Disagreement over tenant mix led to ACE withdrawal, Loveland officials say
Betsey Hale, the city's economic development director, said tenants would have ended up paying too much to lease space under plans by the Colorado Association for Manufacturing and Technology to fill the plant with "hundreds of companies."
"The business model of trying to re-tenant the property with multiple, potentially even hundreds of companies, and also have about 100,000 square feet of shared services space, was not a realistic model," she said.
The plant, she explained, would have to be reconfigured into smaller, individual spaces to accommodate so many companies. Those upgrades would have driven up the cost of rehabbing the plant and driven up lease rate so much that few companies would have been able to afford the rent.
CAMT announced its withdrawal Thursday. The 811,000-square-foot plant plant is owned by Kentucky-based Cumberland and Western Resources. CAMT will now look for a new home for ACE, probably in the Denver-Boulder area.
Cumberland and Western did not return calls Friday. Government and industry officials, however, said they planned to press ahead in their efforts to help the Rocky Mountain Center for Innovation and Technology, the new name given the project by the developer.
Hale pointed out that Loveland never had a formal agreement with CAMT. The city, she said, also had worked to acquire the property before CAMT and NASA signed the Space Act Agreement, which set in motion plans for the ACE project.
"The CAMT Space Act Agreement was not the driving force behind the city getting involved in that real estate transaction," Hale said.
Officials also said NASA will continue to work on the Loveland project.
Robert "Joe" Shaw, deputy director of the Office of Technology Partnerships and Planning at the NASA Glenn Research Center in Cleveland, said in a statement that NASA Glenn looks forward to working with the city of Loveland, Rocky Mountain Center for Innovation Technology and the Northern Colorado Economic Development Corp.
"Federal laboratories have an interest in assisting in job growth and economic vitality in communities throughout the United States. Loveland is a fine example of a city poised for economic success," Shaw said in the statement, which was dated last month and distributed Thursday once more after CAMT's announcement.
NCEDC CEO Walt Elish also said Cumberland and Western wants to continue working with NASA.
"I just wish there could have been a way to work something out that could be beneficial to both," said Elish, noting that now two groups will work with NASA.
"It'd have been nice if it could have been unified," Elish said. "I think it still can be. ... My guess is the discussions aren't over."
Elish added that he remained optimistic about the project and that his organization would continue to help Loveland and Cumberland and Western to try to ensure its success.
Regardless of the location of the ACE project, opportunities for Weld County businesses to work with NASA and CAMT will continue, said Eric Berglund, interim president and CEO of Upstate Colorado Economic Development, which aids Weld County businesses.
"There's going to be opportunities wherever the ACE project ends up being with CAMT and NASA to be able to tap into those different technologies and spin those businesses off," Berglund said.
In its announcement Thursday, CAMT said the developer was moving in a direction that didn't fit the project, though it provided no more detail.
"CAMT is committed to the full vision of the ACE Park, which includes a multi-tenant facility with shared resources and equipment for scaling up manufacturing of new technologies for aerospace and clean energy. We are currently identifying other potential locations in the Denver/Boulder area for the ACE Park," the organization said in an email.
Loveland City Council voted Oct. 4, 2011, to confirm Cumberland and Western as the campus' developer. The idea was to help redevelop the former campus into a technology-driven hub for innovation and manufacturing of products based on patents held by NASA and the National Renewable Energy Lab in Golden.
Loveland originally bought the property for $5.5 million, approximately its assessed value. Cumberland and Western paid $5 million in cash for 177 acres of the 300-acre property in a deal that closed in late 2011.
The decision to sell to Cumberland and Western was made after Loveland officials took a trip to the Southeast to review at least two of the company's redeveloped sites. Those who made the trek included Hale and CAMT CEO Elaine Thorndike. Thorndike also did not return phone messages Friday.
Last month, Cumberland and Western officials told area business leaders that they hope to see as many as 4,500 people working at the former Agilent plant over the next few years.
That figure is about half as large as initial estimates from various officials last year.
Representatives of Cumberland and Western also told a breakfast meeting of members of the NCEDC that they were looking for a few anchor tenants to lead the way in terms of job-creation, with an undetermined number of smaller companies helping to fill the plant.
That figure, too, is a significant departure from early reports that as many as 100 companies could someday occupy the plant.
The developer, NCEDC officials said, declined to estimate how long it might take to attract enough companies that would employ that many people. "There's no timeline," the NCEDC's Kelly Peters said. "No one wants to set one, because that would set the wrong expectations."
Loveland City Councilman Phil Farley also said he was confident in Cumberland and Western's ability to redevelop the campus into a technology park. He said he believed the project will lead to a "couple hundred" jobs by year's end.
- C&W relying mostly on relationships to market RMCIT 9/5/12
- Loveland launches backup plan for former ACE park 3/9/12
- Loveland's loss possible gain elsewhere 3/9/12
- A timeline of the Loveland ACE project 3/9/12
- Loveland gives developer wide berth 1/27/12
- Collaborators anxious to hear what's next for project 1/27/12
- Billionaire behind Loveland project 1/13/12
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