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Grand Station: Dead or Delayed?
Lovleand, January 2007

The proposed mixed-use development east of I-25 called “Grand Station” that raised so much controversy in
Loveland last year (
the developer proposed using future tax revenue to fund an old fashion trolley system and parking
) may have never been properly on the tracks in the beginning.

The development is called “mixed-use” because it combines retail and commercial office space with residences.  
Grand Station was first announced by the developers (McWhinney Enterprises) who later stated the City of
Loveland would need to contribute future sales tax revenues for the business case to close.  The previous City
Council allowed $80 million parking garage subsidy but
declined to allow funding of the trolley using future taxes
through the redevelopment agency.

According to sources close to Chad McWhinney and one official in Loveland, the project never attracted enough
investor interest for the McWhinneys to raise the funds necessary to build the project.  Instead of announcing they
had failed to meet these goals,
McWhinney Enterprises is instead announcing a delay in ground breaking in an
article printed in the January 31, 2008 edition of the Loveland Reporter-Herald.

Grand Station was opposed by McWhinney’s managing partner in Centerra (the existing development east of I-25
and north of Highway 34). McWhinney launched a lengthy but unsuccessful negotiation to buy-out that partner,
Poag & McEwen, following an unfriendly confrontation between the two firms at a Loveland City Council meeting
last year.  

Does Grand Station Compete With Centerra?

The office space, hotel (Valencia) and proposed high density apartment living inside Grand Station would not
compete with Centerra’s life style retail experience.  However, the proposed retail shopping also planned for Grand
Station is targeted at the same tenants Centerra is marketing to fill excess capacity.  This would pit a dozen hardened
industry expert leasing agents against McWhinney's organization when trying to woo some high end retailers.

Poag & McEwen is still struggling to lease out 800,000 sq. ft. in the Centerra development and believe Grand Station’
s retail component will detrimentally impact Centerra by cannibalizing the limited number of shoppers available in
Northern Colorado.  They testified last year to Loveland’s City Council that Centerra was overbuilt intentionally so
the market could “grow into” the development over a period of years.  An analyst from Poag & McEwen testified to
Loveland’s City Council last year that Northern Colorado wasn’t ready yet for another “life style” center given the
population base is still only 500,000 and income levels still middle class.

At issue is the question of whether or not Northern Colorado's market could absorb another “lifestyle center” so
close to the existing one (Centerra) without loosing existing customers thus failing to raise any additional revenue
for Loveland City coffers.  Investors have not been convinced that McWhinney will be able to capture the new
tenants necessary to make Grand Station a success.

Is McWhinney Using Bad Numbers To Sell Grand Station to Investors?

The firm Gregory Stoffel & Associates from Irvine California was hired by McWhinney to provide the market
analysis and research for Grand Station.  The same firm was also hired by Colorado Springs to study
a similar center
that draws from an area of approximately 350,000 shoppers where the average income is today over $73,000 per

Northern Colorado has a slightly larger “primary trade area” according to the Stoffel report that could draw from a
population base of over 500,000 residents.  However, these residents have a smaller average household income
plus a “life style” center is already available in the Centerra project.  While Stoffel is a recognized expert in these
types of analysis, they cannot make accurate market projections if the data provided to them is faulty.

Stoffel & Associates’s analysis regarding the proposed Grand Station is Chad McWhinneys selling document to both
the City of Loveland and potential investors why he thinks Grand Station can be a success.  It isn’t clear the City of
Loveland has staff qualified to provide the proper due diligence on such a study nor on Chad McWhinney's claims
about what it proves.  According to one source, Chad McWhinney failed to disclose the true annual gross receipts
for Centerra by representing six months of gross receipts as an annual number thus intentionally understating the
volume of sales occurring at Centerra.

This is significant since Stoffel projected that only about 6% of the total Northern Colorado market share can be
drawn to these more expensive retail and lifestyle centers given the limited number of higher income earners in the
demographics.  The assumption of the study is that Centerra is only capturing around 2.5% of the 6% available thus
Grand Station would compete for the remaining 3.5% that otherwise may be drawn to areas where Loveland would
not gain sales taxes.  If indeed the real number of annual sales at Centerra is really around 5.5%(a full year of sales),
this leaves only .5% for Grand Station which isn’t nearly enough to pay back the investors in the project.

Given these figures, McWhinney would need to convince school teachers and fireman to shop at higher cost retail
stores like Chico or Nordstrums to bring the combined market share to 12% which isn’t realistic given current
spending habits, trends and salaries in Northern Colorado.  The sporadic markets, sub-prime debacle and negative
economic indicators have all contributed to a growing sense that even if Grand Station had a business plan that
could close the changing economy would make the project impossible.

The bright spot for McWhinney’s current developments is Target west of I-25 that has been looking to expand into
the adjoining retail spaces to create a Super Target.  Rumor has it that Troy McWhinney (Chad’s brother and
business partner who lives in Ft. Collins) supports locating a new Super Target with grocery shopping as well in the
area now approved for Grand Station - this is still a rumor that we have been unable to confirm.  Chad McWhinney
may still intend to build Grand Station in small increments thus creating tension within the company as he slowly
drains resources towards a questionable project.

In the meantime, spokesperson Jack Wolfe has been paraded out to the press (instead of Chad McWhinney) to say
rumors about Grand Station's demise are false and great happenings are just around the corner.  This may provide
an entirely new definition to the saying a boy who cried Wolfe.