|ACE: Loveland To Seek New Bidders
CAMT spars with council on who makes decisions
Loveland - August 24, 2011
The Loveland City Council decided to open to the public a meeting planned by staff to be closed between the council and CAMT
(Colorado Association for Manufacturing and Technologies) Tuesday night. The result was an interesting colloquy between CAMT
officials and the council on how to proceed with the proposed ACE Project in Loveland.
CAMT appeared to be pointing the finger at the developer they chose, United Properties, by telling Loveland’s City Council that United
Properties never understood the “vision” of CAMT for the ACE Project.
United Properties recently withdrew from negotiations with the City of Loveland and CAMT to purchase and develop the old Agilent
campus in Loveland for the ACE Project. In anticipation of the negotiation and due diligence by United Properties, the City of Loveland
recently purchased the campus from Agilent for $5.8 million assuming all liability for any environmental contamination.
According to United Properties President Frank Dutke, the lack of “available credit tenants” made the project infeasible. In other
words, nobody will finance the some $40,000,000 United Properties believes is required to renovate the old Agilent campus unless
sizable tenants with good credit can be identified. As one source close to the negotiations told LovelandPolitics, “the problem isn’t the
purchase price it’s the cost to renovate that property.”
The negotiations broke down when United Properties informed the City of Loveland and CAMT the only way they could go forward
was to have the City of Loveland carry or facilitate the $40,000,000 renovation costs. Another rub was the demand by CAMT that they
eventually own the property after it is renovated by United Properties. Speaking off the record, a source familiar with the discussions
said that CAMT's expectations of both a revenue stream and ownership are "preposterous" given the fact they have no money to
Flo Raitano, Chairwoman of CAMT’s board, told the Loveland City Council Tuesday night that United Properties erred because they
relied upon a certain business model used for all commercial and retail developments. She described the model as finding first an
anchor tenant for a large project and later filling in around that anchor tenant smaller spaces for smaller businesses. She continued, "we
aren't doing it that way". She said CAMT is recruiting the boutique firms first "because that is where innovation comes
from." What she didn't address was whether CAMT had discussed the viability of their "business model" with any commercial
Raitano also told Loveland's council, "we have already got about $650'000 skin in the game" when challenged about
CAMT's lack of financial contributions to the ACE Project. CAMT has not contributed financially so the assumption is this is
Raitano's estimate of in-kind contributions of CAMT staff time dedicated towards the project.
Councilman Hugh McKean asked whether the city can find an interim use for the property that will allow CAMT's ACE Project
vision to "grow into" the property. When CAMT strongly rejected this proposal McKean offered; "We are not talking about
ephemeral things here we are talking about 812,000 square feet [and 300 acres] that costs us $90,000 per month. “ Than he asked,
“Is your vision possible?”
Raitano replied that interest by developers “is still there” offering this as proof of the viability of CAMT’s vision for the ACE Project.
She added again that “United Properties never understood CAMT’s model” reiterating that CAMT is looking to implement a vision that
doesn't conform to the standard commercial development practice. (See list to the right of developers interested in the project)
Councilman Daryle Klassen told his colleagues that a wise old friend once told him there are only two reasons to have a partner, “for his
expertise or money.” He told Raitano CAMT was the city's partner because of their expertise and he was counting on their expertise.
Councilwoman Donna Rice told CAMT's Elain Thorndike, "I don't see any money anywhere - that is the problem I see lots of good
ideas but where is the money coming from except from the City of Loveland?"
Another question by McKean was, "How much is CAMT willing to do to bring some shared services companies to
CAMT's President Elaine Thorndike responded, "I think what you are asking me is where is the money coming from?"
McKean responded, "Yes, where is the business plan?"
Thorndike launched into a long response that didn't directly answer his question. She talked about grants that were applied for,
potentially interested tenants and spoke around various models CAMT considered for the project.
Mayor Gutierrez offered to his fellow councilors the comment, "I am one of those who isn't willing to let a deal go away when there is
a bump in the road."
McKean persisted with more questions like this one, "For tenants to negotiate real leases have you worked out cost models for the
tenant to see...?"
Raitano jumped back up to the microphone answering, "The CAMT board picked Loveland not because it was the low hanging fruit
but because it was the cherry at the top of the tree that gets the most sunshine and is the sweetest." She reiterated an earlier comment
by saying for a second time, "we are in this for the long haul."
McKean observed aloud, "I want ace here but I feel like we have been pushing a rope up-hill to make that
Agilent property fit this project..."
In a more pointed discussion McKean reminded Raitano, "But you brought a developer to us outside our RFP process." He stated he
went along outside the city's own process because he thought they had the better solution because of United Properties' deep pockets
and industry credibility. Than the conversation turned towards who will select the next developer candidate.
Raitano asserted, "I think the city needs to have greater control of selecting the developer but complete control.....I don't think so."
McKean asked for better clarification of whether she is saying ACE is out of Loveland if the council explores other options with the
property, "I am not drawing a line in the sand." She further elaborated, "without a developer really understanding what CAMT brings
to the table." At one point Raitano told the council the developer of the project ideally would be gone at some point in the future and
CAMT would be running the park and own the property.
McKean later offered, "everybody once in their life says this would be just great if I jut had the money
to show" further explaining, "It is a balance between you protecting your vision and us protecting our citizen's investment."
Who Decides On The Buyer/Developer
Councilman Klassen told CAMT, "My concern was that we own the buildings and CAMT is going to decide who will buy
our building - It made sense to me when United Properties was selected." He followed this comment with the question, "Have things
changed will the city play a stronger role in selecting the developer?"
Raitano responded that CAMT is unwilling to "cede the decision to Loveland" but will give more say this time around. After Klassen
asked for more clarification what she meant Raitano answered "it is a partnership and the decision will be mutual consent."
Councilman Klassen inquired, "I learned along the way CAMT was looking for a revenue stream out of this was
that the reason it didn't work [with United Properties]?"
A representative from CAMT responded, "Absolutely we are but never got to that in discussions with developers"
Klassen than asked, "Can you say how much?" CAMT responded, "a modest amount." In fact, that amount was first disclosed by
LovelandPolitics after the City of Loveland discreetly distributed other requirements to bidders that were not originally published with the
RFP on the city's website. The expectation communicated to developers was that each bidder would provide CAMT 10% of gross on
all leases at the park. This indeed was an issue for both the city chosen developers and United Properties.
Elaine Thondike jumped back up to the podium to say, "If all you are looking to do is rent out space at the park than get a developer
to do that but this is a different model." Which prompted this response from the Mayor, "I don't have the expertize to say whether up
was right or that they were wrong".
Mayor Gutierrez added he didn't want to make any definitive statement about the project until the other six developers who bid before
United Properties was selected also tell the city whether it can be developed.
Loveland City Manager Bill Cahill, trying to push the discussion to a conclusion, put up a view graph with questions for the City Council
up on a screen and dimmed the lights. The first view graph stated,
Question to council:
1. Does the city wish to proceed with CAMT
Klassen said his answer would have been no at this point if CAMT would be the only decision maker. Given the fact they were willing
to give the city a voice in the decision he said his answer is yes.
Councilwoman Carol Johnson said "it depends." She wanted to hear what developers have to say before making any decision. Johnson
stated CAMT should be comfortable with he city asking developers whether to proceed with CAMT or without CAMT.
A quick and negative argument came from CAMT, "It is like people preparing nuptials and saying we will still be dating [other
Raitano asked, "Well would you be comfortable with us going back to our consultants?" inferring such an open discussion by
Loveland with developers over options not including CAMT might cause CAMT to begin the selection process again. In an odd moment
of the meeting Raitan clenched her fist, held it out to her side twisting it and said offering developers something over there "like here is
this shiny little thing" will distract them from accepting CAMT's vision for the property.
Cahill suggested, "Let me make a suggestion and thread the needle a little bit, the city will initiate the proposals and CAMT could
participate in the selection."
Councilwoman Joan Shaffer defended CAMT by arguing, "I very much want to go forward with this project" and will continue
"rowing" with CAMT in the same direction.
Shaffer also stated, "Very appealing from this chair to say cool CAMT take your developer and run" Shaffer also told her colleagues,
"The more we are at the table together the more we will cross the finish line together."
Councilman Kent Solt told Cahill, "I don't care who interviews developers." Councilwoman Cathleen McEwen added, "I haven't
changed my opinion."
The next set of questions presented by Cahill for the City Council and provided an an overhead projector to provide staff direction
included the following;
How should proposal recruited?
Open field to all?
Use those already in process?
First come, first served?
McKean asked whether the city can remove the revenue requirements from the RFP for CAMT and see what developers think can work
with their models. Loveland's head of Economic Development, Betsy Hale, responded that CAMT already came to that conclusion and
they heard similar concerns from the bidders so it was already addressed.
Curiously, Councilwoman Joan Shaffer contradicted this direction and said CAMT should "be allowed to charge what
they want for the project."
Hale said that all companies should be invited with the same new RFP to ensure the largest possible group responds.
The City of Loveland will now again seek responses from all companies interested in the ACE Project over the next few weeks.
|CAMT President Elaine Thorndike (above)
deferred a number of questions from Loveland's
Council to the chairwoman of her board of
directors Flo Raitano (seated right of Thorndike).
funds to invest
Greeley Mall thus
tapped out limited
||Lost Promenade to
problems in Calif.
||Favor - "best
|Balance sheet too
small for job but staff
would like to help
of project. Est. $40
million to redevelop
"too small for job"
||Looking for longer
timeline than city wants
|Staff calls IRG,
Council didn't like