One of Colorado Springs' biggest commercial real estate flops over the last decade is getting a new owner, a new name and, perhaps most importantly, a new life.
Westside Investment Partners, a suburban Denver commercial real estate and investment company, has bought the 153-acre Colorado Crossing property, southeast of InterQuest and Voyager parkways on the city's far north side. The purchase price was $22.1 million.
Andy Klein, a Westside principal, said Thursday the company plans to revive Colorado Crossing, which was envisioned as a massive, mixed-use residential and commercial complex until its original developer declared bankruptcy.
Westside will spend about $30 million more to complete partially finished, skeletal-like buildings that have stood idle for eight years on the property, while it seeks to bring apartments, restaurants, hotels and other new uses to the property, Klein said.
The company is bullish on Colorado Springs' future, he said. The city's population growth, expansion of the University of Colorado at Colorado Springs and the addition of amenities such as the downtown U.S. Olympic Museum are among several signs that the Springs is on the move, he said.
"We believe in the growth of Colorado Springs," Klein said. "We love the direction that it's going. With Mayor (John) Suthers, and the entire city staff is incredibly pro-growth, we believe that Colorado Springs will continue to expand because it's a great place to live. There's a lot going on."
Westside's purchase of Colorado Crossing almost didn't happen. After contracting to buy the site several months ago, Westside and bankruptcy creditors - who had become shareholders in New Crossings Inc., a new company that had taken over the property - went back and forth on the deal.
Last month, Jim Johnson, owner of GE Johnson Construction Co. and one of the project's biggest creditors, said a disagreement over terms had killed the deal. However, talks continued and Westside's purchase was recorded Monday in the El Paso County Clerk and Recorder's Office.
Johnson said Westside has paid $10 million upfront, and the rest of its purchase price will be paid to creditors over the next several years as the company sells parcels at Colorado Crossing.
"It's a relief," Johnson said Thursday. "On to the next chapter."
But it's also bittersweet. Neither GE Johnson nor dozens of other contractors and subcontractors who worked on an initial phase of Colorado Crossing - a 9-acre parcel where four buildings were under construction - will receive 100 percent of what they were owed.
Karl Berg, a Springs attorney representing several creditors, said a repayment plan called for them to be paid 53 percent to 58 percent - although future payments are unknown because they're tied to proceeds of land sales as Westside develops the rest of the Colorado Crossing property.
"It's been a long, tortured path to a resolution and my clients, I can tell you, are happy the property's finally been sold," Berg said. "Some of them are disappointed by what they'll receive, but it was the best outcome under the circumstances for them."
Springs real estate developer Jannie Richardson launched Colorado Crossing in 2007; she proposed it as a city-within-a-city - 1.6 million square feet of stores, restaurants, offices and the like, 1,600 residences, a 14-screen movie theater complex and even a water park, among other uses.
But the economy tanked and Richardson's critics accused her of mismanaging the project. She couldn't pay more than $30 million owed to dozens of contractors and subcontractors. and work stopped in 2008. A four-story, 110,000-square-foot office building, a pair of two-story, 20,000-square-foot office and retail buildings, the theater complex and a parking garage all were left unfinished.
Richardson's development company filed for bankruptcy protection in 2010. After a protracted, 4½-year court fight, creditors took over the property in October 2014 and began looking for buyers.
As Colorado Crossing's new owner, Klein said Westside plans to:
- Rebrand the property with a new name, which is still being determined. "It's been through a lot of ups and downs," Klein said.
- Resume construction on the 110,000-square-foot office building, hopefully by year's end, Klein said. The company also hopes to resume work on the 20,000-square-foot office and retail buildings. Westside, which would retain ownership of the buildings, has targeted their completion by late 2017. The company has "significant interest" from office users, while restaurants are eyeing the retail space, he said.
- Work with a theater company to complete the movie complex. Klein declined to identify the company, and he's not sure if the complex still would have 14 screens. However, the completed theater would be "upscale" and "different than anything Colorado Springs has right now," he said. The theater could be completed in early 2017.
- Sell undeveloped parcels. Westside already is talking with an apartment complex developer that's eying 16 acres, Klein said.
- Work with land planning groups to design future uses for the property, which are expected to include residences, retail, hotels and more. Westside envisons a five- to seven-year buildout of the property. "The city is going to be very happy," Klein said.