Greeley’s ex-HP complex an economic ace in the hole

GREELEY – Albatross. White elephant.

Those were the two animals Greeley was left with when Hewlett-Packard Co. in January 2000 announced it would abandon its high-tech home on the city’s western edge, consolidating a printer and digital-imaging division that employed 800 people into a much larger Fort Collins campus.

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It took the company another three years to make good on its threat to leave town, but when that happened in March 2003 the city reeled as if the news was … well, news.

Then it took another year and a half for the building to sell. After numerous suitors made offers, an investment group led by Greeley businessman Bruce Deifik bought the building and the 163 acres of land that surround it for $8 million in September 2004 – $6 million less than HP’s original asking price.

“There’s not another industrial building in Colorado like this,´ said Deifik, a principal in Denver-based Integrated Property Management Inc.

“It’s unique. Where else can you find anything like this?”

Deifik and his partners, Greeley lawyer Jeff Bedingfield and Fort Collins commercial real estate broker Rhys Christensen, are seeing rich opportunity in a place where disappointment and bitterness reigned after the HP announcement.

They also can afford to be patient players in this game. The three have more than 130 acres of land surrounding the corporate building earmarked for commercial and residential development.

Good thing, since that eventually will help offset the $775,000 in annual maintenance costs that accrue while the building remains empty.

Warm reception

Plans submitted to Greeley’s community planning department outline a community of homes and businesses surrounding the 245,000-square-foot building. About 60 neighborhood residents last month gave the plan a warm reception at a meeting in the cathedral-like cafeteria at the HP building.

Vast stretches of asphalt parking lots, put in place when HP was thinking of expanding the building to accommodate even more workers, will be dug out and turned into development land.

And sooner or later, the building itself will hum with activity, the owners say.

“It’s an absolutely great facility, and it will appeal to the right person,” Bedingfield said. “We went into this knowing that the building was the toughest of the issues, and that the other development opportunities made it possible for this to work.”

A walk through the building is eerie. Second-floor conference rooms have flip charts on easels, chairs pulled out from tables, as if participants had walked away in mid-meeting.

The north wing of the second floor – 80,000 square feet of space – remains divided into 8-foot-by-10-foot cubes where office workers were housed.

That’s just what’s on the surface. Embedded in the building are miles of fiber-optic data cables, each set with a redundant twin, power supplies likewise backed up – in short, a technological framework not available anywhere in the state, according to the owners.

Perks, quirks

It also offers some unexpected perks, and quirks: A 700,000-gallon reservoir, covered by a steel grate on the building’s northeast side, is used for Scuba training by Weld County fire and rescue groups.

A 29,000-square-foot cafeteria and conference center, added to the 22-year-old building in 1997, seats 360 people and contains a kitchen “that Wolfgang Puck would be proud of,” Deifik said.

“It’s all a little overwhelming,” Bedingfield said. “That’s a word that we use a lot.”

Marketing strategy is geared toward big-space users. The owners decided early on to set a 30,000-square-foot minimum limit on leases.

“That eliminates about 90 percent of the market,” Christensen said. “It’s been hard to turn down users who want 10,000 square feet. We might take some of those at the end of the process, but not at the beginning.”

Christensen has blitzed commercial real estate brokerages, not just in Colorado but nationwide, with e-mail brochures for the building. A direct-mail campaign targeted community colleges and trade schools, users that the new owners thought might be ideally suited for the space.

“We’ve had five entities take serious looks at this,” Christensen said.

Most have been call centers or back-office support operations, including two – LockLine LLC and Accutel Inc. – that chose other Greeley locations.

Intel passes

Representatives from Intel Corp., on a regionwide shopping trip seeking relocation space for 350 people now working at HP’s Fort Collins plant, clearly were impressed with the building’s capabilities – but not with its location 25 to 30 miles from where nearly all employees live.

The company officially passed up the building several weeks ago.

And the owners remain convinced they got a bargain, no matter how long the wait might be for a new user to put people to work in the space.

“Potentially, we could see 1,600 people working there,” Christensen said. “And we can offer that space at a third the costs of new construction. If you built that building today, you’re talking about $250 to $300 per square foot.”

That would put the value of a newly constructed twin of the HP building in the range between $60 million and $80 million – about 10 times what the owners paid.

That, and the new commercial and residential development that the group hopes to begin next spring, make the waiting worthwhile.

“Did we hold out hope for Intel? Absolutely,” Bedingfield said. “But I think that building is better suited to a new employer coming into the region. Eventually, that’s going to happen.”