Two of the three contractors alleging that Gunnison Rising developers did not pay for construction work settled with the company managing the project, Gunnison Valley Properties (GVP), in mid-July. The agreements resolved nearly $500,000 of the project’s financial liability.
Gunnison Rising is a 630-acre housing and commercial development planned for just east of town. It stretches along both sides of Hwy. 50, and the project’s investors — longtime Gunnison local Dick Bratton and Denver-based real estate lawyer Byron Chrisman — envision it to offer entire neighborhoods, affordable housing units and a business district.
Construction crews broke ground on the site in 2021, laying plumbing equipment and preparing the site for other utilities. But in 2023, GVP ran out of money. Within a matter of months, several local construction companies hired to install utilities and do preliminary road work sued GVP, alleging they were owed millions.
Now three years into construction and with two settlements signed, GVP hopes to get crews back on site as soon as possible, project manager Jeff Prosapio said. Originally, developers wanted to put up the first homes this summer. But it’s been quiet on the property, as GVP was unable to corral enough money to continue work this season. Not only have interest rates remained high since the start of 2024, but the lawsuit is making fundraising more difficult, Prosapio said.
“The very nature of litigation like this makes it even harder to find agreeable and willing capital, or any kind of debt or new equity,” he said.
GVP and its investors hope to finance the $130 million plus project through private debt and equity, and issuing metro bonds. These types of bonds create a kind of government entity that can place a tax on real estate, spreading out costs and shifting a small portion of large infrastructure projects to future businesses. The timeline for the project, which is estimated to be a third of the size of Gunnison, is at least two decades.
The details of the settlements remain confidential, but GVP and contractors Wesco Distribution and Spallone Construction came to an agreement on the disputed amounts, Prosapio said. Spallone was responsible for early utility and road work and Wesco supplied the project with construction materials. In the summer of 2023, Spallone had claimed the company failed to pay for nearly $70,000 of work, while Wesco filed its own claim for just over $400,000.
The settlements follow months of dispute in court, with GVP filing nearly $350,000 in counterclaims, alleging that Spallone did inadequate work on water and sewer and missed key project milestones. GVP then brought Crested Butte-based Dietrich Dirtworks and Construction on to resolve outstanding issues and take over the project, according to court records. But months later in November, Dietrich filed its own claim for unpaid invoices.
GVP and its lawyers are still negotiating with Dietrich to reach a settlement and avoid trial, currently scheduled for this fall. GVP does not dispute that it owes Dietrich $3.4 million for excavation, sewer and water and utility work, Prosapio said. The outstanding debate is over a final amount owed, interest accruing on unpaid invoices and the timeline of these payments. Dietrich’s lawyer, Bruce Rohde, did not respond for comment by press time.
On July 10, Rohde filed a motion for summary judgment in which he asked the court to affirm a breach of contract claim, and affirm that Dietrich is owed $3.8 million. In the motion, Rohde also requested that the court validate Dietrich’s mechanics lien. If the court upholds the lien, which GVP disputes, the developers could be forced to sell portions of the property to pay the bill. In the meantime, unpaid bills have forced owners Stephanie and Rask Dietrich to put up property as collateral and max out credit cards, according to court records.
“Our goal is to resolve it through settlement and avoid a full-blown trial,” Prosapio said. “And we're committed to that path.”
Construction on pause
So far, Gunnison Rising has two occupants: the Bureau of Land Management (BLM) in a new field office, and a FedEx building. The FedEx building was hooked up to permanent power last year, after running on generators for months. The remainder of the property remains vacant.
Next on the list is to finish the offsite power feeds (connecting Gunnison Rising to permanent power) and completing a few “phase one” tasks. Phase one, or the “government campus” is on the south side of Hwy. 50. These items include sidewalks along the curbline of New York Avenue and lane improvements along Hwy. 50, envisioned as the project’s main entrance. Phase two will focus on acres north of the highway near Western Colorado University and include the residential construction.
“We're not necessarily giving up on the season,” Prosapio said. “We’ve got things to get right after. We've got active bids waiting to turn into a contract as soon as we have to do so.”
Trial is currently set in Gunnison District Court from Sept. 23 - Oct. 3.
(Abby Harrison can be contacted at 970.641.1414 or abby@gunnisontimes.com.)
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