Real Estate & Construction  December 4, 2023

Redtail Ridge plans reemerge, Avista relocation still planned

LOUISVILLE — Redtail Ridge’s development team, not stymied by more than four years of setbacks, is back before Louisville city leaders with a new plan to add more than 2 million square feet of commercial space to a long-vacant site adjacent to U.S. Highway 36, a property that could also become the new home to AdventHealth Avista Hospital.

Plans for Redtail Ridge, development of which will be led by Chicago-based Sterling Bay LLC, a diverse real estate company with a significant life-science portfolio, will be reviewed Tuesday evening by the Louisville City Council. Specifically, the council is tasked with approving the project’s preliminary plat, which establishes a general outline for infrastructure, open space and horizontal development on the roughly 400-acre site.

Denver developer Brue Baukol Capital Partners LLC bought the roughly 400-acre former Phillips 66 (NYSE: PSX) site in 2020 for $34.93 million. As part of a July 2022 real estate transaction conducted by a series of holding companies, Sterling Bay acquired the property from Brue Baukol for just under $128 million, Boulder County warranty deeds show. Brue Baukol remains a minority partner in the development. 

When Sterling Bay entered the picture, the developer added plans for flex-lab-office spaces aimed at biotechnology tenants, a red-hot subsector of the Boulder Valley commercial real estate scene in recent years. 

The Redtail Ridge development team has spent the past four years attempting to shepherd its project — which has undergone significant changes several times based on feedback from Louisville officials and residents — through the city’s development approval process. 

Most recently, the Louisville Planning Commission, on a 3-2 vote, recommended denial of Redtail’s final plat in December 2022. That recommendation came after an April 2022 special election in which Louisville voters repealed a previous approval of the project by city officials.

Denver developer Brue Baukol Capital Partners LLC bought the roughly 400-acre, long-vacant, former Phillips 66 (NYSE: PSX) site in 2020 for $34.93 million. Source: Louisville planning documents.

Concerns from residents and city officials— mostly centering around flattening of the site, traffic, the size and location of public spaces, sustainability and economic viability — have nagged Redtail Ridge for years.  

Members of the development team say they expect this time around to be different. 

“When Sterling Bay acquired the property, we really came in with a brand new and updated vision for the site,” Sterling Bay vice president of acquisitions and asset management Evan Pesonen told BizWest on Monday. “…We’ve been listening to the community and listening to the issues that people were having and (listening to) the comments from governmental groups.”

The latest iteration of Redtail Ridge, which is expected to be built in phases over the next decade-plus, calls for a total of about 2.6 million square feet of commercial space, according to planning documents submitted to the city. 

“We really pride ourselves on delivering high-quality projects that really provide a sense of community within them,” Pesonen said.

The first phase, set to be underway by 2025, would include 509,260 square feet of industrial space, 300,000 square feet of life-sciences space and 598,940 square feet of manufacturing practice-rated (GMP) space, according to the documents. 

“The Boulder County and northwest (Denver metropolitan area) life-sciences market has grown at a rapid pace over the past several years and is continuing along that trend,” Pesonen said. “We saw how underserved the life-sciences community was and identified a huge need for additional life-sciences projects and buildings here.”

Much of the Boulder County biotechnology ecosystem revolves around  “startups in the life-sciences chemistry and biology space that are coming out of” the University of Colorado, he said. “We saw the Redtail Ridge site as an amazing location with incredible accessibility” to both Boulder and Denver.  

“What we’re planning on doing here is creating something that this market has never really seen before: a high-quality, beautiful life-sciences campus that really embraces the Colorado landscape,” Pesonen said.

Phase 2, to be built by 2030, calls for another 118,800 square feet of industrial space; 90,000 square feet of office space; 264,000 square feet of research and development space; 14,000 square feet of retail; a 285,000 square-foot, 160-bed hospital (Avista); and 150,000 square feet of medical and dental office space, according to a land-use chart included in a planning memo.

The third phase, expected to wrap up around 2035, includes another 270,000 square feet of general office space. 

“The proposal includes public dedication of several tracts of land to the city for a park,

open spaces, trails and a public safety facility,” according to a memo prepared by Louisville planning staffers. “The public dedication proposal includes 75.65 acres within the development boundaries and 47.4 acres of land located immediately north of the project in unincorporated Boulder County, which would be designated for open space and agricultural use. Additionally, the applicant proposes 15.76 acres of private open space that would be maintained by the Redtail Ridge Metro District.”

Sterling Bay’s goal is to “provide something that the whole community will be able to use and enjoy,” Pesonen said. 

The Redtail Ridge site once housed Storage Technology Corp., which sold to Sun Microsystems Inc. in 2005 for $4.1 billion. Sun was acquired by Oracle Corp. (NYSE: ORCL) in 2010, and employees were shifted to Broomfield.

ConocoPhillips had acquired the property for a proposed clean-energy research park that was expected to generate 7,000 jobs, but the subsequent spinoff of Phillips 66 halted those plans, and the property was put up for sale.

Brue Baukol’s initial plans, which began taking shape in 2019 before the developer had secured the land, sought to turn the parcel into a 5.22 million-square-foot live-work development anchored by a new corporate campus for medical-device maker Medtronic Inc. and a roughly 1,500-home senior-living community operated by Erickson Living LLC. Additional planned components included offices, retail space and apartments. 

Medtronic skipped town for a nearby site in Lafayette, and locals spoke out against the housing portion of the project, arguing that thousands of new residents would strain city resources and exacerbate traffic congestion.

Brue Baukol brought forth a scaled-back plan, which was eventually approved last year by the Louisville City Council, which applied a dozen conditions to its approval to further limit the scope of the project. 

After Redtail Ridge’s plans were approved, Avista — then called Centura Health’s Avista Adventist Hospital — confirmed that it is under contract to purchase land in the Redtail Ridge development for a new hospital on the site.

Almost immediately upon the city’s approval of Redtail Ridge, opponents of the project cried foul and set about gathering 780 signatures, nearly double the amount required by the city, for a petition to force the Louisville City Council to reconsider.

Rather than reversing its decision to approve the Redtail Ridge plans, the council opted to send the matter to the voters in an April special election.

In a result that surprised some observers, the project’s opponents prevailed, and the approved land uses on the site reverted to what was set forth in a 2010 ConocoPhillips development plan. 

That 2010 agreement allows for significant development on the site, however not as much as Sterling Bay envisions.

Avista has been under contract to buy about 40 acres on the Redtail site at the intersection of U.S. Highway 36 and Northwest Parkway, where it plans to relocate from its existing building at 100 Health Park Drive. That deal is understood to be contingent upon the Redtail proposal finally crossing the regulatory finish line. 

Redtail’s developers expect Avista leaders to take an active role in championing the project to the community and to Louisville city officials.

Leaders with Centura, which operated the hospital until this fall when the health system ended its 27-year joint venture with Avista operator AdventHealth, had taken a fairly hands off approach when Redtail made its way through prior portions of the regulatory process. 

“From all of the comments we’ve heard, everybody wants Avista here,” Pesonen said. “It’s (Louisville’s) number one employer.”

Should Avista relocate, the move would come three decades after Boulder Memorial Hospital sold its Mapleton Avenue facility to Boulder Community Hospital and relocated to Louisville as the rebranded Avista.

Hospital leaders have long said that Avista suffers from accessibility issues. The hospital’s vulnerabilities were highlighted during the Marshall Fire in late 2021. 

The site is accessed only by Health Park Drive, which dead-ends at the hospital. Over the years, the hospital has been unsuccessful in securing a new interchange off of U.S. Highway 36. Poor access adds to the time required to reach the facility, making it difficult to attract new patients.

Additionally, Avista’s landlocked location does not offer opportunities to expand, hospital officials have said, with the community missing out on potential new services because the hospital has no room to grow. A new hospital at Redtail Ridge would provide Avista with a far larger market service area, putting it closer to a wider population base.

“Moving the hospital right off of U.S. Highway 36 and Northwest Parkway provides much easier access,” Pesonen said.

Should the Redtail Ridge project move forward as proposed, Avista would likely decommission the existing hospital at Health Park Drive. Hospital leaders have not opined publicly on what could become of the site.

The latest interaction of Redtail Ridge, which is expected to be built in phases over the next decade-plus, calls for a total of about 2.6 million square feet of commercial space, according to planning documents submitted to the city. Source: Louisville planning documents.

LOUISVILLE — Redtail Ridge’s development team, not stymied by more than four years of setbacks, is back before Louisville city leaders with a new plan to add more than 2 million square feet of commercial space to a long-vacant site adjacent to U.S. Highway 36, a property that could also become the new home to AdventHealth Avista Hospital.

Plans for Redtail Ridge, development of which will be led by Chicago-based Sterling Bay LLC, a diverse real estate company with a significant life-science portfolio, will be reviewed Tuesday evening by the Louisville City Council.…

Lucas High
A Maryland native, Lucas has worked at news agencies from Wyoming to South Carolina before putting roots down in Colorado.
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