establish deadlines. (R. 1157-58.) Also attached to the
e-mail was a copy of 45 C.F.R., Part 12a, which governs
applications such as the Coalition's. (Id. at
informed Parvensky that the Coalition's application would
“initially [be] reviewed on the basis of four
evaluation criteria: Services Offered, Need, Implementation
Time, and Experience.” (Id.) These four
criteria match the first four evaluation criteria (out of
five total) listed in the applicable regulation. See
45 C.F.R. § 12a.9(e)(2)(i)-(iv). Alluding to the fifth
regulatory criterion-“Financial Ability, ”
id. § 12a.9(e)(2)(v)-or to the Fast Act (or
both), Ritta then stated, “If HHS determines that the
applicant [has] met [the first] four evaluation criteria, the
applicant is given forty-five (45) days to present a final
application containing a reasonable financial plan . . .
.” (R. at 1157.)
therefore directed Parvensky to an attached
“application packet which contains instructions for
completing an initial application to acquire surplus
property. The applicant must complete all items of the
application packet, excluding items 4. (B), 4. (C), 4. (D)
and 4. (E), which pertain to the applicant's proposed
financial plan.” (Id.) The excluded
“items 4. (B), 4. (C), 4. (D) and 4. (E)” of the
application packet called for detailed estimated costs to
develop and operate the property, as well as information
about ability to finance construction and operation. (R.
1174-75.) Ritta then recapitulated that, “[i]f HHS
determines the applicant met the initial four review
criteria, HHS will notify you by letter. At that time, the
applicant will be given 45 days to submit a reasonable
financial plan.” (R. at 1157.)
attached application instructions included the following
Applications determined incomplete will either result in a
disapproval of the application or a request for additional
information. It is to the applicant's benefit to err on
the side of providing too much information as opposed to
omitting information or not providing enough detail. It is
the applicant's responsibility to ensure their
application presents all the information requested in a
detailed and complete manner.
(R. at 1169.)
The Initial Application
December 21, 2017, Parvensky submitted the Coalition's
initial application. (R. at 140-797.) The Coalition's
proposed “Phase One” project was “a campus
of emergency shelter and transitional housing and services
for homeless families and individuals using temporary
structures constructed or placed on the site.” (R. at
December 29, 2017, HHS sent Parvensky a letter requesting
clarification or more specific information concerning
numerous aspects of the initial application. (R. at 837.)
Parvensky responded on January 12, 2018 (R. at 840), and HHS
announced its initial approval in a letter to Parvensky dated
January 23, 2018 (R. at 919). HHS therefore set a March 9,
2018 deadline (i.e., forty-five days out) for the
Coalition to complete “Application Items 4B, 4C, 4D,
and 4E [what the October 2017 letter referred to as
‘items 4. (B), 4. (C), 4. (D) and 4. (E)'] related
to the ability to finance the development and operation of
the approved program of use.” (Id.) Those
application items read as follows:
(B) Detail the estimated costs anticipated to prepare the
property for full utilization, including:
(4) Funds availavations to existing facilities;
(2) Construction of new facilities; and
(3) Changes to the land areas (e.g. parking, recreational,
* * *
(C) Detail the estimated costs anticipated to operate the
program, including any maintenance costs.
(D) Give a full and complete statement of the ability to
finance, operate, and maintain the property requested.
Identify the source of funding for converting the property
for its intended use, including any new improvements.
Identify funding sources for program operation separately. Be
sure to include the capital outlay budget and the following,
(1) Special building funds;
(2) Undistributed reserve;
(3) Property tax rble for personnel and maintenance (include
any expected volunteer resources, if applicable);
(5) Amount raised by taxation;
(6) State appropriation;
(7) Other (contracts, services, federal payments,
fund-raisers, grants, etc.)
If the funding sources under “Other” are of a
general nature, the application should provide details for
each source listed under “Other”, including any
past grants, uses of past grants, prior fund-raising
activities, commitment letters, details of awards, etc.
* * *
(E) If the applicant contemplates that major
construction/renovation is necessary to make the property
suitable for full utilization, and funds are not currently
available, give plans and proposed sources of funding to
carry out the proposed program and development. Please
include the estimated amount of funds each source will
provide, including any anticipated grants.
(R. at 1174-75 (formatting in original).)
The “Reasonable Plan to Finance” Portion ...