After 50 years of lying idle, a former gold smelter in the heart of Colorado Springs will be redeveloped into housing, stores and offices.
The former site of the Golden Cycle Mill is believed to contain as much as $305 million worth of gold. But Robert Hadley, owner of the 210-acre parcel, says there’s more to be gained by cleaning it up and developing it.
“There’s a lot of gold in seawater, too,” Hadley said. “The question is, can you get it out economically? The value of gold is a little like a mirage. You’d spend almost as much to get it out as the gross revenues would be.”
Development plans call for a dense commercial and residential core anchored by a community center with parks and residences. A total of 877 condos, townhomes and single-family detached units are being developed. John Laing Homes will buy more than 40 percent of the available lots.
The community center is scheduled to open this fall. The residences will take six years to complete.
The site is a brownfield – property that is abandoned or underused and often environmentally contaminated.
Hadley expects to spend $50 million on the project, called Gold Hill Mesa, which will be financed through Denver-based Brownfields Capital, a specialty lending and investment management company.
Through a patented investment product and process, the company finances remediation and redevelopment of environmentally troubled real estate using an instrument called a Brownfields Value Contract.
While Gold Hill Mesa is the first project financed by Brownfields Capital, the company has about 50 more deals in its pipeline, said Cheryl Hoffman, the company’s founder and chief executive.
“The market is so big that our only restriction to growth is human resources,” she said.
The National Brownfields Association estimates there are between 400,000 and 1 million brownfield sites in the United States.
Industry observers estimate the brownfields redevelopment market at $2 trillion, while the total U.S. institutional real-estate investment market was estimated at $7.5 trillion in 2003, according to a report by Glenn Mueller, director of the Center for Real Estate at Colorado State University in Fort Collins.
To date, less than $3 billion has been raised from federal and private sources to target investments in environmentally impaired properties.
Staff writer Margaret Jackson can be reached at 303-820-1473 or mjackson@denverpost.com.
