Eminent domain process 1) LURA board adopts a resolution authorizing eminent domain. 2) City updates the LURA appraisal of Dillard’s. 3) City gets legal descriptions of the property and title insurance details. 4) City sends “notice of intent to acquire” to Dillard’s. 5) City sends final offer letter to Dillard’s. (This can be done at the same time as the notice.) 6) City conducts “good faith negotiations” with Dillard’s. Dillard’s may seek its own appraisal to evaluate the city’s offer. 7) If offer is rejected and negotiations fail, city files a Petition in Condemnation in district court. 8) The valuation decision is made by either a panel of three commissioners (appointed by the judge) or by a jury of six “freeholders” — property owners within the judicial district. All other issues, including the necessity of the “taking” and the timing of possession, are decided by the judge.

LONGMONT — The Twin Peaks Mall owners have reached no deal with Dillard’s and the use of eminent domain will be needed to keep the $80 million redevelopment moving, Longmont city staff announced Thursday.

Negotiations have gone on for months between the store and mall owner NewMark Merrill Mountain States, which said it had to have an agreement by April 1 to keep the project moving on schedule. Dillard’s is the only mall tenant that owns its own land and building, making its approval vital.

City staff assisted the talks, beginning in late 2012. The final proposals from NewMark Merrill included a March 20 pitch that would have included Dillard’s as part of the redeveloped mall and a March 28 offer to buy out the store at “a premium over the current market value.”

Longmont economic development director Brad Power said that Dillard’s rejected the March 20 offer and did not respond to the March 28 one by NewMark’s proposed April 2 deadline.

“Staff and LURA (Longmont Urban Renewal Authority) legal counsel have determined that the prospect for a successful and timely resolution to the negotiations between NewMark Merrill and Dillard’s is no longer feasible,” Power said in a report to the Longmont City Council, which also acts as the LURA board. “In order to fulfill the provisions of the urban renewal plan and remediate the blighted conditions on this site, the LURA Board of Commissioners is requested to adopt a resolution that will authorize the use of eminent domain.”

The City Council will consider the move Tuesday.

Allen Ginsborg, managing partner of NewMark Merrill Mountain States, said he couldn’t discuss what the sticking point in negotiations had been, but that he regretted not being able to strike a deal.

“We really, really did our best to retain Dillard’s,” Ginsborg said. “We did our level best to accommodate their many requests. But sometimes it just doesn’t work out.”

The talks were worthwhile, he said, but time just ran out.

“We’re just facing the need to move the project forward while the opportunity exists,” Ginsborg said. “That window will close. Retailers will move on if we’re not there to accommodate them.”

This May, Ginsborg plans to recruit tenants at the International Conference of Shopping Centers annual meeting, the largest retail trade show of the year.

Julie Bell, director of investor relations for Dillard’s, declined to comment on the talks or the prospect of eminent domain.

If the council approves an eminent domain resolution, Longmont officials would appraise the property, confirm the details and give Dillard’s a “notice to acquire” and a final written offer. Following that letter, Dillard’s can negotiate with the city, but if those negotiations fail, the case would move to district court. There, either a jury or a panel of commissioners appointed by the district judge would decide what the city had to pay for its “taking.”

If the court’s award comes to 130 percent or more of the final written offer Longmont made before condemning the property, the city would be responsible for Dillard’s legal fees.

Power said the total process can take months, but that if it went to court, the city would be seeking “immediate possession,” allowing it to take over the store while the court is setting its value. That, he said, would allow the redevelopment to stay on schedule.

In June 2010, the Boulder County Assessor’s Office valued the Dillard’s property at $3,798,600. The county is scheduled to send a fresh valuation to the property owners by the end of the month.

If the project goes ahead on schedule, the mall’s demolition is expected to take place this fall. The new mall — an open-air design that will include a 12-screen movie theater by current tenant Regal Entertainment Group — is planned to be mostly open in late 2014, with the last pieces completed in 2015.

City officials have agreed to put $27.5 million toward the project if NewMark Merrill meets certain benchmarks, including its scheduling and its tenant mix. Eighty percent of the tenants must be new to Longmont.

One of the city’s requirements, a 100,000-square-foot general merchandise retailer, has been under contract with NewMark Merrill since December; Ginsborg said a non-disclosure agreement bars him from revealing the business at this time.

Power said the details of NewMark Merrill’s offers to Dillard’s will not be released, and that LURA’s appraised market value for Dillard’s will remain confidential until either a settlement is reached or until it becomes subject to release as part of the eminent domain proceedings.

If eminent domain goes all the way through the city would pay Dillard’s for the property and then sell it to NewMark Merrill for the same price.

Power called the failure of the talks “unfortunate,” but said the city was ready to move ahead with its urban renewal plans.

“Hopefully, there’s a way we can move forward on this (project) and get it done,” Power said.

Scott Rochat can be reached at 303-684-5220 or srochat@times-call.com.