| "COIN" A NEW TERM FOR ACE? City of Loveland turns towards Governor's COIN Project and Away from ACE Creator CAMT - Name Likely To Be "Rocky Mountain Center for Innovation" |
Loveland - November 30, 2011
The City of Loveland has nearly concluded negotiations with Cumberland & Western Resources (C&W), to purchase the former
Agilent campus in Loveland for $5 million commonly referred to as the "ACE Project." C&W is owned by Kentucky Billionaire
Brad Kelley,
Recent developments indicate the name "ACE" will be going away in favor of another name to represent the shifting focus away
from seeking only space and clean energy research and manufacturing companies.
Loveland City Manager Bill Cahill along with Director of Economic Development Betsey Hale are working hard to conceal their
discussions with the Colorado Governor's office about incorporating the "COIN" program which stands for Colorado Innovation
Network, into the project formerly referred to only as the ACE Project in Loveland. According to one source close to the ACE
Project, the buyer wants to enhance the opportunities for the old Agilent campus beyond the more narrowly focused industry
sectors of space and clean energy manufacturing to a wider audience by collaborating with COIN. ACE stands for the
Aerospace and Clean Energy Project and was invented by the Colorado Association for Manufacturing and Technology
(CAMT) which chose the former Agilent campus in Loveland for its ACE Project.
Colorado Gov. John Hickenlooper announced the Colorado Innovation Network (COIN) earlier this week as an initiative to
bring new businesses and high-tech innovations to Colorado while creating new jobs while retaining other jobs in the state. To
hear Ajay Menon, the newly appointed "chief innovator" of COIN, describe the program it sounds oddly similar to the ACE
Project. According to Menon, who also kept his current position as the Dean of the Business College at CU (Colorado
University), the intent of COIN is to play matchmaker between government paid scientists working in University laboratories and
well healed entrepreneurs. The idea is to spin those technologies into to new business ventures that will also lead to
manufacturing jobs in the long run.
According to Gov. Hickenlooper's announcements regarding COIN, the state will identify locations where business clusters can
be formed under COIN to bring the scientists and their technologies together with for profit companies. The Governor's
announcement also stated no state funds would be used in forming these clusters but instead COIN would rely on contributions.
A key element of the COIN program will be to link public Universities in Colorado with business thus several schools have
already promised staff and resources to the project.
LovelandPolitics requested copies of the correspondence and emails between the Governor's office and city officials regarding
COIN at 3:00 PM today. By close of business we had not received any acknowledgement from the city clerk's office that any
such documents exist.
What Happened To CAMT?
In the opinion of one former insider, "my guess is C&W will just keep rolling forward without them."
Contrary to what is being reported in local media, CAMT has been fighting for relevance in the project that appears to be
changing ever since the City of Loveland entered into a contract with C&W that aced CAMT out of the transaction. While
C&W has continued cooperating with CAMT in trying to find a role for the small non-profit, nothing appears eminent.
One source involved in the project told LovelandPolitics, "CAMT's problem is they could add no value to the park." This
refers to the fact CAMT is a small non-profit organization that wanted either ownership or guaranteed revenue from the leases
even though CAMT could not contribute any money to the project. During a sometimes heated exchange with Loveland's City
Council during a public meeting last August, CAMT board member and former Mayor of Dillon, Flo Raitano, told Loveland's
Council, "we have already got about $650'000 skin in the game." Councilman Hugh McKean asked for documentation
backing up her statement which she agreed to provide. Three months later she has not delivered anything but has apparently
qualified her comments as referring to "in-kind" contributions made by the staff time devoted to the project. During the same
meeting CAMT rejected pleas by some on the city council to consider a more limited role with the property that could have
allowed their ACE Project to "grow into" the total campus. Elaine Thorndike told the council she considered the entire campus
as part of the ACE Project and showed no willingness to compromise. A month later, Loveland decided to go forward with a
cash buyer keeping CAMT at arm's length.
During the company selection process, Thorndike was advised to seek a minimum of $10 million as leverage to contribute to the
project. Thorndike is reported to have rejected that advice and continued her attempts to influence the city's selection of a
developer while insisting CAMT would need to have a significant role. One city insider observed, "Bill [Loveland City Manager
Bill Cahill] really has a way of letting people talk until they hang themselves." The Loveland Council was reported to have lost
patience with CAMT by the time C&W made their offer so excluding CAMT from the transaction was an easy decision.
Thorndike, desperate for positive publicity, manufactured a number of forward leaning press releases about the project including
one naming big aerospace companies willing to move into the project that later proved untrue. LovelandPolitics learned that
while CAMT boasted of having 50 companies interested in ACE, few if any were willing to even sign a non-binding "letter of
intent" demonstrating that interest. One of the reasons United Properties walked away from the deal was the abundance of "triple
B" tenants but no "A" tenants necessary to secure the financing to redevelop the aging buildings on the campus.
Some view CAMT's unrealistic attempts to control the project as evidence the small organization was over their heads; especially
when they were unwilling to cede control to a more capable entity capable of funding the redevelopment. CAMT previously
selected United Properties to purchase and develop the ACE Project in Loveland until United Properties ceased negotiating with
the city and announced they were withdrawing. At the time negotiations broke down, United Properties was asking from
Loveland $10 million in renovation assistance or loans for each building in the park.
Differences C&W Brings To Project from United Properties Proposed by CAMT
C&W is a quality developer with a reputation for investing in the long term of a project according to industry sources familiar with
the company. According to one commercial real estate broker, C&W prefers to keep commercial space vacant rather than rush
in a lower quality tenant that doesn't fit the project. As an example, the source explained a project C&W is developing in
Macon, Georgia has only one tenant but C&W is happy to turn-away lesser applicants. He told LovelandPolitics, "most
developers would be forced to fold or compromise on the tenant quality because they can't afford the vacancy." The
same broker speculated C&W's real interest is the property value in the long-term and not any near term return for their
investment.
It appears C&W is looking to increase the pool of companies eligible to locate in the campus by not being restricted by the ACE
definition but at the same time seeking better qualified tenants willing and able to spend more money per square foot than some of
the struggling high-technology start-ups CAMT was hoping to draw into the business incubator section of their ACE Project.
C&W is reported to be discussing a role for CAMT but on a much smaller scale than CAMT previously had hoped. One option
on the table is CAMT continuing to assist in recruiting companies but without the need to relocate into the project. CAMT was
seeking either developer or city financial assistance to locate an office inside the project. As one city insider told
LovelandPolitics, "CAMT is great at proposing ways to spend other people's money."
Another important distinction between C&W and the company proposed by CAMT is that C&W projects focus on creating
research facilities while CAMT was trying to make ACE into a manufacturing cluster. C&W plans currently call for a higher
lease price per square foot which means a higher cost of renovation. So far, C&W appears ready to spend its own money to
revitalize the campus which is good news for Loveland taxpayers worried about where the project will lead.
One real estate expert advised, "One issue is the city needs to take their hands out of it. They need to move on. The
fact they are still in there trying to drum up support.....not what municipalities do best."
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| organization that has a board and senior officers but no employees and no dues paying member companies. Describing CAMT (Colorado Association for Manufacturing and Technology) as a business association is a bit misleading. A trade association normally represents private companies that pay dues from private monies to support the association and the issues it advocates for on behalf of that industry. CAMT is mostly funded through a grant from the U.S. Department of Commerce. CAMT has been the recipient of numerous federal grants intended to create more manufacturing and high-tech jobs in the country. Ironically, CAMT doesn't employ any middle income people but instead supports a small staff earning six figure salaries (see 2009 disclosure form above). All other 'employees' are contracted labor and not hired by the non-profit organization. CAMT does provide support services to manufacturing companies that pay a fee which CAMT than reports as the "matching" funds required to receive some of its government grants. Inside the organization, sources reported to LovelandPolitics there is considerable friction between President Elaine Throndike and Board Member Flo Raitano. Flo worked to elect Governor Hickenlooper and also served as the Mayor of Dillon, Colorado. Thorndike boasts of relationships within NASA that helped facilitate the unfunded agreement between CAMT and NASA to cooperate on ACE. |
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| Each makes a salary close to six figures. Ironically, CAMT doesn't use its government grant monies to create middle class jobs but instead has only 5 highly paid employees and relies on contractors almost exclusively to operate. CAMT 2009 disclosure Form 990 (Organization Exempt From Income Tax) |
| The former HP and later Agilent Campus on Taft Ave. in Loveland pictured during its heyday. Cumberland & Western Resources is in the final stages of purchasing the property from the City of Loveland. |