Oakwood Homes of Colorado, the state’s largest private homebuilder, has contracted to buy the northern 2,600-acre portion of the Banning Lewis Ranch in Colorado Springs.
Oakwood CEO Pat Hamill said in an interview Tuesday that his company is scheduled to close on the property May 20, although the acquisition isn’t a done deal and the company must complete its due diligence on the property.
Still, Hamill said, “it’s looking very good.”
A purchase price wasn’t available; Oakwood is buying the property along with a partner Hamill declined to identify.
The deal would be significant because it would ensure that residential development would continue on the northern portion of the ranch where about 350 homes have been built over the last five years and up to 7,500 residences are envisioned. To the south, an energy company is seeking to drill for oil and gas on its part of the ranch and isn’t interested in residential or commercial development.
Oakwood’s purchase also would bring a local influence to the development of the northern portion of the ranch, whose previous owners for decades have been out-of-state companies.
“We do some of the very best master-planned communities in the state,” Hamill said of his company, which is both a builder and residential developer. “We think that Banning Lewis Ranch has the potential to be one of the best in the state, if not the best.”
The sprawling ranch — bounded roughly by Woodmen Road on the north, Fontaine boulevard on the South, Meridian Road on the east and Marksheffel Road on the west — makes up much of Colorado Springs’ east side. It was annexed by the city in 1988, and was envisioned as a place where much of the city's growth would occur. However, little development took place over the years because of a series of ownership changes.
A pair of California-based limited liability companies who owned 21,500 acres of the ranch declared bankruptcy in October 2010, citing, in part, the national and local slowdowns in homebuilding and development. The massive parcel was auctioned nearly a year ago as part of the bankruptcy.
Ultra Resources, a subsidiary of Houston-based Ultra Petroleum, paid $20 million for the lower 18,000 acres of the ranch. Ultra is seeking to drill for oil and gas on its property, although a Colorado Springs moratorium on energy exploration is in place until late May while a city task force studies the issue.
Meanwhile, the northern portion of the ranch was purchased for $24.5 million by KeyBank National Association of Ohio, which had been a lender on the property. After its purchase, KeyBank announced it planned to sell the property and began marketing the land.
Oakwood has been building homes in the Pikes Peak region since it bought land about 2005 in Fountain, south of the Springs. Oakwood later became one of several builders in the Banning Lewis Ranch, where home construction started in fall 2007 southeast of Woodmen and Marksheffel. Oakwood also builds in Falcon Highlands, an unincorporated area east of Banning Lewis.
Oakwood was attracted to Banning Lewis’ beauty and the idea of developing it for residents who want the amenities that come with a master-planned community, Hamill said.
“A master-planned community is way beyond just having lots and streets,” he said. “It’s all about the parks, the trails, the schools, recreation and the lifestyle that people are buying into, as well.”
The company might tweak with previous plans for the property, which called for a series of six “villages” or residential areas on the property, Hamill said. Whatever changes might take place, however, Hamill said Oakwood officials plan to solicit input from existing Banning Lewis homeowners. The company already has met with real estate agents and city officials, he said.
But will Banning Lewis become a destination for homebuyers if Ultra Resources is drilling for oil and gas to the south?
Hamill said he’s not worried. Oakwood is building homes in other areas of Colorado that are near drilling operations, and steps can be taken to mitigate the concerns that homebuyers might have, he said.
Oakwood already has met with Ultra about its plans for Banning Lewis and is aware of Ultra’s targeted locations for wells, Hamill said. The energy exploration industry, he added, will be a plus for the Colorado Springs area, providing jobs and a positive economic impact.
The 2,600-acre parcel is huge, Hamill said. “So, we can control our own environment so that people don’t even see this stuff going on. It’s not a big deal. Ultimately, it’s going help the Springs region with jobs and everything else.”
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