Angelo Alago, Monica Goodson and her daughter Lillyana take a ride on the Manitou and Pikes Peak Railway train toward the summit of Pikes Peak on May 16, 2021, in Manitou Springs. (Helen Richardson/The Denver Post)
The cog railway atop Pikes Peak is suing the City of Manitou Springs, accusing its council of reneging on a tax deal after the railway rescued it from a budget crisis.
“Several current members of City Council appear to harbor a general disdain and negative feelings towards a successful corporate citizen,” the railway’s lawsuit laments.
The Manitou and Pikes Peak Railway opened in 1891 and closed for renovations in 2017, posing a problem for the tourist town. After months of deliberations, a deal was reached between the City of Manitou Springs and Anschutz Corp., the railway’s owner.
Their 50-year agreement required MPPR to make payments in lieu of taxes while the railway was undergoing a $97 million renovation between 2018 and 2021. In exchange, the city would reimburse any annual amusement taxes paid by the railway above $500,000 between 2021 and 2070, saving the railway an estimated $8 million to $36 million over five decades.
In an April 8 lawsuit that it filed in a Colorado Springs court, the railway says it has upheld its end of the bargain and then some, but the city is not sending over reimbursements. The railway made payments totaling $1.75 million and has also spent money on a traffic study, off-site parking and expensive e-ticketing upgrades at the city’s request, it explained.
“In short, MPPR has gone well above and beyond what would be considered typical to help the city and to be a good citizen,” last week’s lawsuit states. The railway claims its payments in recent years have been “saving the city from suffering an existential budget crisis.”
Meanwhile, the city council voted in December not to reimburse the railway. That effort was led by Councilman John Shada, a longtime critic of the reimbursements who unsuccessfully sued to stop the tax agreement in 2018 and 2019, before he was a council member.
Councilman John Shada. (City of Manitou Springs)
The railway says that vote amounts to a breach of their 2018 tax agreement. It is suing the city for breach of contract and breach of the covenant of good faith and fair dealing.
“The city’s decision will no doubt harm the city’s ability to attract new business,” it predicts.
A city spokeswoman, Cassandra Hessel, declined to comment on the pending litigation.
Manitou Springs is politically liberal, making it an outlier in otherwise conservative El Paso County, and its city council has made headlines in recent months for sitting during the Pledge of Allegiance to protest President Donald Trump’s administration. Railway owner Anschutz Corp. is headed by Phil Anschutz, a major donor to Republican and conservative causes.
The railway’s lawyers are Jeffrey George and David Willner in the Colorado Springs office of Hogan Lovells, an international firm. The city does not yet have a lawyer on the case.
Angelo Alago, Monica Goodson and her daughter Lillyana take a ride on the Manitou and Pikes Peak Railway train toward the summit of Pikes Peak on May 16, 2021, in Manitou Springs. (Helen Richardson/The Denver Post)
The cog railway atop Pikes Peak is suing the City of Manitou Springs, accusing its council of reneging on a tax deal after the railway rescued it from a budget crisis.
“Several current members of City Council appear to harbor a general disdain and negative feelings towards a successful corporate citizen,” the railway’s lawsuit laments.
The Manitou and Pikes Peak Railway opened in 1891 and closed for renovations in 2017, posing a problem for the tourist town. After months of deliberations, a deal was reached between the City of Manitou Springs and Anschutz Corp., the railway’s owner.
Their 50-year agreement required MPPR to make payments in lieu of taxes while the railway was undergoing a $97 million renovation between 2018 and 2021. In exchange, the city would reimburse any annual amusement taxes paid by the railway above $500,000 between 2021 and 2070, saving the railway an estimated $8 million to $36 million over five decades.
In an April 8 lawsuit that it filed in a Colorado Springs court, the railway says it has upheld its end of the bargain and then some, but the city is not sending over reimbursements. The railway made payments totaling $1.75 million and has also spent money on a traffic study, off-site parking and expensive e-ticketing upgrades at the city’s request, it explained.
“In short, MPPR has gone well above and beyond what would be considered typical to help the city and to be a good citizen,” last week’s lawsuit states. The railway claims its payments in recent years have been “saving the city from suffering an existential budget crisis.”
Meanwhile, the city council voted in December not to reimburse the railway. That effort was led by Councilman John Shada, a longtime critic of the reimbursements who unsuccessfully sued to stop the tax agreement in 2018 and 2019, before he was a council member.
Councilman John Shada. (City of Manitou Springs)
The railway says that vote amounts to a breach of their 2018 tax agreement. It is suing the city for breach of contract and breach of the covenant of good faith and fair dealing.
“The city’s decision will no doubt harm the city’s ability to attract new business,” it predicts.
A city spokeswoman, Cassandra Hessel, declined to comment on the pending litigation.
Manitou Springs is politically liberal, making it an outlier in otherwise conservative El Paso County, and its city council has made headlines in recent months for sitting during the Pledge of Allegiance to protest President Donald Trump’s administration. Railway owner Anschutz Corp. is headed by Phil Anschutz, a major donor to Republican and conservative causes.
The railway’s lawyers are Jeffrey George and David Willner in the Colorado Springs office of Hogan Lovells, an international firm. The city does not yet have a lawyer on the case.
