United Properties Pulls Out of ACE Project Council to meet in secret to decide next steps
Loveland - August 22, 2011 (Posted at 9:00 AM updated 3:42 PM)
The Loveland City Council will meet in secret session tomorrow night to determine next steps on the ACE Project after learning the developer selected by CAMT (Colorado Association of Manufacturing Technologies) has notified the city they are no longer interested in buying and developing the old Agilent campus in Loveland.
“The above-captioned agreement will expire on August 20, 2011. We regret that we are not able to enter into a definitive Purchase Agreement prior to the end of the Exclusivity Period. We appreciate the City’s assistance in the initial due diligence efforts.”
According to United Properties, the deadline of October 1, was never put in writing by the city therefore the letter declining further negotiation refers to the original deadline of August 20, 2011.
Why United Properties Is Pulling Out of ACE
In a press announcement released by United Properties the two reasons cited for pulling out were "available credit tenancy" and "acceptable financing terms."
In an interview with LovelandPolitics by phone today, Frank Dutke, President of United Properties, answered questions regarding what he meant by the term "available credit tenancy" in the company press announcement. Dutke said while a number of tenants had been identified, they were smaller local companies looking to provide services to a larger companies. He said local companies that are moving from a location close to the ACE Project is fine but doesn't close the business case. Dutke told LovelandPolitics:
"Because of the nature of the property....in order for that type of real estate with local tenants to be finance able really requires other tenants as well."
"With the local companies we didn't have the larger tenants that could take most or all of any single building to be the consumer of the services the other tenants want to provide. If there was an anchor tenant to drive demand for some of those services we would have continued."
According to another industry source who asked not to be identified, United Properties (UP) discovered not a single large or credible company had a serious interest in leasing space in the ACE Project contrary to what was being reported publicly by CAMT. Elaine Thorndike, the head of CAMT, reported lots of interest in the project by "12 out of state companies" but refused previously to release the names of the interested tenants. Today's Loveland Reporter Herald also quotes CAMT head Elaine Thorndike naming two other large aerospace companies in Colorado as being in talks with CAMT over ACE - one of the two companies named already confirmed they are not in talks with CAMT over participating in the ACE Project.
On June 9, the Loveland City Council hosted a special meeting with both CAMT and United Properties to announce the selection of United Properties for an exclusive 60 day negotiation to purchase the former Agilent property and begin developing the ACE Project. A handful of companies responded to a City of Loveland request for proposals earlier in the year but UP did not respond to the solicitation for bids and was a new name not previously considered.
A curious comment by UP President Frank Dutke during the June 9, meeting in Loveland was his anxiousness to be in contact with all the companies that had expressed a strong interest in being a part of the project. LovelandPolitics attempted to reach UP’s Denver based Vice President in charge of the ACE Project, Kevin Kelley, for comment but was unsuccessful.
The Loveland City Attorney and senior staff are preparing options for the council to consider tomorrow night, according to a city source. Among the options to be presented are;
1. Continue searching for an alternative developer in partnership with CAMT to develop the ACE Project
2. Abandon CAMT altogether and move forward with a local developer to buy and develop the campus for a future mixed use development without CAMT
3. List the old Agilent campus with a commercial broker to market and sell the property (cut their losses) Another option may be to pursue options 1 or 2 along with 3 simultaneously.