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Erie Annexation Deal with Anadarko Could Bring Town Millions in Revenue, Officials Say

January 12, 2019
Longmont Times-Call

An Erie deal with Anadarko Petroleum to trade land near Weld County’s western border for a bevy of encroachment licenses could net the town up to $85 million in tax revenue over the next two decades, officials say.

Orchestrated through its urban renewal authority, that cash influx would go toward funding the infrastructure necessary to attract developers to its stake of land along the Interstate 25 corridor, say trustees who this week approved an initial agreement with the drilling firm.

The land in question — nearly 50 acres near the intersection of I-25 and Colo. 52 — is owned by the company and already slated for more drilling.

“They’ll be paying this money anyway,” Erie Town Attorney Kendra Carberry said Friday, though without the deal “it just wouldn’t be coming to Erie.”

The agreement allows Anadarko up to 10 encroachment licenses across town property (the company already has two existing licenses, and the deal would allow for another eight) in exchange for the promise of annexing the property into the town once the wells are drilled and completed, according to the deal’s specifics. The agreement allows the firm to drill up to 23 wells.

The encroachments would only require administrative approval — approved by town staff, rather than trustees — an option that officials say drilling firms have come to pursue at great lengths amid shifting public perception toward the industry.

With the annexation only promised — and poised for sometime in 2020 — the deal contains a liquidated damages provision that allows the town to collect up to $5 million if the company doesn’t follow through.

Officials say the land’s value is poised to spike in the coming years with the wells producing, and with it, the revenue the town stands to gain from property taxes. That influx of cash would go toward the town’s plans to build up its stake along the I-25 corridor with water and sewage infrastructure required to bring large-scale development.

With the industry’s stocks fluctuating in recent weeks, some have argued that an investment in oil and gas might not yield the drastic returns that early calculations suggest. Though others say that any revenue gained from the property’s rising value would make the deal worthwhile.

“It’s a lot of money that could potentially come in or it could not come in,” Erie Mayor Pro Tem Geoff Deakin said Tuesday. “To me, the investment here from the town’s standpoint is guarantying that land that we have earmarked as the ‘Erie Gateway Project,’ land that we are counting on to build our commercial and primary employment future at I-25, would be within the town of Erie (with this deal).

“Absent that,” he added, “that land could wind up in Firestone or Frederick. I don’t want to lose that opportunity here and I feel like losing the potential for this parcel of land could jeopardize the I-25 project.”

Erie has long been keen on expanding its commercial options, similar to surrounding communities Thornton and Westminster, who in recent years have installed massive shopping centers along I-25 access points. The town in recent years has drafted a master plan of its own aimed at how it wants to guide development along the corridor in the coming years.

Last fall, Erie took its first real step toward that goal with a roughly $6.4 million deal for 255 acres at the corner of I-25 and Erie Parkway.

According to that plan, the 12,000-acre region is slated to host large-scale retail and denser housing typical of such a corridor.

Consultants have also offered plans for the area that could include mixed-use, urban-style office space that — along with Erie’s booming population — would feed the region’s commercial sector.

Anthony Hahn: 303-473-1422, hahna@dailycamera.com or twitter.com/_anthonyhahn

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