I-25 corridor properties face transportation truths

Considering the dramatic growth and development taking place at Interstate 25 and U.S. Highway 34, it would seem that real estate along the I-25 corridor north and south of that intersection might be a hot commodity.

In fact, properties in the same corridor can languish on the market. Prospective buyers are frequently scared off by the enormity of traffic problems along the corridor and the price tags that go along with fixing them, particularly at interchanges.

Take the 25-acre parcel the city of Fort Collins owns at the southwest corner of I-25 and Prospect Road. The property was offered for sale at $2 million in August 2003. The city pulled it, unsold, from the market in the spring of 2005.

The lack of buyer interest in the property was not due to absent infrastructure such as water, sewer and electricity, zoning concerns, or even the fact that the land was once part of a sewage sludge farm. The parcel is zoned for commercial use, lies just east of the Colorado Welcome Center and is adjacent to city-owned open space.

Not only is the parcel situated along the I-25 corridor, it is just a hop, skip and a jump from Timberline Road and the burgeoning growth there, as well.

Location, location, location are all pretty much in place.

The issue, it seems, is the overburdened roadways lining two sides.

The Prospect Road-I-25 interchange has essentially failed, said Ken Mannon, operations services director for the city of Fort Collins. “That entire intersection has failed because there is too much traffic for that roadway, more traffic than what it can really handle.”

Any development there would require interchange improvements, Mannon said. “Knowing that development would increase the traffic in that particular area, someone would have to spend some pretty substantial dollars to do those improvements.”

Lack of activity on the parcel and the fact that some improvements to the interchange are expected in the near future caused the city to pull the parcel from the market for the time being, Mannon said. The state plans to move a rest area along I-25 closer to the Welcome Center location. Some roadway improvements could accompany the move.

The media-whipped buzz about the corner of I-25 and U.S. 34 in west Loveland has built dramatic expectations about real estate elsewhere in the corridor. However, those gotta-have-a-piece-of-it attitudes frequently screech to a halt, dissolving in the face of transportation realities.

“I think everyone realizes that the interchanges themselves need to be replaced at 34, Crossroads and Windsor,´ said Michael Ehler of Realtec Fort Collins.

“At 34 and I-25 it really hasn’t seemed to make any difference,” Ehler noted, pointing to the new hospital going up on the west side of the interstate, the completion of the lifestyle center shopping mall on the east side, and the residential growth on the horizon.

Despite complaints about traffic at the intersection now, the status of the outdated, overworked interchange hasn’t seemed to make a difference in terms of slowing interest or growth in the neighborhood.

Raising expectations

The traffic issue has had a negative affect on attitudes toward ground elsewhere in the corridor, however.

“People see what’s going on at 34 and they’re concerned about traffic patterns at Crossroads and Windsor. When are those interchanges going to be replaced?” Ehler said.

As people look at property elsewhere in the corridor “they seem to become more discerning, more analytical than they would be if they were looking specifically in that one area.”

If transportation infrastructure is a problem along the northern I-25 corridor, access to other infrastructure doesn’t seem to be an issue. “Most of the areas are pretty well served with utilities,” Ehler said. “That’s really not a limitation along the corridor between Harmony and U.S. 34. Utilities are pretty much in place in most areas or they can be put in place.”

Ehler does look ahead to a changing focus among buyers. “People are now looking at those other interchanges and other locations and we’re going to see activity starting to increase in those other areas.”

Getting the necessary traffic infrastructure improvements in place will likely require some sort of public-private partnership, he noted.

Further south, Ken Kanemoto of Longmont-based Prudential LTM Realtors has been observing the real estate market in the I-25 corridor as both real estate broker and developer for some 20 years.

He was involved in developing Del Camino Business Park, Del Camino South Business Park and others at the intersection of I-25 and Colorado Highway 119, east of Longmont. The region began by developing into industrial and manufacturing uses, but has evolved to include office, retail and residential, as well.

“It all works out there; it’s just a matter of when,” Kanemoto observed, noting again, “The market has to be ready.”

As the momentum of residential growth picks up in the corridor, the demand for land for other supporting uses will grow. “Residential is starting to come on and when you get enough residential the retail will follow, too,” he predicted.

The fact that there is a lot of inventory to chose from up and down the corridor can also play a role in slowing sales, Kanemoto said. “There is a lot of land for sale. You’re talking from Fort Collins all the way up and down I-25. There’s a lot of land out there.”

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