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Home arrow Working with Section 106 arrow ACHP Case Digest arrow Spring 2004 arrow Colorado: Transfer of Ownership of Redstone Castle, Redstone
Colorado: Transfer of Ownership of Redstone Castle, Redstone

Agency: Internal Revenue Service
In this case, a century-old mansion in Colorado is in line to be sold to the highest bidder, and the ACHP is exploring ways to ensure the long-term preservation of the National Register-listed property.

At the turn of the 20th century, Redstone Castle was the centerpiece of the planned community of Redstone. More than 100 years later, the Internal Revenue Service has seized the mansion for auction, to collect $6 million that the owner owed to investors.

Although the Redstone Historical Society is attempting to raise the money to buy the historic property, it does not seem likely that it will succeed. Consulting parties to the case are analyzing local zoning ordinances to determine whether any legal protections exist for the mansion.

Colorado’s Redstone Castle was built between 1898 and 1901 by industrial giant John C. Osgood, who formed the Colorado Fuel & Iron Company and established the company town of Redstone in Pitkin County.

Redstone Castle, Redstone, Colorado

 

 

Redstone Castle, Redstone, Colorado (Darrell Munsell, photographer)

 

 

The 42-room mansion, designed by architects Boals and Harnois, still features 75 percent of its original furnishings. It is listed in the National Register of Historic Places and the Colorado Register of Historic Places, and is part of the Redstone National Historic District.

Now the historic structure and grounds are listed on Colorado Preservation Inc.’s “11-Most Endangered Historic Properties.” In 2003, the Internal Revenue Service (IRS) seized the mansion to collect $6 million owed by the owner (now deceased) to investors.

Although the IRS has determined that this case is subject to Section 106 review, the U.S. Securities and Exchange Commission—which has filed its own legal proceeding in Florida to recover the fraudulently obtained funds—denies that Section 106 applies if its legal action takes precedence over the IRS’s action.

Although the Redstone Historical Society said it would like to buy the property, it may not be able to raise the money. Alternatively, the community wants to ensure that if the property is transferred to someone else, that it carry with it covenants that preserve the integrity of the historic property.

In 2003, the ACHP wrote to the IRS about its Section 106 responsibilities, and, several months later, the IRS notified the ACHP that it determined that its plan would have an adverse effect on Redstone Castle.

Under the Section 106 review process, the IRS is currently meeting with the case’s consulting parties, including the ACHP, to develop a Memorandum of Agreement. In the meantime, the case’s consulting parties are analyzing the local zoning ordinances for any additional legal protections that might ensure the long-term preservation of the mansion. In addition, Colorado Preservation, Inc., has applied to the Colorado State Historical Fund for money to develop a structural analysis of the property.

While the ACHP has recommended that the IRS continue meeting with the case’s consulting parties, it is possible that the Florida court may take jurisdiction over the Colorado action and possibly jeopardize the current 106 review of the case.

Staff contact: Lee Keatinge

Updated June 1, 2004

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