A-B lists 700 acres for sale

FORT COLLINS – With new zoning in place, Anheuser-Busch InBev has finally listed its more than 700 acres of excess land in north Fort Collins.

Realtec brokers Jim Mokler and Dan Eckles entered into a listing agreement with A-B at the end of May. The duo are developing a strategic plan for selling the parcels zoned for industrial and employment uses. At $1.25 per square foot, the listing is valued at around $43 million.

“It’s a prime future development site,” Eckles said.

He pointed out that the property offers easy access to both the Great Western rail line and Interstate 25, which supports a wide variety of industrial uses and avoids the heavy traffic in bustling development areas such as the Harmony Road corridor.

The importance of rail service is underscored by large manufacturers such as Vestas Wind Systems and Owens-Illinois, which chose the Great Western Industrial Park in Windsor over Fort Collins.

“The key is that Anheuser-Busch wasn’t ready to sell this property until now,” Eckles said. The brokers have been working with the company on the listing for about a year. They even discussed a sale about two years ago, but then “the numbers wouldn’t work,” according to Mokler.

When the brewery originally purchased the land in the early 1980s, the excess land created a buffer from development. A-B was concerned about potential future conflicts arising if residential and other non-industrial users built close to its plant. Since the acquisition of A-B by Belgium’s InBev in 2008, the corporation has focused on shedding non-core assets, such as Sea World and Busch Gardens, as well as vacant land holdings in Europe.

Even before the acquisition, A-B was working with the city of Fort Collins toward the possibility of development around its brewery. Years of planning, which culminated in the adoption of an update to the Mountain Vista Subarea Plan last September, addressed zoning, stormwater mitigation and other development issues.

Not all of the planning is complete, though. Utility issues specific to sewer access still have to be worked out and the opportunity for adding rail spurs must be factored in to an overall plan.

“There are a lot of moving parts,” Mokler said. “The city is a big part of this.”

He and Eckles will be working closely with the city to have the property as near to development ready as possible – “on step six-of-10 rather than one-of-10.”

The sewer issue, in particular, could involve discussions with the city. Mokler explained that there are two main options for sewer service to the parcels: through the Boxelder Sanitation District or by tapping the city system.

Mike Freeman, CFO for Fort Collins, said that while it wouldn’t be impossible for development on the property to tie into the city system, there is no current commitment to do so. The city does provide sewer service to the brewery but the surrounding area falls into the Boxelder Sanitation District.

Economic boon to city

From an economic development standpoint, the listing of the property could be a boon for Fort Collins. Freeman said that the city is not currently in contact with any potential users, but in the last 18 months his office has fielded inquiries from major employers looking for rail-served property.

“It helps us to present a viable development option for them,” he said. “It’s a very strategic piece of property from a long-term employment perspective.”

The rail potential for the A-B property is huge, according to Dennis Olin, president of Littleton-based Railroad Specialties Inc. Olin has been in the railroad industry for nearly 50 years, most of those in Colorado. In the last 10 years, he has seen an increased interest in rail, which he attributes to the steep increase in diesel fuel prices. Clients who haven’t used their rail spurs for 20 years are looking to revive their access.

“Prior to the bottom falling out of the economy, rail-served property was at a premium,” he said.

Olin explained that railroad firms used to have sufficient right-of-way to expand lines and add spurs. However, urban land has been snapped up for other uses, and municipalities sometime balk at having the rails within city limits. For that reason, companies such as Burlington Northern Santa Fe and Union Pacific get pretty excited when land comes available, and see the A-B parcels as a unique opportunity.

“The Denver-area has basically run out of land,” Olin said.

He added that since the listed properties aren’t directly parallel to the line and could be accessed through spurs, it reduces the likelihood of a user blocking or slowing other rail traffic.

“A situation such as this one has even more value to the railroads,” he explained.

Olin will meet with Mokler and Eckles to evaluate the property’s rail potential, even though he’s already familiar with the site. He helped build the track when A-B located there in the 1980s, and he calls the availability of vacant land there an “absolutely rare opportunity.”

Part of Great Western Railway

Interestingly, the rail line at the A-B site is part of the Great Western Railway, operated by The Broe Group affiliate OmniTrax. The line offers connections to the main lines for both UP and BNSF.

The Great Western Railway serves the A-B brewery, shipping beer out as well as bringing bottles in from the Windsor O-I plant. The two companies are among the largest users of the line, each shipping about 4,000 containers annually.

Broe is not only a potential collaborator on the site, it is also a competitor and potentially a client.

“We’re very familiar with the property and are certainly happy to serve any company that needs rail there,´ said Broe Vice President Rich Montgomery.

Broe still has more than 1,000 acres available at its Great Western Industrial Park, with parcels divisible into anything from two to 200 contiguous acres. The park is currently home to Front Range Energy, Vestas and O-I. Montgomery said that he has seen an uptick in interest for available land recently.

Montgomery couldn’t comment on whether Broe would be interested in acquiring any of the A-B land, but the company has shown interest in property along its rail line in the recent past.

In August, an affiliate company of Broe purchased an industrial building at 3620 Weicker Drive – just west of I-25 and north of Colorado Highway 14 – for $8.9 million.

“A big reason for doing that was an effort to develop our relationship with New Belgium (Brewing Co.) and other tenants in the buildings,” he said. “It’s our goal to help them become a rail user.”

New Belgium is in the process of expanding into another 30,000 square feet at the Weicker Drive facility, adding to its initial 130,000 square feet of ambient and cold storage. Montgomery also announced that 30,000 square feet, including three rail docks, has recently become available.

“It’s one of the very few, if not only, available rail-served warehouse buildings in Northern Colorado,” Montgomery said.

Whether as collaborator, competitor, customer or some combination of the three, it’s clear that in Northern Colorado rail will soon become the tie that binds.

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