Pot shop accuses City Council members of retaliation, conflicts of interest
April 11, 2016
Steamboat Springs — The operators of a local marijuana business think two Steamboat Springs City Council members halted their pot shop’s move to Curve Plaza to retaliate against their prospective landlord, whose other pot-growing tenants have irked a council member and a council member’s husband in an office building on the west side of the city.
Natural Choice and landlord Steve Caragol said Friday that Councilwoman Heather Sloop and Councilman Tony Connell last week failed to disclose some personal conflicts of interest and should have recused themselves prior to the close and controversial 4-3 vote that stopped the move.
Natural Choice is planning an appeal, claiming council members unfairly applied stricter rules to their proposed move and are standing in the way of a relocation that will generate more revenue.
Sloop and Connell strongly denied any conflicts of interest Monday and stood by their "no" votes.
Sloop said she voted against the move because of the proposed pot shop’s proximity to Ace Hardware and Girl Scouts and other children who occasionally sell hot dogs there or visit to get popcorn.
Connell said he denied the move because he still wants to learn more about marijuana’s impact on youth, and he didn’t want to endorse a variance request that would have allowed the pot shop to operate less than 1,000 feet from a nearby park.
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But Caragol and the owners of the pot shop allege there’s more to it than that.
They say the council members unjustly applied a stricter set of standards to their move than other marijuana businesses faced in the past.
And they say that some bad blood between Caragol and Connell, combined with an issue that Heather Sloop’s husband, Peter, has had with Caragol’s existing pot-growing tenants, likely impacted the vote and spurred the council members to deny Caragol a new tenant.
Caragol, the landlord who is hoping to lease the more visible space in Curve Plaza to Natural Choice for its medical and retail sales, also leases out space to two medical marijuana grow operations on the west side of the city, which have drawn complaints from Connell and Peter Sloop, who work in the same office complex as the grow operations.
Peter Sloop, owner of Sloop Painting, and Connell specifically complained about the impact the marijuana businesses have had on their operations, including bad odor.
"We are going to demand a new hearing and demand (Connell and Heather Sloop) recuse themselves," Natural Choice operations manager David Brodsky said. "As a citizen and a business owner, when you come to City Council, you expect to get a fair shake, and I think that Councilwoman Sloop and Coucnilman Connell colluded on our application in an effort to get one over on our landlord, Steve Caragol.
"We sailed through planning and zoning, and we were asking for a very reasonable variance," Brodsky continued. "We had no reason to think this was going to play out like this."
Brodsky said he feels Connell and Heather Sloop’s initial effort to table the application for up to six months was an apparent effort to tie up the property at Curve Plaza and hurt Caragol financially.
Caragol said Friday he thinks Connell "has an axe to grind" against him because the council member consulted with legal counsel and was unable to successfully get the owners’ association rules changed at his office complex so the pot growers would be evicted.
Asked Monday whether the claims from Caragol and Natural Choice amounted to a potential conflict of interest that should have been disclosed prior to the vote, City Attorney Dan Foote said it is an issue for the council to decide as a whole.
"It’s ultimatley the council’s discretion," Foote said. "I don’t think there’s a clear answer one way or the other on this one."
Growers as neighbors
Councilman Connell hasn’t liked working in the same building as marijuana-growing facilities.
At one point last year, he kept a daily tally of the times and places he could smell marijuana at Connell Resources.
He said his personal experience with these grow operations, which are legally licensed by the state, led him to vote to approve new city rules that require the operations to register with the city and meet other code requirements.
Before the new rules were put in place, Caragol said Connell ended up losing money consulting with an attorney when he wanted to change the bylaws of the office complex to disallow marijuana grows. The effort did not succeed.
Caragol said he thought Connell opposed the pot shop’s move, which was supported by city staff and the city’s Planning Commission, in part because of Caragol’s past feuds with the councilman regarding the grows.
"These guys should never had to go though this," Caragol said of Natural Choice and the denial of their move.
The marijuana growers who found themselves in the middle of Peter Sloop and Connell’s businesses also are concerned.
They say they have had the police called on them multiple times by Connell, and they noted Connell voted with other council members to strengthen the city regulations on their operations shortly after Connell, Peter Sloop and other business owners in the complex failed to secure enough votes in an effort to evict them.
"It seems like a personal vendetta," caregiver Connor Klingensmith said of Connell’s recent votes and actions on marijuana issues.
Klingensmith also suggested the tension between Caragol and Connell is personal.
"The only time I’ve ever heard (Connell) swear is when I mention Steve (Caragol),” Klingensmith said. “Tony gets all frustrated. You can tell there’s something personal."
Klingensmith said he and Connell have had positive and productive discussions about mitigating the impact of the growing operations in the past.
Connell was professional, Klingensmith said.
But when Caragol was mentioned, Klingensmith said Connell "dropped F-bombs."
Connell said Monday his disagreements with Caragol and the marijuana growers had no impact on the way he voted to deny Natural Choice’s move to Cargol’s space at Curve Plaza.
He accused Caragol of trying to find a way to "silence him" for voting against the move and disagreeing with him.
"There’s nothing about Steve Caragol in this rationale" to vote against Natural Choice’s move, Connell said.
He said he has not called the police on the grow operations, and provided the Steamboat Today with a written complaint from Connell Resources about the grows that was submitted to the city’s code enforcement division.
The complaint requested a response from a drug-sniffing K-9.
Emails Caragol and Natural Choice recently provided to the Steamboat Today show that Connell has raised issues about the neighboring medicinal marijuana grows to fellow business owners at the complex prior to his votes on the Natural Choice move and the changes in city rules regulating such grow operations.
Connell claimed the odor got so bad in May, a Colorado Department of Transportation supervisor who was at the office to consult on a road work project had to leave the Connell Resources office because she got a migraine from the smell.
Connell also accused Caragol of running unlicensed grow operations despite the operations later being deemed legal by a local attorney.
"Do you care about others’ health and welfare? … " Connell asked Caragol in one email dated June 3, 2015. "My staff, CDOT personnel, suppliers, visitors, delivery services, and new job applicants have all reported objectional odor in the last month."
Connell then warned Caragol about trying to lease a space in the office complex to another pot grower, saying it would be challenged.
Peter Sloop, who owns Sloop Painting in the complex, complained last year to his neighbors at the complex that the marijuana odors had reached his office and it often smelled like a "dead skunk."
Heather Sloop said she doesn’t talk about work with her husband or about the building he works out of.
She added she wasn’t aware he had complained about marijuana odors there or voted to disallow Caragol’s tenants from being in the building.
"I’ve never met Steve Caragol," she said. " I don’t even know what he looks like."
She said she did not feel she had any conflict in regards to the vote on Natural Choice.
"I’m still just blown away by the whole thing," Sloop said.
Peter Sloop also said his business operations and concerns about marijuana grow operations were not discussed with his wife.
Asked if he made any other recent efforts to remove Caragol’s marijuana tenants from his office building, Peter Sloop declined to comment and said the information wasn’t relevant.
This isn’t the first time Heather Sloop and Connell have had to address accusations of conflicts of interest during their council tenures.
The council in January re-voted without Sloop on whether to release a more detailed summary of the recent internal police department investigation after it was revealed Sloop, prior to her "no" vote, did not disclose she had been taking flying lessons with former Deputy Police Chief Bob DelValle, one of the main subjects of the misconduct probe.
Connell publicly apologized in January 2015 after the city tapped his brother in law to vet final locations for a new police station, including a site Connell had a financial interest in.
He used the situation to call for new council rules that called for council members to disclose any potential conflicts of interest in writing.
Natural Choice still is hoping to move from a tucked-away corner of an industrial park into the more visible retail space between a liquor store and a breakfast spot.
Brodsky said the business wants to make the move to get a fair share of sales opportunities in the city.
"Golden Leaf, as far as we know, has upwards of two-thirds of the marketplace, and that’s because of their location (on U.S. Highway 40)," he said. "They run a good business, but that location is what has allowed them to dominate."
Brodsky, Caragol and Natural Choice owner Roland French said they polled business owners in the area and heard no formal opposition to locating their shop in Curve Plaza.
French said he was concerned Sloop and Connell did not raise planning-related issues when they opposed their move.
Brodsky noted that a previous City Council unanimously approved without comment the move of Golden Leaf, another pot shop, to a space that fronts U.S. Highway 40 next to a restaurant.
"We deserve equal protection under the law, 14th Amendment protection,” Brodsky said. "The arbitrary and capricious application of city code to our business was unique. The City Council actions speak to the huge discrepancies in how these two businesses are treated."
Natural Choice will request that the council reconsider the vote before the denial is ratified on April 26.
If that appeal is denied, Foote said the business can go through the district court to appeal the council’s decision.
The denial of Natural Choice was supposed to be a topic of conversation Friday at a Coffee with Council meeting.
The three council members who were in attendance did not want to discuss the case because of the "high likelihood" of an appeal.