Rail-served industrial park: Steam engine for business?
WINDSOR – More than 130 years ago, the railroad arrived in Northern Colorado and tugged the local economy into the modern era.
Still a factor after all these years, the Iron Horse could once again be part of an economic awakening for the region.
Owners of the Great Western Railway, a short-line rail network that operates in Larimer, Weld and Boulder counties, plan a 700-acre industrial park on the east side of Windsor. As designed, the size and scope of the project would be unprecedented north of the Denver metro area.
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The Great Western Industrial Park could accommodate 8.2 million square feet of manufacturing and warehouse space. That’s nearly seven times the size of the Hewlett-Packard Co. campus in Fort Collins.
An economic analysis for the project conducted by the University of Northern Colorado forecasts 2,000 new jobs at the industrial park.
The Broe Cos., the Denver-based developer that owns the Great Western, is the force behind the industrial park. Broe’s targeting users that would be customers for the short-line service, which connects to main lines operated by the Union Pacific and Burlington Northern Santa Fe.
Broe’s formula has already shown signs of success. The much-ballyhooed Owens-Illinois Inc. glass bottle plant was lured to Windsor in large part because of Broe’s rail service. The $120 million, 500,000-square-foot bottle plant, while not technically part of the Great Western Industrial Park, is a de facto anchor tenant for the project.
In 2003 Owens-Illinois acquired 150 acres from Broe, a site located just north of the industrial park grounds. The company started rolling out bottles in August and will eventually employ 150 people when it reaches full capacity.
The first official resident in the industrial park is the $50 million Front Range Energy ethanol plant, which broke ground at an 80-acre site last month. Broe is in negotiations with other potential users, and believes it can fill out the industrial park within 10 years.
“We’re moving aggressively,´ said Alex Yeros, managing director of the Great Western Development Co., the division set up by Broe to develop the industrial park. “If we do our job right, it will take less than 10 years.”
The 700-acre industrial park is just half of Broe’s vision for the Windsor area.
In February, Broe contracted to buy 1,400 acres from Kodak Colorado Division – land that Kodak has held as a buffer on the east and west sides of its sprawling plant in Windsor.
Broe designated 700 acres on the east side of Kodak for the industrial park. The land west of Kodak along Colorado Highway 257 is proposed for residential and commercial use, including at least 2,000 dwelling units and about 1.3 million square feet of retail and office buildings.
All three components of Broe’s plans – industrial park, housing and retail-office – add up to a potential $2.7 billion economic impact on the area, according to the UNC study.
Birth of an industrial park
The Broe Cos. first claimed a stake in Northern Colorado in 1986 when it acquired the struggling Great Western Railway. The short-line had been reliant upon the sugar beet industry. Once the sugar processing plant in Loveland closed in 1985, the Great Western couldn’t absorb the blow.
Broe merged the Great Western into its OmniTrax division, which is now the largest operator of short-line rail service in North America. The company has since built up a customer list in Northern Colorado that includes Anheuser-Busch Inc., Eastman Kodak, Packaging Corp. of America, Universal Forest Products and, recently, Owens-Illinois.
The company expanded its Northern Colorado holdings in 1996 when it acquired a rail link between Fort Collins and Greeley, which it’s incorporated in the Great Western network. The system now covers 80 miles of track between Longmont on the south and Fort Collins on the north.
At the time Broe acquired Great Western, it was moving about 400 freight cars a year. That number has increased to about 13,000, and should grow to 17,000 by next year, when Owens-Illinois reaches full capacity.
It was the Owens-Illinois deal that seemed to alert Broe to the potential of an industrial park near Windsor. At the time Broe sold 150 acres Owens-Illinois, it still held 60 acres with the goal of future industrial development.
Soon Kodak made it known it was ready to unload some of its vast holdings around the Windsor plant, which it previously used as a buffer. Broe stepped up to buy the property, including a sizeable portion of water rights, all estimated to be worth $50 million.
The return on the purchase, scheduled to close later this year, could be manifold.
Broe’s gains would come not only from the sale of the developed industrial, commercial and residential lots, but also contracts for rail service.
The Broe project underlines the continued significance of short-line rail service for U.S. industry. According to Progressive Railroading magazine, short-line tracks make up about one-third of the entire rail network in the country.
Broe and other short-line companies are learning to develop “value added” services, such as industrial parks, to grow their list of customers, the magazine said in a November 2003 article.
“For short lines to attract shippers, they have to offer a complete package of services, such as real estate or partnering with a government to provide incentives, and not just transportation service,” Broe executive Mike Ogborn told Progressive Railroading.
One rare advantage of the Great Western Railway is that it connects to two major, or Class I, rail lines. That allows customers like Owens-Illinois to enjoy the price breaks that come with competition.
Windsor annexation next
Next on Broe’s to-do list is to get the new holdings annexed into Windsor, which abuts the property on both the west and north boundary lines.
The first in a series of public meetings to assess the impact of the project is scheduled for Oct. 19. The Windsor Town Board is scheduled to rule on the annexation by the end of the year.
While the 1,400-acre Broe addition would not be Windsor’s largest – a 3,000-acre annexation in the mid 1990s stretched Windsor’s western boundary to Interstate 25 – it’s bound to have the most impact.
The housing development would add at least 4,500 residents to the town’s population – now at 15,000 – representing a 30 percent increase in residents.
Traffic impact projections have not been finalized, but would easily generate a like increase in trips on city streets.
Among the key elements in the Broe proposal is the possible connection between Greeley’s O Street and Crossroads Boulevard, a roadway that would provide an alternative to U.S. Highway 34 as an east-west arterial in Northern Colorado.
The obvious impact of the project has even prompted Windsor to create new positions next year in both its planning department and engineering departments, said Mayor Ed Starck.
Annexation or not, the Windsor Re-4 School District will have to contend with the growth that comes with Broe’s project.
One immediate impact, thanks to the additional property value provided by the Owens-Illinois plant, is a greater assessed valuation in the district, Superintendent John Karbula said. That translates to increased bonding capacity for the district when it needs to issue debt for school construction, and a reduced mill levy for residential property taxpayers.
Density concerns
While Starck speaks in support of the Broe project, and no formal opposition has stepped forward, some of the neighbors are uncomfortable with the density of the residential proposal.
“Windsor historically has been adamant that (Colorado Highway) 257 was the demarcation line between an employment corridor (on the east) and the residential community (on the west),´ said Martin Lind, developer of the Water Valley development on the west side of Colorado 257. “For them to deviate from that could create tremendous conflict.”
Chris Ruff, developer of the Windsor Tech Business Center, holds similar views.
“I fully support the industrial project they are looking at doing over there,” Ruff said. “The idea of adding residential development to that (east) side of the highway is not a good idea.”
Town Administrator Rod Wensing agrees the historical land use map called for industrial use east of Colorado 257, but said the town hasn’t done any detailed analysis in this area, “because we never contemplated that Kodak would sell off 1,500 acres of their buffer land.”
The Broe proposal brings a new focus on the future use of the former Kodak ground, and housing densities will get a close look, Wensing said.
