A Thornton plan to develop the area around the Eastlake Grain Elevator and RTD’s N-Line station is raising some City Council eyebrows, with questions about the property’s actual value and development costs.
Julie Jacoby, a member of the city’s Economic Development team, presented incomplete numbers to councilors at their Jan. 18 planning session meeting about the cost of the proposed Eastlake Grain Elevator project, according to Councilor Kathy Henson. Jacoby also left out important details, Henson said.
“I need more information and I think there needs to be factual improvement in our information sharing so that we can make the best decisions for the people,” she said.
According to Jacoby, the area needs water, drainage, sewer and other infrastructure that would total almost $2 million before the development starts, although she admits that estimate isn’t imprecise. The estimate is based on 2019 values, she said, and there has been a 40 percent increase in construction costs since that number was calculated.
Jacoby said the Carlsons, the developers of the proposed project, asked for the city to pay for the infrastructure and to waive fees. That means the developers would receive both the infrastructure and the land for free.
Councilors Karen Bigelow said Jacoby failed to mention that the city bought the land from Lee Carlson in December 2001 for $570,200. Based on the federal Bureau of Labor Statistics CPI Inflation Calculator, that number in today’s dollars is almost $900,000.
Jacoby said she thought it was not relevant.
“I didn’t feel like it mattered because it didn’t go into our decision on who chose this developer,” she said.
Henson disagrees.
“I think that that is a very gross misstatement. I don’t know how it couldn’t be relevant to the issue,” she said.
Henson, who would like to see a development there and thinks it would be beneficial, said she needs more from the city.
Free Land
According to Jacoby, all three developers who submitted a proposal said that buying the land, building the infrastructure and renovating the buildings did not make the project worth the money, so they requested the city to pay for the infrastructure and to be given the land.
“You have to make business sense out of the development like this,” Jacoby said. “It’s an incredibly expensive development. It requires a lot of work and a lot of very fine attention when you’re doing a historical project like this.”
However, Jacoby said the city does not know why developers say that it would not be worth it to them. The city did not ask developers in the proposal request why they could not afford to do the project without city help, Jacoby said.
She said she expects approximately $2 million in tax revenue over five to seven years from the project. Henson said the development will be a very valuable asset to anyone who buys it. It is right off the Eastlake and 124th RTD station.
“Transit-oriented developments are always highly valuable developments in any city,” she said.
Councilor Karen Bigelow said that she has nothing against the Carlsons, but knows they are a busy developer in Thornton.
“The Carlson’s are a very large developer in our city. I know that they are not hurting. Let’s put it that way,” Bigelow said.
Wrong Numbers
Jacoby also defended using out-of-date cost forecasts for the infrastructure work around the site. The estimated cost of $2 million for that work is based on 2019 conditions. The final cost could increase by as much as $800,000, which is 40 percent, and maybe more.
Jacoby said she was comfortable using that dated cost forecast because the Jan. 18 discussion was “simply a refresher” since the project has been tabled for two years due to COVID-19. She said the Carlsons will provide more current numbers to the council before they vote on it.
Councilor Bigelow, who said she is very much for the development, said she is not okay with the city leaving out parts of the story.
“Don’t come to me with 2019 numbers and tell me that you want a 40% increase, come to me with the real numbers, go get the quotes and then ask me,” she said.
She’s afraid the final cost could be even higher.
“(The city) just came to us two weeks ago and asked us for a 50 percent increase on building Firehouse Number 7, up in my ward, because the construction costs have gone up so much. So how do I know that giving you 40 percent more is going to be enough and you aren’t going to come back and ask for more again?” she said.
Chosen Developers
Mayor Jan Kulmann said she has worked with the Carlsons on projects before. Three developers submitted proposals for the Eastlake project, but Kulmann said the other two developers didn’t meet the city’s criteria.
“One was from out of state and they had some interesting ideas to bring in that didn’t quite mesh with the area. One was another local developer, but they just didn’t have the funding and the ability to bring the full realization of the property to life,” she said
“They (the Carlsons) are one of the biggest landowners in Adams County and they have been involved in development in the community for a very long time,” she said. “They live here and they’re part of our community so they want to see what to them is very important of building up the community together.”
Campaign Donations
Councilor Bigelow also noted that members of the development group had given donations to Thornton City Councilors, including Kulmann, Mayor Pro Tem Jessica Sandgren and Councilor Tony Unrein.
Bigelow said it is legal to accept campaign contributions from developers and still vote on proposals from those developers, but that needs to change.
“It seems like that would be a conflict and they should have had to recuse themselves,” she said.