| Council Doubts On ACE |
Loveland - June 7, 2011
Two members of Loveland’s City Council who frequently disagree are together questioning whether they will be voting in favor of
the current deal being negotiated with CAMT on the ACE Project. Other members of Loveland’s council are not saying either
way until the final documents are negotiated.
As the negotiations with CAMT drags-on the City Manager has struggled to bring unity to a council that has agreed to buy and
redevelop the former Agilent campus in Loveland but not yet agreed to the terms being offered by CAMT. Loveland City
Manager Bill Cahill met privately with at least two council members recently who are questioning the deal.
CAMT sought ownership of the ACE Project on the Agilent property from the beginning despite bringing no money to the table.
CAMT appeared to be trying to leverage their agreement with NASA into ownership of real property or the now proposed
written guarantee of a 10% bonus in perpetuity on the gross amount of all future leases.
Loveland developer and former CAMT consultant Don Marostica privately told Loveland officials that NASA had promised test
equipment valued at over $500 million to be located at the facility to help lure companies to the project. This information was
critical to several councilors in deciding to buy the property to push the deal forward.
The types of equipment discussed include the relocation of NASA Marshall’s Space Flight Center’s Solar Thermal Test Facility
concentrator mirror plus construction of several large new vacuum chambers using NASA funds. The mirror is composed of 144
small hexagonal segments that beam about 1,000,000 watts per square meter of solar energy. The mirror and vacuum chamber
will be available to companies locating at the cluster for free thus creating considerable interest in the private sector. Such test
equipment could enable smaller companies to speed testing of various alternative gallium arsenide solar cell designs, for example,
by measuring efficiencies in simulated harsh solar environments.
While CAMT head Elaine Thorndike has confirmed in private some of Marostica’s claims according to one city source, she has
been reluctant to put anything in writing as the negotiations drag on. NASA’s funding is appropriated annually by the U.S.
Congress and any multi-year commitment by the agency would constitute a violation of the Anti-Deficiency Act. In addition,
Marshall Space Flight Center and other NASA centers may resist efforts to relocate any test equipment they currently control
into a private business cluster in CAMT's ACE Project.
The rub for city negotiators is NASA’s agreement with CAMT provides no remuneration therefore the non-profit CAMT is
unable to commit to any of these verbal promises made during the selection process when Loveland determined its own level of
financial commitment to win the ACE Project.
Last month the Loveland City Council voted unanimously to purchase the Agilent property in Loveland at a cost of $ 5.8 million
for the purpose of later financing a deal for a local developer subsequently to buy the commercially viable areas of the property
for $4 million -- largely financed by the City of Loveland. Loveland proposes carrying a loan of $3.5 million for the next 10 years
(mostly from water fund monies) while paying the buyer a $150,000 annual subsidy via a ghost lease.
The City of Loveland also released an RFP (Request For Proposal) to select a winner of the city’s significant investments in the
project. Curiously, all seven respondents indicated they would be willing to proceed with the project even if CAMT and their
intangible promises of future NASA funding and equipment never materialized. This is because Loveland communicated to the
bidders an expectation by CAMT to funnel 10% of gross receipts from all leases into an entity created and controlled by CAMT
whether or not the group assisted in drawing the tenant.
A June 6, Reporter-Herald article stated,
“The city has set the table for CAMT and a development partner that the agency will choose to take title to most of
the Agilent property, including 160 acres of land and the four empty buildings that total 812,000 square feet.”
While Loveland invited CAMT to participate in the selection process for the developer/owner of the project, the comment above
presumably originating from an email by Thorndike referenced by the newspaper may indicate the city already capitulated in
negotiations to CAMT demands that CAMT select the developer to receive ownership of the property. If this is indeed true, it
would represent a significant change from what city staff was trying to accomplish when bids were solicited from interested
developers who would be selected by the City of Loveland in consultation with CAMT. Loveland will be the owner of the
Agilent property if it closes the current purchase contract on June 23. Some on council believe the city as both owner and
financier of the mortgage should have sole discretion in choosing the buyer and not CAMT.
While Loveland’s City Council has maintained a unified front to the media, privately they are not yet together on all the terms
being proposed by CAMT. One councilor described, off-the-record, CAMT as “flaky” and incapable of following through on
promises made early in the negotiations. Another questioned the staff’s ability to understand the “finer deal points” and just how
much risk the city is taking if CAMT's selected developer forecloses on the city's $3.5 million loan.
Both the city and CAMT have agreed to a new schedule to decide the various outstanding issues. In the meantime, the Loveland
City Council appears content with Cahill’s handling of the negotiations and don’t fault him for what they described as CAMT’s
“transgressions.”
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