Eagle ponders future in wake of ERS announcement
The news that RED Development will not be proceeding with the approved plan for the Eagle River Station project has generated a flurry of Facebook shares and a lot of talk around town.
Last week, Jeff McMahon, managing partner for architecture and engineering for RED Development, of Kansas City, Missouri, met with town officials to inform them that the company will not be submitting its final plat proposal by the deadline date of May 29. That means the development agreement negotiated for Eagle River Station will expire.
“We are confident we are going to be coming back with some kind of new plan, with new phasing, that meets the needs of the market and the community,” said McMahon. “RED is not going anywhere.”
But Eagle River Station, as approved by both town board action and a voter referendum back in 2012, is not going anywhere either. The Eagle River Station plan proposed a commercial/residential project at an 88-acre property located on the eastern end of town, south of Interstate 70 and north of U.S. Highway 6. The proposal called for 582,000 square feet of commercial space and 250 rental units in the first phase with another 150,000 square feet of commercial space and an additional 300 rental units in the second phase. As part of the proposal, there was an estimated $35 million price tag for RED to pay for public improvements to the site, including $18 million estimated for a new I-70 interchange at the site.
Last week McMahon said that those costs, combined with today’s economic landscape, didn’t add up for Eagle River Station. So RED will not be submitting its final plat by the May 29 deadline.
“We are trying to be proactive and to reach out and let the commercial know what’s going on,” said McMahon. “There has been a lot of interest in the project from the residential side but there is not enough commercial interest to pay the sales tax dollars for the public improvements. The phasing of the project is not in alignment with the sales commitments.”
Jan Rosenthal Townsend was one of the most outspoken opponents of Eagle River Station.
“The news does not surprise me — in fact it’s what many of us thought would transpire all along,” she said. “The project was always too big to be successful and sustainable given our population, in particular in this still fledgling market and with the internet continuing to take the lead in the retail sector.”
Rosenthal Townsend noted the national news features weekly articles about large format stores and malls going under and ceasing operations, most recently an announcement that Target is closing stories in Canada.
“The most unfortunate thing is that the developer promised jobs and revenue ‘coming soon’ and an exorbitant amount of time, town resources and money has been spent, not to mention the extreme division amongst Eagle’s citizens that occurred,” said Rosenthal Townsend.
McMahon said last week that the future for Eagle River Station is undecided. “I would hate to speculate on what a future project would be,” said McMahon. “Certainly, everything is on the table, but if anything, it will be a smaller project, not a larger one.”
“It will be most interesting to see what happens if the project is revised, in that they said all along that they couldn’t make it work financially if it was smaller,” said Rosenthal Townsend. “Meanwhile, there are scores of commercial vacancies all over Eagle and across the county.”
Eagle Town Manager Jon Stavney noted that discussions have been on-going with RED since the 2012 project approval.
“Town staff has met regularly with ERS during recent months in preparation for a final plat submittal in order to meet the terms of the development agreement, which had a key action date coming this May,” said Stavney. “Even the minimum actions required to lock in vesting had significant financial implications and set future deadlines.”
Stavney maintained that last week’s announcement from RED signifies a change in direction for the ERS plan.
“A lot has changed in the market since ERS and the town headed down the development path three years ago,” said Stavney. “Today it appears that what was negotiated isn’t feasible as a whole.”
As for next steps, Stavney said town staff has no preconceived notions for what ERS should look like.
“We are looking forward to hearing what the property owner brings to the table. They have a lot invested already,” said Stavney.
RED Development owns the 88-acre parcel and has estimated that it has spent a total of around $30 million on the ERS project.
“We continue to be very bullish about the project and the community,” he said. “It is just taking longer with the retail component than we would like it to.”
McMahon said the company’s next step will be to sit down with town staff and officials to rework the Eagle River Station plan.
After RED’s announcement, members of the Eagle Town Board also released a statement expressing disappointment that the approved plan will not proceed and commitment to continue working to find a viable ERS option.
“The town board is disappointed with this news and is committed to work closely with the developer or potential future owner of the property to develop a project that fits the town’s master plans and goals for the area,” the statement said. “The town board would like to express their thanks to RED Development for advising the people of Eagle of their intentions in order to eliminate any ongoing uncertainty regarding the status of this project.”
As for the future, McMahon insisted that there still is one for Eagle River Station.
“I don’t consider this a step backward. It’s more a signal that whatever we do, it needs to be correct for the marketplace,” said McMahon. “We are not giving up. We just want to get it right.”