Tower Center offers free land for big box
November 9, 2012
GYPSUM – The Tower Center in Gypsum is ready to give free land to the first big box retailer that commits to build at the site.
The press release announcing the offer plainly acknowledged that the free land deal is an attempt to spur development for the project. The town of Gypsum approved the Town Center plan more than five years ago, but to date, no development has happened on the proposed 450,000-square-foot retail project. The free land marketing strategy was announced Friday by Richard Kabat, a joint venture partner of Next Realty.
“We think the best way to jump-start this to make this dramatic offer,” said Kabat when contacted on Friday.
“This is a no-cost opportunity to be part of a significant new retail center,” he added. “We’re offering free land and building to the first big-box anchor user in our well-located new power center development. Anchors and mid-sized boxes have already expressed interest. They will follow the lead of the first one in.”
Friday’s press release said: “Fully approved and shadow anchored by Costco, Tower Center ultimately will be a be a 450,000-square-foot power retail project, the first approved project of its kind in underserved Eagle County. The developers envision the center will include a home improvement center, a general merchandiser, a supermarket and junior anchors. Nine outparcels are suitable for inline retailers, restaurants and banks, among other users.”
That vision of a downvalley retail mecca isn’t unique to the Tower Center. This spring, Eagle voters approved the Eagle River Station – a commercial-residential project proposed by Trinity RED Development , which has its headquarters in Kansas City, Mo. The 88-acre Eagle River Station site is located south of Interstate 70 and north of U.S. Highway 6 on the east end of Eagle. The Eagle River Station proposal includes 582,000 square feet of commercial space and 250 rental units in its first phase, along with the new east Eagle I-70 interchange and improvements to U.S. Highway 6 and Chambers Avenue. A second phase of the development calls for up to 150,000 square feet of additional commercial space and another 300 rental units.
“We’re pleased to see that others have recognized the same retail market that we recognized long ago and that we continue to fill as we move forward with Eagle River Station since its approval at referendum in May,” said Jeff McMahon, managing partner of RED Development. “It’s a retail market that is ripe to be developed and that we feel will provide convenient shopping to the residents of Eagle Valley and the visitors that use I-70 along their way through the valley. We’ve always known that Eagle River Station is the best location to do just that.”
Kabat said the Tower Center free land offer was not prompted by the Eagle River Station plan.
“What we are doing has nothing to do with them. We think we have the best site in the valley,” said Kabat.
When specifically questioned about the desirability of the Tower Center site compared to the Eagle River Station site, which fronts I-70 and includes plans for a direct interchange access, Kabat said, “Our site is at the commercial heart of the valley, right next to the airport and Costco and it doesn’t require any special infrastructure improvements.”
Kabat also said voter approval of Eagle River Station did not prompt the Tower Center free land offer.
“Timing is always an important element to any development project and that has nothing to do with ERS,” Kabat said. “Time is money.”
Friday’s press release marks the second aggressive announcement from Next Realty this year. On April 11, the company announced a sealed bid auction for the 74-acre commercial site.
At that time, Kabat said Next Realty bought the Tower Center property in mid-2006 intending to develop a regional shopping center.
“After getting ready to start, the economy collapsed. In the time since we’ve been carrying it, partners have changed and interest has waned,” said Kabat last April. “It’s time for us to move on, but somebody is going to develop it and have a whale of a project.”
The auction prompted much speculation regarding who would bid on the project, and an emphatic denial from Gypsum that the town would be purchasing the land.
Now, Kabat said the auction did not produce a viable bid and that Next Realty opted to retain ownership and proceed with efforts to develop the Tower Center.
“Tower Center is visible and accessible from I-70, 30 miles from Vail and next to the Eagle County Airport. The site is fully entitled,” Friday’s release said.
The release also quotes Kabat saying that the town of Gypsum and surrounding markets have no power center retailers, and that Gypsum will give strong support to this project and unique deal structure. From the first approval, Gypsum has indicated it would offer the same type of sales tax revenue rebate to retailers at the Tower Center that it currently has with Costco and Columbine Market.
Friday’s press release quotes Gypsum town manager Jeff Shroll saying “the town of Gypsum wants this project to happen and will devote significant financial resources in making it so.”
When contacted directly, Shroll said that while the town supports the Tower Center, Gypsum is not one of the development partners referenced in the press release.
“We are not developers. We don’t have the money to be doing that,” he said. As for the free land offer, Shroll said that was Next Realty’s decision.
“Now that construction prices are getting lower, they are getting more interested in development. I think for some of the big boxes, that (free land) is the only thing they will respond to. We will see what happens.”
In Eagle, Mayor Yuri Kostick declined to comment about the Tower Center free land announcement. Kostick noted that Eagle and Gypsum officials recently gathered together in a social context, and in the coming months he looks forward to following up that meeting with more substantial discussions regarding each town’s issues and finding common ground between the communities.
Eagle Town Board member Scott Turnipseed said the Tower Center free land announcement underscores the importance of the Eagle River Station approval.
“I don’t know retail well enough to say if free land makes it worthwhile for a retailer to be there,” he said. “I am just very grateful that ERS passed.”