Colorado Legislature Supports Homebuyers

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Developers' dream bills dismantled by politicsColorado legislative experts laud 'democracy at work' Copyright 2003 The Denver Post Corporation The Denver Post April 22, 2003 Tuesday 1ST EDITION Three months ago, homebuilders, developers and real estate agents sauntered into the state Capitol, ready to pass legislation that would be a boon to their bottom lines.

The stars were aligned: The Republicans, generally supportive of business interests, had recaptured the Senate, meaning total GOP control of the statehouse.

Developers also had access to the governor's office and to legislative leaders. Indeed, records show that development interests between 1996 and Election Day 2002 had contributed $ 2.7 million to state elected officials. Gov. Bill Owens alone had collected nearly $ 500,000.

And development groups spent thousands of dollars to hire expensive, well-connected lobbyists.

Despite it all, the developers did not get everything they wanted: Key legislation was killed and other bills were watered down. Bills that many had expected to pass easily became the subject of hot debate at the Capitol.

'I thought it was a huge morass,' said attorney Jim Mulligan, who helped craft bills this year for developer groups. One of the bills he helped write would have restricted some homeowners from suing developers for punitive damages. It was bogged down for weeks while those who opposed the bill successfully convinced many lawmakers it was a bad plan.

'I was surprised by it,' Mulligan said.

In addition, homebuilders could not fight the public-relations battle the way they wanted to. A sour economy meant they could not raise the money for a $ 350,000 lobbying plan they had hoped to launch.

Trial lawyers, who fought the main bill championed by developers, mounted an equally fierce campaign and brought out homeowner victims of shoddy building, winning public relations points.

Many now point to the developers' inability to rubber-stamp all of their pet legislation as proof the system works - and that legislators listen to their constituents.

'Investing money in elections works. Hiring good lobbyists works,' Colorado State University political science professor Straayer said of developers' efforts. 'Did they get everything they wanted? No. Should they have? No.'

Many argued during the debate that it was bad public policy to approve the agenda of the building industry carte blanche.

For example, pro-developer legislation that would have prohibited local governments from making sure developers set aside some new units as affordable housing languished for weeks before being killed by legislators. Another bill pushed by pro-development groups to make sure landowners get reimbursed for their attorneys' fees in some eminent domain proceedings has been amended and its future is uncertain. It has become a 'nightmare of an issue,' according to one lobbyist.

And the developers' centerpiece bill - legislation to restrict the rights of homeowners to sue developers - barely squeezed through the Republican-dominated House and was altered substantially in the Senate, where GOP control is razor-thin.

During a conference committee, the bill's original language was changed after several fierce debates. Originally, the bill would have gotten rid of punitive damages in some cases. As it finally passed, such payments to punish wrongdoers are allowed, but capped.

Veteran lobbyist Micki Hackenberger, with the powerhouse firm Hays, Hays and , was hired to push the bill: 'The bill that came out wasn't everything our industry wanted. a It was far from that,' she said. 'But we truly believe it was the best we could do.'

Some believe the homebuilders still got too much. A frustrated Sen. Deanna Hanna, D-Lakewood, said she was disappointed after the Senate passed the legislation to help builders avoid lawsuits.

'This bill favors the construction industry at the expense of the people,' she said after the vote.

Others, though, point to the fate of the developers' package of bills as proof the system works.

'I think we're seeing democracy at work,' said Sen. Bob Hagedorn, D-Aurora. 'It's frustrating to the lobbyists who thought all they had to do was simply lobby the senate leadership and get a slam dunk. The rubber-stamp Republican agenda has moved into a buzz saw on a number of issues.'

Many on the developers' side, though, said they expected a fight going into the legislative session. And others said they are relieved they were able to push items through the Capitol this year, in contrast to last year when the Democrats controlled the Senate.

'At least this year there is a debate,' said Virginia on Love, who lobbies on behalf of many business interests.

There are some factors, though, that may have contributed to a breakdown in the developers getting pet legislation passed.

First, say those pushing pro-developer bills, they lost the public relations battle. In the case of the homebuilder/lawsuit legislation, legislators were swamped by a barrage of negative stories, mostly revolving around homeowners who believe they were taken advantage of by unscrupulous builders.

And the trial attorneys fighting the bill were able to mobilize dozens of homeowners with tales about shoddy construction on a moment's notice to descend on the Capitol.

'From the other side's perspective, all they had to do was show a picture of a house sliding off the cliff, and someone losing the biggest investment of their life,' Hackenberger said. 'That's a tragic case, but that is in the minority. That doesn't happen every day.'

Indeed, some legislators who might normally side with business interests were barraged with calls opposing some of those bills.

'One can have the best lobbyists money can buy, but for many of us down here, we pay attention, first and foremost, to our constituents,' Hagedorn said.

Developers were also hindered by this year's budget problems.

Most legislators have been consumed by the requirement to enact drastic cuts in the budget. Some lobbyists said it was difficult to get the time to sit with some elected representatives and go through all the details of complex legislation, some of which might be 80 pages long.

In addition, a sour economy meant that homebuilders could not wage the best public relations campaign that money could buy. Developers had crafted a $ 355,000 'Cadillac' lobbying effort, but, ultimately, they could not raise that cash.

'We couldn't muster those resources,' Hackenberger said. Mulligan said it was difficult for homebuilders to come up with extra cash because 'they were focused on making their bottom line,' he said. 'We're in a tough economy. Breaking loose dollars is tough to do.'

Developers say they hope this session will show that no one single interest group can sway the legislature every time.

"I just think the system works, said Rob Nanfelt, lobbyists for the Colorado Association of Home Builders. "You talk about getting stuffed rammed through here: It doesn't." ------------------------

TOUGH NAILS

Bills pushed by development interests have not faced smooth sailing:

SENATE BILL 154

Effect: Would have erased affordable-housing laws from the books of many cities in Colorado by prohibiting local authorities from forcing homebuilders to set aside a percentage of houses they build to sell at below-market rates.

What happened: It was introduced in January and survived the debate of one committee. It was killed on the Senate floor March 31.

HOUSE BILL 1161

Effect: Would have prohibited homeowners from suing homebuilders for triple damages in cases of shoddy construction.

What happened: After heated debate in both the House and the Senate, the homebuilders pushing the bill relented and allowed triple damages, although with a $ 250,000 cap. The bill passed both chambers last week and now heads to the governor.

HOUSE BILL 1089

Effect: Would force local governments to pay a landowner's attorneys' fees if the government condemns property as part of an eminent domain action.

What happened: Pro-developer groups initially wanted local governments to pay attorneys' fees if the landowner went to court and the court awarded the landowner 120 percent of the government's offer. That would cost local governments an estimated $ 2 million. It has since been amended so the trigger is 130 percent, which could cost local governments $ 625,000. It may be debated before the Senate this week.