County negotiating cost of dismantling Intel's electrical systems

With a closing date only a month or two away, El Paso county officials have been in intense negotiations with the Los Angeles-based group that sold it several buildings and a parking garage on the former Intel campus on Garden of the Gods Road for $25 million.

One issue that has added a charge to negotiations is the estimated $2 million to $4 million  that it will take to break up the chip manufacturer’s sophisticated electrical system so it can be used by multiple tenants, including the county.

“Who pays for what and how it’s going to be done are being worked out,” said Monnie Gore, deputy county administrator.

County Attorney Bill Louis said he will call for an executive session Thursday to brief commissioners on the talks.

“Because these are ongoing negotiations, I’m not going to comment on what our numbers are and what the seller’s numbers are,” he said. “That said, I’m confident that this transaction will close.”

Gore said Intel had constructed an “incredible”  electric service in its buildings to provide 100 percent redundancy for its chip-manufacturing process. Transformers were placed inside of buildings, distribution lines are located in walkway bridges and electricity was brought in from two substations, he said.

Now, with multiple tenants planning to use the campus, the electric service must be broken apart. “Some costs should be borne by the owners and some should be our costs,” Gore said.

Commissioner Amy Lathen characterized the negotiations as a normal part of the give-and-take between buyers and sellers. “I have no worries. Things have been moving well.”

Bruce Haas, senior vice president for the Los Angeles-based Industrial Realty Group, which purchased the entire Intel campus, also said talks were going well.

“We’re working awfully hard,” he said. “This is a phenomenal deal for the county.”

Industrial Realty Group purchased the 1.4 million square-foot plant in 2009 from Intel for $15.1 million. Since then, Haas said the firm has sunk a lot of money into marketing the campus and making it re-usable. “We try to be a for-profit company but not to the extreme,” he said.

After considering the cost of renovations and repairs to its aging buildings, county officials concluded the purchase of existing commercial space was the most cost-effective solution.

When interest rates and other factors are considered, including renovation of some county offices and sale of other county property, the county likely will spend roughly $80 million over the next 25 years, County Administrator Jeff Greene has said.

The county plans to move various social services departments to the new location, including the Department of Health and Environment, the Department of Human Services and the Pikes Peak Workforce Center.

Also slated to move are the treasurer, assessor and clerk’s offices.
County officials had hoped to start moving by late summer.

But Gore said the move may be delayed due to the need to revamp the electrical system and other construction.

“Right now we don’t know how long it will be. It could be six months. It could be a year.”