Legal & Courts  January 7, 2005

Developers to unleash interstate?s retail potential

Mapping out Northern Colorado’s retail future can be as simple as dropping a 40-mile long plumb line along Interstate 25 from Wellington to the point at which the highway passes over 144th Street in Westminster.

Once the line’s in place, then count the number of new, major retail developments all scheduled for completion between fall of 2005 and 2006. Starting from the top:

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The Summit Front Range, proposed for the Harmony Corridor in Fort Collins.

The Shops at Centerra lifestyle center, now under construction at the northeast corner of the interchange of I-25 and U.S. Highway 34.

2534 (previously known as Thompson Crossing), located near the southeast corner of the same interchange.

Palisade Park, on the east side of the interstate in Broomfield.

Larkridge, in Thornton, is roughly across the highway from Palisade Park.

Finally, the plumb bob comes to rest at The Orchard, near the soon-to-be-created interchange of I-25 and 144th in Westminster.

When completed, these centers — the six left standing after years of negotiating intergovernmental agreements and interchange improvements — will offer up roughly six million square feet of new retail space.

Too much? When the developers look at the growth potential for the north side of Denver and onward to Northern Colorado, they remain convinced that there will be plenty of shopping dollars to go around. Moreover, even more dollars might arrive from Wyoming, western Nebraska and Kansas, and even South Dakota.

In addition to the simple fact of population growth, estimated at 3.5 percent a year and up to 50 percent in the next 15 years, each of these retail centers has its own strategy for market positioning.

Centerra’s strategy appears to be size.

“If I-25 is Main Street in Northern Colorado, then I-25 and Highway 34 is the epicenter,´ said Chad McWhinney, president and CEO of McWhinney Enterprises, the development company for the 3,000-acre Centerra development. “The location is convenient to the region. You will be able to get your car or your heart worked on.”

All true. The new regional Medical Center of the Rockies promises to be an anchor for all manner of medically related commerce, and the 80-acre autoplex already has Co’s BMW, Davidson Chevrolet Buick Pontiac, Ferrero Dodge and Jeep, and King GMC and Pontiac signed on as tenants. Then there is the 14-screen Metrolux movie theater that will open with The Shops at Centerra.

Although McWhinney sees Centerra as a 25-year project, Terry McEwan, president of Poag and McEwan, said that The Shops would open in August 2005.

“This is the intersection of a virtual Main Street and Commerce,” he said. “We have about 77 percent of the space committed, and we are talking to half the businesses in Northern Colorado. We signed our first tenant last summer, and we will have 80 total.”

The sheer size and momentum driving the filling out of Centerra might well have sent the competition packing were it not for the predictions of population growth in the area. Developers of both The Summit in Fort Collins and 2534, right across the interstate from Centerra, are confident that their sites have their own appeals.

“We like our site because the infrastructure at the Harmony interchange is complete, and we have only to do some upgrades on Harmony,´ said David Silverstein, principal at the Alabama-based Bayer Properties. “The work at the I-25-Highway 34 intersection is so massive that it will take a lot of time to put all the improvements in place.”

Silverstein acknowledged that retailers in the area were looking at both sites to see which one best represented their interests. But he is betting that an affluent market — which includes Fort Collins, Greeley, Loveland and Cheyenne, Wyo. — that has expanded at a rate of more than three times the U.S. growth in the past decade will find The Summit attractive and convenient.

“We plan to break ground in the spring of 2005 for a 2006 opening,” he said. “We have Dillard’s, Cost Plus, Borders and Wild Oats in place and will have more leases to announce as soon as they have been completed.”

Of the three northern sites still on the books, 2534 is evolving in a more measured way. Nick Christensen, principal of Chrisland Inc., the managing partner for 2534, sees his center as complementary to, rather than in competition with, Centerra. For example, the rehabilitation hospital by Earnest Health Inc. that has broken ground on the property will serve the patients drawn to the regional medical center across the highway.

In all, the big three on the north end of the plumb line will add some 1.9 milion square feet of retail. Still, that’s relatively modest when compared with the square footage of the three projects on the northern edge of Denver. Each of these is being built on the assumption that the population in the surrounding market areas — including Adams, Boulder and Weld counties — will continue to grow, prosper and shop.

Bringing 2 million square feet to the party, the Larkridge regional retail center in Thornton promises to be the largest in the Denver area. By comparison, the much-touted Park Meadows on the south side of Denver measures in at 1.7 million square feet.

“The focus of our retail effort will be the 132-acre portion of our 240-acre property,´ said Jonathan Perlmutter of Jordon Perlmutter & Co. “Washington Street is being realigned at the intersection of Colorado Highway 7 and I-25 to make the center work better.”

Like The Shops at Centerra, Larkridge leads its neighbors in signing tenants, which include Sears Grand (an off-the-mall concept), The Home Depot, Bed Bath and Beyond, and Dick’s Sporting Goods. Perlmutter is certain that the expected growth in the region will support multiple shopping opportunities.

“We’re a little further along than Palisade, but all projects create a synergy that benefits everyone,” he said.

What might have slowed down the development of Palisade Park, located on the Broomfield side of I-25, was the loss of its retail developer, Developers Diversified Realty, in June 2004. Alberta Development Partners LLC of Greenwood Village took over the project in September and is moving it ahead, although no tenants have been announced to date.

“We think that the northern corridor is exciting, and we are looking forward to developing this project in Broomfield,´ said David Goldberg, principal, Alberta Development Partners.

The project at the plumb bob, recently named The Orchard at Westminster, may achieve early distinction not for its tenant list but for its designer, Peter Calthorpe, the nationally recognized “new urbanist” designer, and for the fact that a new interchange at I-25 and 144th Street will be created in tandem with construction of the lifestyle center.

“We think Peter Calthorpe is the best in the business and are glad to have him working with us on The Orchard,´ said Tom Gleason, vice-president for Forest City Stapleton.

Although The Orchard is not scheduled to open until October 2006, Foley’s, JC Penney Co. Inc. and the 12-screen AMC Theatres have been announced as tenants.

All of the above may shift in slight or major ways between now and 2006, when all six projects are scheduled to be ringing up sales. And there may be more on the way: between Colorado Highway 7 and Wellington, I-25 still has 11 interchanges without lifestyle centers to call their own.

Mapping out Northern Colorado’s retail future can be as simple as dropping a 40-mile long plumb line along Interstate 25 from Wellington to the point at which the highway passes over 144th Street in Westminster.

Once the line’s in place, then count the number of new, major retail developments all scheduled for completion between fall of 2005 and 2006. Starting from the top:

The Summit Front Range, proposed for the Harmony Corridor in Fort Collins.

The Shops at Centerra lifestyle center, now under construction at the northeast corner of the interchange of I-25 and U.S. Highway 34.

2534 (previously known…

Christopher Wood
Christopher Wood is editor and publisher of BizWest, a regional business journal covering Boulder, Broomfield, Larimer and Weld counties. Wood co-founded the Northern Colorado Business Report in 1995 and served as publisher of the Boulder County Business Report until the two publications were merged to form BizWest in 2014. From 1990 to 1995, Wood served as reporter and managing editor of the Denver Business Journal. He is a Marine Corps veteran and a graduate of the University of Colorado Boulder. He has won numerous awards from the Colorado Press Association, Society of Professional Journalists and the Alliance of Area Business Publishers.
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