Banning-Lewis Ranch holds key to numerous options for expansion
by Rich Laden
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Hey, Capital Pacific Holdings Inc., you just plunked down $55 million to buy the 21,400-acre Banning-Lewis Ranch.
Whaddaya gonna' do next?
Well, this California real estate company has much more than a celebratory trip to Walt Disney World in its future.
Now that Capital Pacific has completed its purchase of pretty much the entire eastside of Colorado Springs, the Newport Beach- based luxury home builder has critical issues to confront.
- How quickly does Capital Pacific move forward?
- What acreage of the massive parcel does it develop first?
- Should the company offer a piece of the action to other developers?
- How would any plans comply with the restrictive conditions of an agreement approved by city officials when the property was annexed to the city 13 years ago?
"At this point, this initial acquisition is the ante," said Les Gruen, head of Urban Strategies, a Springs-based development consulting firm, and who worked for a Mobil Co. subsidiary when it owned the ranch in the early 1980s. (spydra note: More recently, Mr. Gruen worked as Richard Skorman's campaign manager)
"At this point, they (Capital Pacific) need to move ahead and decide how they want to implement any business plan connected with the development of this property."
Crossing the border
The Banning-Lewis Ranch is the key to unlocking decades of residential and commercial development in the Springs.
Its rectangular shape runs almost the entire length of the city's eastern side. Its lack of development has forced city growth to the north and northeast, with Fort Carson, Fountain and the Pike National Forest as barriers to the southern and western growth, respectively.
These growth patterns make the sprawling Banning-Lewis Ranch, covering a land mass a little larger than Boulder, instrumental to the future of Colorado Springs.
This potential wasn't lost on past owners and developers.
Arizona developer Frank Aries got the property annexed into the city in 1988 as part of his grand plan to develop the entire ranch.
But a faltering economy caused him to abandon those plans, and he turned the land over to the savings and loan from which he had borrowed the money for his purchase. The thrift already had been taken over by federal regulators managing a bailout of the nation's savings and loan industry.
The feds then sold the ranch for $18.5 million in 1993 to the Banning-Lewis Ranch Corp., a company controlled by members of the billionaire al-Ibrahim family of Saudi Arabia. Banning-Lewis Ranch Corp. sold the property last Monday to Capital Pacific.
By buying the ranch, Capital Pacific will operate under terms of the deal Aries negotiated with the city. Some might work to the company's benefit: The city already has annexed the property and approved zoning and a master plan for the entire 21,400 acres.
Does that mean Capital Pacific is poised to move quickly? Well, yes - and no.
Everett Pfeiff, regional president of Capital Pacific Homes of Colorado Inc. in Denver, an arm of Capital Pacific Holdings, said last week it's difficult to say how quickly the company will move forward.
Platting the property - deciding where homes and other development would go - could take a year, he said.
The company has its sights set on roughly 3,000 acres on the ranch's north side as a likely initial area for development, Pfeiff said. The city has grown to the north and northeast, and the ranch's north side would be a logical place to start, because it's close to roads and utilities already put in place for other nearby developments.
In that portion of the ranch, there appears to be a greater need for new housing than stores, offices or other commercial uses, Pfeiff added.
Dealing with uncertainty
Whether the terrorist attacks of Sept. 11 and the ripple effect they've had on the economy will alter any of Capital Pacific's plans is unknown, Pfeiff said.
"Over the next 30 days, we need to digest where things are at, and which direction the economy, and home building in particular, are going," he said.
Another unknown: whether Capital Pacific will be the sole developer. Pfeiff said last week that in-state and out-of-state developers have shown interest. He declined comment on who's interested, although officials from Classic and Nor'wood Development Group - two high-profile Springs real estate development companies - have said in the past they've talked to Capital Pacific.
"There's really nothing that we're pursuing at this time," Pfeiff said. "Our main thrust was to get the (land) acquired and keep the process going that will start taking some of the (outside) interests into consideration."
But regardless of who actually builds on the Banning-Lewis land, they would have to work with the city of Colorado Springs to comply with the annexation agreement put in place in the 1980s.
That agreement requires developers to pay huge costs - likely to be in the millions - to construct roads and extend utility lines to the property.
Among major road projects envisioned in the annexation agreement and master plan: the Banning-Lewis Parkway, a north-south spine through the heart of the property; an upgrade of Marksheffel Road, which borders the ranch's west side; construction of an overpass at U.S. Highway 24 and Colorado Highway 94 in the center of the property; and the extension of the existing east-west Barnes Road through the property's north side.
"Capital Pacific, from the annexation agreement perspective, becomes the master developer," said City Planning Director Quinn Peitz. "The annexation agreement contemplates a list of responsibilities the master developers need to take on. Capital Pacific needs to come in and we need to talk about the type of cooperation the master developer is obligated for."
While Capital Pacific is not required to develop the property in an orderly manner, it probably will do so, Peitz said. As such, the city wants to know more about how fast and where the company will seek to develop the property.
"To put it mildly, we are anxious to get this online," Peitz said. "El Paso County is an urbanizing county. We in the city see the need to develop Banning-Lewis, so that we prevent satellite development from occurring throughout the county."
Whether Capital Pacific attempts to amend either the annexation agreement or the master plan is yet another unknown. Pfeiff, the company's man in Denver, said he couldn't comment on whether Capital Pacific will pursue such actions.
But regardless, Capital Pacific's purchase seems to speak volumes to its commitment to the property and its ability to develop it.
"From our acquisition," Pfeiff said, "the transaction says a lot."
- Rich Laden may be reached at 636-0228 or rladen@gazette.com
BANNING-LEWIS RANCH CHRONOLOGY
1897: William Marion Banning starts Banning Ranch near Colorado Springs.
1927: Raymond W. "Pinky" Lewis, husband of Ruth Banning, begins buying land east of Colorado Springs to expand the ranch and sells the original Banning Ranch. By the early 1930s, he expands the Hereford cattle ranch to 38,000 acres stretching from Falcon to Widefield by absorbing four smaller ranches in 43 different transactions.
November 1963: Phoenix-based Lawrence & Stegall Colorado Properties Inc. buys 23,670 acres of the ranch from Lewis for an undisclosed price.
March 1965: Lawrence & Stegall defaults on a loan from U.S. Steel and Carnegie Pension Trust Fund and deeds the ranch to Colorado Springs Land Holding Co., a New York-based company controlled by the pension fund.
November 1981: A subsidiary of Mobil Land Development Corp., in turn a subsidiary of Mobil Corp., buys the ranch for $22.56 million for residential, commercial and industrial development.
August 1983-May 1984: Mobil sells 1,562 acres to three groups of buyers for $18.71 million for what eventually becomes the Colorado Springs Ranch and Pheasant Run housing developments and a motel site.
October 1985: Tucson, Ariz., developer Frank Aries buys 20,483 acres for $92.05 million from Mobil. Western Savings of Phoenix makes a 10-year, $104 million loan to Aries and his partners for this and subsequent purchases.
October 1986: Aries buys the adjacent 3,631-acre Colorado Centre development for $41.3 million from L-P Associates. Western loans Aries another $33.3 million. In less than a year, he has purchased 26,003 acres for $158 million.
September 1988: Colorado Springs annexes 24,310 acres owned by Aries, including the Banning-Lewis Ranch and Colorado Centre. It is the largest annexation in the city's history.
June 1989: The ranch becomes the biggest property involved in the nation's S&L bailout, as federal regulators take over Western Savings. Two months later, Aries deeds land to Western in lieu of foreclosure.
March 1993: Banning-Lewis Ranch Corp., a company owned by Saudi billionaires, buys most of the ranch for $18.5 million.
October 2000: Capital Pacific Holdings Inc. of Newport Beach, Calif., enters a contract to buy the ranch for an undisclosed price. Deal is to be completed in late 2001.
Sept. 17, 2001: Capitial Pacific pays $55 million to buy 21,400 acres of ranch property.
Source: Gazette research
Copyright 2001
Provided by ProQuest Information and Learning Company. All rights Reserved.
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