Sitzman, Mitchell mix well in real estate

FORT COLLINS — What do you get when you put together a lawyer and an accountant?Try an extremely successful commercial development and real-estate firm.
In the past 20 years, Fort Collins-based Sitzman-Mitchell & Co. has quietly become a multimillion-dollar company through private investors, business relationships and the paring of two people who, with no previous background in the commercial real estate business, managed to partner up with the competition: Everitt Companies Real Estate Inc.
Eugene E. Mitchell was a lawyer by trade when he founded the company, then known as E.E. Mitchell & Co., in 1975. David Sitzman, now president of Sitzman-Mitchell, hired on as an accountant in 1983.
In recent years, Mitchell has been easing into retirement. Sitzman became president of the company in 1990, after signing on as chief accountant in 1983. As a CPA for Kruchten & Co., he˜d actually been doing Mitchell˜s books for years.
"Gene Mitchell is a big-picture visionary, very creative." Sitzman said. "I tend to be more numbers-oriented, tending toward soundly financed projects and structure. Commercial real estate is legally and financially oriented … there are legal documents, leases, contracts. It seems logical to me that an accountant and a lawyer would do this type of business."
Sitzman serves as president and broker for two subsidiaries of the company, Sitzman-Mitchell Property Management Inc. and Sitzman-Mitchell Commercial Brokerage Inc. He directs corporate planning through conceptual development for all projects, including arranging financing and organization of each investment group.
The company˜s professional services for its properties include management and maintenance.
Longevity is a characteristic of its key employees. Mike Braskich, property manager, has a 15-year history with the company. Vice president and office manager Barbara Herron has worked with Mitchell for 35 years (Herron and Mitchell worked together at a Fort Collins law firm then called Allen, Mitchell, Rogers and Metcalf before Mitchell ventured into commercial real estate).
The company has its beginnings in 1974. Mitchell was a partner at the Fort Collins law office when he and a friend decided to go into business together. They started up several businesses that used Colorado State University˜s pool of talent, companies such as Scott Scientific that provided geologic learning tools for higher and lower-level education, and Western Scientific, a cloud-seeding company.
"We started more small businesses in the Fort Collins and Larimer County than anybody," Mitchell said.
Mitchell acquired Strachan Farms in the mid-1970s. It was a piece of property bounded by Stover Street, East Drake Road and South Lemay Avenue. He formed a partnership with several local investors, including the Strachan family, to create the company˜s first project, Scotch Pines Apartments.
Today, Sitzman-Mitchell retains an interest in Scotch Pines Village Shopping Center, which was built in 1980.
"They had significant ownership in most of their projects," said Steve Stansfield of Realtec Commercial Real Estate Services Inc.
From 1991 to 1993, Realtec was brought in as a leasing agent with Sitzman-Mitchell on the Foothills Plaza Shopping Center, Scotch Pines Village and Norwest Bank Plaza building.
The Scotch Pines project set a pattern the company maintains today. Sitzman-Mitchell acquires and develops a property through a partnership or joint venture, raises equity through private offerings, and receives compensation for services rendered for the property in the areas of management, brokerage, development and administration.
That˜s roughly how Sitzman-Mitchell handled the Fort Collins Marriott project. Mitchell knew a Denver man whose retirement package from the Marriott included a franchise. Mitchell completed construction on the six-story, 229 room full-service hotel at 350 E. Horsetooth Road in 1985. And it was the Marriott Hotel project that drew the attention of Everitt Companies Real Estate Inc.
Sitzman said his company˜s partnership with Everitt began when an out-of-town hotel developer˜s interest in Fort Collins sharpened the Everitt Cos.˜ interest in the same thing. Everitt connected with Sitzman because of its experience with hotel building and its connection with the Marriott.
"We had been respectful competitors for years," Sitzman said. "People here were surprised, but we made a good team, and it gave us more access to equity capital."
The two companies formed the partnership Harmony Hotels Ltd. to develop the Courtyard by Marriott Hotel, across the street from the full-service Marriott in the Oakridge Business Park.
The Residence Inn, an extended-stay Marriott product planned south of the Courtyard by Marriott, will be another project of Harmony Hotels. Construction on that project should begin in the next few months.
Dave Everitt, president of Everitt Companies Real Estate Inc., says Sitzman-Mitchell has "historically been very forward-looking in thinking and in concept and design of projects. They were also the developer of Old Town, an innovative project."
Sitzman was still officially chief accountant for Mitchell when he began raising equity for the Old Town project, the restoration and renovation of several blocks of downtown Fort Collins.
"Old Town was a wonderful thing," Mitchell said. "We had our hearts and souls in it."
But the timing was terrible for Old Town. The double-digit interest rates of the mid- to late 1980s, 30 percent vacancy in commercial properties, changes in real-estate tax laws and a kind of real estate depression combined for heavy losses.
"There were huge vacancies all over the city," Sitzman said. "It was an idea before its time."
Sitzman-Mitchell pulled out of the Old Town project in 1989. "Now (with Old Town˜s current restructuring) it˜s operating the way Gene thought it would in 1985," Sitzman said. "It˜s a beautiful place."
In the immediate future, Sitzman-Mitchell will venture further into the hospitality industry and revisit some of its Old Town stomping grounds.
The renovation of the Mountain Empire Hotel at 259 S. College Ave. in Fort Collins will be an Everitt Cos./Sitzman-Mitchell venture. The property was purchased Sept. 10.
Tentative plans for the 1920s-era hotel, where rooms currently go for about $14 a night, include turning it into a kind of boutique hotel such as the Hotel Boulderado in Boulder. Sitzman said he hopes to complete design plans by next year.