Plans brewing for Agilent campus?

LOVELAND – The empty parking lot, slashed with weed-sprouting cracks, remains a haunting reminder of the thousands of jobs gained and lost by the tech boom-and-bust’s impact on Hewlett-Packard Co. and Agilent Technologies Inc. – and the city of Loveland.

The multi-building campus has been empty for four years, on the market but not moving, as several promising deals have fallen through over the years. For city and economic development officials, its vacancy is a disappointment of massive proportions. In early August, Agilent sent a consultant from New York to Loveland, raising hopes that the company might have a serious strategy for reviving the site.

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Betsey Hale, Loveland’s business development manager, recalled her first week with the city in May 2006, when City Manager Don Williams drove her through the Agilent parking lot and let her know that filling the site was now part of her job. Today, the project is still a top priority for her.

She pointed out that many longtime residents of Loveland feel that the property is as much theirs as it is Agilent’s, since it was the local community that landed HP in Loveland to begin with.

More than 50 years ago, Loveland businessmen Paul Rice and Bob Hipps organized the Loveland Development Fund to help create employment and spur the economy of the sleepy town of under 10,000. Money was raised through pillowcase collections on the major street corners. School children collected quarters and dimes that were matched by Loveland First National Bank, where Rice was president. The money was used to purchase farmland in southwest Loveland to offer as an incentive to lure HP, which was also considering Boulder for its first site outside of California.

Agilent inherited the buildings when it split from HP in 1999, just before the tech slowdown. The company decided in late 2005 to consolidate its Loveland employees into a single building – 140,000-square-foot Building E, built in 1995 – then put the rest of the property on the market in November 2006. The listing is for four buildings totaling 811,000 square feet and 300 acres of raw land, including a renovated D Building.

Building E, detached from the rest of the campus, is not part of the offering, and still houses about 275 Agilent employees.

Very large building in small market

Realtec’s Tom Reznik, listing broker, points out that the property is priced well below replacement cost at $12.5 million, but it is still a very large property in a relatively small market. Reznik added that despite the “unfortunate timing” of the listing and other challenges, the property has been generating significant interest, showing several times per month.

In December 2007, it seemed that Agilent was close to a sale to Denver-based Old Vine Acquisition Corp. The investment group entered into an agreement to purchase the facility but by March 2008 the deal had fizzled.

Similar stories have played out over the years, though less publicly.

“We have had interest in the building, in the past, particularly from large users,´ said Mike Masciola, chief operating officer of the Northern Colorado Economic Development Corp. “It’s very good light industrial space that we really need.”

Masciola said he believes Agilent is looking for larger users in need of between 200,000 and 800,000 square feet. Instead, interest has been from 50,000- to 80,000-square-foot users. Users of light industrial/flex space that size could employ around 150 to 200 each.

Masciola explained that about 90 percent of the companies already located in Larimer County ready to expand are looking for existing buildings; about 70 percent of companies considering a move into the county also want existing buildings. In the last 15 months, NCEDC saw 11 prospects walk away because there was not readily available existing space, he said.

One such employer was GE Energy, a locally based division of General Electric. GE Energy started searching for new space in 2008 after Woodward Governor Co. informed the division that it would no longer lease it part of its Loveland facility. Woodward was planning to expand its wind turbine inverter line at the Loveland site, and GE Energy had outgrown the space anyway.

The company scouted out new space in a 30-mile radius of Loveland, wanting to stay within the city if at all possible.

“We were very diligent about our search,´ said Mark Thomas, plant manager for GE Energy.

GE Energy had two criteria: It needed around 100,000 square feet of light manufacturing and office space, and it needed it quickly. Woodward had given the company until November 2008 to be out of the site.

“We had a very tight deadline to work with,” Thomas said. “We would have needed to know if it was available for lease at that time. Really, the quick turnaround (we needed) was the real issue with the facility.”

At that time, the property was listed only for sale.

“With the short time frame, we were asking a lot of questions and expecting a lot of answers,” Thomas said. “When we were looking, we needed to find people that already had things laid out and were ready to make the building what a tenant needed it to be.”

GE ultimately selected an existing facility in south Longmont, moving its 180 employees there.

“We were quite surprised that in that big of an area, the options were so limited,´ said Mark Beckett, communications manager for GE Energy’s Control Solutions Group. “It’s a shame. We would have loved to stay in Loveland.”

Reznik said Agilent is now considering leases to tenants above a certain size.

Ghosts of jobs passed

Situations such as the one with GE got Loveland business owner Hugh McKean riled up enough to run for city council.

“That property represents about 3,000 jobs that the city had at one time,” McKean said. The shame, he added, is that now it sits empty and deteriorating across the street from homes were former employees still live.

“I think the biggest challenge has been Agilent,” he said. “Agilent, in my mind, has been the stumbling block. We’ve had people interested in the space.”

Hale confirmed McKean’s and Masciola’s assertion that the site has not been without potential users. She recounted site visits by companies from Texas, California, Germany and numerous anonymous site selectors.

“I don’t know how many times I’ve walked through that building – too many times,” she said.

Even Agilent concedes there has been interest, but the company declined comment for this article, citing the involvement of its new consultant. A company spokeswoman provided the following statement:

“… I can say that Agilent had some interest in the property in the past, but for a variety of reasons we haven’t been able to close a sale. We do remain committed to finding a buyer for the site that will bring new businesses and jobs to the Loveland area.”

With a property that size there will need to be a multifaceted partnership to see the it thrive again. McKean likens it to dominos: Every piece must fall just right at the correct time. Hale said she’s not sure what the city’s involvement will be, but she is sure that the community and the company must have a shared vision.

“I’m not sure there’s a shared vision,” she said. “Agilent doesn’t know what the property means to the citizens of Loveland, and the citizens don’t know what Agilent’s perspective is.”

Communication has also been an issue. Agilent cut its local community relations position more than a year ago, and the company no longer invests in NCEDC. With that presence gone, communicating with Agilent at a corporate level has grown increasingly difficult.

“There is a huge component of Agilent that deals with their real estate,” McKean said. “But it’s like trying to make a call to the White House.”

Hale extended an open invitation to the corporate decision makers at Agilent: “Come to our town, sit down with us, and let us tell you about that property, about why it’s so important to us.”

Reznik said that senior management for Agilent makes periodic visits to Colorado and has visited the Loveland site “numerous times” since it was listed. He feels that the city has shown a high level of motivation to see the property used again.

For Hale, the key to getting the Agilent property revived lies in the hands and hearts of Loveland’s citizens, as it did half a century ago.

“We’ve let these people down, the people who had the vision,” she said. “When a community decides to do economic development, it gets done. What we need in Northern Colorado today is bold leaders – citizens, not elected officials.”