Urban redevelopment projects tend to start strong with big announcements of promising new office and residential projects. But the track record of such projects is decidedly mixed.
Earlier this month, the City Council granted urban renewal status to the Copper Ridge project in Northgate. If all goes as planned, tax incremental financing will be used to help finance the extension of Powers Boulevard to Interstate 25.
But often, little goes as planned.
Three of the six projects approved in past years are at the moment stalled, the aspirations of their developers to revitalize aging or blighted neighborhoods falling far short of expectations.
Granted, in some cases depressed areas of the city are undergoing transformation. But the going is slow. And so far the only site that has generated new sales taxes is University Village — $50,000 that will go to the project’s bondholders. It will be years before those bonds are paid off and the city begins to see its share of new sales or property tax revenues.
The city now counts seven projects among its urban renewal targets: the Lowell Redevelopment; a pocket of southwest downtown including Palmer Village; Gold Hill Mesa; University Village Colorado on North Nevada; the City Auditorium block; CityGate and, the most recent addition to the list, Copper Ridge at Northgate.
What’s happening at these sites today? Why have so many fallen short? And what are their prospects?
Some urban renewal projects gather momentum quickly. Others take their time. Business Journal reporter Becky Hurley took a look at the six approved by the city and their status.
Ten years into the Lowell Redevelopment just south of the Colorado Springs Police Operations Center, the project is paying off in tangible and intangible ways.
The neighborhood features new housing, flower gardens, parks and businesses and community groups that employ several hundred residents.
But it took almost 20 years after approval by the City Council in 1988 for the Lowell revitalization to yield its dividends.
Today the 58-acre redevelopment includes The Lofts, a 12-unit retail and residential community; the Westwood and Prestwick townhome complexes; the first of a two-phase, 120-unit Wyndham Apartment complex, and a new Peak Vista senior health clinic.
Lowell Development Partners’ Director of Development Mike DeGrant said work will continue for the next five to 10 years.
“We’re about 50 percent through (our plan) and are about 90 percent done with infrastructure improvements. But we have several holes left to fill,” he said.
Still, the Lowell community today, with its pedestrian-friendly design and “new urban” feel, exhibits many of the signs of a successful turnaround.
And while progress slowed to a crawl following 9/11 and during the recession, DeGrant said Lowell continues to draw developers.
The partnership is in discussions with a company that wants to build another 120 condominium units, though financing is tight, so the developer has been forced to wait.
Maybe that’s just as well. Many thought the undertaking was ahead of its time.
“If The Lofts, for example, had been in LoDo in Denver back when they were first built in 2002, they would have sold out right away,” DeGrant said. “Down here, our demographic took a little longer to accept it.”
The City Council named a Nor’Wood Development-Classic Cos. partnership as master developer for the 100-acre Southwest Downtown redevelopment, setting the stage for a large residential and commercial center just west of downtown.
But when voters refused to approve a convention center and hotel complex in 2004, the Colorado Springs Urban Renewal Authority had to start over.
Its next plan: put a new 225-room Embassy Suites Hotel (built adjacent to America the Beautiful Park) in an arts-entertainment district with an upscale townhome community north of the Colorado Avenue bridge that would attract locals as well as out-of-towners. The area would be accessed from downtown by pedestrian walkways across the railroad tracks.
That, too, was a no-go.
“When (developer John Q.) Hammons got busy up north with his other hotel, (developer) Chuck Murphy’s townhome and arts district didn’t have the economic engine it needed,” CSURA consultant Chuck Miller said.
Shortly thereafter, CSURA and Classic Cos. were asked along with several other groups to submit their bid to develop a headquarters facility for the U.S. Olympic Committee. Their southwest downtown site was offered, but not accepted.
Today, the property’s stakeholders are once again searching for new possibilities.
Nor’Wood Development Vice President Chris Jenkins believes the project still offers plenty of upside for revitalization, but what will happen is still “in formation.”
The project’s urban renewal designation will help pay for items such soil remediation and other land preparation costs. But Jenkins said the site’s tax incremental financing doesn’t deliver what every project needs, an anchor that serves as an economic driver.
“We’re still very interested in seeing downtown redeveloped along the lines of Palmer Village. But we’re in an international recession with no job growth. At the appropriate time, we hope to re-engage and see what’s viable,” he said.
Some of the latest ideas floated for a Southwest Downtown anchor include a multi-use stadium, a sports education center or a hotel complex and entertainment venues.
“I hope that the community will come together (on a concept) once the market corrects for the next positive (economic) cycle,” Jenkins said.
Approved for redevelopment in 2004, the 210-acre Gold Hill Mesa site underwent two years of site environmental remediation and site preparation prior to opening its first model homes and its Exchange community center in 2006.
Officially designated as a traditional neighborhood development by the city, more than 800 dwelling units and a 60-acre commercial center are planned.
So far the community has attracted more than 100 home buyers, in spite of an economic downturn that forced John Laing Homes to abandon dozens of lots and poured foundations. For almost a year, activity on the site slowed to a near-stop.
Developer Bob Willard, hard hit by the loss of the development’s key homebuilder, was able to refinance debt on the property and has added three new builders in the past 18 months. He credits Gold Hill Mesa’s success so far to an attractive location near downtown and easy access to two highways.
While redevelopment of the former ore processing mill site has required costly land conservation, streamside improvements and soils remediation steps, results so far are in line with redevelopment results urban renewal authorities hoped to achieve.
“They continue to grow — even during the recession,” Miller said.
Plans for a future commercial center near the intersection of South 21st Street and Highway 24 are still two to three years away, Willard said.
University Village Colorado could be the first Colorado Springs urban redevelopment project to repay its bond holders and to generate new sales tax for the city.
Approved in December 2004, it was originally expected to generate more than $120 million in new sales tax as a result of a tax incremental financing agreement between the Colorado Springs Urban Renewal Authority and the developer.
Almost 75 percent complete, pending the lease of about 100,000 square feet of existing space and construction of a final 150,000 square feet of new retail, the 650,000-square-foot center could be almost full within the next two to three years, said Kratt Commercial Properties’ Kevin Kratt.
Kratt and partner Tom Cone of Olive Real Estate Group were able to attract not one, but three big box anchors that filled almost 400,000 square feet. Costco, Lowe’s and Kohl’s have all opened in the last year.
“To succeed, you have to have economic engine, a driver in order to accomplish or achieve the necessary increments to service bonds,” Kratt said.
But it took years of hard work and expense before the project became reality.
Without TIF financing, it never would have happened. The developers had to address five decades of neglect and to cover the unusually high costs required to extend utilities to the site.
And even then there were the surprises, usually discovered in the process of redevelopment.
Qwest, for example, had buried 17,000 pairs of fiber optic lines in an underground trunk line that had to be relocated. As a result, a planned pedestrian underpass from the shopping center to the UCCS campus had to be first built above ground, and later buried once the phone cables were removed.
The economy also delivered a few unexpected jolts. Costco and Lowe’s both opened months later than expected and have, so far, generated less than projected revenues and sales taxes.
The developers estimate that once the economy enters full recovery, their plan to repay University Village’s bondholders should “get back on track” in the next 18 to 24 months.
The historic city auditorium and much of the block on which it sits have been designated as “blighted,” and, so far, the site remains vacant and any redevelopment plans on hold.
Nor’Wood, which owns a 4-acre part of the property along Pikes Peak Avenue, explored construction of a Pikes Peak Place, a mixed-use residential and retail high-rise designed to meet the needs of a growing urban community.
The project stalled, however, at the recession’s outset in 2007.
An accompanying plan by developer Ray O’Sullivan to build a 24- story hotel, retail, office and residential tower on the block’s northwest corner was abandoned shortly thereafter.
Nor’Wood’s Jenkins said he still hopes to move forward on the project in “the near future” — maybe five to 10 years from now.
The CityGate site was purchased by a Griffis-Blessing investment fund, GB Value Fund I, in 2006.
The 19.33-acre property is located south of Cimarron and Sierra Madre streets, just south of America the Beautiful Park. Hoping to build on momentum created by the Southwest Downtown urban renewal project, the site was slated for mixed-use development, loft-style homes and an entertainment district.
Today a 12-acre vacant parcel that could eventually become a south-end “gateway” to downtown remains untouched — available for build-out or for lease, said Griffis Blessing Chief Investment Officer Gary Winegar.
“We had some interest prior to the economic downturn, but we’re in a holding pattern for now,” he said.
One bit of good news: The property’s 44,000-square-foot former Metso Minerals building is fully leased to both private and government groups.