Russell Stover seems set to buy the property it has leased from the City of Montrose for the last 47 years, and the price tag, according to the original contract, is set at a dollar.
The reason for the low price goes back to 1972 when Montrose City Council used incentives to entice the candy-making company into making Montrose its permanent headquarters.
The property was originally purchased by the Montrose Economic Development Corporation and then titled to the city, Sandy Head, MEDC executive director, told the Montrose Daily Press Tuesday. She explained it was part of the plan to get the company to set up in Montrose.
“The Montrose EDC purchased the land and then titled it to the city,” she said. “It’s not that the city has this major investment. It was part of an incentive package, and it worked.”
Head said the company has been the largest private employer in Montrose for some 50 years, having as many as 600 employees and averaging 400 employees since the company came here in 1972.
“It was kind of a nice reminder that hindsight is 20/20,” Mayor Barbara Bynum said Tuesday. “It was a really big deal to get them to come to Montrose, and our community has been the benefit of that for 47 years. We’ve had families that have worked there for three generations.”
The news was made public at Montrose City Council’s Monday work session, during which City Attorney Stephen Alcorn made clear the contract is cut and dry and that the current city council has little choice but to approve the $1 transaction.
He told council members that the city will draft an ordinance for the purchase. If council members elect to go through with the sale, Russell Stover will own the property. And if they decide to vote “no” on the sale, Russell Stover will most likely sue the city.
“They will sue us if we choose not to (sell),” Bynum told the Daily Press. “And I’m certainly not going to vote to put the city in that situation to spend money on litigation when the outcome will be the same.”
Head said Tuesday that Russell Stover has a contract on the retail store part of the property and a letter of intent — steering toward a contract — on the plant. Those details have not all been worked out yet, Head said, and the potential buyers in both situations have not been made public as of yet.
As stated in the original contract, Russell Stover could have purchased the land at any point after its sixth lease year and at any point after the lease term, as explained by Alcorn at the Monday meeting.
But Russell Stover, in not owning the property, hasn’t had to pay property taxes at any point during its lease.
They did pay other use taxes, Bynum said, which made sure the company paid “its fair share of taxes,” but purchasing the property before 2020 likely didn’t make sense for Russell Stover.
Bynum said the city has known about this part of the contract since Russell Stover in March made the decision to move forward with closure of the plant. In May, the plant closed earlier than it originally planned due to the COVID-19 pandemic.
When councilors first heard about this part of the contract, Bynum said she didn’t understand the deal to be as airtight as it is.
“I thought we might have more options when I originally heard about it, and we really don’t,” she said. “You don’t have to even be an attorney to see that it really is quite that simple.”
Going forward, Bynum said, the city wants to ensure whatever business eventually does move into the building has the resources it needs to succeed so that the property doesn’t fall into disrepair or become an abandoned building.
Head said the dollar price tag is what might quite possibly ensure the buildings aren’t left vacant.
“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 said, explaining that Russell Stover can sell the property well under market value due to the $1 transaction.
“They have a price that is very, very low,” Head said. “They price those properties low because they want to make sure they don’t leave Montrose and leave those buildings empty forever.”
Head cited Russell Stover’s efforts to make sure the building isn’t left vacant — and the community service the company has done in Montrose for the last 47 years — as reasons why Russell Stover has been nothing but good for Montrose.
“People have to understand this is the ebb and flow of life, and Stover’s is not stabbing Montrose in the back,” she said.
Head said if the plan comes together with a potential buyer for the plant, it would be a positive for Montrose and for the Western Slope.
The Montrose Daily Press wasn’t able to get in touch with Russell Stover before the story was published.