Russell Stover building

Russell Stover leased this property from the city since the 1970s. The company recently activated a part of its contract that allows it to buy the property from the city for $1. 

Montrose City Council on Tuesday approved an ordinance allowing Russell Stover candy company to purchase for $1 the property where it recently operated a factory and retail store.

Council first discussed the deal two weeks ago in a work session and made clear there wasn’t much of a choice whether to allow the sale to go through.

“This was written into the contract in 1972,” city council member Dave Frank said at the Tuesday city council meeting.

When Russell Stover originally agreed to build a factory in Montrose, it was agreed the company could purchase the land at any point after its sixth lease year. Russell Stover has leased the land — originally located near the outskirts of Montrose and purchased by the Montrose Economic Development Corporation — from the city since the 1970s.

“It was part of an incentive package to get Russell Stover to build a plant here,” city attorney Stephen Alcorn said

According to the city and MEDC, it’s understood the candy-making company intends to sell the factory and the retail store properties separately.

“It’s our understanding that once they purchase it they’re working with two different buyers,” Alcorn said.

MEDC executive director Sandy Head previously told the Daily Press that Russell Stover priced the properties to sell quickly.

“If you look at the value of that 29 acres, fair market value, and the cost of that property with a factory, it would be so expensive it would almost be impossible to sell,” she previously said, explaining that Russell Stover can sell the property well under market value due to the $1 transaction.

Once the sale is complete, Russell Stover — or whoever purchases the property from the company — will have to pay county property taxes, which hasn’t been the case since the city owned the property originally.

“It will go on the tax roll. They do apparently have an agreement with the city where they’re paying some amount of money in lieu of taxes,” Alcorn said.

Alcorn explained there was little else city council members could do other than to sell the property. If they decided not to sell, Russell Stover made clear its intention to go to court, Alcorn said.

Because of the threat of litigation, the vote on Tuesday was more of a formality than a decision.

“You are voting on this because the charter says if the city is going to sell or divest themselves of property, the council has to approve that,” Alcorn said.

It’s not clear yet who plans on purchasing the properties from Russell Stover or what the price tag is.

Justin Tubbs is the Montrose Daily Press managing editor. 

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