We find ourselves in the middle of one of the greatest wealth transfer periods of all time. Those with wealth must decide whether they want to make transfers, and if they do, they must decide how much, to whom, when and in what structure?
FORT COLLINS – More than six years after Denver developer Lloyd Goff first announced plans to turn the old Fort Collins Downtown Airport into a 150-acre mixed-use community anchored by a high-tech research park, his Airpark Village property may be headed for foreclosure.
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Lender Mile High Banks has filed a Notice of Election and Demand with $5.449 million of the original $5.45 million loan still owed.
Although there has yet to be any redevelopment at the site, Goff isn’t ready to throw in the towel just yet though.
“We’re trying to get it refinanced,” he said. “The bank is under FDIC watch and pushing us out the door because the FDIC wants them to sell 20 percent of their loans. We can’t get a loan from a bank, so we’re looking at private money.”
Longmont-based Mile High Banks in February signed an agreement with the Federal Insurance Deposit Corp. to strengthen its financials stemming from its loan concentration in commercial real estate at a time when commercial real estate values were rapidly declining.
Mile High Banks Chairman and CEO Dan Allen, however, said the NED filing on the Airpark Village loan had nothing to do with the bank’s agreement with the FDIC. He said he could not comment on the specifics of the litigation.
According to the filing in Larimer County, borrower Airpark Village LLC has until March 1 to cure the loan default before the property is sold on March 2.
Optimistic, Goff said that deadline gives him several months to secure financing. He said he is in talks with two potential investors, one of whom he hopes to go to contract with this month.
“We’ve got a lot of people looking at it. It’s hard to say what’s going to happen,” Goff said. “If we had a decent market then we wouldn’t be having any problems. We wouldn’t have problems with the bank. The essence of human adventure is uncertainty.”
Goff first acquired an option on the property, which is part of the city’s East Mulberry Corridor, in 2004. The airport closed in 2006, and there were concerns that adjacent businesses, primarily aviation-related, would leave with it. Goff, though, said he did not have a problem filling existing space after purchasing the property that year, bringing in about 30 new tenants.
“We’re full,” he said. “We don’t have anything left to rent. The hangars are all rented out.”
Those tenants include some entertainment, computer and storage businesses, along with driver training for various groups like law enforcement and truck drivers.
Goff’s vision for the property, however, looks very different.
“The first project we want to do is an energy tech institute, a brain trust that would link members with a conference center that sits on top of five labs and would allow us to get a national audience,” he said. “We would work on energy research and development. The main theme of the campus, of the development project, is a research and development campus.”
Goff wants to change the name of the futuristic development, eventually, to Energy Park One. He said the first building he envisions for the park can co-exist with the hangars, but the second building – still years away – would have to replace them.
Josh Birks, economic adviser for the city of Fort Collins, while not opposed to Goff’s plans, sees the Airpark Village area more as an opportunity for light manufacturing and other industrial uses. He does not think its foreclosure would have much of an economic impact on the city.
“We have a need for reasonably affordable space for those kinds of uses,´ said Birks, who joined the city in March 2009. “We see that area as an opportunity to continue to enhance that part of the economy. I’m not sure the ultimate owner of the property will impact what happens there over the long term one way or the other. We haven’t seen it as a major economic asset other than in terms of a place for light industrial manufacturing uses to site.
“We had initial conversations with the property owner before my time, and our contact diminished significantly just as he was trying to move the project forward,” he added. “We’ve never done a formal estimate of the economic impact, but something closer to the status quo is the way we are looking at it from an economic impact standpoint at this time.”
Birks said there are a number of other areas in the city that can respond to research and development opportunities, and the airpark is not an area they earnestly track as an economic development asset.
“Ultimately that area and parts of South College, south of Harmony, and parts of North College are the strongest places for small scale light industrial uses in the community and there are other opportunities for larger new construction and new employment,” Birks said. “If companies are looking for affordable or existing facilities, those are the kind of places we think of as opportunities consistent with our overall vision.”
Fort Collins Zoning Administrator Peter Barnes said the city annexed the Airpark Village property and zoned it as an E (Employment) zone, which has a wide variety of uses, at the request of Goff. The city also approved Goff’s Overall Development Plan in 2008, but Goff has yet to submit a specific development plan for anything.
No flights allowed
One use that is not allowed in an E zone is an airport, and Goff has for years been involved in litigation with pilots who want to continue using the airport’s runway. That’s because an airport can be allowed in an E zone as a grandfathered, nonconforming use forever as long as the use was not abandoned for 12 consecutive months. After the FAA closed the airport in 2006 and 12 months passed, the city determined the property was not an airport anymore and thus lost its nonconforming status. However, some pilots continued to use the runway for occasional takeoffs and landings without notifying the FAA and argued that such use meant the airport had not in fact been abandoned.
At Goff’s request, the city will look at the issue again to determine whether or not flying is allowed at the old airport.
“We expect to get the answer that zoning doesn’t allow it and the FAA said it was shut down properly,” Goff said.
He categorizes the zoning dispute as a minor annoyance compared to the much larger headache of the market collapse.