Who owns the rights under city land? Don’t assume

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City residents shouldn’t expect oil wells in the shadow of Pikes Peak any time soon, but the question of mineral rights is heating up.

Who owns the mineral rights to land within the corporate boundaries of Colorado Springs?

“We asked that question,” said City Councilor Brandy Williams, who co-chairs the council committee charged with creating regulations to govern oil and gas exploration and production in the city, “and we were told it would take too much research to answer.”

“I’d like to know the answer to that one too,” said Mayor Steve Bach. “I’ve been trying to get a comprehensive list of properties the city owns for 19 months, and they haven’t been able to give it to me.”

Ten years ago, any geologist would have told you subsurface mineral rights within the city limits were largely valueless — unless you had a nice deposit of sand or gravel, and enough land to exploit the deposit profitably. Sure, there were a few long-abandoned coal mines in Rockrimmon, with collapsing tunnels that occasionally created sinkholes in driveways of unsuspecting homeowners, but that was about it.

No gold-laced granitic intrusions lay beneath the downtown, the North End or the ranchlands to the east. There was nothing but gravel, clay and shale.

Oil and gas? No way. Weld County’s giant Wattenberg Field didn’t extend this far. There might be gas in tight formations thousands of feet below the surface, but it couldn’t be economically extracted.

Technology changed all that. The gas-rich Niobrara formation underlies much of El Paso County, and may extend under the city’s developed portion as well. The once-irrelevant question of mineral rights may loom large in the future.

For example, do the city and county own the mineral rights to parks? Did the federal government wholly or partially reserve mineral rights when it conveyed land to the city’s founders 142 years ago?

“Unless specifically severed from the real estate, mineral rights are included when land is conveyed,” said Lindsay Fischer, the acknowledged dean of Colorado Springs attorneys. “Those rights are very extensive. The Latin phrase is ‘Cuius est solum, eius est usque ad coelum et ad infero,’ or ‘Whoever owns the land, it’s his from the top of the sky to the depths of Hell.’”

But before you start digging down to the center of the earth, check the applicable city ordinance.

“You may own those mineral rights,” said Fischer, “but city ordinances effectively eliminate the right of the surface owner to exploit them (on a small lot).”

Back to the 19th century

It all started with Gen. William J. Palmer, the brash 33-year-old entrepreneur who founded Colorado Springs.

You couldn’t very well start a new city without land, so Palmer set about to acquire some. He authorized agents to buy 360 acres on the eastern bank of Monument Creek where he intended to locate his new city. The agents, seized with irrational exuberance, eventually acquired much more.

According to a contemporary account, “The Mountain Base Investment Company — later and better known as the National Land & Improvement Company purchased ten thousand acres of land in El Paso County, on the Monument, and five hundred villa sites on the Fontaine. Some of this land was bought from the government at a dollar and a quarter per acre, and the remainder from settlers who had already preempted it. These purchases were intended to include all the valuable mineral and agricultural lands of this vicinity, and those suitable for town sites along the proposed railroad, all mineral springs, etc.”

The National Land & Improvement Company later became the Colorado Springs Company, which is still in existence — at least on paper. Five years ago, CSBJ noted that the present owner of the company, which no longer had any assets, was seeking to sell it, hoping that some ambitious entrepreneur would want to own a piece of local history.

Is it possible that the company has other assets? When Palmer sold lots in his new development, did he retain mineral rights?

Probably not, said Don Whitmore at Land Title.

Whitmore, described by Fischer as “the dean of title officers in town — except when his judgment is contrary to my client’s interest,” said that property owners throughout historic Colorado Springs likely own the mineral rights as well. Nevertheless, it’s not a simple question.

“Much of (Palmer’s) land was transferred through patents from the United States government,” Whitmore said, “and there may have been reservations (of mineral interests) by the government. You’d have to examine every one of the patents. And if any came through the State of Colorado, mineral rights to sections 16 and 36 would have been reserved by the state.”

Colorado Springs was formally incorporated at a special meeting of the El Paso County Board of Commissioners on Sept. 2, 1872. It’s not clear whether the state retains the mineral rights to the now-developed land, since the state reservation didn’t become effective until 1876.

“That depends on each particular case,” said Tim Kelly, mineral leasing manager of the State Land Board. “Generally speaking, we like to retain those rights, but you’d have to examine every individual parcel.”

Drilling in the parks?

As Colorado Springs grew, it was not uncommon for sellers to reserve mineral rights.

“Take the Pring family, or any of the old ranchers who gradually sold off parcels for development,” said Whitmore. “John Pring might have sold land 50 years ago and reserved a 1/8th or 1/4th share in the mineral rights, just in case it might be worth something. So who owns that share today? One of the Pring heirs? All of them? We don’t know.”

Title companies don’t attempt to locate or identify the holders of mineral rights, if those rights have been severed.

“We just write the title policy accordingly,” said Whitmore. “Finding the owner (of the mineral rights) isn’t our job. That’s for the land men who work for the oil companies.”

The land men have been busy in unincorporated El Paso County of late, and they may soon be busy in Colorado Springs. As Weld County Commissioner Sean Conway told a Colorado Springs delegation some months ago, city ordinances governing oil and gas extraction can’t effectively prevent an owner of mineral rights from exploiting them.

And who owns those rights? There’s no convenient database, no block-by-block map, no index of mineral rights owners.

“The only way you will know the answer to that question,” said Whitmore, “is to look at every parcel in the city.”

“We’d be most interested in the parks,” said Brandy Williams, “because those are the only undeveloped tracts of land within the city that are large enough to accommodate drilling. I assume that (the city) owns these (mineral) rights.”

In all probability, it does. Yet when Palmer or his estate gave Monument Valley Park, Acacia Park and Palmer Park to the city, did the gift include the mineral rights? Palmer Park’s ownership can be traced to 1873, when Matt France sold the property to Henry Austin. Palmer eventually acquired the property, and his estate gave it to the city in 1909. Such a chain of title inspires confidence, but what about the county-owned Bear Creek Park, which includes the site of the defunct Colorado-Philadelphia mill and lands formerly part of the County Poor Farm?

It appears that neither the city nor the county has ever done comprehensive title searches on their legacy properties.

“The short answer to (to that question) is no,” said county spokesman Dave Rose. “We’ve done title work on smaller properties, ones that were more recently acquired, but not on Bear Creek Park, or properties that might date back to the founding of the county.”

“I’d be stunned if we had,” said City Councilor Tim Leigh. “We haven’t even put together an inventory of what we own.”

2 Responses to Who owns the rights under city land? Don’t assume

  1. Funny … the City’s crack attorney WAS NOT quoted as a source …. Gee I wonder why? Clueless perhaps?

    RJF
    January 30, 2013 at 4:44 pm

  2. If Mayor Bach cannot get information that he needs to run this city, the person not getting him the information should be FIRED.

    Janet
    January 31, 2013 at 2:41 pm