Innovation park could be catalyst in Southeast

0
296

After a slow start, development in the Commercial Aeronautical Zone surrounding Colorado Springs Airport is poised to take off. There’s particular excitement about the prospect of development at Peak Innovation Park, the 900-acre master-planned business park that occupies the south end of the zone, on both sides of Milton Proby Parkway at the entrance to COS.

The hope is that developers will soon secure another key tenant for the park — which is zoned for multiple uses including office, retail, industrial, entertainment, recreation and residential — and that will ignite development not only within the business park and the aeronautical zone, but throughout the city’s Southeast side.

“What we’re hoping is that we get a key tenant, with a deal, before the end of this year,” said Greg Phillips, director of aviation for Colorado Springs Airport. “I can’t say that we’d have construction complete, occupation this year, that’s probably not likely … but I think it’s pretty fair to say we’re excited about the possibility of having something in place by next year.”

The Business Journal talked with Phillips, Colorado Springs Chamber & EDC Chief Economic Development Officer Tammy Fields, and Garrett Baum, managing partner at Urban Frontier, master developer for Peak Innovation Park, for updates on the CAZ and the business park.

Commercial Aeronautical Zone

The Commercial Aeronautical Zone was launched in 2014 to revitalize Colorado Springs Airport as an economic driver for the region. Colorado Springs Airport partnered with the city of Colorado Springs, El Paso County and Pikes Peak Rural Transportation Authority for the plan, offering sales tax exemptions to support business growth and attract commercial aeronautical businesses engaged in the manufacture, maintenance, repair or overhaul of aircraft.

According to information from Colorado Springs Airport, completed projects include a 15,000-square-foot hangar built by JHW Investment Co. in 2015; a 28,000-square-foot hangar built by TKC CLVI LLC and a Cutter Aviation fuel farm completed in 2016; and an executive fixed base operator terminal, a 60,000-square-foot hangar and a campus fire suppression system completed by Cutter Aviation Colorado Springs, and an 18,000-square-foot hangar built by COS Owners Association in 2017. According to Aidan Ryan, marketing and communications manager for the airport, these combined projects totaled about $29 million in development.

“The zone itself, since [2014] we’ve had a lot of interest — actual projects take a while to gestate,” Phillips said. “Probably the biggest success that we’ve seen is with Sierra Nevada Corp. There was a hangar built for Rampart Aviation, the very first hangar that utilized the CAZ, and they certainly received some benefit from it, but the bigger one right now is SNC.”

SNC built a 60,000-square-foot hangar in 2017 and is in the process of building another.

Fields said the CAZ was “definitely an attractor for the Sierra Completions project … of course that project has not materialized quite to their expectations,” she added, “but we’re still hopeful that that will come to fruition in some fashion.”

Sierra Completions, a subsidiary of SNC, has plans to build an $88-million hangar complex that was expected to result in the employment of 2,100 locals. Sierra Completions received its Repair Station License from the FAA in January 2017, but there’s been no progress since.

“[Sierra Completions has] the organization but they have not done any actual work, development or construction here or anywhere,” Phillips said. “…Their goal is to secure a contract before they really do much in the way of construction at all. …  It’s a tough and small market to break into. Now, we have every expectation they’ll, in the end, be successful and we’re certainly strong cheerleaders for them.”

The Business Journal contacted Sierra Completions, but did not receive a response by press time. Phillips said he’s “not at all” discouraged by the delay.

“Absolutely we want them to succeed — we’re excited to try and support them, and it will be great for the community and for the airport. Gosh, if … they were to bring in 2,100 high-paying jobs for this kind of business in an advanced sector like aviation aeronautics, that would be fantastic for the community. But that’s not the only thing going on at the airport. … I’ll say it this way: There are enough opportunities in front of us right now, [potential tenants] that are talking to us, that even if only some of them materialize — even if it’s just a small percentage — we’ll still be growing.”

Peak Innovation Park

Phillips is buoyant about the business park, which now has a draft master concept plan, marketing materials, a master developer in Urban Frontier and a broker in Cushman & Wakefield — both its Colorado Springs and Denver offices.

“So we’ve got the pieces in place to make this grow and we have a number of potential tenants,” Phillips said. “Our belief really is if we get one good tenant in there, then dominoes will start to fall.”

Non-aeronautical tenants in the park, which is part of the CAZ, still receive the aeronautical zone’s benefits on construction, Phillips said.

Northrop Grumman and The Aerospace Corporation are already tenants in the park, Phillips said, and a hotel, convenience store, fast-food restaurant or other restaurant would be an ideal new tenant to spur additional leasing.

“We see opportunities along Milton Proby on both sides for a mix of uses including hospitality and retail and office and likely even some R&D, manufacturing and maybe even some distribution in various parts,” Baum said, adding the Urban Frontier team is in discussions with two active prospects.

“Those are prospects that are looking at multiple states, and we’ve gotten good feedback,” he said. “And I think that we’re going to land one of these soon, and that’s really going to kick off the next wave of development.”

Baum said Urban Frontier is working on a deal for a potential hotel and has had discussions about another phase that could include conference space.

“I think that we’re going to start seeing some retail develop there as well soon, some restaurants and some convenience as well that I think is an important amenity for the existing businesses as well as businesses that will be coming soon.”

Asked if he expects to see construction next year, Baum said “I think anything is possible.

“I am a realist, and what that means is … after 30 years I’ve been through this long enough that a deal’s not a deal — after it closes and it’s under construction, that’s when it’s going. And I don’t say that with negativity.

“I think that is a possibility, that we will see construction next year. I mentioned two prospects, and if we land one of those I know that they would want to be open for business in late 2019 or early 2020.

“So if we’re successful in landing one of those, yes, I can tell you from the retailers that I’ve met with, I think there’s a real possibility we’re under construction with some retail by the end of 2018 or beginning of ’19.

“I do think that all the pieces are in place to make that happen, and now we just need to finish the execution.”

Editor’s note: This is the first in a two-part series focusing on development around Colorado Springs Airport. Read more in next week’s Business Journal.