Tag Archive for Twin Peaks Mall

Twin Peaks Mall (Village): not a true renaissance

Much has been made lately over the intent to build a new shopping district in Longmont. Its proponent wants one and all to believe this will be a new “mall,” and that the reincarnation of the mall property will generate a retail renaissance in northeastern Boulder County.

One has to wonder about property developers. I worked with them long enough to learn that “earning” a development fee comes first; supply and demand come later. In this case the property developer has even convinced or coerced the city of Longmont to become its financial partner, and that after the former basically “stole” the pre-existing, nearly shuttered improvements. One does not have to be a trained real estate analyst to see that the lead tenant in Longmont retail centers is “available.” Not so obvious is the underlying potential for demand for retail business.

Photo by M. Douglas Wray ©2011 FreeRangeLongmont.comAdd to the large empty spaces once occupied by Kmart, Sears (part of the old mall) and the original Walmart on a tract adjoining the mall, and a number of vacations by restaurants that chose to flee rather than fight unrealistic rent increases. Consider that when the economy seemed stronger (1990s), there were about 49 square feet of retail space in the country for every person. Now, with incomes and employment down, development activity has largely caved. Largely.

Allowing for a reasonable average of no less than $125 annual sales per square foot, Longmont’s 6.4 million (or so) square feet of retail space, owned or leased, need at least $800 million of disposable income. Assuming that the population is still 87,000, that means each man, woman and child must have more than $9,200 of income after taxes and rent (or mortgage), to support the existing retail base of 73 square feet per person. How many households do you know in Longmont pulling down that kind of dough (gross income would generally be two to three times the “disposable” sum)? Adding to the challenges, more than half of Longmont’s work force leaves town each morning. Many people shop near work as well as, or instead of, near home.

To be fair, the city hasn’t done everything wrong here. Its public tiff with Dillard’s came about in large part because a previous mall owner was desperate to keep Dillard’s when other anchors were moving out. By the way, Dillard’s right to veto improvement or redevelopment is worth something on its own; Dillard’s owns more than just a store. Perhaps Dillard’s wants no competition, or maybe the developer doesn’t want Dillard’s to stay. We may never know. What seems important is that a city so hungry for sales tax continues to ignore what might be its biggest asset: its historic downtown. Look around the country and see what I mean. The possible ambiance and amenities there can’t really be matched by a sterile, stainless-steel series of coffins parachuted onto a parking lot the size of some counties.

Longmont could take a page from London, where a 50-acre development will be designed as a “brand pavilion,” aimed at allowing global labels to set up interactive exhibitions linked to the growing online buying trend. To its credit London intends to include more than 1,500 homes within its new attraction.

The effective economic lifetime of Twin Peaks Mall was less than 20 years. In 2034 the tax incremental financing to be imposed for the new “mall” will not yet be retired. If malls per se are becoming extinct, wrecking ball operators in Longmont may want to keep their machinery well oiled.

Longmont City Council lap dog for developers

The new mall plan looks DOA to me. Basically, we are replacing Dillard’s with Sam’s Club. Why does Longmont need three Walmarts?

And what small businesses will want to be in the same mall as Walmart? Why cozy up with people who will undercut small business prices?

The stores that NewMark Merrill has in mind are not bringing new kinds of business to Longmont. On the contrary, they are aggressively overlapping with stores on Hover and Ken Pratt that have proven they can do business here. The mall’s intent is to siphon off that business, not develop new business.

Photo by M. Douglas Wray ©2011 FreeRangeLongmont.com

Twin Peaks redevelopment will use TIF to destroy what are now viable businesses

The tax increment financing is what the developer is looking to pocket, and reaping these tax dollars will also give them the upper hand in undercutting the prices of the existing stores they seek to undermine. That’s not a productive way to do business. It will use TIF to destroy what are now viable businesses, and will only replace them with a cheaper version. If you think Twin Peaks Mall has succumbed to urban blight, wait ’til you see what Hover and Ken Pratt will look like in 5-10 years.

Big-box abandonment will be pervasive. Or Longmont City Council will be dishing even more TIF money in an attempt to save them.

This is a poisonous project and NM should be kicked out of here. It is self-destructive for Longmont to continue with this plan.

That the new mall will restore Longmont’s reputation as the armpit of Boulder County is really the least of our problems. This is a financially unsound plan, designed to benefit the developer and not the city or residents. It will damage Longmont seriously. Longmont’s tax dollars would be far better spent in redeveloping Main Street, Kimbark and Coffman.

Council Not Serving Citizens

Katie Witt, poster girl for council's confusion.

Katie Witt, poster girl for council’s confusion.

Longmont City Council seems to be floundering again on city planning.  It’s a familiar story.  They cozy up to a company that wants to have its own way completely in what it does to Longmont.  Whether it is oil companies or mall developers, they make deals that do not reflect the thoughts or preferences of the people of Longmont.  Then they paper it over simply by declaring that their own bizarre decisions are “what the people want,” or “what the people have asked for.”  Listen up, City Council!  The people of Longmont didn’t ask for fracking wells in the city, or fracking wells surrounding Union Reservoir, but it took a public referendum and official vote to make that clear to the Longmont City Council.   Even so, the City Council seems less than enthusiastic about enforcing the ban on drilling that the people’s vote now mandates.  Instead of listening to the residents of Longmont, the City Council seems distressed at the thought of conducting themselves as the representatives of the people who elected them.

The recent disputes about how to redevelop Twin Peaks Mall involve tactics that are similar to the push for sweetheart deals with the oil companies.   City Council members have again shown their eagerness to bend over because the failed cinema wants to extend its failures into the future by using Longmont tax dollars. The existing mall has only one major survivor at this point, a large department store that found a way to stay in business, despite the disastrous mismanagement of the mall.   And what does City Council want to do with it?  Taking a wrecking ball to it, of course, and declare that this is what the people have asked for.  On the contrary, the people have already voted with their dollars to keep this department store.  There is no other store like it in Longmont, and no other store with their survivor skills in today’s market.  You’d think the City Council would be consulting the department store about what would be needed for a viable mall.  Instead, they have courted one of the worst cinema chains, whose appeal is largely to teenagers and small children, and made this the cornerstone of their redevelopment.  This theater habitually screens the cinematic equivalent of fast food.  There are other cinema chains that would be far better choices for redeveloping the mall.  Boulder has found them and so has Denver.  Why can’t the City Council take its blinders off and do the same?  Do they really think that the weekly allowance of twelve year olds is what it takes to make a new mall financially viable?

And aren’t these the same Council members who moaned and complained about the expense of law suits when it came to standing up for citizen’s rights against the encroachments of oil companies?  Now they have decided to initiate legal action to try to condemn the only viable store at the present mall.  This strategy seems like a very long shot, and a ridiculous misuse of Longmont tax dollars.  It will cause serious delays in the mall redevelopment and will drive away many new tenants who might otherwise want to be in Longmont.

If the deal with the current cinema can’t get the wrecking ball, then choose something else for another anchor.  Why not revitalize the conference center, and give it more variety and visibility in the possible uses for it.  Add a performance hall to it, for example, like the one that Arvada has.   Put a new multiplex cinema on Hover or Ken Pratt Blvd or upper Main St. or Pace St.  Apparently the present cinema only has a deal for the present location.  The cinema for Longmont could easily be relocated, and could attract a film distributor that would provide us with much more variety and quality.  And finally, why rebuild the entire mall when only parts of it need to be changed?  Has City Council never heard of remodeling?

The City Council needs to change its approach, and in fact put the needs of residents first in their considerations, not last.  Longmont residents have shown that they will not stand for a flagrant misuse of tax dollars to underwrite sweetheart deals with companies that have no interest in the well-being of Longmont.

Longmont’s October Surprise

Photo by M. Douglas Wray ©2011 FreeRangeLongmont.com

Shell game?

Well, well, well, it looks like hizzoner Bryan Baum has pulled a fast one just in time for the election.  Or maybe, just maybe, the real fast one was pulled by NewMark Merrill.

NewMark Merrill (NMM) was hired by Panattoni to salvage Twin Peaks Mall.  NMM specializes in distressed properties and the mall has certainly been distressed.  NMM was supposed to pull Panattoni’s fat out of the fire.  It appears that NMM let the fat sizzle until there was nothing left to sizzle and then “signed a contract” to pick up the property at a fire sale price.

Panattoni, good shopping center free marketer that it was, bought high and had to sell low.  Actually, it would be interesting to know just who the seller is and who the buyer is in this latest iteration.  Chances are that Panattoni may be toasting champagne.  They put $8 million dollars down and likely took in sufficient revenue since July of 2007 to justify an $8 million dollar investment, at least to break even.

As to the $37 million dollar purchase price (according to insider Council Member Witt), it’s likely that Bank of America is holding the bag on this one.  And there’s likely not much money in that bag.  $8 million from Panattoni.  Perhaps another $8 million from NewMark Merrill, if the sale eventually materializes.  Golly gee.   Poor B of A.  It will have lost somewhere in the vicinity of $20 million.

If this “high finance” wasn’t pathetic, it might actually be funny.  We the American taxpayer likely subsidized that loss at least in part.  Bank of America was a big bank bailout beneficiary.  And it’s been leading the way in foreclosure fraud since the crash of 2008 by hiring paper pushes to sign off on foreclosures without reading the documents or verifying who actually held the papers to what.  There might actually be some sort of divine justice in the B of A episode – if you believe in Karma.

We’ve all heard about the fox guarding the hen house.  It seems that NewMark Merrill positioned itself to take advantage of a potential purchase just at the right time.  Barely more than two months away from formal foreclosure, NMM steps up to the plate and makes an offer – an offer that at least somebody couldn’t refuse.  NewMark Merrill came aboard the Twin Peaks Mall freight train in July 2010 and in the ensuing 15 months learned all it needed to know.  Wouldn’t you like to be in on insider trading, insider trading in commercial real estate that is.

But that’s bidness for ya.  One man’s meat is another man’s carrion.

Baum is making all kinds of back room promises to be sure.  Make no mistake about that.  It’s in his bloodstream.  Former Mayor Julia Pirnack likely did something similar in the spring and early summer of 2007.  She couldn’t keep her promises because the makeup of Longmont City Council changed.  The 2007 council took its fiduciary responsibility to the taxpayers of Longmont seriously.  They refused to put the city on the hook for $15 million in bonding and forfeit all property taxes and 90% of sales taxes for the blighted area for 25-30 years.

If the deal actually is a deal and not just a campaign stunt as suggested by one of Baum’s backers in his/her Times-Call blog comment, I heartily recommend that the community not let its desire to see something good happen with the mall cloud its collective judgment when somebody, somehow comes knocking at city hall’s door with a hand out.

Longmont can benefit from a productive mall in a prime location, but only if it doesn’t buy a pig in a poke when it comes to a public-private partnership.  Remember, NewMark Merrill is getting the property at the cheapest possible price.  They should not need financial assistance of any kind from Longmont.

Baum’s “used car” salesmanship

Photo by M. Douglas Wray ©2011 FreeRangeLongmont.com

Longmont's getting malled

Mayor Bryan Baum came into office on a wing and a promise.   And in the black art of “used car” salesmanship, he’s hoping you won’t notice the sleight of hand.

During the 2009 campaign Baum repeatedly chastised the 2007 City Council on their progress on reviving Twin Peaks Mall and claimed that he would make it happen.  And what has been Mayor Bryan Baum’s position on the Mall since his election?  “Oh, well, there’s nothing we can do about it.  The Mall is private property and the city has no control over it.”

Mayor Baum, you knew all along that this was private property but you chose to use the state of the mall to agitate your way into public office.  Voters are getting mighty exasperated with politicians making promises that they don’t keep.  And you made a whopper.  No matter how you cut the mustard, you have done nothing.  Fool them once, shame on you.  Voters won’t be fooled twice.

Longmont Mayor Bryan Baum - Dim moment

Longmont Mayor Bryan Baum - Dim moment

During the run-up to the 2009 city election Mayor Baum totally dismissed the previous council’s action to “blight” the mall and surrounding properties.  And we all know that the qualifications for “blight” are broad enough to drive a Mack truck through them.  It would have been just as supportable to deny a blighted condition.

The 2007 Council also arranged for mall development experts to conduct a two-day charette in October 2008 to determine how the entire mall area might be designed and developed to meet the many needs of the citizens and City of Longmont.

The community might be very interested to know that when the final chapter of that event was to be presented – the financial analysis by Panattoni – their computers (all of them?) failed and there were NO numbers produced.  More than curious.

The city was negotiating with Panattoni on how Tax Increment Financing (TIF) might be used, but Panattoni wanted $15 million in bonds for Phase I only, an outrageous amount of exposure for the city.  To pay off these public bonds, Panattoni wanted to use 100% of all new property taxes and 90% of all new allowable city sales taxes collected at the mall to construct their version of Phase I.  The public benefit to the city would have been a mere 10% of new sales taxes generated.  Panattoni further disregarded not only the ideas generated in the charette, but disregarded the public’s input from numerous public meetings on Twin Peaks redevelopment.  Their “my way or the highway” negotiating position caused the negotiations to break down.

Incidentally, lost property taxes to our schools from TIF have to be backfilled by the state.  As everyone knows, budget shortfalls at the state level have resulted in repeated cuts to education.

Panattoni purchased the mall at the height of the development craze in July 2007 for $37 million.  And it wouldn’t surprise me to learn that intentions were expressed, if not promises made, to Panattoni by the sitting council at the time of the purchase.  In February the mall was valued at $17 million.

Panattoni hired NewMark Merrill, a shopping center management firm known for specializing in distressed properties, to handle the mall’s myriad of problems.  Just recently Bank of America placed Twin Peaks Mall into foreclosure.

The Baum SquadBut then I suspect that foreclosure was anticipated by those that Baum has called “connected.”  Connected, in this case means Longmont’s “Old Guard,” its oligarchy, select movers and shakers within the business community but far from all of Longmont’s business community.  It certainly does not include those council members who are not part of the Baum majority.

If/when the mall is sold, it clearly will be a short sale.  How low the fire sale price goes will depend on how big a bath Bank of America wants to take.   Panattoni put $8 million down on the property.

Should Longmont be fortunate to have a new mall owner – one that is not looking for a deal that includes the sun, moon and the stars – I hope that Longmont will have a mayor who will look out for the interests of the entire community and not one who will give out the city’s PIN on yet another wing and a promise.

Twin Peaks Mall: Silence unlikely to be golden

Twin Peaks Mall - photo by Duane Leise

At the close of Tuesday’s city council meeting, Council Member Gabe Santos requested that City Manager Gordon Pedrow and Director of Economic Development Brad Power contact Panattoni, owner of Twin Peaks Mall, to determine the status of the Mall.

He indicated that he and other council members receive many emails and calls asking, “What’s happening with the Mall?”  Clearly, all in Longmont have concerns.  Historically, the Mall has been a primary source of city revenues through the sales taxes that it has generated.  The neglect of the mall, by the previous and the current owners, and the state of the economy have caused the mall to decline.

Almost before Santos finished his comments, Mayor Bryan Baum interrupted to explain that both he and Power had attempted to contact Panattoni on Monday and “have not had the courtesy of a return call.”  They did, however, identify the party who would be able to answer their questions.

City Manager Pedrow followed up with a phone call to Panattoni’s CEO, and he, too, has failed to return the City of Longmont’s call.   Perhaps the corporation needs to be sure that they all have the same story to tell in response to Longmont’s inquiries—and just how much of it to tell.

Santos then requested that if no word is heard within a week, a letter be written to Panattoni from Longmont’s Mayor and City council insisting that the city receive “something in writing that addresses our concerns.”

I, of course, have no tea leaves to read, but I do have corporate background in Public Relations and in human behavior.  The silence from Panattoni is very disturbing.

People and companies usually are motivated to publicize good news and reluctant to share news that reflects poorly on the organization or could impede its objectives.  This leads one to believe that they haven’t yet secured an investor to meet the terms for refinancing the debt Panattoni assumed on the mall.

The City of Longmont has a long history of giving development virtually anything it wants.   I have long wondered what unofficial promises were made in 2007 by the Pirnack administration to encourage Panattoni to purchase Twin Peaks Mall.  As they say in the gambling industry – “on the come”.

The previous majority along with Mayor Roger Lange had well-founded concerns about the nature of the Mall’s future development and the degree of financial involvement in this public-private partnership.  Their diligence served the community well, especially considering the financial meltdown that arrived in 2008.

The Mall became the political hammer used by the current council majority to win the November 2009 election.  Either these new members were extremely naive or they were fully aware of the unlikelihood of development in the near future and found this issue useful to attack their opponents regardless of the facts.

Had Longmont rushed into this partnership early, the damage to the city’s overall financial situation would have been critical.

Bond ratings are critical to municipalities.  They are important both to our ability to bond and to do so at favorable interest rates.  And reduced sales tax revenues that result from Tax Increment Financing over 20-25 years if projections are not realized may also be a gamble.  In the situation Longmont finds itself, this is almost assured.  Although there has been some up tick in retails sales, that by no means indicates that there is a market for new or redeveloped commercial retail.

The citizens of Longmont need open and honest information.  Political spin will not suffice, either from Panattoni or from the Mayor or city council members or from the city’s administration.

Will Panattoni default on its debt?  Will the mall be purchased at a fire sale?  Will a new buyer sit on the property as is until the market for redevelopment makes economic sense?  Will any future buyer prey on the community’s desire to have a healthy and prosperous mall to negotiate financial conditions for themselves at the expense of Longmont’s many obligations and needs?

Members of the Longmont community must recognize that Twin Peaks Mall is indeed private property.   Members of our community have no control over what businesses, anchors or otherwise, choose to locate in the Mall.  Potential businesses operate according to their own business models.  If the demographics and location do not follow those models and make financial sense, no forceful demands or pleadings will make any difference whatsoever.  Just because we want something doesn’t mean that we can have it.

Because of the uncertainty in commercial retail and the uncertain future over business financing, no one in Longmont should expect redevelopment anytime soon.  That’s hard to hear, but it’s the reality.

Where’s the skin?

Ruh Roh

Bryan Baum 2010

There’s skin.  There’s thin skin.  And then there’s no skin at all. The latter appears to be the apt description of Longmont’s Mayor.  Perhaps he put it all into the quid-pro-quo game.

KCRN 1060 AM and the Best of Longmont  have created a live broadcast between 6 and 7 PM called “Mondays with the Mayor”.  It seems, however, that Mayor Baum considers this an exclusive opportunity to pepper the airways with his personal ideology.

It’s a new show and is broadcast live from Buzz Coffee.  I was present to observe Mayor Baum demonstrate his intolerance—again.  And in so very many ways!!

Today’s guest was Jonathan Singer, President of the Longmont Area Democrats.  As always, Mr. Singer’s humor is quick and witty.  Such a marvelous contrast to the dour  and humorless  Mayor Baum, a characteristic  so typical of the rabid right – whether in Longmont or across this great country.

After Mr. Singer introduced himself to the Longmont listeners, he quipped, “So we have a mayor and a president.”  I’m confident that brought a chuckle to some and some head-banging to others.

One of the first questions asked of the mayor was about tuition equity at our Colorado colleges and universities.  Many of Colorado’s immigrant students are effectively blocked from fair tuition rates because their parents, here without documentation, brought them to Colorado.  These are good, dedicated students who have demonstrated their ability.

Baum’s reply was the typical deflection used by right wing ideologues.  But before he was finished talking the truth slipped out.  (He just can’t help himself.  No matter how his handlers try, and no matter how far up the food chain they go, they won’t be able to make a silk purse out of this sow’s ear.)

Baum’s solution to high school seniors hoping to go directly into college, is to continue to live in the shadows while seeking naturalization.  Now that, of course, takes years.  Clearly Baum, cares little for the plight of the immigrant community and particularly the Latino community, a substantial part of Longmont’s population.  Baum spoke of immigrants who seek the help of attorneys for naturalization as being “victimized by their own people.”

Their own people!”  Isn’t that lovely.  And I suppose that we’re to accept HIS word for this.  Since you have no skin, Mayor Baum, perhaps you can “show us the beef”.  He spoke of gathering a “consortium of attorneys”  to assist.  I certainly hope these attorneys are not descendents  of Longmont’s presumably buried KKK history.

But, Baum wasn’t done.  Oh, no!

A young student asked Mayor Baum about Longmont’s density per population of gangs and what could be done about this.  The young man is black.  The first question out of Mayor Baum’s mouth, “Are you in a gang?”  Had the question been asked by a white student, I seriously doubt that Baum would have asked the same question.

2 + 2 = 4, Longmont.  I’m sure that those who frequently post racist comments on the Times-Call article blogs are delighted to have elected one of their own.  The rest of us are simply nauseated.

But Mayor Baum, wasn’t done picking fights with those who don’t agree with him.  Don’t forget, this program was viewed by his political allies and operatives as a way to burnish an image of Mr. Nice Guy.  Sorry, Charlie, it won’t wash.  Perhaps the losses should be cut.

This was my first experience with “Mondays with the Mayor”.  So I took the opportunity to ask about an issue that means a great deal to the Longmont community – Twin Peaks Mall.

I asked the mayor why the community hasn’t been given the complete set of facts about Panattoni’s ability to redevelop the Mall.  Since the Times-Call has failed to report the numbers that are relevant to understanding the company’s ability to proceed, I took the opportunity to provide that information.

Panattoni purchased the Mall in 2007 for $37 million.  The boom led to a bust and now the Mall is worth only $17 million. And that is likely not yet the bottom for the commercial retail market.  Panattoni put $8 million down on the property.  Bank of America, who holds the paper, now requires 50% equity in order to refinance.  Panattoni is “underwater,” meaning they owe more that the property is worth.

The Baum SquadBaum doesn’t dispute the data, he merely tries to claim that this is “old news” and “everyone knows this”.  No, Mayor Baum, “everyone” doesn’t know this.  Not the other members of the council outside the well-described “Baum Squad”.  Not the public.  But the Times-Call, who oh-so-carefully reported in generic terms so that the gravity would remain hidden, undoubtedly did know.

Mayor Baum, I read the Times-Call.  EVERY DAY.  These numbers were never published.  They first appeared in an email from Council Member Katie Witt and were revealed on www.freerangelongmont.com.    And unless you don’t read the Times-Call, your statement to the contrary about the availability of this specific information is, yes, “Disingenuous, sir.”  And that was the nice way to put it.

Again, the skinless mayor, had to have a retort (amongst his many incivilities), when he addressed me as amongst those who are not “well-connected”.   Yes, Mayor Baum, I’m not a part of the Longmont oligarchy.  And I’m proud of it.  I “speak truth to power” so that the ordinary Longmont citizen can live his or her life trusting that city business will be taken care of—to the benefit of us all.  I “speak truth to power” to expose what goes on behind all those Wizard of Ozian curtains.

When Singer asked about the Longmont Fair Campaign Practices Act, Baum suggested that the convoluted “in-kind” method that he used in the recent campaign is the way reporting should be done.   Does he really expect the public to swallow that dollars spent “in-kind” are any different than donated dollars or that somehow they are more open and transparent?

Come-come, Mayor Baum.  The Longmont community is not that gullible.  Keep insulting them and see where that gets you.

And let’s not forget that Baum previously explained that he didn’t want his hands dirtied by political money.  Spoken like a man with a very guilty conscience.  The opportunities to ask Mayor Baum, “What did you know and when did you know it?”, are the gift that keeps on giving.

Mr. Singer asked the mayor what other opportunities might be available to help the environment since Baum ferociously torpedoed Longmont’s opportunity to participate in the Governor’s Energy Office’s matching grant program for solar photovoltaics.  Predictably, he once again “went postal”.

This mayor has no respect for the environment.  He’s a climate-change denier.  He’s an oil-gas-and-coal man who was catapulted into office by the rabidly anti-environmental Montana organization Western Tradition Partnership.  He’ll throw a bone once in a while in a feeble attempt to obscure his attitude toward the environment and hoodwink the public.   Don’t expect the Longmont that your kids will live in to be protected by him or his supporters.  They’ll take theirs NOW, thank you.

So, Mayor Baum, you can talk to the community on Monday nights, but this is not a pass to spread your corporatist ideology or advance the agenda of the oligarchy.   Your inner sanctum  knew what they were getting when they voted for you.  The rest, victimized by the Times-Call political water torture for two years and frustrated over the economic conditions prevailing in Longmont and throughout the nation, thought they were getting a fix-it man, new blood.

In fact, they have gotten everything they were sick of in 2007 and before.  The community will figure that out – sooner or later.  Truth eventually rises to the surface.  All the lipstick you apply will not change that.