Is this what Eagle wants?
EAGLE, Colorado ” Eagle’s hired gun says the proposed financial arrangement for Eagle River Station is ‘reasonable.”
But that same consultant notes that the desirability of the proposed shopping center and residential complex is something the community will ultimately have to decide for itself.
“The project, in concept, is certainly a valid one,” offered Arnold Ray of Ray Real Estate Services, the consultant hired by the town to review the Eagle River Station Plan and make recommendations regarding how to best structure the deal. He called the project a viable and fair deal, but noted that working in today’s economic climate is a challenging proposition.
The on-going review of the Eagle River Station proposal resumed this week with the Eagle Town Board turning attention to the financial package proposed by project developers Trinity/RED Development.
Eagle River Station is a mixed used development proposed on an 88-acre tract located on the eastern end of town, south of Interstate 70. The plan includes 552,000 square feet of commercial space including a 132,000 square foot anchor store.
Eagle River Station also calls for 581 residential units and a 150-room hotel. The estimated cost of the development is $346 million. Of that amount, $62.4 million is earmarked for public improvements including a new I-70 interchange.
The developers have proposed a revenue sharing plan to finance the public improvements package. That plan calls for formation of a metropolitan district to issue bonds for the infrastructure. The town of Eagle would not issue the bonds.
Under the agreement the town would dedicate revenue collected from its 4 percent sales tax generated at Eagle River Station businesses. The money would go toward paying off the public improvements bonds. When the bonds are paid, the sales tax money would go back to the town. In the interim, a Public Improvement Fee would be charged on Eagle River Station retails purchases. Proceeds from the fee would go to the town.
The amount of the fee was a sticking point between the town and the developer. Originally proposed as 1 percent for Eagle River Station purchases, the town pushed for 1.5 percent. The developer countered at 1.3 percent and then agreed to a compromise ” the fee will be 1.3 percent at the anchor and junior anchor sites and 1.5 percent at smaller businesses located in the Eagle River Station ‘lifestyle center.’
Mike Hans of RED Development said the potential anchor tenant balked at the 1.5 percent fee.
“It significantly diminishes their interest in being here,” he said.
Eagle Town Board member Yuri Kostick said he opposed any fee deal. He said the town should simply collect sales tax from the development. “I realize this make it more difficult for the developer but there’s got to be a way to work it out.”
Other board members said the fee has been successfully used by many communities and would allow the public improvements to be made more quickly.
The board also agreed, in concept, with charging RED Development $1 million in street impact fees and granting 177 pre-paid sewer tap fees. This year the town increased sewer tap fees from $5,000 to $10,000, in part because of costs associated with construction of a new $22 million wastewater treatment plant. Eagle River Station will get a price break on the taps by paying for them upfront.
“We need that money in our wastewater fund now. The prepayment plan is good,” said town board member Roxie Deane.
The final item of discussion Wednesday night centered on phasing for the project. RED Development agreed to build a minimum of 200,000 square feet of commercial space in its initial phase. That was a sticking point for the town because staff members wanted to make sure there would be enough commercial revenue generated to cover the town’s expenses associated with servicing the development.
“It is our intent to build the bulk of commercial space at the onset,” said Hans.
The crowd at Wednesday’s meeting wasn’t inclined to buy into the Eagle River Station financial projections or proposals. Comments by opponents outnumbered proponents 13 to four.
Mary Lo Keller, of Eagle, said she had been ambivalent about the Eagle River Station proposed until she attended an October presentation on the financial crisis. An esteemed group of panelists told the audience to avoid investing in commercial real estate because it was the next sector poised for a fall.
“I would like all of us in Eagle to consider if this is the right time for us to become involved in this type of development,” said Keller.
Other comments questioned the viability of financial projections that assume 95 percent tenant occupancy and the long-term financial impact of the proposal development.
Among the project proponents, Trevor Theelke said Eagle River Station would be an economic stimulus for the community. “I think it will be a huge factor in bringing people to the town and keeping people in town.”
Tom Olden, of Eagle, said he didn’t want big box stores and large parking lots to be the dominant feature of Eagle and questioned if Eagle River Station would prove to be a long term financial drain for the community.
“Is it going to cost me more and more to live in Eagle?” he asked.
The Eagle River Station hearings will resume at 6 p.m., Jan. 21.