By Vince Phillips
Salida’s city government is increasingly acting as both regulator and developer on major housing projects, most notably South Ark. This dual role raises important questions about fairness, transparency, and public trust.
It is legal for a city to develop its own land. Municipalities across Colorado routinely act as master developers, acquiring property, installing infrastructure with public funds, then selling or leasing lots to private builders. Courts generally give cities wide latitude when they act in a governmental capacity on public property.
However, legality and ethics are not always the same thing. When the city sets the rules (zoning, permitting, impact fees, design standards, affordability mandates) and competes directly against private developers using taxpayer resources and regulatory power, it creates an inherent tension. Private builders must follow the city’s rules while the city can change or ease those same rules for its own projects. This can appear to many residents and developers as an unfair advantage, even if no specific law is broken.
Where the Legal Boundaries Lie
Allowed:
- The city may use its Housing Fund, grants, and bonding authority to prepare land for development.
- The city may offer incentives or relaxed standards on its own property to attract partners.
- The city may act as landowner and negotiate ground leases or development agreements.
Not Allowed (or Highly Problematic):
- Using regulatory power (delaying permits, increasing fees, or adding last-minute requirements) on private projects to make the city’s own projects more competitive.
- Applying rules unevenly between city-led projects and private ones.
- Failing to disclose potential conflicts when council members or staff have personal or professional ties to outcomes.
There is a significant gray area in the middle. Changing requirements mid-process, pressuring developers for extra concessions after initial agreements, or prioritizing city projects for infrastructure dollars can be legal, but they erode trust and drive builders away. Developers thrive on stability and predictability. When they perceive “shifting sands,” many simply choose to build elsewhere.
The Need for Clear Guidelines
Salida’s City Council and Mayor should have clear, written guidance on how to manage this dual role. At minimum, this should include:
- Strong transparency requirements on all city-as-developer decisions.
- Consistent application of rules between public and private projects.
- Recusal policies when individual officials have personal or professional interests.
- Regular public reporting on Housing Fund expenditures and project comparisons.
The current City Attorney has a responsibility to advise council on both the legal allowances and the ethical risks of this setup. Past controversies have already strained public confidence. Continuing without clearer guardrails risks repeating the problems we have seen with Artspace, Poncha wastewater, and South Ark, in addition to the controversies involving the NRCDC.
Good government requires more than staying within the legal lines. It requires officials to actively avoid even the appearance of unfair advantage, especially in a small town where everyone can see who benefits and who struggles.
Salida residents deserve a level playing field. When the referee is also one of the teams, everyone should be extra careful about the rules. I urge the City Council and Mayor to publicly discuss and adopt clearer ethical guidelines for situations where the city acts as developer.
Defining the boundaries now, before more resources are committed, would be a service to taxpayers and would help restore trust.
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