A controversial proposal for a granite quarry just south of Colorado Springs is getting a renewed push, with a ranch owner saying she has secured a local investor who wants to move ahead with the project.
The effort reprises a mining proposal opposed by one of the largest and most influential nonprofits in Colorado, the El Pomar Foundation, which successfully objected to a 2018 proposal to mine the land.
Top executives with Colorado Springs-based nonprofit said back then that the mine would harm the environment and adjacent lands. Supporters of the quarry contended it would deliver a powerful jolt to the local economy, bring millions of dollars in royalty payments the state could use to improve schools and cut prices for construction materials.
The view from U.S. Highway 115 shows the hill, behind the sign, where the Hitch Rack Ranch rock quarry would be built behind. (The Gazette, Christian Murdock)
Lawsuit claims El Pomar engaged in illegal lobbying to kill El Paso County quarry proposal
The renewed effort for the mine comes as a vigorously contested lawsuit winds its way through the 4th Judicial District Court alleging El Pomar used an illegal, secretive lobbying campaign to block the earlier effort to mine at the ranch. The lawsuit also alleges El Pomar exerted undue influence on a previous business relationship between the ranch owner and a mining company that has since abandoned a its effort for the quarry.
Cindi Allmendinger, a retired school teacher whose family owns Hitch Rack Ranch, filed an application with the Colorado State Land Board on Monday seeking transfer of the mineral rights at the property. A letter accompanying her application states that a local investment group named the Colorado State Material Association plans to seek a permit to mine the property on her behalf. Allmendinger said her investor is Kevin O’Neil, a Colorado Springs native who is CEO of the O’Neil Group Company. The Colorado Springs Chamber in 2019 named him business citizen of the year.
Transit Mix Concrete, Allmendinger’s former business partner, still holds the mineral rights lease from the state land board for Hitch Rack. But Allemendinger in a brief appearance before the board on Friday said Transit Mix has “effectively abandoned the lease” because it has terminated its business relationship with her and is not pursuing mining or seeking a mining permit.
During the meeting, Bill Ryan, the land board director, said Transit Mix remains current on the lease terms, which requires $200,000 in annual royalty payments to the state land board for the years 2017 through 2020. The lease specifies that for the years 2020 through 2025, the company would pay the land board at least $100,000 in royalty payments or 30% of the average annual production from the previous five years.
Allmendinger’s family business, RMBC Group, last year filed a lawsuit against El Pomar and its chairman, William Hybl, and his son, Kyle Hybl, who succeeded his father as chief executive officer of the foundation, alleging the nonprofit violated state law by secretly lobbying members of then-Gov. John Hickenlooper’s staff to kill efforts in 2018 to obtain a permit to mine the property.
El Pomar and the Hybls contest the lawsuit’s claims and denied wrongdoing. In court documents, El Pomar and the Hybls claim they had a First Amendment right to communicate their opposition to Hickenlooper administration officials, including Bob Randall, the then-executive director of the Colorado Department of Natural Resources, who played a crucial role in blocking a permit application for the quarry.
Randall has denied wrongdoing, stating that his contact with the Hybls and El Pomar representatives did not influence his vote against a mining permit when he was chairman of the state mining board.
Maureen Lawrence, general counsel for El Pomar, declined to comment on specifics of the litigation. “We will not comment on pending litigation,” Lawrence said. “El Pomar’s publicly available filings speak for themselves. RMBC’s allegations are meritless.”
The case is scheduled for a November trial. Allmendinger is seeking up to $8 million for decreased value of the ranch property and unspecified damages due to loss of royalty payments she would have received if the mining permit had been approved in 2018. The team of lawyers representing El Pomar in the litigation includes John Walsh, a former Democratic U.S. Senate candidate and former U.S. attorney in Colorado.
Even if Allmendinger succeeds in convincing the Colorado State Land Board to transfer the mineral rights to her and the local investors wanting to pursue the granite quarry, she still would need to take additional steps before mining could begin on the ranch.
She and O’Neil, her local investor, would need a mining permit from the Colorado Mined Land Reclamation Board, which denied two previous permit applications for mining the property.
“He lives just down the road from the ranch,” Allmendinger said of her new partner, O’Neil. “We both grew up with gravel trucks going up and down our road, and we understand the concerns as well as anybody. Having a local touch that’s sensitive is important.”
Allmendinger predicted she’ll have a better chance at getting a mining permit this time because prices for gravel and construction materials have continued to rise. She noted the quarry won’t be visible from the road.
Allmendinger said the proposed granite quarry would reduce the prices for construction material, and she continued during an interview to tout the royalty payments benefiting the state’s schools.
“I have to say as a retired school teacher, it really does speak to where our school teachers are going to get raises from, and how the governor is going to afford full-day kindergarten when school children return back to school,” she said, stressing the millions of dollars in royalty payments the state would receive from the mine.
Allmendinger’s lawsuit alleges that after the mining board rejected the permit to mine the property, El Pomar and Transit Mix’s Chicago-based parent company, Continental Materials, entered into a confidential settlement agreement. In exchange for $15 million from El Pomar, the company agreed to abandon efforts to obtain a mining permit, the lawsuit alleges.
The lawsuit alleges the agreement “also contains terms” requiring the company to “assign its mineral lease and/or mineral rights” for Hitch Rack Ranch with the State Land Board to El Pomar. That assignment blocked Allmendinger from receiving royalty payments that would have been due her if the company had continued to pursue a mining permit and been granted the permit, the lawsuit contends.
Allmendinger wants the mineral rights lease the State Land Board granted Transit Mix to be transferred to her and her new business partners, the Colorado State Material Association, because she says those investors are ready to make a renewed push for the quarry mine.
Randall, the chairman of the Colorado Mined Land Reclamation Board and the executive director of the Colorado Department of Natural Resources, cast the deciding vote as a member of the state mining board denying an application to mine the Hitch Rack Ranch property in 2018.
The 3-2 vote by the mining board denying the mining permit hinged on arguments that the quarry posed a threat to groundwater. Supporters of the quarry had argued it would be a boon to local economic development, lower the price of granite for construction and deliver millions of dollars in royalty payments the state could use to bolster schools in Colorado.
Transit Mix initially applied for a state permit in 2016. The mining board rejected that earlier effort, too, by the same 3-2 vote, citing concerns raised by neighbors, the threats to water and wildlife habitat.
In 2018, backers reduced the size of the proposed quarry and moved the operation south of Turkey Creek Road.
Email communication between Kyle Hybl, chief operating officer of El Pomar Foundation, and Bob Randall, executive director of Colorado Department of Natural Resources.
A Jamie Van Leeuwen email to Bob Randall, executive director of Colorado Department of Natural Resources, regarding concerns about Hitch Rack Ranch quarry and introducing Bill Hybl, chief executive officer of El Pomar Foundation, and Kyle Hybl, chief operating officer of El Pomar Foundation.
Emails obtained by The Gazette showed that Randall granted a private meeting for Kyle Hybl to press his concerns about the mining proposal. About three months after that meeting, Randall cast the deciding vote against the quarry. The lawsuit contends the meeting between Randall and Hybl violated state law, which bars members of state agency boards from having communications with one party to an issue without the other party present.
“Fearful that its opposition to the 2017 permit application would not succeed on the merits through the legitimate hearing process, El Pomar and the individual defendants made an intentional decision to go far beyond legitimate channels and methods of opposition, such as petitioning the government in an appropriate forum and manner, abiding by the hearing rules and procedures, and making transparent public statements and presentations,” according to court papers submitted by Allmendinger’s lawyer, Steven Nolan.
The lawsuit asserts that the secretive meetings with El Pomar representatives prompted Randall’s vote against the mining permit.
In court documents, Allmendinger contends she “has a factual basis to allege that control of the mineral lease by El Pomar forecloses the possibility” of mining the property, substantially decreasing the value of her ranch. In one court document, she said that “while the lease may still be in the name of Transit Mix…, the devil is always in the details.”
She said in the court filing that those details are spelled out in the confidential settlement agreement between El Pomar and Continental Materials, which has not been made public. The lawsuit alleges El Pomar exerted “improper interference” on Allmendinger’s contract with her former business partner, Transit Mix.
El Pomar in court documents has provided answers to those allegations, but those answers were blacked out from the document due to a protective order barring disclosure. The judge issued the protective order after El Pomar and Allmendinger’s lawyer agreed to its terms and asked the judge to issue the protective order.
In the letter accompanying Allmendinger’s recent application with the State Land Board to transfer mineral rights to a new business group, Adam DeVoe, the registered agent for the Colorado State Material Association, said Transit Mix has abandoned the mineral rights it previously obtained from the land board.
“As you know, the minerals are currently leased by Transit Mixed Concrete, but it is abundantly clear that Transit Mixed Concrete has no intention to mine the leased minerals,” the letter states. It goes on to state: “Transit Mixed Concrete has ceased efforts to obtain a mining permit and does not currently have mining permit application pending.”