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Real Estate & Construction  February 26, 2010

A-B in talks with city about selling land

FORT COLLINS – After holding a massive land buffer in north Fort Collins for more than 20 years, Anheuser-Busch Cos. is looking to sell of some of its holdings.

Company officials and the city of Fort Collins have been working for several years to determine the proper zoning for the acreage around the Budweiser brewery, and the city is now in negotiations to purchase land for a future community park. The new zoning, approved late last year as part of the Mountain Vista Subarea Plan update, will make the northeast corner of Fort Collins a future employment hub.

A-B approached the city about three years ago, before its November 2008 acquisition by Belgium’s InBev, about selling. The discussions came at a good time, as the city was receiving inquiries about developing on the large, rail-served parcels. Vestas Americas expressed interest in the area before finally deciding on Windsor for the site of its first U.S. manufacturing operation.

Mike Freeman, chief financial officer for the city of Fort Collins, said there were three main issues to be addressed with A-B InBev to pave the way for future development around the brewery. The first, now complete, was the update to the Mountain Vista Subarea Plan. The company was concerned that the existing plan didn’t provide a proper buffer between its industrial and commercial uses and nearby residential zoning.

The next issue related to the Boxelder Drainage Basin, which is being addressed by the Boxelder Stormwater Authority.

The last issue relates to wastewater. In 1982 when the A-B land was annexed into the city, the company largely funded an expansion and modification of one of the city’s wastewater treatment facilities. Freeman referred all questions on the issue to the company.

For its part, A-B InBev is being quiet about the specifics. Michael Taylor, vice president for the Busch Properties Inc. business unit, said in an e-mailed statement that the brewery’s large land purchase more than 25 years ago gave the company discretion regarding the types of potential developments that could be built near the facility.

“Since then, the brewery has undergone expansions, and we have considered selling or leasing this extra land for some time,” he said. “Now, we are pleased to be working with the city to identify potential future uses for this property, such as an industrial or commercial park, that will bring new businesses and employment opportunities to the area.”

The e-mail added that specific details of the sale agreement will not be disclosed.

Shedding assets

In the year since the merger, A-B InBev has unloaded a number of properties and other assets:

  • January 2009 – The company turned over the Bevo Mill building and windmill in south St. Louis to the city for consideration of $1, according to the St. Louis Business Journal;
  • October 2009 – A-B InBev announced the sale of its entertainment businesses, including Sea World and Busch Gardens, to the New York-based Blackstone Group for up to $2.7 billion;
  • August 2009 – The company detailed the execution of about $280 million in small asset disposal, including Labatt USA and real estate and land assets in Western Europe and other “zones,” in its second-quarter earnings announcement. For the first half of 2009, the company’s “disposal program” included the sales of Tsingtao and the company’s South Korean beer business, netting $3.56 billion;
  • December 2009 – A-B InBev sold its central European operations to funds advised by CVC Capital Partners for $2.2 billion and inked an agreement for the new owner to continue to brew its beers.

In the grand scale of A-B InBev’s assets, the Fort Collins property is only a blip, but for the city the property represents the future of employment growth.

“It’s very valuable long-term development area,” Freeman said. “That’s general ground we don’t have now, at least not on a large scale. This is going to be an area we’ll see significant employment opportunities in the future.”

The update to the Mountain Vista Subarea Plan paved the way for additional industrial and commercial uses. The subarea contains about 5.5 square miles, bounded by Interstate 25 on the east, Richards Lake Road on the north, Lemay Avenue and Turnberry Road on the west and East Vine Drive on the south. The A-B InBev property makes up about half of that area. Of the 1,130 acres owned by the company, around 200 acres are occupied by the brewery.

“With the update, we looked at reassessing the overall land use and street network,´ said Pete Wray, senior planner at the city. “They really wanted compatible uses for the brewery and future expansions.”

The final plan update reduced the amount of residentially zoned land, and situated it farther from the brewery – about a mile versus half of a mile. Land zoned as employment increased from 530 acres to 661, and industrial uses increased from 309 acres to 457. It also maintained plans for a large community park, something previous company representatives did not support.

The city is currently in negotiations to purchase 80 acres for the park, which will sit largely on the A-B InBev property. The deal is likely to close this year. Wray counts the park deal as a sign that the company has shifted its views about its land holdings and the plan.

“This is really looking at the long-term growth for the Fort Collins area,” he said.

Market drives development

However, market conditions will drive development despite the city’s best-laid plans. Steve Pfister, a broker at Marcus & Millichap, recalls that the original Mountain Vista plan was also touted as a plan for growth, which didn’t happen.

“Market forces are far greater than any politicians’ ability to legislate,” Pfister said. “There are a lot of competing industrial sites in Northern Colorado.”

He points out that while Fort Collins might not have large industrial parcels for sale, surrounding communities do. Some of those, such as the Great Western Industrial Park in Windsor, might have a competitive advantage because of a more central location, proximity to the airports and possibly price, too.

General demand for land in Northern Colorado has been very low. Steve Kawulok, managing director at Sperry Van Ness/The Group Commercial, points out that there were only 38 land transactions in the region during 2009, and the average land sale was three acres. Right now, there are almost 1,000 parcels on the market.

“The demand has been virtually nonexistent,” Kawulok said. “We have not found large-scale developers wanting to enter the market yet on industrial properties.”

He added that if the city does purchase some of the A-B InBev property, that could spur purchases by helping set appraisals. Kawulok also points out that large industrial parcels will make the city more competitive in attracting and retaining businesses in the clean energy and bioscience industries. Both Abound Solar and GE Energy set up shop south of Larimer County due to an inability to find an appropriately large facility locally.

For Wray, the plan update represented more than just a minor tweak to rezoning. It was also about finding common ground with the area’s largest landowner.

“I think the plan is much more successful in that we have buy in from Anheuser-Busch InBev. As a result, I think they’re in a new and better position to look at marketing their property,” he said. “That’s a big change from the past.”

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Eco-friendly burials take recycling to logical end

Green Summit set for April with new features, awards

PVHS starts on Water Valley medical fitness center

Riverwalk could also include ice arena

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What’s next for NextMedia? Restructuring under Chapter 11

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FORT COLLINS – After holding a massive land buffer in north Fort Collins for more than 20 years, Anheuser-Busch Cos. is looking to sell of some of its holdings.

Company officials and the city of Fort Collins have been working for several years to determine the proper zoning for the acreage around the Budweiser brewery, and the city is now in negotiations to purchase land for a future community park. The new zoning, approved late last year as part of the Mountain Vista Subarea Plan update, will make the northeast corner of Fort Collins a future employment hub.

A-B…

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