University Village expands in tough times

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Kevin Kratt and Tom Cone are partners in University Village Developers, a success story in the current weak economy.

While the 2-year-old University Village retail development is not yet fully occupied, several new tenants have recently signed leases, restaurants are moving in and big box retailers are eyeing the location.

Kevin Kratt, owner of Kratt Commercial Properties, said the development is about 70 percent full.

Tenants that have signed leases in the last couple of weeks include Super Cuts, a Which Wich Superior Sandwiches and two sit-down restaurants that Kratt said he wasn’t at liberty to name yet.

He and partner Tom Cone of Olive Real Estate Group are in negotiations with a cosmetics store, a nutrition retailer and chiropractor.

“We’re also working with a couple big box stores we hope to be able to disclose later this year,” Kratt said.

Current tenants have been so successful, they’re expanding.

Veda Salon grew from about 3,200 square feet to about 5,000 in April. And Panera Bread is expanding within the next month by about 1,300 square feet, which will make it the biggest Panera Bread in the city.

But the area wasn’t always a hot spot for business and getting the development moving was a challenge.

Five years ago, it was hard to imagine seedy North Nevada Avenue becoming a thriving up-scale retail development, even for Kratt, who would eventually turn it into one.

“Initially it didn’t jump out at me as a retail location,” Kratt said.

It didn’t seem like much then. It was pretty rough and tumble with one of the biggest tenants in the area being ComCor, a non-profit community corrections facility. Most of the buildings were older and had fallen into disrepair.

That was what caused the City of Colorado Springs to declare the area an urban renewal zone. The designation allowed Kratt to secure a $55 million bond to pay for infrastructure improvements.

Then, he started building it right before the recession hit.

“We started construction on that project in 2008,” Kratt said. “Our timing couldn’t have been worse.”

But even with that bad timing, Kratt said University Village has been wildly successful with tenants finding better business there than they imagined.

The location’s success can be attributed to a lot of the same factors that led to its creation, Kratt said.

The development’s primary anchor, Costco, made commitments and came on board early. The development’s high visibility near I-25 and across from the University of Colorado at Colorado Springs put University Village on the drawing boards years ago, and continues to spur growth today.

“Costco was looking for a location along the freeway and that was really the impetus to look at the location,” Kratt said.

After Costco, Lowe’s and Kohl’s followed suit.

“We had all three of those commitments prior to the recession,” Kratt said. “We had some really interesting conversations with them during the recession about what they would do.”

They all followed through on their commitments to the new development.

That would prove to be key.

Having those big draws at the heart of the development enticed other retailers like Chipotle, Excess Threads, Smashburger, BJ’s Brewhouse, Veda Salon, Panera Bread, Famous Footwear, Noodles and Company and Johannes Hunter Jewelers to move in.

Linda Hunter, co-owner of Johannes Hunter Jewelers, is moving her shop from downtown Colorado Springs, where it has been located for 23 years, to the new University Village shopping center. She expects to open in the new location, after some delay, in mid-November.

“We’re going to be in the same building as Veda Salon,” Hunter said. “And that is definitely our clientele. A lot of our customers also shop at Costco and men shop at Lowes.”

As most of the residential growth in the city has stretched to the north and east, Hunter said University Village has become central to all of the store’s current and potential clients.

Being across from the University is a plus, too, she said.

“University students get engaged,” Hunter said. “And there’s a lot of faculty and staff.”

There are more than 9,400 students plus more than 1,000 faculty and staff who spend time at the UCCS campus, said Martin Wood, vice chancellor of university advancement. About 900 students live in dorms on campus, he said.

The development is connected to the university by an underground walkway called Mountain Lion Crossing.

“Certainly, I know if I want to find someone and they’re not on campus, I just go over to Panera Bread,” Wood said.

He visits the center at least four or five times a week himself for breakfast, lunch and meetings.

“People like to meet there because it’s new and there’s a lot there,” Wood said, adding that an estimated 300 students have part-time jobs in the development’s shops and restaurants.

Kratt knew that the success of the development would depend on building a solid relationship with the university, he said. The two entities have worked together to spruce up the North Nevada Avenue corridor and depend on each other for support.

“What you see today versus what you saw then is a huge turnaround, and we’re delighted,” Wood said.