The city of Denver has been trying for months to track down the owners of a marijuana dispensary — targets of a federal drug investigation — to give them more than $23,000.
The money is what’s left of the sum Denver agreed to pay VIP Wellness Center to relocate one of its grow locations early last year to make way for a massive construction project.
The city has already paid VIP’s owners — Luis Uribe and his cousin Carlos Solano — more than $30,000 to move about 1,000 marijuana plants to southwest Denver from where they were growing at the Peoria Street warehouse.
VIP had been renting part of a former tire-storage warehouse on the city’s north side to grow the marijuana it sold, but the land was in the footprint of the Peoria Crossing, a $50 million overpass construction project on Peoria Street to bypass railroad tracks just south of the Interstate 70 interchange.
Using eminent domain, the city bought the property and building at 3739 Peoria St. in December 2012 for $1.5 million from owners Sims/Roady LLC.
Although the city had paid $1.4 million toward the purchase, it waited four months to record the deed because, according to records and interviews, Denver didn’t want to be landlord to a marijuana business.
No other property acquired for the Peoria Crossing project shows a delay longer than three days from the time a property was purchased to the time the deed was recorded, records show.
On top of that, the city paid thousands of dollars to relocate a business whose owners were the target of a number of federal drug raids that seized hundreds of pounds of marijuana just seven months after the deal officially closed.
In fact, the city in theory risked losing the property — and the taxpayer money used to buy it and to relocate the medical marijuana grow — to federal forfeiture had those raids occurred at the Peoria Street warehouse, according to experts familiar with those laws.
“There was something about them not wanting to collect the rent from the medical marijuana people. They wanted it to go to us,” said Helen Sims, co-owner of the property with the longtime business partner of her late husband, Richard. Richard Sims and Ken Roady ran Sims Tire for years and built the warehouse for inventory storage.
“They (the city) didn’t want the rent on their books,” Sims recalled.
Denver Councilman Christopher Herndon, whose district includes Peoria Crossing, said it mattered little that the relocated business was a marijuana-grow facility.
“What business is there is irrelevant,” he said. “When doing acquisitions, the city doesn’t want to be a landlord. And as a legal business, we are required to move them.”
Businesses impacted by the eminent-domain acquisition of land for public projects must be relocated at taxpayer expense beyond what is paid to buy their properties. Denver had set aside about $13 million for land acquisition and relocation costs related to Peoria Crossing.
And although more than a dozen properties in Peoria Crossing’s footprint were purchased — some in Denver and some in Aurora — VIP’s location had a number of unique problems.
Most sensitive was that the marijuana operation was illegal under federal law and Peoria Crossing is funded in part with federal dollars.
Paying to relocate VIP would be tricky.
Denver used city funds to pay $1.4 million to Sims/Roady LLC in late December 2012 but didn’t record the title transfer until April, property records show.
And although the city signed an escrow agreement that said Sims/Roady remained the owner — and collected rents as landlord — until the sale was recorded, it had already handed over the bulk of the money.
“The owner asked to be paid before the end of 2012 for tax purposes — so to accommodate him, we paid for the property in December,” Public Works Department spokeswoman Emily Williams wrote in an e-mail to The Denver Post.
The rate at which capital gains were taxed was to change Jan. 1, 2013, and the landowners didn’t want to pay the higher rate.
“We wanted it closed in 2012,” Roady said from his retirement home in Phoenix. “They couldn’t get it done, so we asked to be paid for the tax benefit.”
Records kept by the Peoria Crossing project show there was a rush to close the deal that December, and increased pressure to move VIP out by then. When VIP hadn’t moved, the deal couldn’t close.
But the city paid the landowners anyway.