A residential development project in Commerce City that has been stagnant for more than 10 years is nearly ready to begin construction after City Council approved a $1.3 million loan extension to help a private developer complete infrastructure for the project.
The Buffalo Highlands Metropolitan District was formed in 2003 by Bill Klaess, a private developer who bought 320 acres of open land near 96th Avenue and Tower Road and planned to sell it to a homebuilder that would put up 650 single-family and about 200 multifamily homes on 200 acres.
“At that time, development was pretty active,” Klaess said. “Especially up near Reunion … We were initially under contract with D.R. Horton, and then, when the recession hit, they cancelled.”
Two more national developers entered and exited agreements in the years to follow as construction and development costs rose.
Klaess had renewed interest this year from a local homebuilding company that said it would take over the project if 96th Avenue was built out to Tower Road. Currently, 96th Avenue ends about a mile west of Tower Road.
“We went to the city and said we’d like to accelerate the development of that road and the bridge over Second Creek, and we’d like to form a public-private partnership to get it done,” Klaess said. “The city loaned us $5.5 million, which we would pay back over 25 years.”
The loan was granted last summer and Klaess’ road construction crew began work on what they thought would be a routine road project. But utility relocation and land easement agreements held things up and drove the project costs through the roof.
“The main delay has been that there are oil wells on the property next to us that belong to Anadarko (Petroleum Corp.) on Second Creek Farms,” Klaess said. “They have a flow line from the wells to their collection point, and their right of way is right where they’re going to build the road.”
Legal fees for mediation efforts, as well as installing traffic lights and underground power lines, put Klaess more than $1 million over budget. On Sept. 15, council extended the loan by $1.3 million to help finish the road, which will be done by the end of the year so that home construction can begin in the spring.
“The extension of 96th Avenue is a great example of the public and private sector working together to benefit the broader community,” said Commerce City Mayor Sean Ford. “A paved connection only improves east-west connectivity for our residents and opens up a new area for development.”
The city will also begin a widening project on Tower Road from 104th Avenue to Pena Boulevard next year to encourage developments in the area.
The new loan money will come in part from the city’s tipping fee fund, which it gets annually from BFI Waste Management, which controls the Tower Road landfill.
“We get a 5 percent fee off of the landfill, which is specifically earmarked for road improvements to mitigate the impact of having that landfill,” said Maria D’Andrea, director of public works in Commerce City. “There’s about $800,000 in the fund now, so the city will advance $500,000 from the capital improvement fund.”
Klaess said he’s thankful for the partnership with Commerce City.
“It’s been a long, painful struggle,” he said. “But I’ve thoroughly enjoyed working with Commerce City, and I’ll be glad when it’s finished.”
