New outlet mall nears approval

Posted 11/25/13

A proposed 900,000-square-foot, 200-acre outlet mall called Promenade at Castle Rock — which would be adjacent to and potentially twice as big as the existing Outlets at Castle Rock — got a step closer to reality on Nov. 19 when town council …

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New outlet mall nears approval


A proposed 900,000-square-foot, 200-acre outlet mall called Promenade at Castle Rock — which would be adjacent to and potentially twice as big as the existing Outlets at Castle Rock — got a step closer to reality on Nov. 19 when town council gave its preliminary OK to an agreement with the developer and a proposed metropolitan district that addresses sales-tax sharing and other issues.

Promenade would occupy land on the south, west and north sides of the Outlets, and would stretch north nearly to the Castle Pines Village boundary. The developer’s plans also call for 350 multi-family residential units on the property.

Before the council’s 7-0 vote, Steve Craig, the managing partner of the Outlets at Castle Rock, expressed concerns — as did Promenade’s developer, Don Provost, founder of Greenwood Village-based Alberta Development Partners LLC.

Craig told the council that he only became aware of the project in May at the International Council of Shopping Centers Convention in Las Vegas, when one of his tenants asked him if he knew about it. “I looked a little stupid for not knowing …”

He said he went to Provost’s booth in the convention hall and Provost told him he was proposing to build a “premium outlet” mall with high-fashion tenants.

“We have someone that is really coming in as a direct competitor,” Craig told the council. “As much as they’re talking about lavender plants and bushes and trees and bricks and fireplaces, the reality is this deal is about money, it’s not about plants, not about pretty places.

“It’s a way for his company to make money — and we think to a large degree at our expense,” Craig said.

Craig asked council to send the proposed project back to staff so all his issues could be addressed.

Provost gave his reaction later, telling the council:

“Just as a general matter, I was raised by my parents to compete, and to compete every day, in a country that was built on competition,” said Provost, whose company also developed SouthGlenn in Centennial and Southlands in Aurora

Provost also said he “also didn’t know that Mr. Craig’s company was a nonprofit” and that he, Provost, likes his investors “to make a profit.”

Residents raise concerns

There were also concerns from a few area residents: Les Lilly, who lives in nearby Happy Canyon, questioned whether Castle Rock needed a project this large now, and expressed concerns that no traffic analyis had been done. Another person expressed concern about this project continuing the town on a road of reliance on sales tax revenue. A small business owner told the council of his concerns about Promenade’s developer being able to get financial incentives when he couldn’t, and said he had started his business with money he earned in the fields of Afghanistan.

“I ask you why I’m different from him,” said Eric Seufert, a U.S. Army veteran.

In the agreement — which the council will consider again, for a second reading and final approval, at the Dec. 17 council meeting — the town would give back 27.5 percent of Promenade’s sales tax revenues for up to 25 years. Also, the town would reimburse some development fees as the project develops.

Under the terms of the proposal, that revenue as well as a property tax on the property and a fee imposed on retail customers would be used to pay off a bond issue to be levied on the property’s metropolitan district to fund the project’s infrastructure costs.

Castle Rock Town Manager Mark Stevens said advantages to the town include that the town and taxpayers are not responsible for the metro district debt or repayment and assume no financial risk.

And by 2017, net new sales tax to the town from Promenade is estimated to be $4 million per year, in addition to property taxes and various fees.

Project resurrected

The Promenade project was tabled “indefinitely” earlier this year when Stevens told the town council that negotiations had stalled.

But at the Nov. 19 council meeting, Stevens said that after months of negotiation an agreement had been reached and that probably the “hardest portion of the agreement to work out” had been the issue of the town’s concern about the possibility of existing major retailers in town wanting to relocate to Promenade.

The agreement the town and Alberta came to was that current tenants of the Outlets at Castle Rock can’t relocate to Promenade prior to Dec. 31, 2024.

“This was very difficult. This was very unusual,” Stevens said. “… Very hard to figure out what was the appropriate role for the town. The town is clearly influencing the market.”

In addition, there are restrictions for some existing retailers elsewhere in town that have expressed interest in relocating.

The town council — which considers King Soopers, at 100 Founders Parkway, an important anchor store for businesses around it on the east side of Interstate 25, excludes King Soopers from the sales-tax sharing arrangement if it relocates to Promenade prior to Jan. 1, 2025.

If Target, at 5010 Founders Parkway, also currently located east of Interstate 25, would relocate to Promenade prior to Jan. 1, 2025, it would be able to participate in the sales-tax sharing arrangement for only that increment of sales tax generated above the store’s prior location.

Lastly, the agreement restricts other existing retailers of 50,000 square feet or greater from relocating to Promenade prior to Dec. 31, 2024.

Stevens emphasized the agreement is just the start of a very long process.

More work ahead

The 200-acre property is made up of three areas: north from the Outlets nearly to Castle Pines Village; west of the Outlets to Highway 85; and south of the Lowe’s store. The property is under contract but still needs to be acquired. Existing metro districts on the site need to be revised; there are zoning modifications and land-use requirements that need to be dealt with; and there is infrastructure to be constructed.

The project, which would be the town’s largest-ever master planned commercial development, would be built in phases starting as early as 2014, but partly depends on completion of North Meadows Extension, a new road connecting The Meadows to U.S. 85 and I-25 and which would serve as another access to Promenade, according to a town spokeswoman.

“There has been literally thousands of man hours that have been put into these negotiations …,” Mayor Paul Donahue said. “We’ve worked really hard to find workable solutions for this particular project.”

Donahue said this is a “huge project” on land that’s zoned for commercial use and that development is going to happen at some point.

“(This) is an opportunity for the town to move forward on it rapidly and do it in a way that makes sense financially and makes sense for the residents of Castle Rock overall,” he said.


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