Mall developer wants to modify public-financing agreement

FORT COLLINS – The developer of the Foothills mall project in Fort Collins Tuesday night will seek an important modification to a $53 million public-financing agreement to keep the project on track.

The modification will allow Alberta Development Partners LLC, the Denver-based company in charge of redeveloping the mall, to issue $71 million in nonrated bonds sooner, an important matter as the deadline for issuing the bonds approaches.

The agreement between the city and Alberta can be terminated if the bonds are not issued by June 30, according to Josh Birks, economic health director for the city. The bonds are projected to include an interest rate around 7 percent, Birks said, but the precise interest rate will not be known until the bonds are issued.

The modification relates to the amount of space that must be leased before the bonds can be issued. In the original agreement, signed in January, the developer was required to have signed leases on 240,000 square feet before the bonds could be issued. The developer would like to reduce that number to 155,000, according to Fort Collins city council documents.

Additionally, the developer would decrease the total square footage occupied by tenants new to Fort Collins from the previously agreed-upon 120,000 square feet to 90,000.

The agenda item also states that if the requested alterations are made, only $23 million of the $53 million in bond proceeds would be released to the project. The remaining $30 million would be released in segments to the project as additional leases are executed by the developer.

Approving the changes to the agreement will pose no additional risk to the city and will not result in additional financial gain for the developer, according to the agenda item.

Alberta currently has about 90,000 square feet of space in the new mall leased, according to the document, and expects to have 195,000 square feet leased by the end of May.

A number of factors led to the request for modification of the agreement, according to the agenda item.

A delay in the project’s opening from fourth-quarter 2014 to fourth-quarter 2015 and related timing uncertainty are listed among these factors.

Also noted are a leasing strategy that focuses on “critical” retailers first, who will attract other quality retailers, and that retailers are focused right now on leases for 2014 openings and will think about leases for 2015 openings later in the year.

Waiting too long to issue the bonds could negatively impact the project in a number of ways, including further delaying the opening or issuing the bonds at a higher rate than expected, according to city documents.

Tuesday night’s city council meeting will be held in council chambers at 300 W. Laporte Ave., beginning at 6 p.m.

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