A Chicago company will auction the unfinished buildings and vacant land left from the 2008 collapse of the ambitious Colorado Crossing mixed use development in northern Colorado Springs as one of two potential paths to bring the abandoned 151-acre project back to life.
NRC Realty & Capital Advisors LLC is seeking sealed bids through Aug. 12 on the property, which includes five partially completed buildings totaling 190,000 square feet on 9.8 acres, and 134 acres of surrounding land southeast of Voyager and InterQuest parkways.
The company is selling the property "free and clear of all liens" as part of the 2010 Chapter 11 bankruptcy filing of SRKO Family Limited Partnership, set up by Colorado Springs developer Jannie Richardson to develop the complex.
The auction is part of a process to end the bankruptcy by one of two means: a sale to a winning bidder, or an alternate plan by creditors to set up a trust to complete construction on the buildings, find tenants and sell the rest of the land for future development of apartments, town homes, shopping centers and office buildings. The winning bid must top the $15 million estimated value of the creditors' plan, which calls for transferring the property to a new limited liability company controlled by creditors.
"We expect bids in the $15 million to $20 million range for this property. The market will speak through the bidding process," said Evan Gladstone, NRC's executive managing partner in Chicago. "This is one of the last large undeveloped parcels in northern Colorado Springs. We expect good interest and competitive bidding. If the bids are deemed sufficient by the creditors, the property would be sold to the winning bidder at auction rather than go forward with the creditor's plan."
C. Randel Lewis, of Denver-based Western Receiver, Trustee & Consulting Services Ltd. and trustee in the SRKO bankruptcy, said Thursday that creditors plan to review the bids in mid-August and ask the bankruptcy court to either approve the bid they select or OK the creditors' plan. He said court approval likely would come by mid-October, allowing the sale or the transfer to the creditors' limited liability company to be completed by the end of October.
"Creditors would be thrilled to get a high enough bid to abandon their plan and go through with a sale," Lewis said.
"This auction helps establish a critical element of the creditors' plan, which is that it is worth more than the liquidation value of the property, and therefore in the best interests of all creditors."
Construction on Colorado Crossing began in 2007, but SRKO ran out of money as the recession hit and worked stopped in 2008, leaving the buildings partially finished. Contractors and subcontractors filed about $26 million in liens against the property for work they had completed but had not been paid for, and SRKO sought U.S. Bankruptcy Court protection from its creditors in 2010.
Creditors filed their plan in March with the court, and NRC was hired to auction the property a month later.
The property's unfinished buildings include a four-story, 110,000-square-foot office building that is about two-thirds complete; a pair of two-story, 15,000-square-foot office and retail buildings that also are about two-thirds finished; a 14-screen movie theater complex that is about 85 percent finished; and a 1,050-space parking garage that is 90 percent finished.
Under either the auction or creditors' plan, the contractors, subcontractors and other creditors would likely receive only part of what they are owed. With an auction sale, they would receive payment almost immediately; under the creditors' plan, the payments would take several years.