RE Summit: Despite popularity, developing master-planned communities remains a challenge

Northern Colorado’s master-planned communities, with their proximity to businesses and variety of amenities, are a popular choice for the region’s homebuyers, but the neighborhoods present unique challenges for the developers who build them.

“Connections to schools, parks [and] businesses” and “the energy of community” drive demand for such projects, David Crowder, McWhinney Real Estate Services Inc. vice president of development, said during a panel discussion Wednesday at BizWest’s Northern Colorado Real Estate Summit, moderated by NAI Affinity’s Jake Hallauer. 

Still, the complexity of master-planned communities, combined with increasing construction costs and speed bumps from growth-wary local governments, limits the number of players who are able to participate in building, and ultimately buying, homes there. 

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A major hurdle in the development process is access to affordable water, participants in the roundtable said. 

“We are not running out of water in Northern Colorado; what we’re running out of is water that’s been converted into municipal and residential uses,” Hartford Homes president Patrick McMeekin said. 

A solution would be more diversion and storage capacity along Northern Colorado’s waterways, Water Valley Co. CEO Martin Lind said. 

“We need to be really proactive, and there needs to be the political will” to undertake such projects, he said.

Political will also plays a role in communities’ willingness to work with developers to usher projects to the finish line. 

“The level of commitment it takes to get through the entitlement process anywhere in Northern Colorado is significant,” TB Group principal Jim Birdsall said.

It can often take two years or more to navigate the entitlement process, he said. “That period of time is risky, [and] you’re exposed to changes in policy, changes in code and changes in the market.”

Lind agreed, adding: “It’s no secret that it’s a burden to find a large piece of land in this area without an extraordinary amount of restrictions. … We don’t have the political will in Northern Colorado for growth.”

That’s not the case for the entire region, said Caliber Cos. chief development officer Roy Bade.

Caliber, an Arizona-based developer, is building the master-planned The Ridge community in Johnstown.

“It was very unusual to have the welcome we got from Johnstown,” he said. “… What a joy.”

Crowder said he’s been impressed by local planning and development officials’ performance during the COVID-19 pandemic. 

“We didn’t see dramatic slowdowns,” in processing and approving development paperwork, he said.

Developers and municipalities are best served by “agencies [that] have a [development-review] pathway that’s well intended and well worn,” Crowder said.

Another feature that helps developers get to the finish line is the metro district, which helps builders spread out the expense of infrastructure construction and maintenance. 

“To do amenity-laden projects, you must have a metro district,” Birdsall said. 

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