CALL DOLA TO ACT: CLAW BACK $1.9M IN GRANTS FOR THE PAGOSA WEST DEVELOPMENT

Our community must act to preserve both our ecological and financial resources. The decision to award $1.9 million to a proposed development in Pagosa Springs that neither supports our infrastructure nor protects our environment is a blatant oversight that demands correction.

Stand with us to advocate for responsible use of public funding and hold decision-makers accountable.

Sign this petition to urge DOLA to retract the grant awarded to the Town of Pagosa Springs for the Pagosa West Proposed Development project — and protect our community’s values and resources.

Sincerely,

Concerned Citizens of Pagosa Springs

WHAT WE DEMAND

We call on the Department of Local Affairs (DOLA) to:

1. Retract and recover the $1.9 million in grant funds awarded to the Town of Pagosa Springs for the Pagosa West project.
2. Conduct a full accounting of where these funds have gone.
3. Assure the public that no additional taxpayer funds will be spent on private development without site control, public dedication, or demonstrated public purpose.

ARGUMENT

DOLA’s “More Housing Now” grant guidance (2024) requires that projects demonstrate:

• Site control (ownership or long-term lease),
• Approved subdivision or entitlements, and
• Readiness to proceed with infrastructure construction.

The Pagosa West site does not meet these requirements and is ineligible for grant funds according to DOLA's own specifications. 

Funds Benefit a Private Developer

The Colorado Supreme Court has acknowledged that housing and employment can be a public purpose (In re Interrogatories on H.B. 91S-1005, 814 P.2d 875 (Colo. 1991)). But the Court also held that expenditures are unconstitutional if the primary benefit accrues to private parties.

In this case:

The primary beneficiary is the private developers and their private partners. The current infrastructure and habitats will be additionally burdened-not relieved- by these additional development proposals.

The County Administration Building used to justify the grant will not be built on this site as the county has already dedicated over $2M to the purchase of another site and are in discussions for Phase One bids and design.

The Pagosa West Development proposal ignores public input for housing needs. The public is overwhelmingly concerned about infrastructure, natural resources, and wildlife interruptions. 

Market Re-Creation is an Ultra-Vires Act (Outside of Statutory Municipal Authority)

 

 

 

 

Governor Polis and the General Assembly have described their housing agenda as an effort to “remake” or “recreate” the housing market. This language makes clear that the intent is not simply to regulate land use or approve lawful projects, but to engineer the market itself.

The Town of Pagosa Springs and DOLA have no statutory authority to undertake this type of market manipulation through speculative public-private partnerships.

Under Colorado law:

Municipal authority is limited to powers granted by the state — a town may regulate zoning, land use, and development in line with statute, but it may not create or subsidize markets for the private benefit of developers.

Colorado Constitution, Article XI, Section 2 prohibits using taxpayer funds to confer private benefits. Recreating the market to favor developers is not a public purpose — it is an unconstitutional transfer of public money to private actors.

By applying for a DOLA grant on behalf of a private developer, the Town exceeded its statutory capacity. This is ultra vires — an action beyond the scope of lawful municipal powers.

Further, this “market re-creation” places an unjust burden on residents.

According to the Town and County's recently published Housing Needs Assessment: 

Pagosa Springs Real 100% AMI: <$50,000 (61% of earners)

Archuleta County Real 100% AMI: <$50,000 (71% of earners)

Taxpayers are being forced to subsidize housing they themselves cannot afford. Workforce housing priced at higher Area Median Income (AMI) levels is not affordable housing. It does not relieve housing insecurity for the most vulnerable (60% of workers in our community); instead, it shifts public funds to projects that benefit the top earners in Archuleta County, developers, and real estate brokers while excluding many in the community.

 

 

 

 

The true median income in all of Archuleta County including the town is under $50,000. Yet only a page later in the HNA, these real numbers are ignored in favor of HUD’s inflated Median Family Income of $94,200.

This substitution creates a misleading picture: while most local households earn well below $50,000, housing policies are being based on nearly double that amount, allowing projects to be labeled “affordable” even though they are priced far beyond the reach of the majority of residents.

In short, the Town of Pagosa Springs has attempted to step into a role it does not lawfully hold — that of a market engineer- to create housing for high earners — and in doing so has jeopardized the integrity of both public finance and community trust.

LEGAL REFERENCES

Colorado Constitution, Article XI, Section 2 — Prohibits the state or local governments from lending or granting public funds or credit for private purposes.

In re Interrogatories on H.B. 91S-1005, 814 P.2d 875 (Colo. 1991) — The Colorado Supreme Court held that expenditures are unconstitutional if the primary benefit accrues to private parties, even if there is some incidental public benefit.

C.R.S. § 18-5-205 (Fraudulent Acts in Securing Government Funds) — Submitting false or misleading information to obtain state funds may constitute fraud.

C.R.S. § 24-109-105(2) (Colorado Procurement Code) — Any person who knowingly misrepresents material facts to secure a grant or contract with the state is subject to remedies, including termination and recovery of funds.

DOLA “More Housing Now” Guidance (2024) — Requires projects to demonstrate site control, entitlements, and readiness to proceed. The Pagosa West project lacks site ownership, subdivision approval, and public dedication, and therefore is not shovel-ready.

BACKGROUND

Introduction

The integrity of public fund management is at the core of functional community governance. This principle has been threatened in Pagosa Springs.

In July 2024, the Town of Pagosa Springs submitted a grant application to the Colorado Department of Local Affairs (DOLA) for nearly $1.9 million under the “More Housing Now” program. The application was made on behalf of a private developer for a 99-acre parcel known as the Pagosa West site.

The application represented that the project would include both "affordable housing" and a new Archuleta County Administration Building, serving as the public justification for taxpayer-funded infrastructure. Based on this information, the grant was awarded.

Since that time, the County has relocated the Administration Building project to another site closer to the courthouse and county jail. That project is now moving forward on land the County already purchased for over $2 million. The Pagosa West site no longer includes any public facilities and is slated only for private commercial and residential development.

Additionally, the application described the housing as “affordable,” but the project is now classified as "workforce housing", targeting higher income bands with an unknown number of properties being deed restricted and no long-term affordability guarantees.

These material changes mean the Pagosa West project no longer meets the criteria for public benefit originally used to justify the grant and- along with other reasons- make this project ineligible for publicly funded grants.

The Town of Pagosa Springs' initiative to become public partners with private developers for "housing of all types" does not meet a public benefit need and, in fact, directs taxpayer funds to private developers when the town is failing to meet current infrastructure needs. 

See the grant application here.

No Longer Serves a Public Purpose

Because the grant application- presented in July of 2024- stated that a County Administration Building would be located on site to justify the use of public funds in coordination with a private apartment development marketed incorrectly as "affordable", the application information is outdated and no longer relevant. That building is no longer being built on this site.

The current Sketch Plan includes only private businesses and private residences, see below.

 

 

 

 

Housing is Not "Affordable" by Definition

The application also labeled the proposed housing as “Affordable,” but the current proposal is for “Workforce Housing.”

In plain terms, DOLA has created thresholds based on AMI for “affordable housing”, which typically refers to deed-restricted homes priced for low-/moderate-income households relative to Area Median Income (AMI), often with long-term affordability covenants.

“Workforce housing” targets higher AMI ranges and may lack those long-term affordability restrictions.

Calling this project “affordable” in the application was misleading and does not reflect what is being advanced.  

 

 

 

 

 

The Colorado Constitution

Under the Colorado Constitution, governments may not provide grants for projects that primarily benefit private developers. This misuse of taxpayer money not only breaches public trust but also bypasses legitimate community needs during a time of urgent infrastructure crises in sewage, water, schools, fire mitigation, and road maintenance.

RELEVANT FACTS

Proposed Development is Ineligible for Grant Award: 

The grant was said to benefit public development, but this is no longer the case.

The County Administration Building, originally listed in the 2024 application as a central justification for the use of taxpayer funds, will not be built on the Pagosa West site.

Instead, Archuleta County has already spent more than $2 million to purchase land near a separate, established government development area closer to the courthouse and county jail. The County is moving forward with discussions on phase one bids and design for the new facility there. This means the Administration Building has been fully relocated, and the Pagosa West site will have no public facility, no county presence, and no justification for taxpayer-funded infrastructure.

Further:

1. The land is not owned by the listed developer. 
2. The application was submitted by the Town on behalf of the developer that does not own the land because private developers are ineligible for state grants for infrastructure.
3. The property is still listed as a “pending sale” by listed grant partner EXIT Realty.
4. Upon completion, the property will neither be owned by the Town nor dedicated for public use. The indicated deed restrictions could be as little as 0 units and up to 96 units in accordance with the verbiage in the TOWN OF PAGOSA SPRINGS, COLORADO RESOLUTION NO. 2024-11.
5. The application described the housing as “affordable,” but the proposal is for “workforce housing”- serving higher AMI bands- and is not low-income affordable housing in accordance with state definitions for housing initiatives. The Developer Agreement states properties will be targeting those making "at least" 80%-120% AMI. Language in Developer Agreement states "up to 96 units" will be deed-restricted and indicates the number can be lower, as noticed in the new proposed Sketch Plan, which has now become 88 units.
6. The Sketch Plan Proposal in the June 2024 application was not accepted by the Town of Pagosa Springs and is currently obsolete. A new Sketch Plan without infrastructure or subdivisions has been submitted for community input in August 2025.
7. Site location for proposed development is no longer the same as in grant application.

With the administration building relocated and the remaining development limited to private commercial and residential use, the grant award cannot be justified as serving a public purpose.

The Town is attempting to use state funds to subsidize speculative private development — a use explicitly prohibited under the Colorado Constitution, Article XI, Section 2, and contrary to established case law.

These realities nullify any claim of public benefit or eligibility for a grant awarded to a government entity on behalf of a private developer that does not own the land proposed to be developed.

Site is not shovel-ready and does not meet DOLA Specifications

DOLA’s “More Housing Now” grant guidance (2024) requires that projects demonstrate:

• Site control (ownership or long-term lease),
• Approved subdivision or entitlements, and
• Readiness to proceed with infrastructure construction.

The Pagosa West site does not meet these requirements:

• The land is still privately owned and is listed as a “pending sale” by EXIT Realty.
• The developer does not hold title, lease, or binding site control.
• There is no subdivision plat, no land dedication, and no approved development applications.
• The site remains in a conceptual sketch phase with no entitlements or permits to begin construction.

By approving over $1.9 million in funding for a site that fails DOLA’s own criteria, the Town and DOLA have allowed taxpayer dollars to be committed to a speculative project that cannot lawfully proceed.

This is not a technicality — the readiness requirement exists to protect taxpayers and ensure that state grants are spent only on viable, legal projects. Ignoring it in this case undermines both program integrity and public trust.

Infrastructure Strain

This speculative development further burdens failing infrastructure:

1. The Town of Pagosa Springs is moving forward with language for a sales tax increase on the November 2025 ballot due to a $80M-$100M million shortfall for sewage system replacement.
2. PAWSD (Pagosa Area Water and Sanitation District) has imposed drought restrictions due to water shortages.
3. Roads maintenance remains underfunded, with county disputes (see here​, here​, here and here) over which roads should be maintained or abandoned.
4. The elementary and middle schools are in disrepair, with ongoing evaluations about how to fund renovations or new construction.
5. Local residents face unaffordable or unavailable home insurance due to wildfire risks.

Meanwhile, $1.9 million in taxpayer funds has been funneled to a private land deal.

Environmental Impact

The project is slated to destroy a wildlife corridor that has existed for over a century, compromising a vital natural habitat that local species depend on for survival.

No impact studies have been conducted to assess this irreversible loss.

CONCLUSION

The Pagosa West project is not a public project — it is a speculative private development cloaked in the language of public benefit. The relocation of the County Administration Building to another site, the misrepresentation of “workforce housing” as “affordable housing,” the lack of site ownership, and the absence of any public dedication or shovel-ready readiness make this grant award indefensible.

At a time when Pagosa Springs faces critical infrastructure shortfalls, wildfire risks, and the loss of a century-old wildlife corridor, taxpayers cannot afford to see nearly $2 million diverted to enrich private developers and real estate brokers.

The Colorado Constitution, state statutes, and Supreme Court precedent are clear: public funds must serve a genuine public purpose, not speculative private gain. To restore integrity, accountability, and community trust, DOLA must retract the grant, recover the funds, and ensure that future awards align with law and the true needs of Colorado citizens.