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ARCHIVED  November 5, 1999

Greeley business building sputters

City has new rooftops aplenty, but commercial construction lags

GREELEY — Alarms go off when Greeley officials get monthly construction activity reports from the city’s building department.

The barometer that measures the residential building rate is rising sharply. But the gauge that tracks commercial construction is stuck. The two are so far out of balance that a citizens’ committee appointed to draft a new land-use and development code for the city is making the gap a priority.

Greeley’s commercial construction business has not only failed to grow the past two years. It has slumped. After peaking in 1997 with 35 projects totaling $32.4 million, the number fell last year to $21.4 million spent on 29 projects. And 1999 will fare no better, with builders so far filing just 22 permits to do $15.3 million worth of work.

“Just look at the statistics,´ said Greeley/Weld Chamber of Commerce President Lyle Butler. “There’s been a huge shift, and a huge growth in residential. This could be the beginning of Greeley becoming just a bedroom community for Larimer County and Boulder County and even Denver.”

Usually, commercial construction follows closely behind the numbers of residential rooftops that rise in new neighborhoods. But the numbers posted in Greeley’s Building Inspection Department tell another story:

n The number of single-family homes built annually has jumped seven-fold since 1990, when 118 homes went up. Through September, the number was 607, and by year’s end officials expect to have written 850 permits.

n The number of commercial projects peaked in 1992 at 39. Since then, the rate has dipped — and flattened, averaging 31 annually in the past five years.

If business building wakes from the decade-long slumber, it will not be soon, say commercial real estate experts.

“I don’t see anything right now that will change that trend,´ said Jack Mackey, a commercial real estate specialist with The Group Inc. of Greeley. “At least for the rest of this year and next, I don’t see that gap closing.”

If not for the development of the new Elk Lakes retail center at U.S. 34 and 35th Avenue, and the building of three new car dealerships in west Greeley, the past year would have been even more bleak.

The Elk Lakes project is anchored by the state’s largest Home Depot store — a reflection not so much of a resurgence in commercial building as a response to the pace of residential construction: New homeowners are Home Depot’s steadiest and best customers. Likewise, plans for a PetSmart store at the same location are linked to all of Greeley’s new back yards full of dogs and cats.

Restoring some balance to the building rates for new homes and new businesses will mean slowing the relentless march westward that Greeley’s new residential subdivisions are making, Community Development Director Becky Safarik said.

“One of the highest costs of building is the development of infrastructure,” Safarik said. “People need to consider the cost of taking that west, versus the cost of filling in developable land in the city.”

A commercial vacancy rate survey that the city was completing at the end of October, after the Business Report went to press, likely will show the effects of the westward shift.

“I think it will show what we instinctively know,” Safarik said. “We have more vacancy in the core, less in the west.”

An obvious effect of the westward sprawl is the easy access that new homeowners in Greeley have to the retail centers in Loveland, Fort Collins and fast-growing Windsor. The magnets to the west pull Greeley’s leading edge toward them.

Butler said he worries that unless the tide turns and investors fill the commercial gaps in a mostly residential landscape, city services and quality of life will begin to suffer.

“If it keeps going this way, we are going to have some problems,” Butler said. “A residential home does not pay for the services it receives. Businesses do that for them. Businesses pay more in property tax by 3-to-1.”

The quandary that a lapse in commercial development presents is that quality of life — one of the prime lures for business location in Northern Colorado — would slip, making Greeley’s problems even more acute.

“Bedroom communities create a lot of demands,” Butler said. “Newcomers have expectations that they’ll have parks, transportation systems and other things paid for with tax dollars. Property taxes would go up substantially in Greeley, and as the cost of those things go up, people wouldn’t support them. There goes your quality of life.”

It’s not too late, say others with an eye on Greeley’s commercial building future. While numbers of permits might be slumping, total value can rise as large projects, like the new State Farm Insurance Co.’s campus set for development next year, take shape.

But even by the measure of dollars spent per project, Greeley’s commercial construction activity is lagging again this year. The 22 commercial permits filed through September were worth a total of 15.3 million, or about $700,000 per project.

For the two previous years, the average value of the 64 commercial projects completed was $840,000.

“But it doesn’t take more than two or three large projects to reflect huge dollars,´ said Chris Jeavons, a construction-lending specialist at Eaton Bank in Greeley and a board member of the Northern Colorado Homebuilders Association.

“We’d all like to see more of that.”

City has new rooftops aplenty, but commercial construction lags

GREELEY — Alarms go off when Greeley officials get monthly construction activity reports from the city’s building department.

The barometer that measures the residential building rate is rising sharply. But the gauge that tracks commercial construction is stuck. The two are so far out of balance that a citizens’ committee appointed to draft a new land-use and development code for the city is making the gap a priority.

Greeley’s commercial construction business has not only failed to grow the past two years. It has slumped. After peaking in 1997 with 35 projects totaling $32.4…

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