Legal Battles Loom As Denver Passes Controversial Gas Station Ban

The city council passed Denver’s controversial gas station ban Tuesday in a 12-1 vote, but legal challenges are “imminent,” sources say.

The ordinance bans new gas stations within a quarter-mile of existing stations and rail transit stops and 300 feet of protected residential areas, as defined in Denver’s zoning code.

Its most controversial feature, however, is its retroactive enforcement date of May 13, 2024. Projects submitted to the city after that date that don’t meet the just-passed requirements will automatically be rejected. That means sunk costs in land purchases, architectural fees and other expenses associated with planning a new development.

The cost of building a gas station from start to finish in Denver typically runs between $8M and $12M, Bisnow previously reported. With planning and permitting often taking more than a year, several projects that were legally viable last year are now in limbo. Those costs add up quickly.

NavPoint Real Estate Group, a local brokerage, and the office of Council Member Paul Kashmann, a sponsor of the bill, each said that about seven existing deals will likely be impacted.

People familiar with the situation told Bisnow that litigation is imminent. Law firms had already warned the city council to expect legal action.

“Constitutional language and the rule of the Colorado Supreme Court are clear: the retroactive application of the gas station text amendments is illegal,” law firms Brownstein Hyatt Farber Schreck and Foster Graham Milstein & Calisher wrote in a joint December letter to the Denver city attorney. “If the City chooses to proceed with such application of the amendments, we will not hesitate to pursue the legal remedies available to our clients.”

Both firms represent “multiple clients who develop and operate gas stations in the City and County of Denver,” they said in an earlier letter.

Convenience store chain QuikTrip is one of the more vocal opponents of the bill. It has “made significant investments based on existing zoning rules,” it said in a December letter to the Denver Planning Board. Those investments included land purchases and the preparation of detailed proposals.

“As a proud and active member of the Denver business community, QuikTrip is deeply disappointed in the City Council’s unconstitutional decision to retroactively change the city’s zoning laws and discourage responsible economic development,” QuikTrip Corporate Communications Manager Aisha Jefferson told Bisnow in an email. “The Colorado Supreme Court has previously made clear rulings on these issues, and we intend to continue creating quality jobs, providing excellent customer service and supporting local nonprofits.”

Proponents of the bill argue that Denver’s dwindling developable land would be better used for social good such as affordable housing. They also point to the environmental impact of fossil fuels and increased electric vehicle usage.

“Building new gas stations now is like building more Blockbusters in the age of Netflix,” Council Member Chris Hinds said during the meeting.

Organizations like the Denver Streets Partnership, Urban Land Conservancy and YIMBY Denver either wrote letters or testified in support of the ordinance.

Anshul Bagga of the Denver City Attorney’s Office said at the meeting that the city disputes claims that the ordinance is unconstitutional but didn't elaborate, according to Denverite.

Kashmann’s office didn't respond to a request for comment but previously told Bisnow that the need for affordable housing outweighed any financial loss by “corporations making enormous amounts of profit.”

His fellow sponsors, Diana Romero Campbell and Amanda Sawyer, previously declined to comment.

Flor Alvidrez was the sole council member to vote against the bill, saying she doubted the new law would be a real fix for Denver’s affordable housing crisis.