A neighborhood group’s lawsuit challenging the Colorado Springs bond deal for the Royal Pine Apartments was dismissed in the summer of 2025 on standing grounds, clearing the way for the $60 million financing to close and the 232-unit affordable housing project to break ground. The developer’s countersuit against the neighbors is still active on two of its three claims, and the underlying constitutional question the case raised was never decided on the merits.
What the Bond Financed
Royal Pine Apartments is a 232-unit affordable housing complex planned for 4150 Royal Pine Drive in the Briargate area of north Colorado Springs, with units reserved for residents earning less than 30% up to 70% of the area median income.1The Gazette. Two Affordable Housing Projects in Colorado Springs on Different Paths The developer is DBG Properties, led by principal Eric Grodahl.
To finance the project, the City Council authorized $60 million in bonds on May 27, 2025, in an 8-1 vote: up to $40 million in tax-exempt Private Activity Bonds and a $20 million taxable portion.2The Gazette. Briargate Neighbors File Lawsuit to Block Colorado Springs Bond for Affordable Housing3Yahoo News. City of Colorado Springs Faces Lawsuit Over Bond Deal Private Activity Bonds are tax-exempt bonds a city can issue on behalf of a private developer for projects with a public purpose. The city acts as a conduit issuer, and the developer, not the city, is responsible for repayment. According to the city’s own materials, the developer is “solely liable for the loan” and taxpayer dollars are not at risk.4City of Colorado Springs. Private Activity Bonds FAQ
The TABOR Challenge
On July 3, 2025, Preserve Pine Creek Village, LLC filed suit in El Paso County District Court against the City of Colorado Springs and Mayor Yemi Mobolade, asking a judge to block the bond from closing.5KKTV. $40 Million Deal Sparks Lawsuit Against Colorado Springs Mayor The city had expected to finalize the deal in mid-July.
The complaint centered on Colorado’s Taxpayer Bill of Rights, the 1992 constitutional amendment that generally requires voter approval before a government entity takes on “multiple-fiscal year direct or indirect district debt or other financial obligation.” Preserve Pine Creek argued the $60 million bond was exactly that kind of multi-year obligation and could not be approved without a vote of the people.3Yahoo News. City of Colorado Springs Faces Lawsuit Over Bond Deal The suit also alleged violations of Article XI of the Colorado Constitution and due process requirements, and claimed the ordinance was passed to benefit a private developer rather than out of public necessity.
The city’s position rested on the structure of conduit-issued Private Activity Bonds. Because the city bears no repayment obligation, it argued, the bonds do not create the kind of multi-year government debt TABOR was written to restrict. Under existing Colorado case law, government obligations structured with annual appropriation clauses have generally survived TABOR challenges, because the government retains discretion over whether to fund the obligation each year.
The Dismissal
Fourth Judicial District Court Judge William Bain dismissed the lawsuit later that summer. His ruling turned on standing rather than the merits. Judge Bain found that Preserve Pine Creek Village had failed to identify any members who would be directly affected by the bond or show that they would be harmed as taxpayers. He wrote that the group’s assertion that the city might ultimately be liable for bond payments was “conclusory” and lacked factual or legal support.6Colorado Politics. Judge Dismisses Pine Creek TABOR Lawsuit
Because the case was thrown out on standing, the court did not decide whether Private Activity Bonds actually constitute “debt” under TABOR. That question remains open and could resurface in future challenges to bond-financed affordable housing projects in Colorado.
City spokesman Max D’Onofrio said the city would wait seven weeks from the ruling before closing on the bond, allowing the full appeal period to lapse.6Colorado Politics. Judge Dismisses Pine Creek TABOR Lawsuit
The Developer’s Countersuit
While the TABOR case was still pending, DBG Properties filed its own lawsuit in July 2025 against Preserve Pine Creek Village and five individual residents, including Pine Creek Village Association Board President Steve Parrish.7The Gazette. Pine Creek Neighbors Sued by Developer for Malicious Lawsuits Against Affordable Apartments DBG alleged malicious prosecution, abuse of process, and tortious interference, claiming the residents had engaged in a two-year pattern of baseless litigation designed to delay the project, undermine its financing, and kill it through attrition.
The residents’ attorney, Joseph O’Keefe, moved to dismiss under Colorado’s anti-SLAPP statute, which protects people from lawsuits targeting their right to petition the government or use the courts.6Colorado Politics. Judge Dismisses Pine Creek TABOR Lawsuit The court granted the motion in part and denied it in part. The malicious prosecution claim was dismissed, but the judge found DBG was “reasonably likely to prevail” on its abuse of process and tortious interference claims and allowed those to move forward. The court concluded DBG had presented sufficient evidence that the residents’ legal actions were intended to delay the project and cause financial harm rather than pursue legitimate claims.8Midpage. DBG Properties LLC v. Preserve Pine Creek Village
Where Things Stand
As of late 2025, the Royal Pine Apartments project was officially under construction after receiving approvals from the City Council, City Planning and Zoning, and Colorado Springs Utilities.9KKTV. New Apartment Complex Under Construction in North Colorado Springs The bond closing had been delayed by the litigation earlier in the year; the El Paso County Housing Authority’s financial closing had been anticipated for July 2025 but was made contingent on the outcome of the pending lawsuits.10El Paso County Housing Authority. EPCHA Meeting Minutes June 2025 DBG has proposed a completion date of July 2027 for the 232-unit complex.11The Gazette. Bonds for Two Colorado Springs Affordable Housing Projects Moved Ahead
DBG Properties’ countersuit against Preserve Pine Creek Village and the five individual residents remains active on the abuse of process and tortious interference claims.