South of Colorado Springs and cheek-to-cheek with Fort Carson, plans are brewing for a new commercial development on more than 100 acres in Fountain.
The proposed center could take off quickly in the quiet suburb that’s eager to grow up. Fountain’s commercial centers have been a flurry of activity with intense growth even through one of the slowest economic periods in the region’s history.
The Markets at Mesa Ridge, across Mesa Ridge Parkway from where the new center could go, has nearly filled up a couple years after meaningful development started.
Principals in San Diego-based Lusardi Land Company have owned the property, bordered on the north and west by Syracuse Road and Mesa Ridge Parkway, since 1990. But they believe now is the time to develop.
They’re not the only ones.
“We get calls from citizens and they’re asking for services and retail,” said Lisa Cochrun, economic development director for the City of Fountain.
And businesses, reluctant as they are to grow in these tough economic times, are answering those calls.
While Cochrun anticipates Fountain’s 27,461 residents will spend $351 million on goods and services outside of the town in 2012, she doesn’t think the town will continue “leaking” tax revenue to neighboring communities like Colorado Springs much longer.
The activity level in the last six months has skyrocketed, Cochrun said.
She has recently fielded questions about tax incentives from six businesses interested in moving into the Markets at Mesa Ridge, a 575,000-square-foot retail center anchored by Lowe’s, Safeway and Walgreens.
Cochrun would not name the businesses that have been asking, but they’re in addition to the Culver’s, Denny’s and I-Hop restaurants that have opened or started construction in recent months.
She’s had another six inquiries from major retailers that could anchor the new development on the Lusardi land. She’s talked to three developers who want to build apartments and has given tours to two manufacturers considering moving their operations from out of state with hundreds of jobs.
It’s all pretty hush-hush right now.
“I can’t say,” she said. “I can’t name them until they break ground.”
The keen interest that businesses are showing in Fountain results from two factors. First, basic demand, and second, the sweet tax deal the city offers — a 50 percent reduction in sales tax for relocating businesses that meet growth and hiring parameters.
The population has long been underserved, Cochrun said, and people have to go outside the community for shopping and necessities.
Rich Walker, a First Properties broker who represents the Markets at Mesa Ridge, has said business activity in the town is similar to the way it was in 2005 to 2007, the “good ol’ days” when retailers couldn’t wait to scoop up new storefronts and expand.
“We probably have 10 or 12 new deals in the works,” Walker said recently. He also wouldn’t name his prospects but said they include a national chicken chain, a Mexican chain, a men’s hairstylist, a cell phone business and others who have submitted letters of intent.
“Our plan is to have Markets at Mesa Ridge totally built out and done by the end of 2013,” he said.
Walker’s prospects for the Markets at Mesa Ridge are all national chains, and he’s excited to be enticing brand-name retailers like Dollar General and restaurants like Denny’s into the development.
Chains do well in the area, he said. The Subway and McDonald’s restaurants are among the state’s highest-volume locations, he said.
And for all the excitement and interest from commercial business, there’s little discussion about the mom-and-pop shops that lend character to a community.
There’s good reason for that, Cochrun said.
“The model for a lot of retail centers is to get those national chain anchors in first and then fill the gaps with the mom-and-pop shops,” she said.
Big chains bring with them big advertising budgets and lots of foot traffic that can support different types of businesses.
Small businesses also have a harder time raising the capital to go into a new market than established national chains.
Tthere’s one more reason Fountain’s new development will likely be built out primarily with national names: That’s what residents want. When people call Cochrun asking her for a shop or service, they usually ask for it by name, she said.
“That’s just America,” she said.
Six of those big-name chains have shown interest in the Lusardi property, Cochrun said.
Lusardi principals formed the Fountain Industrial Park partnership in 1990 and bought the land where the development is planned. It built Mesa Ridge High School but done little else aside from extend sewer lines to the property, said company president Kyle Denning.
Lusardi isn’t a development company, Denning said, but is a contractor and land holdings business. The partners bought the Fountain property because it seemed well-located, close to the Interstate and military.
Denning said the land was originally zoned for industrial use.
“But Fountain has changed,” he said. “It’s grown up.”
And the partnership was able to change the zoning several years ago. Now — with the right zoning, sewer access and a booming market in the little town — seems like the right time to develop.
Denning and Cochrun say they imagine a lifestyle center on the land — an outdoor shopping and dining mall. The region’s other comparable center is the Promenade Shops at Briargate. Cochrun said she imagines Fountain’s version would differ as retailers would cater to its demographic.
Tom Cone, a broker with Olive Real Estate Group and partner in the University Village development on North Nevada Avenue, said he could imagine something like a lifestyle center as part of a larger mixed-use development with retail, apartments and light industrial use. He’s been working about two months on developing the property for Lusardi.
“It’s a great location, right outside of the south gate of Fort Carson,” he said.
But he’s skeptical that even Fountain’s draw can overcome a weak economy.
He’s been talking with national retailers that could anchor such a large-scale development. On so much land, it will be important to develop a solid plan for how the project could come together as a whole. More than 100 acres is a large development. University Village is 70 acres, Cone said.
“We’re doing some preliminary site planning and some pre-development work to make sure the utilities are in place and stormwater, so we’ll be ready to go,” Cone said.
Cochrun said that while she couldn’t say who, the six inquiries she’s had on the land were big retailers that could anchor the space. They were keenly interested in that specific location and would be willing to wait for it to develop.
“My crystal ball is broken,” Cone said. “I can’t predict when it will happen.”