Loveland to mull incentive package for Hensel Phelps

LOVELAND — The Loveland City Council on Tuesday will consider a business-assistance agreement with Hensel Phelps Construction Co. that would waive up to $1 million in fees if the longtime Greeley-based contractor agrees to move its headquarters to Loveland. 

Under the proposed agreement outlined in Tuesday’s council agenda, the city would waive use tax, building permit, general government capital expansion fees and law enforcement capital expansion fees, but the combined waivers could not exceed $1 million. The fee waivers would occur at the time a building permit is issued for the project site.

Helsel Phelps would be responsible for all other fees, such as streets, capital expansion fees, impact fees and fire, water, and sewer fees, which would be paid by any other applicant.

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The proposed agreement would help Hensel Phelps purchase a 1-acre parcel, build a Class A office building of at least 100,000 square feet for its global headquarters, and create between 125 and 250 jobs within three years.

The company told BizWest on Wednesday that it planned to build its new office near Interstate 25 and U.S. Highway 34 and is considering Centerra South, McWhinney Real Estate Services Inc.’s billion-dollar planned community south of its existing Centerra mixed-use development.

Hensel Phelps would have to complete construction of the building and obtain a certificate of occupancy or equivalent letter by Dec. 31, 2028. Three years after the city of Loveland issues the certificate of occupancy, according to the proposed agreement, the city would review data provided in the most recent Quarterly Census of Employment and Wages report provided by the Colorado Department of Labor and Statistics and then pay the company $2,000 per job, not to exceed $500,000.

In exchange for the incentives, Hensel Phelps would be required to complete the purchase and sale agreement with the developer, abide by all city codes and processes, and then maintain ownership and occupancy of the building.

If, within the first five years, Hensel Phelps were to move its business away from Loveland or sell the property, the company would have to pay back the city’s investment at a staggered rate plus interest to account for the time value of money. It would have to pay Loveland $1 million if it left before the end of the first year, $800,000 before the end of the second year, $600,000 before the end of the third year, $400,000 before the end of the fourth year and $200,000 before the end of the fifth year. The interest would be calculated at 5.5% per year.

According to the proposal in Tuesday’s agenda, “failure to meet any of the deadlines or conditions identified above will result in automatic termination of the agreement.”

Mandy Peters, a communications officer with Hensel Phelps, told BizWest that multiple locations are in consideration near the I-25/U.S. 34 interchange and that the property transaction has yet to be concluded.

Founded in 1937, Hensel Phelps specializes in real estate development, construction and facility services in markets ranging from aviation, transportation, government, mission-critical, water/wastewater, commercial and health care. Its headquarters is at 420 Sixth Ave. in Greeley.

While not identified by name, the Colorado Economic Development Commission noted last November that it was working with a Greeley construction company on an expansion. Hensel Phelps was the only company that fit the description. The state said the company planned a 107,000-square-foot facility and would pay an average annual wage of $80,051. Such an expansion would qualify the company for $4.9 million in tax credits over eight years, the report then said.

Hensel Phelps also once considered a location in Broomfield in Baseline, which also is a McWhinney development.

BizWest Managing Editor Ken Amundson contributed to this report.