One week after voters approved the Eagle River Station proposal, Jeff McMahon of Trinity/RED Development said the company's priorities are to finalize plans for a new east Eagle interchange and find tenants interested in setting up shop.
"The process of development is a sometimes long and arduous one," said McMahon. "Last week's vote gives us the chance to try to make this project happen. Now we are going to go out and do what we do best."
Last week, by a vote of 1,247 in favor and 1,022 against, Eagle voters approved the ERS plan. Eagle River Station is a commercial/residential project proposed by Trinity RED Development headquartered in Kansas City, Mo. The 88-acre site is located south of Interstate 70 and north of U.S. Highway 6 on the east end of Eagle. The ERS proposal would include 582,000 square feet of commercial space and 250 rental units in its first phase. A second phase calls for up to 150,000 square feet of additional commercial space and another 300 rental units. The ERS battle has been furiously fought in the Eagle community this spring following a 6-1 vote by the Eagle Town Board on March 27 to approve the project.
McMahon noted that the ERS development hinges on a key infrastructure improvement - construction of a new Interstate 70 interchange east of town. "We can't open anything until the interchange is open. That's the first thing we need to do."
McMahon said ERS is working with the Colorado Department of Transportation to finalize the interchange plan and the development could begin construction of the shopping center concurrent with the interchange construction. That depends on RED's second priority - finding tenants.
With voter approval in hand, McMahon said RED can start seriously shopping for retailers. ERS will make the tenant announcements as they are finalized, McMahon said. "We are not ready to make any announcements today, but will certainly be making them in the near future."
He noted that last week the International Conference of Shopping Centers convention was held in Las Vegas and said the ERS proposal created buzz among attendees. McMahon also pointed to the www.retailtrafficmag.com's most recent breakdown from that event.
"Brokers and landlords reported that retailers are out looking for spaces," states the website. "They are no longer asking for concessions. Vacancies have flat-lined and even begun to fall in the strongest markets. That means landlords, finally, have some leverage to push for rises in rents. This, in turn, will pave the way for discussions about development as rents approach the levels necessary to justify new projects. Some developers did have new projects on the board already. More common, however, was firms talking about building in 2013, 2014 and beyond."
McMahon said that Trinity/RED will be sharing ERS information, including key dates and tenant announcements, on its website www.eagleriverstation.com.
"Development is a process. You may see a lot of progress one day and then not see anything for week, but that doesn't mean we aren't working hard on it," he said. "Hopefully, one year from now we will be making the first turn of dirt at the site."
Last Friday, a report from the Kansas City Business Journal about the potential foreclosure of The Legends Outlets Kansas City caught the eyes of many local readers.
According to the story by Steve Vockrodt, the project is headed for foreclosure and its lender has asked a federal judge to appoint a receiver for the retail project.
"U.S. Bank , the trustee for a group of securitized loans that includes a $137 million construction loan for The Legends, filed a lawsuit in the U.S. District of Kansas on May 18, claiming that the shopping district's owners have not made a payment since October," said the story. "The bank claims that owners of The Legends, including Kansas City-based RED Development LLC, owe $179.4 million, which includes the original $137 million principal from 2006."
When contacted this week, Jeff McMahon of RED Development said he directly addressed this issue both in testimony before the Eagle Town Board and in a letter to the editor that appeared in the Eagle Valley Enterprise on Nov. 22, 2011.
"We only own 5 percent of that project," said McMahon. "We sold 95 percent of that project about five years ago to an ownership group managed by Morgan Stanley. We are not the managing company of this project and did not make the decision to put it into default. "
In his November letter, McMahon also stated, "I would like to clarify that the property is not in distress; it is 95 percent leased; all retailers are open for business; and this recent event will in no way impact sales at the shopping center. The fact is, the world of commercial real estate financing has changed significantly in the past few years, and it is not uncommon for banks and owners to place a loan in default while they are renegotiating financial terms. Retailers and shopping centers across the country have "re-tooled" their operating costs and restructured financial agreements with lenders to continue to operate successfully within the new economic environment."