Construction at Banning Lewis Ranch moves forward

You don’t need a crystal ball to see Colorado Springs’ future. A road map will do.

Go east on Woodmen Road, past a sea of Briargate rooftops, past the last-chance (for now, anyway) Wal-Mart near Powers Boulevard and out onto the prairie that’s disappearing faster than you can say suburban sprawl.

On the far northern portion of the Banning Lewis Ranch, a massive, undeveloped tract that makes up the eastern third of Colorado Springs, a handful of model homes and a recreation center are under construction near a completed elementary school.

The rec center opens next month, the model homes are to follow in September, and the first Banning Lewis Ranch homeowners could be shoveling wind-drifted snow by December or January. Neighborhoods, parks, shopping centers and the like will follow.

Even though city officials annexed this 24,000-acre property nearly two decades ago, pronghorns still outnumber human residents.

But over the next half-century, give or take a few years, the California owners who control most of the ranch say it will become home to about 75,000 residences and 180,000 people — close to the current combined populations of Fort Collins and Grand Junction.

"The land is the future of Colorado Springs,” said John Cassiani, vice president of project operations for Banning Lewis Ranch Management Co., which is developing the ranch.

Even as some growth critics question the wisdom of the project, the real question isn’t why the ranch is being developed, but why it wasn’t developed sooner.

Capital Pacific Holdings of Newport Beach, Calif., paid $55 million in September 2001 for 21,400 acres of the ranch; an additional 3,000 acres or so remained in the hands of smaller landowners.

Capital Pacific seemed like the right real estate company to develop the property; it had deep pockets and a successful history in California. Company chairman Hadi Makarechian made last year’s Los Angeles Times list of the 100 most powerful people in Southern California.

The timing also seemed right in 2001. Even though the nation had entered a recession, the Springs’ housing market was about to take off. Home construction set a record that year; two more home building records were set in subsequent years.

But Banning Lewis Ranch Management Co., created by Capital Pacific to develop the property, couldn’t clear development, bureaucratic and legal hurdles, at least not right away.

“I would have loved to have been part of that deal,” Cassiani, who joined Banning Lewis in 2005, said of the hot housing market. “Couldn’t do it.”

Twenty-three owners of smaller pieces of the ranch and Banning Lewis Ranch Management Co. wound up in court over how much each would pay toward hundreds of millions of dollars’ worth of future roads, fire stations and utilities on the property.

As part of a settlement, the city has assigned fees to ranch owners to pay for the public improvements. The bill will be a combined $1.2 billion, with Banning Lewis Ranch Management estimating it will pay 95 percent.

The Colorado Springs City Council gave preliminary approval to the deal in May. Some ranch property owners continue to meet with city officials, and the fee plan still needs final council approval, which could come July 24.

Banning Lewis Ranch Management had another problem before it could proceed. As part of the land’s 1988 annexation, future developers would be required to pay for a new wastewater treatment plant, which would serve the ranch and be built south of the city. The plant’s first phase, to cost about $100 million, is scheduled to be completed in 2012. As the largest landowner, Banning Lewis Ranch Management will pay the biggest share.

But until Colorado Springs Utilities approved a funding plan for that facility, it wouldn’t allow the city’s existing Las Vegas Street wastewater treatment plant to serve initial areas being developed by Banning Lewis Ranch Management. Agreements are now in place for the interim service and construction of the permanent plant.

“Every property is unique and has its own set of issues,” said longtime Springs developer Steve Schuck, who was once interested in buying the ranch, but has no ties to its development. “For a project of this magnitude and complexity, it’s especially true.”

Even as development moves forward, not everybody’s happy.

Springs resident Dave Gardner, who founded and chairs a group called SaveTheSprings and who often criticizes Springs growth policies, questions if the city will have enough water to serve the ranch.

Utilities plans to serve large portions of the ranch with its Southern Delivery System, which will cost about $1 billion in today’s dollars and pipe water the city has purchased for its future use from the Pueblo Reservoir.

SDS — opposed by some Pueblo-area elected officials and business leaders and still facing environmental hurdles — remains on the drawing board, and Gardner wonders if other water supplies will be adequate to serve the area.

Although Banning Lewis Ranch Management and other property owners are expected to chip in $1.2 billion for new roads, utilities and the like, Gardner said it’s not enough.

Developers will pass on some of those costs to new homeowners through special taxing districts. But there’s no way they’ll foot the entire bill, which means existing Springs residents will pay much of the long-term public improvement costs, Gardner said. Banning Lewis Ranch Management will pay only about $70 million toward SDS costs, Cassiani estimated.

“Today we have backlogs, increased taxes, fees and utility rates, declining levels of municipal service, and our city, county and utility all face severe budget crunches,” Gardner said. “The prosperity brought by this type of growth turns out to be a myth.”

Cassiani dismissed Gardner’s anti-growth sentiment, saying the city will continue to grow whether Gardner or anybody else likes it or not.

And SDS isn’t being built to serve only the Banning Lewis Ranch, said Steve Berry, a Utilities spokesman. It also will serve existing portions of the city, provide a backup to aging water delivery systems and ensure that the Springs has adequate water no matter what direction it grows, he said.

“We are going to be building something that’s special, unique, that’s a wonderful place to live,” Cassiani said of his company’s project, “and we’re going to do it with the biggest burden of infrastructure requirements of any developer in the history of Colorado Springs.”

Banning Lewis Ranch Management wasn’t the first owner to encounter problems in getting the ranch developed.

In the 1980s, Arizona developer Frank Aries and the city hammered out agreements to annex and develop the property. Aries defaulted on a $235 million loan and gave the land to his lender, which went belly up as part of the nation’s savings and loan collapse in the late 1980s.

A federal agency wound up with the property and sold it for $18.5 million in 1993 to members of a Saudi family, who let the property sit for the next eight years. Capital Pacific then bought it.

The ranch’s lack of development prompted some developers to leapfrog the property to find home sites. That’s one reason unincorporated Falcon, abutting the ranch’s northeastern corner, sprang up with thousands of homes over the past decade.

Because of its size and availability of home sites, Banning Lewis Ranch officials believe they’re poised to compete with Falcon, Briargate, Wolf Ranch and other blossoming residential areas.

The Banning Lewis Ranch Academy, a charter school that’s part of Falcon School District 49, will draw homeowners to the ranch, said Jay Peterson, regional sales director in Denver for Hanley Woods Market Intelligence, a research firm. The school, which opened in 2006, has a waiting list.

Banning Lewis Ranch Management also believes its marketing plan will capture homebuyers.

The company’s subdivisions — which it calls “villages” — will have all amenities in place before homeowners move in, Cassiani said. It’s been common for Springs homeowners to move into a neighborhood and wait years for a park to be built.

“It’s not like a year from now we’re going to have this park done, or a year from now that swimming pool is going to open,” Cassiani said. “Day one, you move in, the pool’s done, fitness center’s done. All done, all in.”

Six villages covering about 2,400 acres on the northern part of the ranch are to be developed initially; the first, to be called Northtree, is laid out over 321 acres.

The six areas are to include about 9,600 homes, townhomes and apartments; each area also will have its own recreation center, school and parks. The first Banning Lewis Ranch shopping area, about 200,000 square feet, will be developed in the second village, which will called Trailwood and where the first homes are expected to be built in late 2008, Cassiani said.

Banning Lewis Ranch Management has signed deals with four home builders: Springs-based Classic Cos. and Todays; California-based John Laing Homes, which has become one of the larger builders in the Springs area; and Capital Pacific Homes, the homebuilding arm of the California real estate company that bought the majority of the ranch in 2001.

Homes will sell for $220,000 to $380,000, Cassiani said, and builders have been asked to create designs they haven’t offered in other Springs neighborhoods.

Even though the future is now for the Banning Lewis Ranch, it seems like it’s come at the worst time.

The area’s housing market has tumbled, and home construction is down nearly 40 percent this year over last year.

But the Banning Lewis Ranch is what’s known in real estate as a long-term play. Taking a snapshot of today’s housing market and using it to dictate development decisions is silly, Schuck said.

“They might have missed the last upsurge,” Schuck said of the Banning Lewis developers, “but Colorado Springs is still, according to some of us, the best place in America in which to live and bring up a family and will continue to be attractive. They’ll get more than their share.”

CONTACT THE WRITER: 636-0228 or rich.laden@gazette.com

ABOUT THE PROPERTY

WHAT: The Banning Lewis Ranch is a 24,000-acre, 38-square-mile parcel that makes up most of the eastern third of Colorado Springs, stretching from Woodmen Road to southeast of the Springs Airport. The city annexed the land in 1988; at the time, it was like adding a city the size of Fort Collins to Colorado Springs.

HISTORY: William Marion Banning started the Banning Ranch near Colorado Springs in 1897. Thirty years later, Raymond W. “Pinky” Lewis, the husband of Banning’s daughter, Ruth, sold the original Banning Ranch, but also started to buy other acreages. By the early 1930s, Lewis had 38,000 acres.

PAST OWNERS: A Phoenix company bought nearly 24,000 acres from Lewis in 1963; a New York company got the land two years later after the Phoenix firm defaulted on a loan. Mobil Oil Corp. bought the land in 1981 and sold it to Arizona developer Frank Aries four years later. Aries defaulted on a loan, and the land was turned over to his lender. The federal government took control as part of the savings and loan bailout of the late 1980s and early ’90s, and sold it to a Saudi family in 1993.

CURRENT OWNERS: In 2001, Californiabased Capital Pacific Holdings bought 21,400 acres with plans to develop a residential and commercial project. Capital Pacific created Banning Lewis Ranch Management Co. to oversee development. About two dozen other landowners own the rest.

NEXT UP: Banning Lewis Ranch Management is launching development in six “villages” on the northern part of the ranch, 2,400 acres southeast of Woodmen and Marksheffel roads. The six villages will have about 9,600 homes, townhomes and apartments.

Development has begun on the first village, called Northtree, where the first few homes will be completed by January.

Construction in the second village, Trailwood, is expected to start in late 2008; Trailwood is expected to have 200,000 square feet of retail space — about as much as a Wal-Mart Supercenter — by 2009.

A 74-acre town center, which will include retail space, is planned as part of the fourth village; it likely will be completed in 2015.

By 2017, the company hopes to have completed construction of all six villages.

The Banning Lewis Ranch Parkway, a northsouth highway, will be one of the most prominent public improvements on the ranch.

In 2009, a segment of the parkway, from Woodmen to Dublin Boulevard, should be complete. By 2011, the leg from Dublin to Stetson Hills Boulevard should be finished.

A commercial center is planned near the parkway, U.S. Highway 24 and Constitution Avenue in the center of the ranch. But development of offices and shopping centers won’t begin until the first phase of the city wastewater treatment plant is completed in 2012.

OTHER DEVELOPMENTS: Springs developers Randy Case and his brother, Lindsay, own about 530 acres southwest of Marksheffel and Bradley roads on the ranch’s southwest side. They plan 800 homes, with construction starting in the first quarter of 2008.

Several hundred homes were built years ago in Colorado Centre, an unincorporated area southeast of Drennan and Marksheffel roads, on the south edge of the ranch. The property is not part of the ranch.

July 24 City Council could finalize a fee schedule for public improvements.

August The property’s first recreation center is scheduled to open.

September Several model homes are expected to be completed.

December-January The first homes should be completed in the first village, Northtree.

Late 2008 Homes in the second village, Trailwood, are expected to open.

2012 First phase of a $100 million wastewater treatment plant is expected to be completed.

2017 Homes and businesses in all six villages are expected to be completed.