County expected to settle for $80M, allow development on Blue Diamond Hill

The proposed agreement — which still needs approval from the board of commissioners — would require the county to pay Gypsum Resources $80 million and allow the company to go forward with its stalled housing development, with a few requirements.

The settlement avoids the risk of a nearly $2 billion award against the county that would be footed by taxpayers and protect the county against future liability while preserving the natural landscape and access to the Red Rock Natural Conservation Area, the county said in a statement.

“While an $80 million payment is significant for the county, by reprioritizing and reallocating funds for planned capital projects and other economic development projects not yet underway, the settlement will not have a detrimental impact on services nor will it require a reduction in staff,” the county said in a statement. “Without the settlement, a larger judgment could have had an adverse impact on the county and the community.”

The settlement would require the development to be limited to 3,500 homes, down from the little over 5,000 homes previously approved by the board in 2011. The development would also be contingent on right-of-way approval by the Bureau of Land Management to divert traffic from Scenic Route 159 to Route 160.

The county will have two years to secure BLM’s approval, after which it will be required to pay the developer $1 million a year, up to a maximum of $6 million.

The deal also requires that the county acquire 192 acres of environmentally sensitive land in the Red Rock Canyon National Conservation Area for $1 after the development’s final map is approved. Gypsum owns approximately 2,400 acres on Blue Diamond Hill.

Gypsum Resources said in a statement that the company has agreed to resolve its outstanding lawsuits with the county, and said the agreement will allow for the reclamation of over 1,800 acres of previously mined land.

“Upon adoption, the resolution will streamline Gypsum’s Reclamation Plan that envisions a sustainable master plan that is community driven and balances the natural environment,” the company’s statement said.

The agreement comes after a District Court judge ruled that county officials, including Commissioner Justin Jones, willfully destroyed evidence related to the development.

The settlement could be the end to a yearslong legal dispute. Last year, Gypsum Resources filed a lawsuit in state court after a federal judge dropped all federal claims brought against the county. A jury trial was expected to begin in July.

At the end of May, county commissioners voted to authorize the district attorney’s office to challenge a District Court judge’s decision to deny a motion for summary judgment in the case to the state Supreme Court.

Gypsum Resources and its owner, Jim Rhodes, allege county officials destroyed evidence to purposefully block the proposed housing project. Gypsum filed its initial application for a 5,000-unit residential master-planned community in 2011, but planning stalled after a key measure was voted down by county commissioners.

County officials are expected to present the agreement to county commissioners on June 18 for final approval.

Contact Taylor R. Avery at TAvery@reviewjournal.com. Follow @travery98 on X.