REAL ESTATE: Flood plain rules wash out plans for student apartments

FORT COLLINS ? Developers have scrapped two-year-old plans to build a student-oriented apartment complex near the Colorado State University campus, saying they couldn?t adapt the project to meet storm drainage regulations.
Student Housing Partners Ltd., led by Bill Neal and Fred Croci, intended to develop a 250-unit project near the southwest corner of College Avenue and Prospect Road. The 5.1-acre site is at the location of the former Johnson Center Mobile Home Park, which was devastated in the July 1997 flashflood that hit Fort Collins.
The developers tentatively worked out a stormwater drainage plan by the fall of 2002 and were hoping to complete the project by 2005.
However, Neal said the final stormwater rules set by the city became too expensive.
?We pulled the plug ? we could not contend with the storm drainage requirements,? Neal said.
With its decision to halt development, Student Housing Partners walks away from its investment in the entitlement process, including the cost of designing and engineering for the project. The partners also swallowed the cost of keeping an option on the land for two years.
?It?s a pretty good-sized loss for us,? Neal said.
Neal did not disclose the amount of losses. However, Student Housing Partners had previously raised about $1.5 million in private financing to cover development and land acquisition costs.
Fundamentally, construction of any new building or parking lot can deflect the existing flow of stormwater runoff. Storm drainage requirements for a new development are necessary so construction does not cause runoff problems for any neighboring property owner.
Because the location of the proposed apartment project was also in a flood plain ? Spring Creek runs along the north boundary of the Johnson site ? the stormwater requirements were more complicated than normal.
For instance, one of the design proposals for the apartment buildings would have elevated the housing above ground level, so only parking would be on the ground level.
According to Jim Hibbard of the city of Fort Collins Stormwater Services, several flood mitigation projects for Spring Creek are on the drawing board that could simplify development potential at the Johnson site in future years.
Currently, the key obstacle is the likelihood in a 100-year-storm that stormwater would spill over the top of an existing railroad berm and into the development site; the berm runs along the west boundary of the Johnson property.
Upstream improvements, such as a larger detention ponds and diversion channel for Spring Creek, will help to alleviate that problem, Hibbard said. But completion of those projects are four years away.
Neal said he?s not ready to look for another campus-area location for a similar project.
?We don?t have any current plans to do that, but we?re not ruling it out,? he said. ?We think the (student housing) market?s still there, and will be there.?

Agilent sheds office building
LOVELAND ? While Hewlett-Packard Co. continues to shop its vacant Greeley complex, Agilent Technologies Inc. has found a buyer for an unused office building in Loveland.
The Thompson School District agreed in April to pay $4.7 million for the 88,000-square-foot building at 800 S. Taft Ave. The school district plans to move its administrative headquarters into the building, which had been vacant since late last year.
The deal seems to be a bargain for the school district. Agilent, through real estate broker Cushman & Wakefield, originally listed the property at $8 million before dropping to $6.5 million, and then to the final price.
Agilent acquired the building as part of the corporate split with Hewlett-Packard. It was originally built in 1984 by Colorado Memory Systems, which HP purchased in the late ?80s.
?Cushman & Wakefield was marketing that for close to two years,? said Ken McCrady, a broker for Prudential Warnock Commercial Realty of Loveland, who represented the school district along with partner Jack Thetheway. ?With our economy in Northern Colorado, without many major businesses moving in, trying to find a user for that property at the original asking price was very difficult.?
Hewlett-Packard knows that fact all too well.
HP has been trying to sell its 370,000-square-foot facility in west Greeley for a similar length of time, and has cut the asking price from $18 million to $14 million.
Like Agilent, HP seems to be finding its best prospect is a tax-supported school, rather than a private business. Aims Community College has recently expressed interest in taking over the HP site, rather than invest in needed improvements on its Greeley campus.

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