UPDATE: 5 March, 2023. Public comment is not being accepted for this item on Lakewood speaks. Until and unless they enable this feature, you can comment under agenda item 6: General Public comment. The latest redline version to be voted on is available on https://lakewoodspeaks.org/items/2887.
Over two years of committee work on Short-Term Rentals (STRs) was overthrown during February 13ths City Council meeting. One of the basic underlying premises of the proposed regulations was whether to allow STR use in investment homes, or only in primary residences. After working with residents for year, the Lakewood City Council committee on STRs decided to only allow STR use in home with an owner in residence,
However, on Feb 13, Council Member Shahrezaei proposed changing that base assumption and allowing another, secondary or investment home, to also be used as an STR.
Whether you agree or not, this was a major change and one that residents may not be prepared for. Those concerned can still contact City Council with their views.
Using a non-owner-occupied house as an STR impacts the residents that are concerned about an increased number of strangers in the area posing a safety concern; that increased use of investment housing will make housing more unaffordable; that properties will not be well cared for.
Advocates for non-owner-occupied homes point to the economic advantages in investing, property rights and standards of care that ensure good business.
Discussion in City Council revealed that a “primary residence” clause was recently struck down in Texas. Legal advice was that federal case law in other circuits don’t affect us.
Sidenote: Council Member Springsteen disagreed with this legal opinion and stated her reasons. Mayor Paul forced a break with the advice that she was not the City’s Attorney.
Council Member Franks, who worked extensively on the issues, raised many questions that showed the proposed regulations would need reworked if non-owner occupied STRs were accepted. Everything from definitions to operations would need changed. New language to accompany this change was not available but Council Member Shahrezaei did offer the insight that in 2021 she replaced someone who had a different philosophy on this issue than she did.
Discussion ensued as to how to pass this change quickly, in part because elections were again coming up, but also because the issue has already taken so long. The City Attorney offered language that would allow it to pass with any future modifications necessary to be made by city staff.
In the end, the amendment to allow a second, non-owner-occupied STR passed 7-4, with Council Members Franks, Springsteen, Vincent and Able voting no.
The entire proposal was then tabled until March 13, to allow time for the city staff to rework the regulations as necessary. On March 13, there will be another public comment period regarding the whole proposal, including the new changes. This is your time to have your concerns heard.
However, Lakewood’s City Attorney asked for 30 days to complete the required work so it is unclear when the final product will be available to the public, or even to Council itself.
Other changes to the proposed regulations:
Inspections: A provision was added to allow the City Clerk to decide if adequate compliance with the section on inspection rules was made, so that grace periods can be accommodated as necessary.
Parking: The entire proposed parking plan was removed. Discussion against a parking plan was that there is already a problem but we don’t make others follow a plan and this would be hard to enforce anyway. Discussion for keeping the parking plan was that there is already a problem so don’t make it worse.
Insurance: Council Member Mayott-Guerrero made a motion to change “commercial” insurance to “insurance that adequately covers STR liability”. Motion passed.
Notifications: The requirements for notifying neighbors of STR activity were simplified. Mediation requirements were removed.
During the February 13 City Council meeting, item 8, approving $472,000 for a public benefit agreement, was pulled from the consent agenda for public discussion. Although any item can be pulled for more discussion, the tool is rarely used because items on the consent agenda are routine and assumed to have support.
The agreement in question was giving the Natural Grocers food store chain a total of $472,000 to be used for expanding their corporate headquarter building on Alameda, adding a new building in that existing parking lot, and adding 25 new employees with high-paying jobs. Natural Grocers will also receive up to $140,000 in sales tax rebates.
Discussion involved whether it was the job of government to pick winners and losers. This point was underscored by a Council Member who called attention a neighboring business, Green Mountain Sports, which is going out of business.
Sidenote: Green Mountain Sports owner is retiring but a current employee would take over if it was financially possible.
A motion was made for partial funding for Natural Grocers but did not pass.
Discussion revealed that the money would come from a Lakewood economic development fund, not the general fund. The economic development fund is a result of the City of Lakewood Accommodation Tax (3%) on accommodations within the city. Estimates are that funding the Natural Grocers expansion would result in increased sales tax and high-paying jobs for Lakewood.
Several Council Members spoke in favor of economic development in general.
The economic development fund currently has approximately $9.5M in it, but unfortunately, City Council did not get that information until just before the council meeting.
The question arose as to who else had this opportunity; there were no other contenders. Other business can apply for grants, available through the Economic Development Program. This public benefit agreement was a unique opportunity, solely for Natural Grocers, similar to that made for Walmart.
A Lakewood City Council Study Session of February 6, 2023, included a presentation on the Strategic Housing Plan that Lakewood might utilize in determining plans for affordable housing. Lakewood received a grant from the Colorado Department of Local Affairs (DOLA) for funds to conduct a housing study and hired Gruen Gruen + Associates to conduct the study.
Initial results can be found at LakewoodSpeaks. By analyzing where there are available units for sale or rent, the conclusion seems to be that Lakewood needs units where they are not available. For example, there are no rental units available under $875/month or homes for sale under $275,000. That also agrees with the fact that largest group of renters, 33%, cannot afford over $875/month rent. Therefore, what Lakewood needs to be truly affordable is rental units under $875/month and residential home sale prices to be less than $275,000. No data was offered as to whether new units could be provided at the recommended costs.
Gruen Gruen + Associates also reported that in the past 20 years, 67% of new housing built in Lakewood were multi-family units. From 2014-2020 there was a drastic increase in the number of units being built. In 2014, the number of units doubled from 2013. In 2021 and 2022, the number of units being built dropped back to pre-2014 levels, although that number is disputed, per public comment.
During this time of intensive growth, prices also increased dramatically. Prices for attached units more than doubled, growing 14% faster than detached units. Prices for new units were 70% higher than for older units due to rising building costs. This scenario implies that building more units may not result in decreased prices.
Vacancy rates for Lakewood renters have decreased from 5% to 3.4%. In comparison, on a state level, Federal Reserve statistics indicate that rental vacancy rates vary from 3.4% to 13.5% since 1990.
Surplus of units in the middle ranges…
According to the data shown at the Council meeting, Lakewood needs more units for low-income renters, mainly those that can afford up to $875/month. However, there is a surplus of units in the middle ranges, those that can afford $1,250 -$1,800/month. Also, there is another lack of units needed for very high-income renters. The data also shows a home affordability point at $275,000; there is a surplus of ownership units available over $275,000, which seems to be used as evidence that those units are unaffordable.
“Jobs to housing balance is not unusually high.”
In fact, Gruen Gruen + Associates say that “Housing value is not unusually high” in Lakewood. The city has a 1:1.2 ratio of jobs to housing, indicating that for every 10 jobs in Lakewood, there are 12 housing units available for workers. This suggests that it is not the local job market that is driving housing prices higher in Lakewood, as is the case in areas such as Denver and Boulder, which have higher jobs-to-housing ratios. In fact, the study points out that populations in those areas may be looking for housing in low-growth areas, like Lakewood. This phenomenon is what is commonly called a “bedroom community”, which is someplace where people live but do not work.
Forecasting future needs, Gruen Gruen + Associates indicate that one goal for Lakewood may be tomaintain its place as the most populous city in Jefferson County. If so, thenLakewood should plan to grow. They estimate that 75% of population growth will be in workers and 25% in non-workers, such as retirees. They follow up with the fact that most low-income people in Lakewood already have housing so that is not driving growth.
One Council Member summarized the findings by saying they showed a need for affordable housing in both the low-income and middle ranges. Gruen Gruen + Associates concurred that the Council Member was reading the study the way they intended it to be read.
Consolidated Neighbors report that Consolidated Mutual has “completed unauthorized filling of the ditch and changing the grade most likely to heighten the base of the fence. CMWC crossed over public right of way and deposited approximately 100-150 cubic yards (10 large truck loads) of unspecified soil, apparently commingled with asphalt, into the Rocky Mountain Ditch water corridor and onto the City of Lakewood property near the 23rd Ave. and Ward Rd.”
Consolidatedneighbors.org has more details of the work that has resulted in unauthorized grade changes to public land, filling in ditch property and causing erosion problems.
As of February 9, City of Lakewood has issued a stop work order to Consolidated Mutual that they “must immediate cease all work on the retaining wall, the fence and apply for a Grading permit and install temporary erosion control measures.”
Consolidated Neighbors continue to ask for shareholders to let the company know what they think of these actions.
Prestige Fitness has closed its doors on its 7777 W Jewell Ave, Lakewood location. Prestige has told customers that it was forced to leave due to increased rent demands. Prime Management company denies this claim and surrounding businesses support the management company. Surveyors have recently been seen inside and outside of Prestige. Prime Management may provide comment on that at a later time. Prestige is not offering membership refunds at this time.
Residents of Lakewood, Colorado occasionally have a voice on state issues. One example was Lakewood’s vote to cut a lane expansion on C-470 near Morrison in order to decrease traffic emissions for air quality.
Lakewood is a voting member of the Denver Regional Council of Governments (DRCOG). From the DRCOG website: “DRCOG has served as the Metropolitan Planning Organization (MPO) for the Denver region since 1977.” DRCOG models vehicle emissions for proposed projects using state and federal funds. If a project shows emissions that will exceed limits it cannot proceed or must be modified.
The limits for projects are defined in a new state rule adopted by the Transportation Commission. If a project doesn’t pass the new limit, no problem, money is still available for multi-modal projects.
“…reduce growth in driving is an important tool”
-DRCOG
From the new rule, pg. 4, “A key finding in the Roadmap recognized that “making changes to transportation planning and infrastructure to reduce growth in driving is an important tool” to meet the statewide GHG pollution reduction goals (see Roadmap, p. 32). Section 8 of these Rules also advances the State’s goals to reduce emissions of other harmful air pollutants, including ozone.”
To sum it up, the unelected Transportation Commission made a new rule, not a legislative law, to reduce growth in driving in order to meet their own new regional emission standards. This new rule was then passed to another unelected organization, DRCOG, to implement. Officials from metro governments got to vote on the new plan.
How did Lakewood Vote
Lakewood City Council Member Jeslin Shahrezaei serves as the Lakewood DRCOG representative. With her vote, Lakewood voted to support the new plan, which eliminated a proposed new lane on C-470 near Morrison, along with plans for I-70 and I-25. This is in line with DRCOGs shift away from focusing on traffic congestion.
In a LakewoodInformer interview, Council Member Shahrezaei says it’s a matter of law. This is in reference to the new rule that will not fund projects increasing emissions.
When asked if she thought this was a place to advocate for those driving to the tech center for work, the answer was unequivocal…. “No”.
But she also says, per the video, that there are many other ways for commuters to get to the tech center and that people work from home now anyway.
“I think there’s a lot of ways to get to the tech center, and I don’t know that it’s single occupancy vehicles that are gonna do that for us,” says Shahrezaei. DRCOG agrees. See their performance measures listed below, or their Mobility Blueprint Summary.
Updated 1/30/23 with comments and call to action below
January 23, 2023 Lakewood City Council meeting showed strong concern from residents around the Maple Grove reservoir. Consolidated Mutual is moving a fence around the reservoir, resulting in elimination of a wildlife corridor. The new fence itself is not compatible with wildlife. The damage has already been seen. These changes were not communicated to residents, or sometimes communicated falsely.
Residents were present to ask Lakewood to coordinate with Consolidated Mutual in an effort to do better for the wildlife and fulfill more of the promises made to residents, who are also shareholders in Consolidated Mutual. For more information, see ConsolidatedNeighbors.org
From ConsolidatedNeighbors.org: A stag is seen alongside many other deer who are walking and grazing alongside the ditch that will soon entrap them rather than provide safe passage (per Colorado Parks and Wildlife).
Comment from those involved
LakewoodInformer reached out for comment from Consolidated Mutual with no response.
Consolidated Neighbors responded with additional information on the lack of transparency from Consolidated Mutual. For example, the Consolidated Mutual webpage has been extensively updated in the last two weeks to show their care for wildlife, but the old-growth trees have already been cut down without prior communication.
Regarding the fence, Consolidated Mutual promised to use the existing fence type but switch to a wildlife-unfriendly fence with no prior communication. Slides below from the City Council presentation, available online at https://consolidatedneighbors.org/presentation/
But what they actually used was different….
Call to Action
Consolidated Mutual is made up of shareholders. Consolidated Neighbors asks for your voices at the annual shareholder meeting, or contact Consolidated Mutual anytime.
The City of Lakewood offered mediation services. Consolidated Mutual declined.
A follow-up neighborhood meeting has been promised to be held by Consolidated, but it has not been scheduled or confirmed yet.
My best friend Michelle came from Florida to spend Christmas with my family. It was the best present and made my Holiday. We were driving north on Union and at 4th I was pointing out the 59 acres of Federal land recently under contract and discussing a pending FOIA when she said, “It sounds like Cabrini Green.” “What?” I said. Michelle had grown up near Chicago and was always making Chicago references. “Cabrini Green, a Housing project from the late 50’s and 60’s. It was going to be utopia, gardens, open spaces and a roof over all but by the 70’s it was hell on earth. The gardens and open space were paved over. It started as two story row houses (Cabrini) and then there were extension of 17 story skyscrapers.”
The gangs came in and took over the buildings. And people using public housing became afraid to leave their apartments. Cabrini Green became a political hot potato and there was no repair of the damaged buildings. By the late 70’s the project was so unmanageable that the city started to dismantle the buildings. By 1995 the area had being urban renewed and the high rises were gone. It was a failed experiment and a hugh embarrassment to the people of Chicago.
I pondered if we are under the best of intentions, with the vision of utopia and equity repeating history. With 15 acres under an EPA restriction because of unknown content of a previous munitions landfill, are we placing children in an unconscionable situation of exposure to God knows what? Is this the best choice for Lakewood?
I now think of the development as Cabrini Green West with the addition of the Bridge to Nowhere.
But some think I am a pessimist. Actually I have just lived long enough to see what often happens with the BEST INTENTIONS.
“The Employee shall receive 20-days of Executive Leave Time which may be used in any manner desired with the intent of advancing leadership succession & organization development planning for the City by the Employee.”
What does this mean?
One interpretation is that City Manager leadership succession planning is currently underway.
The only member of Council to directly comment on the new clause was Council Member Shahrezaei, who seemed to think the leave was for personal growth in leadership, rather than succession planning. When asked about it in an interview, she responded that the clause could mean both things. She’s right.
Find Out
While the new clause may not mean that a City-Manager-in-Training is in place, for a move of this magnitude, it may be important for City Council to find out, and decide how they would like to deal with succession management, rather than have the decision made for them.
In fact, if there is a succession plan in place, approving this employment agreement may be tacit agreement to the plan.
Two Council Members brought up the fact that it may be time to start looking for a new City Manager, based on length of service rather than any performance reason. Two other Council Members pushed back that they were not looking for a new manager and that no one asked them to look for a new manager.
During this time, cautions about disparaging remarks were repeated. No alternative time to discuss a new City Manager was offered, although if succession planning is taking place, that is a matter for the public. Succession is already introduced in the agreement amendments. However, it seems no one on Lakewood City Council understands the topic is already on the table, if indeed, that is the case.
As a reminder, Lakewood’s current City Manager, has worked for the City of Lakewood since she was 17 years old, and was trained by the previous City Manager.
On December 19, 2022, Lakewood City Council passed a new City Manager employment agreement after receiving incomplete information and having limited Council discussion. Some City Council Members seemed to equate a new agreement with the City Manager performance evaluation while others spoke of contract provisions. The result is an agreement for the City of Lakewood’s highest-paid position that increases the City Manager’s benefits, reduces the City Manager’s accountability, and includes misunderstood provisions.
The agreement amendment process started with misunderstandings. From the beginning, the public (and Council) was told that discussions were being held because incentives in the City Manager Employment Agreement expired. In fact, no expiration dates can be found in the previously existing 2014 agreement. (see note 1 below)
There is also some confusion regarding the extent of the amendments. Although the Mayor and some Council Members stated that only specific amendments were being changed relative to incentives, important City Manager performance objective evaluationmeasures were removed (see note 2). Even the head of the negotiating team believed, and stated, that these evaluation objectives remained, although they were actually removed. In addition, at least two Council Members still believed they remained after votes had been cast.
Other items were added without discussion, including a new provision for retirement payout for the City Manager, on top of existing retirement benefits. (see note 3)
In the end, the entire 2014 agreement was terminated and superseded, although only specific clauses were rewritten in the final 2022 employment agreement. (see note 4)
Brief Recap…
Public statements from Lakewood City Council members during the December 19 meeting show that City Council members were not clear on what was being discussed. These issues include:
The belief that the contract contained an expiration date, which it did not;
The belief that the City Manager’s objective performance criteria remained intact, when they were removed;
Enhanced retirement benefits were added without any council discussion.
City Council’s role is to provide checks and balances related to the financial and executive activities of the City Manager. Checks and balances should begin with implementing a critical review of the proposed City Manager employment agreement. Without a critical review, the public’s interests are not represented. The troublesome fact is, without adequate Council oversight, the City Manager could ask for, and receive, practically anything.
HOW DID THIS HAPPEN?
A healthy Council review process includes information dissemination and review, discussion with multiple viewpoints, position statements, and the ability to vote based on correct and understood information. In the case of the City Manager Employment Agreement review, these processes failed:
Council was given the City Manager Employment Agreement changes without a redline version – which is the industry standard for editing. (see note 5)
Council voted on a new employment agreement without seeing the entire agreement. (see note 6)
Council was not given an opportunity for informed discussion regarding changes (see note 7)
Three Council Members are on record stating that they believed the December 19 meeting was to be an up/down vote only, i.e. no discussion and amendments were to be offered (see note 8)
Formal amendments (to the proposed amendments) were not posted ahead of time to give other Council Members an opportunity to consider options (see note 9)
Rules for yielding the floor were not followed, resulting in muting additional discussion (see note 10)
One result of the discussion breakdown was the apparent misunderstanding surrounding the role of the City Manager’s performance evaluation. Several Councilors made remarks implying that since the evaluation was good, the employment agreement amendments must also good. One person said we got here because of the performance evaluation and the decision to give her a bonus. Two others commented favorably on performance and referenced similar comments on LakewoodSpeaks. One councilor said that everybody already had a chance to talk about this, apparently during the performance evaluation. In fact, every Council Member who voted for the new agreement and made any comment at all, referenced the performance evaluation more than the agreement. It seems that a majority of Council believed that a favorable performance evaluation meant that the new employment contract could just be “rubber stamped” for approval, with little discussion.
Implementation of a “rubber-stamp” process is contrary to the oversight policy inherent in the city charter. It is also evidence of misconceptions about the responsibilities of Council.
Does your Council Member know that nothing expired in the City Manager Employment Agreement? Do they know they authorized an additional 3% pay increase over other employees? Did they calculate how much the new incentives cost on top of the existing bonus? Do they know they could ask for redlines or make the argument for additional discussion? Are they willing to have the extra discussion?
The resolution states “certain incentive provisions that concluded on December 8, 2022” with no other explanation. Inquires to City Council as to what those incentives are have not been answered. The Mayor stated in the meeting that pension benefits expired. However, December 8, 2022, is the date Kathy Hodgson is 100% vested in the City Manager’s defined benefit plan. This plan is unique for City Managers, separate from regular employees and law enforcement. The Manager will get this incentive regardless of the new agreement; “Benefits payable under the Retirement Plan will vest, i.e., become nonforfeitable, in Employee remains employed on the 8th anniversary of this Agreement, on December 8, 2022”. Although “several incentives” are referred to in the Council materials, only this one has a date. “Vesting” does not mean expired. 2014 Agreement below
Below is the new section 5, which completely replaces the previous section 5. Section 5 no longer contains any objective outcomes, shown in the previous contract. Even the mayor, in charge of negotiations, stated several times during the meeting that he believed these measures remained. One Councilor voted for the removal of objective evaluations but later stated objectives were essential, showing the misunderstanding continues.
Note 3:
This new provision reads: “In the event the Employee elects to become Retired from the City, the City shall pay to employee, in lump sum, an amount equal to the pro-tata [spelling mistake in contract] Total Compensation earned as of her final day of employment.” Existing retirement benefits include being vested in the City Manager Pension Fund, the only defined benefit fund the city manages. If correctly interpreted, that means she shall receive an annuity worth 60% of her annual income. A new provision seems to be for an additional 2 years of income but the terms remain unclear, while also investing in the regular defined contribution, City Employees Pension Fund.
Note 4
In fact, the 2022 agreement reads, “This amended Agreement shall supersede and terminate the Employment Agreement dated December 8th, 2014”. This clause by itself is a contradiction to section 9a: “In addition to the unexpired benefits set forth in the 2014 employment agreement, and any other unexpired benefits”. (see note 1 for expired benefits). The agreement seems to leave in place the 2014 agreement while at the same time superseding it. So when the amendment clauses are put in with the entire agreement, there are contradictions. Most of the unchanged clauses are “legalese”.
Note 5
Redlines are used to clearly indicate changes
Deletions are especially hard to detect without redlines.
Council had to work unnecessarily to get and compare old contracts to determine changes.
Council has had problems in the past after approving zoning changes without a redline. After approval, they found out they voted for several deletions no one noticed, which had long-term ramifications. (Ex, CCU housing)
Note 6
The 2022 agreement below supersedes the 2014 agreement. Instead of providing the entire agreement to Lakewood City Council, only the amended clauses were provided.
Informed discussion requires information for consideration
All information comes at the beginning of a convened executive session, not beforehand
Council is only given time at the beginning of session to consider items and ask questions.
Council Members who asked for additional time to get informed first were denied
Presentation of information often replaces informed discussion
Note 8
It seems apparent that someone made the decision to only have an up/down vote prior to December 19 and communicated outside of open session, in order for so many Councilors to have that idea.
Note 9
Amendments that are written out previously can be posted for full Council consideration. During the meeting, two Councilors proposed changes to the amendments, but they were not written out so that others could consider them beforehand – just like the original amendments themselves.
Note 10
Reasons offered by the Mayor for muting Councilor comments and questions include:
Being off topic (although all Councilor comments and questions related to the amendments. Not all were related to passing the amendments. “You already made your statement that you disagree”… Mayor Paul)
Potential for making personally disparaging remarks about an employee. No disparaging remarks were made, unless one counts two Councilors calling for a new manager without showing dissatisfaction with the person. The question must be asked: When would be a good time to introduce the idea – which must be done in public.
Maintaining decorum. No Councilor appeared upset until they were muted by the Mayor.
Lenore Herskovitz: On December 19, our City Councilors didn’t know if they were voting solely on amendments to the City Manager’s contract or for a Resolution that included a complete employment agreement. Why wasn’t the 2022 Employment Agreement in its entirety included in their staff provided packet that night? This is a very generous contract that will cost taxpayers around $360,000. Seven representatives voted to pass this resolution that included an employment agreement that they had not even read. How can you justify such negligence? Two councilors had their hands raised to speak when the Mayor called for a vote. He ignored them. These two councilors were half of the four who voted “No”. It is unfortunate that more did not join them.
