Historic renovations require ample dose of tenacity, cash

FORT COLLINS — This city˜s downtown has an impressive collection of renovated old buildings which seem to have arisen from their own ashes much like a Phoenix.But unlike the mythical bird, these buildings weren˜t resurrected by mysticism or alchemy. Most rose again as a labor of love, that risky deed which tends to feed the soul more than the pocketbook, at least over the short haul.Old Town Square is a prime example.
Consisting of eight buildings occupying 120,000 square feet, Old Town Square was conceived by developer Gene Mitchell in the late 1970s "when the economy was good," and completed in 1985 when the economy had begun to sour.
Mitchell is now retired as both a developer and an attorney, although he continues to consult with Sitzman-Mitchell & Co.
Mitchell tackled old Town Square because "I had the naive, idealistic impression that I could do it … and because I was a part of the activities that (had) moved the downtown out to the suburbs and there was a legitimate cry that the (downtown) was dead," he said.
"I undertook to put the heart back into the center of Fort Collins, and I went at it heart and soul," Mitchell said.
The $10 million project accomplished its goal: It helped rejuvenate downtown. But the declining economy took its toll on Mitchell˜s ownership and, in 1987, he lost the property which eventually sold, minus the parking area, for under $2 million, Mitchell said.
For large-scale historic renovations to be commercially successful, Mitchell said, they should be within a large area that is already stabilized and operating profitably and efficiently.
"You˜ find them on seacoasts, in the midst of million population-type office facilities … they are difficult to make succeed in areas of marginal size," he said.
The first renovation of Old Town Square was actually completed before Mitchell began his work, said Ed Stoner, former mayor of Fort Collins and present manager of Old Town Square Properties.
It was a 6,000-square-foot building at what today is 25 Old Town Square, which Stoner and Danny Rogers bought and renovated in 1978. It had been vacant for 12 years after fire destroyed the adjacent building.
Stoner said they had to restructure the building from its granite base up, but decided to complete renovations only on the lower floor which they opened as the Red Garter Saloon.
The building became Mitchell˜s first purchase toward Old Town Square, Stoner said. Mitchell renovated the upper floor and today, Lucky Joe˜s Sidewalk Saloon occupies the ground floor.
Although no other downtown development has been as extensive or costly as Old Town Square, numerous other buildings have been rejuvenated or restored in the downtown area,
Dave Veldman and Mitch Morgan of Veldman Morgan Commercial, renovated two properties and, in spite of Veldman˜s statement that "it˜s very difficult-" to make renovation profitable, they recently bought a third and began reconstruction in September.
Their current project is the C.C. Forrester Block Building at the corner of Walnut Street and Pine Street. The purchase price for the 7,200 square foot building was $360,000.
Renovation is expected to cost another $360,000, Veldman said.
Earlier projects were the Loomis Building at 217 Linden and the Linden Hotel, adjacent to the Loomis. Veldman said they haven˜t lost money on these two buildings, but: described them as only "marginally economically successful."
The Linden Hotel has 16,000 square feet. It had been empty for about 14 years, "about to destroy itself," Veldman said, when the partners purchased it for $75,000. They spent $1.95 million renovating it and received a $350,000 grant from the city and the Downtown Development Authority.
The Loomis Building also has 16,000 square feet. The total investment — purchase price and renovation — was about $1.75 million, less a $100,000 grant, Veldman said.
To break even on a project, Veldman figures that the purchase price and all hard and soft costs of renovation, less public assistance, should total about $100 a square foot, which is about what his redevelopments have cost.
"If you come out at the $100 figure, you˜re at the break-even point, and over time, the building might give a return," Veldman said.
Getting tax credits on a project also helps the bottom line, Veldman said, but qualifying for them is arduous.
The plans must be approved at the local level, the state level and, finally, at the national level by the National Park Service, the organization that "really controls the tax-credit program on historic, structures," Veldman said.
Projects that do qualify receive 20 percent in credits from the federal government and 2 percent from the state on redevelopment costs, not including expansion or new construction costs.
The next historic redevelopment in downtown is likely to be the Mountain Empire Hotel at 259 S. College Ave., a move that will please many locals who think Fort Collins needs an up-scale downtown hotel.
According to Tom Livingston, a partner and project manager at The Everitt Companies, the 68-room, 36,000 square foot hotel was recently purchased for $1.35 million by a group of local investors that includes Livingston.
It˜s not yet clear which direction redevelopment will take on the 1922 building, although Livingston said the new owners are considering a boutique-style hotel format.
The Empire Hotel renovation will be far more extensive than Livingston˜s first renovation project, a "squatty, vanilla-looking building" located at 218 Linden which he bought in 1990 for $40,000 and spent $5,000 and "a lot of sweat equity" renovating it.
"My main purpose for buying and renovating the building was I wanted my family to make a contribution to Old Town," Livingston, said, adding that he plans to keep the building in his family.
The small building occupied only half a lot when it was built in 1891 by Christian Phillipe, a harness maker who was the first paying customer of municipally treated water in Fort Collins, said Livingston, who researched the building˜s history.
Historic renovations are "terrifically important to a community," said Chip Steiner, who works in urban development through his locally based company, Steiner Co.
They improve the appearance of a business district, excite visitors and tourists, connect the history and character of a city to present-day people and events and stimulate a city˜s artistic community, Steiner said.
"They are perhaps more expensive to do up front, but they can return big dividends if you can hold them because ultimately, they attract very high end users (who) pay big rents," he said,
"There may be risks up front, but the project that Gene (Mitchell) built is a cash cow today," Steiner said.visitors and tourists, connect the history and character of a city to present-day people and events and stimulate a city˜s artistic community, Steiner said.
"They are perhaps more expensive to do up front, but they can return big dividends if you can hold them because ultimately, they attract very high end users (who) pay big rents," he said,
"There may be risks up front, but the project that Gene (Mitchell) built is a cash cow today," Steiner said.

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