Unpaid taxes cause cargo headaches in Colorado Springs

Selects 2012 Pikes Peak region photos for CSCVB

The Colorado Springs Independent is reporting that the city’s airport came close to losing its cargo facility when the operator failed to pay property taxes. The company, MDC Colorado, did not pay appropriate taxes on the terminal and the tax lien was sold to a third party.

The newspaper reports that it was only then that the city discovered the problem and moved urgently in to secure the 10,937 sq m property. The city is now suing MDC Colorado, alleging breach of contract and fraud in failing to disclose that it had not paid the tax bill.

At issue is a lease that dates to 1998 between the airport, which saw some 50,000 tonnes of airfreight in 2016, and MDC, which constructed the cargo facility, located on airport land. The lease required MDC to pay taxes on the property, and it did so until five years ago, the year the lease expired.

However, MDC did not notify the city of the unpaid tax bill and “continued to ignore the City’s repeated efforts to determine if MDC was interested in exercising its option to extend the Agreement,” says the city’s lawsuit. The city assumed ownership of the facility in 2014.
For the following three years, the El Paso County Treasurer’s Office sent notices of the unpaid taxes to Kansas-based MDC. Unknown to the city, the tax lien was sold in 2014 to PTL Partners of Denver who paid the cargo facility’s taxes for three years and then applied for a tax deed in 2017, which would have transferred ownership of the terminal to PTL had it gone through.

In 2017 the City notified by the Treasurer, not MDC, of the cargo terminal’s outstanding property taxes. The lawsuit notes that MDC ignored the city’s attempts to reach the company.

The city has paid the 2013 taxes of about $15,000 to prevent the sale, says Treasurer Mark Lowderman. PTL had also paid $25,000 in subsequent years’ taxes but recovered that money from other taxing districts that had received the tax payments during those three years, because the property should have been declared tax-exempt when the lease ended and the city became the owner of the terminal, Lowderman says. The facility, on the airport’s west side, is now leased to Sierra Nevada Corp.

“Once the lease is broken,” he says, “the building becomes owned by the city.”
The Independent is reporting that the city is seeking unspecified damages in an amount to be determined at trial.