Colorado's Constitution prohibits the use of proceeds from the state lottery, which are used to fund the "Great Outdoor Colorado Program" Trust Fund from being "used to acquire real property by condemnation through the power of eminent domain." Colo. Const. art. XXVII, § 9.
The Town of Silverthorne used trust fund money on a recreational trail project, a part of which required the condemnation of Lutz's land. Lutz objected to the taking, arguing that the Town lacked the power to take because the constitution "barred the Town's exercise of eminent domain power to acquire the easement rights over the landowners' property."
In Town of Silverthorne v. Lutz, No. 2015COA17 (Feb. 11, 2016), the Colorado Court of Appeals disagreed, concluding that the constitutional prohibition only extended to using trust fund money to "acquire" land by eminent domain, and since the Town was not using the money to actually pay compensation, but was only using it for planning, engineering and surveying and the like, nothing stood in the way of taking Lutz's land.
The court also held that in Public Service Co. v. City of Loveland, 79 Colo. 216, 233, 245 P. 493, 500-01 (1926), the Colorado Supreme Court concluded that evidence regarding the project funding and the source of financing is not admissible in an eminent domain case.
Town of Silverthorne v. Lutz, No. 2015COA17 (Colo. App. Feb. 11, 2016)
