As many of you may know, for the last few years we have been honored to work together with a great group of professionals from Curis Resources on the Florence Copper Project. It has been a long struggle trying to bring jobs and economic development to Florence and Pinal County. The effort has covered the spectrum- from hundreds of positive community presentations to wholesale condemnations.
The article below from the Florence Blade Tribune does a good job of explaining why the Town of Florence should stop having their taxpayers foot the bill for fruitless legal efforts. We should let a 2 year test phase, and science, show whether this project can provide a safe and effective way to produce copper, hundreds of jobs and millions of dollars in much needed revenue for the surrounding schools, town, county and state.
Florence Copper: price for our property is $403 million
By Mark Cowling, Editor | Posted: Thursday, December 5, 2013
Florence Copper on Tuesday served the town of Florence with a notice of claim for $403 million — 10 times the town’s annual budget — in response to the town’s October lawsuit seeking a declaratory judgment against the company.
Earlier in March, the Town Council voted unanimously to use the town’s eminent domain powers if necessary to buy the 1,182 acres Florence Copper owns off Hunt Highway.
Florence Copper officials said the dollar figure is based on a third-party appraisal of the value of their property as an in-situ copper mine today. The town’s lawsuit required the company to respond in this way to protect the interests of its investors and shareholders, the company said.
“We really did not want to file the notice of claim; it’s something we were forced to do, because they made the decision to go forward with filing the complaint on Oct. 14 in Superior Court,” according to Rita Maguire, Florence Copper’s executive vice president and general counsel.
“State law is very clear on this point, that a private party that has been harmed by government action must serve a notice on that local jurisdiction within 180 days of the cause of action.”
“…If we didn’t file a notice of claim, we are forever barred from claiming damages as a result of the town’s actions against us.”
The fair market value of $403 million was calculated by Deloitte LLP, a top accounting and financial advisory firm, according to Florence Copper.
Earlier this summer, the town submitted an offer to buy the land for $8.9 million, according to Loren Locher, the company’s director of communications and community affairs. He said the company declined that offer on Sept. 12, and advised the town its eminent domain case was weak.
Assistant Town Manager Jess Knudson said he couldn’t immediately comment in detail Tuesday afternoon, except that the town is confident in the legal actions it has taken to this point.
Maguire’s view was different, and described the town as reckless.
“They’re going down a path that could eventually bankrupt the town. A $400 million judgment I don’t think is something any city or town in Arizona could sustain, certainly not the town of Florence.”
Maguire said the October lawsuit has put the town in a no-win situation:
“They’re literally asking the court to rule that we do in fact have the right to mine, and if so they choose to condemn it. And if they condemn it, they’ve got to pay $400 million.”
If on the other hand, the court rules that Florence Copper has no historic rights to mine, the town then has no grounds to condemn the property, since the town has no need to eliminate a “legal nonconforming use right,” Maguire said.
The town might consider that latter ruling a victory — except it has no bearing on the Florence Copper’s plans to mine on 160 acres of state trust land outside the town’s jurisdiction. The company said it can operate on state land for nine years. The company is awaiting word from the U.S. Environmental Protection Agency (EPA) on the last of the 19 permits it needs to begin its testing phase.
Maguire said the town’s eminent domain case may be found to violate Arizona’s Prop 207, a law passed seven years ago to restrict a city or town’s powers to take private property. “And [the law] made it absolutely clear that you couldn’t take private property to benefit one private interest over another,” she said.
“And we really think that’s what’s driving most of the town of Florence’s actions these days. … The grounds they’re alleging a right to take this property don’t make any sense.” The Town Council’s ordinance in March identified four purposes for the town to acquire the land.
One was to obtain the water rights. “But no case law or statutory law supports that use,” Maguire said. She said the state Constitution doesn’t recognize the ability to take someone’s water rights.
Another reason was for a wastewater treatment plant — and that is recognized in state law as a public use, Maguire said. But the problem there is wastewater treatment plants don’t need that much land, perhaps 20-40 acres at most, Maguire said. The town’s General Plan already provides 60 acres for a wastewater treatment plan just north of the Gila River, straddling the border of land owned by Southwest Value Partners and Florence Copper.
“Well how do you justify taking 1,200 acres? So that reason isn’t justified,” Maguire said.
The March ordinance further declares a need for the land for other future town facilities, buildings and related improvements, but “that’s not legitimate grounds under the law to condemn private property,” Maguire said.
The ordinance also notes the town’s need to eliminate a “claimed legal nonconforming use” of copper exploration. The town’s October lawsuit cited this reason. Maguire said this argument fails too:
“It’s long-standing law in Arizona and across the country that if you are using your property to do a particular activity, and it’s legal at the time you begin doing that, and then later on a town surrounds you, and annexes you into its boundary, and they determine they don’t want the property used for that purpose”.
“Well the courts recognize that that historic use predates the town’s annexation. So the town can’t just unilaterally say, “Guess what, we don’t like what you’re doing on your land, and we want you to do something else, and you are no longer allowed to do it.’ That’s just a classic abuse of power argument.”
She added the company has a good case for its historic legal rights.
“The use of this property as a mine predates its annexation by 40 years. There’s an ongoing pattern of activity by multiple mining companies to engage in copper mining on that site. There’s every reason to believe that a court is going to recognize that that activity should continue, regardless of what the town says.”
The town’s October litigation is part of a “pattern of behavior” of legal action against Florence Copper, Maguire said. The Town Council last year outlawed any business that used large quantities of sulfuric acid, except for farmers. The council later repealed the ordinance. The town and company are scheduled to go to court next year over the town’s efforts to condemn Florence Copper’s office on Hunt Highway.
These actions may be long shots, but Maguire said they have an effect — shareholders see a decrease in stock value, potential investors are scared away, and partners who want to do business with the company think twice. The company’s reputation and bottom line suffer.
“It’s absolutely inappropriate for a public body to engage in that kind of behavior towards their own citizens,” Maguire said.
She said Tuesday’s notice of claim is an “opportunity for the town to rethink their position.
“Now it’s up to them to consider whether they want to continue to pursue this line of action.”
The town argued in its October lawsuit in Pinal County Superior Court that any right to mine copper off W. Hunt Highway was “lost and abandoned” when the property was rezoned in 2007.
The town is seeking the court’s declaration that in rezoning the property, the previous owner, developer W. Harrison Merrill, abandoned any right to mine the property or maintain any nonconforming uses and structures related to mining.
If the court rejects this argument, the town seeks to condemn the property and take it by eminent domain. The town would have to pay just compensation for the land as determined by a judge or jury.