Updated: Developer seeks to alter Foothills mall financing agreement

The developers of the Foothills mall will take the $53 million public financing agreement back to city council for a third time next week, this time to modify the conditions they must meet before they can issue $71 million in non-rated bonds that will help pay for the $313 million project.

Among the modifications is the amount of space that must be leased before the bonds can be issued. In the original agreement, the developer, Alberta Development Partners, 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 matter will go before council April 15.

“Our sole focus is on delivering a re-imagined Foothills for the 2015 holiday season. This minor amendment allows us to close the comprehensive finance package, which includes the bonds,” Alberta founder Don Provost said in a statement Thursday. “The modification is required to meet the market conditions placed on the execution of the overall financing. The great news is that we are at the finish line and on track to open in 2015.”

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.

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.

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