Mayor of Manitou Springs reacts to lawsuit settlement with Manitou and Pikes Peak Railway Company

MANITOU SPRINGS, Colo. – The Manitou Springs mayor says a new lawsuit settlement with the Manitou and Pikes Peak Railway Company is a weight off their shoulders.

KRDO13 spoke with Mayor Natalie Johnson after it was announced that the City of Manitou Springs and the Manitou and Pikes Peak Railway Company had settled a tax incentive dispute. The city will pay out $3.2 million to the railway company to void a 2019 agreement that placed a cap on how much the city could collect in amusement taxes from the railway.

The city predicts that over the next 50 years, the removal of the tax cap will bring in over $80 million in tax revenue — about $1.6 million each year. This comes after months of budget concerns for the City of Manitou Springs.

When recreational marijuana sales were legalized in Colorado Springs in April 2025, this cut into a major source of revenue for Manitou Springs.

Johnson says the new agreement will help fill this void, but it’s still not quite enough to make up for the loss.

“I believe that we’re still short several million on that front, so there’s still a lot of work to be done. Without a doubt, that $80 million will be a game-changer in various ways. But again, that’s over 50 years, so we still have some tough decisions to make over the course of the next couple of years,” Johnson said.

The $3.2 million payout is coming from the city’s reserves — a lot of which was marijuana sales tax revenue. 

Johnson says she believes settling this lawsuit was the best use of those dollars, but the next challenge is to figure out how to build those reserves back up. 

"We take our taxpayer dollars, and we save it up for these moments where we can make great leaps and changes as a community," Johnson said.

KRDO13 reached out to the group that owns the Manitou and Pikes Peak Railway Company for comment but hasn’t heard back. 

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