O L S E NT A G G A R T

PO BOX 3005 IIDAHO FALLS. ID 83403

1449 E17TH ST. SUITE AIIDAHO FALLS. ID 83404

TEL: 208-552-6442 i fax : 208-524-6095A T T O R N E Y S A T L A W

September 17, 2021

V i a E m a i l

M s . K o n n i e K e n d a l l

Pocatello City Clerk911 7'^ AvenuePocatello, ID 83201kkendoil crnocatcllo.u.s

RE: NOTICE OF CLAIM AND REQUEST FOR REGULATORY 7>lA7iVGA N A L Y S I S

D e a r C l e r k :

In accordance with I.C.§ 6-906 el al., the Herold L. Rupp Sr. Trust and the Veda J.Rupp Revocable Living 'I'rust (Rupp Family Trust) hereby provides the following "Noticeof Claim" against the City of Pocatello, Idaho (City) including its Mayor, employees andagents for their wrongful acts as indicated herein with regard to property owned by the trust(Rupp Property) that abuts the newly constructed 1-15 Northgatc Parkway interchange.Claimants also hereby request a"written takings analysis" with regard to the City’s actionsaffecting the Rupp Family Trust’s property rights, in accordance with l.C. §67- 8003.

The Claimants' address is as follows:

Harold L. Rupp Sr. Trust and the Veda J. Rupp Revocable Living TrustP.O. Box 5307Chubbuck. Idaho

All correspondence with regard to this matter should be directed to the Claimants'attorneys Olsen Taggart PLLC and the address above.

O L S E N T A G G A R T . C O M

Ms. Konn ie Kenda l lRE: Notice of ClaimPage No. 2

In summary* the City has knowingly and willingly engaged in afraudulent andillegal scheme to deprive the Rupp Family Trust of much of the value of the Rupp Property.The City and its accomplices have conspired with developers including in particular aUtahcompany Millennial Development Paitners* LLC (Millennial) to breach an agreementbased upon the original design of the intersection that would allow for sufficient access tothe Rupp Property essential for the property’s development value. Such actions infurtherance of this illicit endeavor include misrepresentations made to the IdahoDepartment of Transportation, the City Council and P&Z, the tampering of and destructionof public documents, and violations of the City’s code -all with the intent to deprive theRupp Family Trust of its development rights. Moreover, such acts were willful andmalicious, t en because the Rupp Family Trust would not submit to the City’s andMayor’s extortive demands to compel the trust to annex the Rupp Property into the City ofPocatello and punitive measures taken against the trust and the Rupp family when the RuppProperty was annexed into the City of Chubbuck.

The potential damages suffered by the Rupp Family Trust resulting from the lossof value well exceed $21,000,000. Additionally, the inability to develop this property -which sits next to the Interstate has curtailed development and growth throughout the area,thus adversely affecting the communities of Pocatello and Chubbuck.

Background

The Rupp Property consists of a930-acre farm and water rights which had itsorigins when one of the first settlers of the area Henry Jensen and his family arrived in1923. The farm has been passed down the family generations, now preserved in the RuppFamily Trust, which currently has six living original beneficiaries and 95 living contingentbeneficiaries -most of whom reside in Eastern Idaho. As the Cities of Pocatello andChubbuck have grown northward toward the property, and the decision was made by theITD to construct the Northgate Parkway Interchange, the Rupp Family Trust planned todevote aportion of its legacy land, approximately 380 acres, toward commercialdevelopment along the interstate as well as to construct affordable housing. (See enclosedmap). This would not only benefit the numerous trust beneficiaries, but also thecommunity as awhole -both in terms of job creation and much needed affordable housingin the region allowing families to live and work in the area.

The Northgate project was dependent upon the construction of anew road from the1-15 off ramp, i.e. Northgate Parkway. During the planning and approval stages of theinterchange which involved the ITD, City Engineer Merrill Quail, Millennial and the RuppFamily Trust, aroad design was submitted by Millennial and approved by the ITD. Thisdesign dated March 5,2018, (attached) included asufficient access point from the road tothe Rupp Property for commercial and residential development. (See also the enclosedITD m£ ). This access point was negotiated between the trust and Millennial as part of the150-foot right-of-way width and approximately 30 acres purchased by Millennialnecessary to complete the road. The parties agreed that part of the consideration paid for

L

Ms. Ko imie Kenda l lRE: Not ice o f C la imPage No. 3

the road would include the Rupp intersection, along with water and sewer stubs and sewerline at no cost to the trust. In fact, the purchase price paid by Millennial was substantiallylower than fair market value, again in consideration of the promised Rupp Property accesspoint.

In preparation for the anticipated development, the Rupp Family Trust exploredtheir options for annexation of380 acres of the Riq>p Property for development. While thefamily was initially interested in annexing the property into Pocatello, after nearly ayearof investigation and discussions with the City officials and mayor, it became clear to thetrust that the more viable and economic choice was to annex the land into the City ofChubbuck. This was due to the fact that the City of Pocatello would not agree prior to theannexation that it would be able to provide awater and sewer system to the development,which would have required to trust to construct asewer pump and lift station and complextransportation system at acost of $4 to $5 million. Additionally, the City wanted the trustto provide to the City much of the trust's water rights, which would be used for otherdevelopments initially and thus depriving the Rupp farm and developments on the propertyof water for two years or more. Alternatively, Ae City of Chubbuck was in aposition toprovide awater and sewer system to the development at acost of only $300,000 to thetrust. Thus, to fulfill its fiduciary obligations to its beneficiaries which includes soundfinancial management, the only real option that the Rupp Family Trust had was to annexthe property into Chubbuck.

When learning about the Rupp Family Trust's application to annex the propertyinto Chubbuck, Pocatello Mayor Brian Blad called Mayor England of Chubbuck and issuedathreat that if Chubbuck annexed the Rupp Property that the City of Pocatello woulddiscontinue sewer service to the City of Chubbuck. Such act would have been ablatantlyillegal violation of the City's agreement with Chubbuck. After the Rupp Family Trustentered into an annexation agreement with the City of Chubbuck on December 19, 2018,Pocatello officials including in particular Mayor Blad and several prominent Cityemployees both publicly and privately expressed their displeasure and hostility toward theRupp family. TTie family was immediately cut out of all discussion and decisions withregard to the development in and around the Northgate Interchange area. On severaloccasions the Rupp family was told directly and indirectly that the Rupp Property includingits water rights would become part of the City “whether they wanted to or not.”

The Rupp family was perplexed when after construction of the road occurred, thatthe agreed upon access point was not built and in fact barriers were placed at the designedpoint of access. Repeated requests made to Millennial to explain and remedy thesebreaches were rebuffed and ignored. Instead, Millennial and its partners were workinghand in glove with the City of Pocatello to serve their own interests -which included theCity's intent to deprive the Rupp Family Trust of its development rights and effectivelycompel the trust to sell the Rupp Property to Millennial or its other related entities at afraction of its value.

Ms. Konnie Kendal lRE: Not ice of Cla im

Page No. 4

This fraudulent plot came to fruition when on March 5, 2020, the City Coimcilannexed into the City the right of way that had been purchased by Millennial for theNorthgate interchange. In ablatant act of deception to the Pocatello*s P&Z and Council,City employees and Millennial agents did not disclose that the developer had only used130* of the 150’ width of the right-of-way purchased from the trust. (This was also amisrepresentation to the ITD and the trust who would have most certainly held onto thisvaluable property). As such, aten feet wide strip on each side of the road was annexed intothe City of Pocatello. The map marking the annexation presented to the City Council andthe public did not show the ten-foot-wide strip. (See enclosed). This now meant that theCity of Pocatello had, without any prior notice or disclosure, effectively taken control ofand permanently restricted the Rupp Family Trust from developing its own commercialand residential access points. In doing so, the City violated its own code Section 16.20.050which states that “the use of a‘control strip* intended to control or prevent the futureextension of public facilities or development of land is prohibited.**

The City has attempted to cover up its fraudulent acts by expunging its records ofany indication or evidence of the designated Rupp Property access point. Records showingthe initial designed project with the access point disappeared from Ae City’s website. Suchrecords were also not provided as part of the public records request made to the City. Theenclosed design maps showing the Rupp Property intersection were not obtained from theCity of Pocatello, but rather from the ITD. Additionally, the Rupp’s have become awareof anumber of meetings that have occurred with the Mayor, City officials and complicitdevelopers which would certainly classify as apublic meeting but for which no notice wasgiven or record of what occurred in the meetings has been disclosed.

The damage to the Rupp Family Trust and its beneficiaries resulting from the City’sactions have already been felt. The trust has already had to turn down multi-million dollaroffers from potential commercial developers due to alack of access -at atime whencommercial and residential land value is at an all time high. The tangential effects of theCity’s actions have also caused economic harm to the area and its communities. Due tothe City’s willful and spiteful acts against the Rupp family, potential development alongthe prime real estate abutting the interstate has come to astandstill. Additiondly, planneddevelopment further east of the freeway has come to ahalt due to the City caused stalemate that has effectively prevented awater purchase agreement to provide water to thesedevelopments. It appears that the City’s current policy is to prevent the Rupp Family Trust-with its long heritage in the area -and the neighboring City of Chubbuck from benefittingfrom the Northgate Interchange at all cost, even if that means effectively shutting downeconomic growth and much needed affordable housing in the area, adversely affecting all.

I I . P o t e n t i a l C l a i m s

Regardless of intent, the City’s blatant violation of Section 16.20.050 constitutes anarbitrary and capricious act that warrants declaratory and injunctive relief and an awardof caused damages to the claimant The conduct of the City also rises to the level of

Ms. Konnie KendallRE: Not ice o f C la imPage No. 5

fraud and racketeering, to which there is no tortious immunity and which could subjectthe City and/or its complicit employees/officials to punitive and exemplary damages fortheir nialicious conduct.

III. Regulatory Taking

The City’s actions, in particular the annexation of the road in violation of Section16.20.050 constitutes aFifth Amendment taking of property without just compensation and42 §1983 deprivation of property rights, equal to the amount of the fair market value ofthe taking. Tlie deprived property rights include in particular the developmental rights tothe property which are already accruing and are substantial.

I V . Potential Damages

Aconservative estimate of the developmental value of the Rupp Property is well inexcess of $21,000,000. Additionally, exemplary or punitive damages which are not cappedin afederal case (which this would be) are typically double the amount of actual damages.The City would also likely be required to reimburse the claimant’s attorneys fees and costs.

The claimant’s foregoing tort claim and request for aregulatory claim analysis asprovided for under law is now hereby submitted for the City of Pocatello’s consideration.

Sincerely,u J \r n C G A RT P l l . C

i=J|-Nathan M. OLSENHesQ

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A t t o r n e y f o r C l a i m a n tHerold L. Rupp Sr. Trust and the Veda J. RuppR e v o c a b l e L i v i n g T r u s t

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