Westside Investment Partners Inc. is scheduled to buy the 153 acres and buildings at Colorado Crossing, at the corner of Interquest and Voyager parkways in northern Colorado Springs.
The company is expected to pay $22 million for the beleaguered property, vacant since 2008 as its developer filed bankruptcy. Of that, $10 million will be paid at the April 1 closing and $12 million will be paid on a five-year, 5 percent owner-carry note.
Westside is a private commercial real estate development and investment group based in Greenwood Village, south of Denver.
The sale means an end to nearly a decade of angst for Jim Johnson, president and CEO of the GE Johnson Construction, the principal contractror for the property. Johnson estimated his firm will lose up to $1.5 million, or between 50 cents to 75 cents of every $1 invested, not including GE Johnson’s legal expenses.
It is unclear what Westside Investment Partners’ plans are for the land and buildings.
“They have talked about completing the existing buildings and putting them to use,” Johnson said.
Westside principals were unavailable for comment.
With five partially built buildings totaling 190,000 square feet, the project has stood vacant since 2008. At that time, developer Jannie Richardson, owner of SRKO Family Limited Partnership, ran out of money and construction halted.
Originally, the development was to have included 1,600 housing units, a water park, a 14-screen movie theater, offices, retail stores and restaurants.
In ensuing years, the development has been the subject of a series of bankruptcies, receiverships and lawsuits involving Richardson, contractors and subcontractors.
GE Johnson, Stresscon and other subcontractors took ownership during March 2015 after SRKO filed its 2010 bankruptcy. The businesses formed another firm, New Crossings Inc., and divided shares in that firm based on the amount of money owed them from Colorado Crossing.
GE Johnson Vice President and CFO Peter Speiser said there are between 30 and 50 shareholders in New Crossings and another firm, also formed to work with Colorado Crossing’s financials.
One of the shareholders in New Crossings Inc. is the Jannie Richardson Estate. As a result, Richardson’s court-appointed trustee, Randy Lewis was eligible to vote on the sale of Colorado Crossing. Because of Richardson’s conflict of interest, the bankruptcy court was required to rule on allowing Lewis to vote on the sale.
The sale will remove uncertainty about the development’s ownership and direction, Johnson said.
“The project has so much history,” Johnson said.
The property’s listing garnered tremendous interest, Johnson added, but most of the inquiries related to buying just a parcel of the entire 153 acres.
“They wanted 10 [acres] for this … people looking at office building … retail interest, but nobody wanted the whole enchilada,” he said.
For now, the development has $18 million in encumbrances, and of that, $2 million belongs to GE Johnson, and between $9 million and $10 million belongs to GE Johnson and its subcontractors, Johnson said.
“I cannot speak for the creditors … We acknowledged that loss many years ago, and you had to learn to operate your business without that money. Fortunately, those people had enough ability to work through it,” he said. “In the end, it was a very poor business decision to do business with Jannie,” Johnson said.
“We’re pleased with the offer,” Speiser said. “We’re hopeful that Westside sees this as a great opportunity. We see this as a way to wrap up and move on.”
In addition to the closing, one last step remains. New Crossings must file a final report to the court.
“The case is still under the oversight of the bankruptcy court,” which had to approve the sales contract with Westside, Speiser said. “In order to get out from under the bankruptcy, we just need to file a final report with the bankruptcy court. That can happen at any time.”