A prime piece of downtown real estate may be on the market soon, if Nor’wood Development Group declines to buy back a portion of Plaza of the Rockies.
Colorado Springs Utilities, which co-owns the 13-story building with Nor’wood, has decided to sell the third floor of the South Tower. Per their legal agreement, Nor’wood gets right of first refusal. If they choose not to buy, Utilities may entertain other offers.
“We want to make sure we get fair market value for our customers,” said Utilities spokesman Mark Murphy. “We have to strictly adhere to the city of Colorado Springs procedure manual for the sale. Nor’wood has first dibs on buying the floor back. They had the North Tower and in 1999 we entered into a tenant-owner agreement when they decided to build the South Tower.”
The entire third floor has been appraised at $3.75 million.
A message left for Nor’wood President Chris Jenkins was not returned.
Utilities owns the third, fourth and fifth floors of the South Tower, plus half the second and sixth floors.
The South Tower of Plaza of the Rockies, at 111 S. Tejon St., opened in 2001 with Utilities moving in immediately.
“It’s good to have a presence downtown, and it puts us close to city and county officials,” Murphy said.
About 130 Utilities employees worked on the third floor, mostly connected with the Southern Delivery System. SDS delivers about 50 million gallons of water each day to Colorado Springs, Security, Fountain and Pueblo West. When Utilities work on the $829 million project lagged after SDS became operative, the number of employees on the third floor decreased dramatically.
“SDS was a major project and as it wound down and became operational, it gave us a chance to move employees to other facilities in anticipation of selling the third floor,” Murphy said. “It basically took all of 2016 to wind it down and vacate. Most of the employees moved to our Leon Young Service Center off of Hancock.”
By selling the third floor, Utilities figures to save about $175,000 annually in maintenance costs.
“If we can generate money and save for our customers, that’s a good thing,” Murphy said.
When the property sells, Murphy said customer rates aren’t likely to drop.
“Collectively, everything we do does make an impact on rates,” he said. “We continually evaluate our properties and dispose of what is not needed.”
Any profit from the sale, he said, would “be spent where it’s needed most, maybe on aging infrastructure. It would go into our operating budget.”
He gave credit to Thane LaBarre, facilities manager for the city-owned utility.
“A lot of credit goes to Thane and that facilities group,” Murphy said. “This is a great example of a great space being re-assessed and making the most of it to be put to better use.”