As part of a court settlement, The Ranch at Steamboat Condominium Association is purchasing 23 acres of land that was once slated for 15 single-family homes.
The purchase is part of a settlement agreement between the association and The Ranch's developers, Donna Mae Hoots, Martin Abel and Mel Seiden.
The homeowners association will pay $1.2 million for the property sandwiched between Overlook Drive and Burgess Creek Road. Some of the 15 single-family lots in the Overlook Preserve were listed for as much as $475,000.
A homeowners' meeting will be held March 13 to determine what to do with the land, said homeowners association vice president Timothy Rastello.
Rastello said his group is leaning toward acquiring conservation easements on the land to preserve it as open space. It also has the option of developing part of the land to recover its purchase price, but Rastello said much of the cost could be recovered from tax benefits through the conservation easements.
Overlook Preserve subdivision was proposed for land that had been phased for the third and final development of The Ranch at Steamboat and, at one time, was approved for 70 units in six buildings. The existing The Ranch has 88 units plus tennis courts and a swimming pool.
The settlement agreement means a jury trial slated for May will be canceled. The homeowners association also is dropping a lawsuit it filed against the city of Steamboat Springs for approving the Overlook Preserve development, Rastello said.
When the city approved Overlook Preserve in January 2003, The Ranch condominium owners raised concerns, saying the changes in development plans extended development into land they had thought was designated open space.
A lawsuit filed a month later asked the court to reverse the city's approval. Another lawsuit was filed in March, asking that building stop, alleging that the developers had been fraudulent and breached fiduciary duties owed to the association.
The association said the developers breached their fiduciary duties while they served as the property management company for the condominium association.
When the land was bought from Roland Colorado Ltd. last fall, the Overlook Preserve's principal owners were Martin Able and Mike Seiden, who also managed the association for 15 years.
After a June 3 and 4 hearing, 14th Judicial District Judge Paul McLimans ordered the injunction in July. In the order, the court stated Abel "sought to use information he acquired through his relationship with Roland to his own advantage -- and to the resulting direct disadvantage of his longstanding client, the (association)."
The court's injunctive order meant the developers could not start construction or sell the lots until the court made a final decision on the case.
"The court's injunction order finding (that) the association had a reasonable probability of proving fraud, then gave the association the leverage it needed to force a settlement," Rastello said.
In May, the court would have decided if the land should go under a constructive trust, which would allow the association to purchase the property for what the developers paid for it -- $800,000 -- plus development costs and interest. That amount is roughly what the association agreed to pay in its settlement agreement.