King Soopers in east Loveland requires Centerra South in order to proceed

LOVELAND — Loveland’s City Council indicated general support for a new King Soopers-anchored shopping center on the east side of the city but heard from the project’s developer that it won’t happen if Centerra South fails to move forward.

That’s because, on its own, the infrastructure for development of 30 acres of the Schmer farm, where the shopping would be located, would require $26.7 million in infrastructure costs, $17 million of which would be available only if Centerra South is created.

Centerra South has faced an uphill climb since it was first suggested in 2023. At present, the city has agreed in its settlement of a lawsuit filed by McWhinney Real Estate Services Inc. that it will permit the urban renewal area to go forward and would defend the development from any future lawsuits that challenge it.

But as described by Tyler Carlson, CEO and managing principal of Evergreen’s Denver office, McWhinney hasn’t committed — to Evergreen — that it will continue its project.

Evergreen, which worked with the city to develop the Sprouts Market grocery development at the corner of Lincoln Avenue and Eisenhower Boulevard, said that he was confident that the new King Soopers development could be accomplished as long as Centerra South moves ahead.

The new shopping center would be a joint venture between the Schmer farm family and Evergreen. Schmer would continue to farm the remainder of the 120 acre property, but city staff would like to bring the entire parcel into the city through annexation. The farmstead would be buffered from the shopping center property. The King Soopers store would be a King Soopers Marketplace store, meaning it will be about 130,000 square feet in size — larger than the existing King Soopers stores in Loveland.

“This project will take many months and hundreds of thousands of dollars of investment on our part before we have something ready for you to approve,” Carlson said. “We’d rather know now what you’re thinking rather than after we’ve made that investment.”

The timetable is short, he said, in order to meet King Soopers’ corporate requirements to open the store by the fourth quarter of 2026. That means the annexation decision would need to be made in the next 30 days, Carlson said.

He said that benefits to the city, in addition to providing grocery shopping on the city’s east side and attracting sales to people from outside the city, is that it would generate $9.8 million in fees on the construction and would capture $15 million in sales taxes over the coming 10 years. Even though Loveland does not charge a sales tax on food sold for home consumption, “about 20% of a store’s revenue is not food for home consumption, so there is sales taxes collected,” he said. 

The developer would impose a 1% public improvement fee, or PIF, on all sales including food. In response to a question from council member Troy Krenning, who wondered whether the PIF would run contrary to the city’s food sales tax exemption, acting city attorney Vince Junglas said the language of the city’s ordinance says that “the council shall not” impose a tax. A fee imposed by the developer would be permitted.

Carlson said that the developer also would impose a 3% PIF on sales of services; services are not otherwise taxed. 

Finally, the developer would need approval of a metropolitan district in order to impose an assessment on properties established there. While the council has imposed a moratorium on residential metro districts, council members did not express opposition to a commercial metro district.

Carlson described “four buckets” of infrastructure costs: 

• U.S. Highway 34 improvements, including deceleration and acceleration lanes, median improvements and improvements to access to the existing hotel and gas station/convenience store.
• Rocky Mountain Avenue, which doesn’t exist now but would be four lanes in each direction.
• Water and electric utilities, which would be extended through the Centerra South project.
• A sewer lift station, the most expensive of the infrastructure costs at $13 million. The lift station would service the combined Centerra South and Schmer farm development.

“There’s no way a 30-acre shopping center can afford a $26 million cost. Without Centerra South, it doesn’t happen,” Carlson said.

“We’re conjoined twins from an infrastructure perspective. I’m not sure they need us, but we certainly need them.” He also said that some of the costs will be absorbed privately by Evergreen.

Half of Rocky Mountain Avenue, some share of U.S. 34 improvements and most of the lift station would be paid by Centerra South.

Council members asked questions about traffic, which Carlson said would be discussed at a later meeting after the Centerra South and Schmer development traffic plans are folded together to explore impacts.

It’s possible that the Best Western Plus Loveland Inn and the Conoco gas station east of the Schmer homestead could share in the cost of the lift station; those properties are on septic tank/leach field sewer systems. It’s also possible that the Schmer development will improve the highway access to the hotel and gas station, driveways that are considered dangerous now.

No members of the public commented during a comment period.

“I didn’t hear anything to tell you to slow down,” Loveland Mayor Jacki Marsh concluded.

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