City, McWhinney agree to oil and gas agreement if Centerra South URA is approved

LOVELAND — McWhinney Real Estate Services Inc. has agreed to permanently relinquish its rights to drill for oil and gas on the property adjacent to the Centerra South commercial development, but the agreement is contingent upon approval of the new urban renewal area that would include Centerra South.

Last week, in answer to a question from Mayor Jacki Marsh, McWhinney offered to negotiate such an agreement if the county returned to the negotiating table over its piece of the financing agreement that would be part of the URA. 

The county had withdrawn from negotiations pending clarification of whether ag land could be included in a new URA. A call to Larimer County to determine if the county was willing to discuss McWhinney’s offer was not returned last week.

Today, the city sent a notice indicating that the city’s proposed oil and gas agreement would be implemented regardless of what the county decides to do if the URA is ultimately approved Tuesday by the City Council.

“Ultimately, the decision to approve a new urban renewal plan lies with the City Council, but we felt compelled to impose that condition as part of this conversation regardless of the county’s involvement,” Loveland city manager Steve Adams said in a written statement. “While the proposed oil and gas pad site is not part of the Centerra South project, we appreciate both companies’ willingness to work with us on an agreement that best meets the needs of the community at this time.”

The “both companies” reference is to McWhinney the developer and an affiliated company called MRG LP, which filed an application to drill for oil and gas on a site identified as MRG South Well Pad but then withdrew the application March 27 as the discussion over Centerra South heated up.

“With any development project for consideration, the city must balance property owners’ rights and regulations. City staff across all departments remain committed to making sound decisions for this project that align with the city’s strategic priorities and are in the best interest of our residents, businesses, and stakeholders,” Adams said.

The council will see the final Centerra South urban renewal plan at its meeting Tuesday. If approved, the council would then consider the master financing agreement on May 16 as well as the oil and gas agreement, the city said.

The city declined to release to BizWest a copy of the proposed oil and gas agreement. In answer to a question about whether the agreement applies to land adjacent to or outside of Centerra South, it said it applies to “the full quarter section (the property within the Centerra South plan area as well as the land identified in the formerly proposed CS pad site.)”

Questions directed to McWhinney Real Estate Services were not answered as of publication time.

Source: BizWest

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