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A U L I A D V I S O R Y S E R V I C E S P R O G R A M R E P O R T

The Lowry RangeColorado

Urban LandInstitute $

The Lowry RangeColoradoA Strategy for Development

June 1–4, 2004An Advisory Services Program Report

ULI–the Urban Land Institute1025 Thomas Jefferson Street, N.W.Suite 500 WestWashington, D.C. 20007-5201

An Advisory Services Program Report2

ULI–the Urban Land Institute is a non-profit research and education organiza-tion that promotes responsible leadership in the use of land in order to enhance

the total environment.

The Institute maintains a membership represent-ing a broad spectrum of interests and sponsors awide variety of educational programs and forumsto encourage an open exchange of ideas and shar-ing of experience. ULI initiates research thatanticipates emerging land use trends and issuesand proposes creative solutions based on thatresearch; provides advisory services; and pub-lishes a wide variety of materials to disseminateinformation on land use and development.

Established in 1936, the Institute today has 23,000members and associates from 80 countries, repre-senting the entire spectrum of the land use anddevelopment disciplines. Professionals representedinclude developers, builders, property owners,

investors, architects, public officials, planners,real estate brokers, appraisers, attorneys, engi-neers, financiers, academics, students, and librar-ians. ULI relies heavily on the experience of itsmembers. It is through member involvement andinformation resources that ULI has been ableto set standards of excellence in developmentpractice. The Institute has long been recognizedas one of America’s most respected and widelyquoted sources of objective information on urbanplanning, growth, and development.

This Advisory Services program report is intendedto further the objectives of the Institute and tomake authoritative information generally avail-able to those seeking knowledge in the field ofurban land use.

Richard M. RosanPresident

About ULI–the Urban Land Institute

©2004 by ULI–the Urban Land Institute1025 Thomas Jefferson Street, N.W. Suite 500 WestWashington, D.C. 20007-5201

All rights reserved. Reproduction or use of the whole or anypart of the contents without written permission of the copy-right holder is prohibited.

3Lowry Range, Colorado, June 1–4, 2004

The goal of ULI’s Advisory Services Programis to bring the finest expertise in the realestate field to bear on complex land use plan-ning and development projects, programs,

and policies. Since 1947, this program has assem-bled well over 400 ULI-member teams to helpsponsors find creative, practical solutions forissues such as downtown redevelopment, landmanagement strategies, evaluation of develop-ment potential, growth management, communityrevitalization, brownfields redevelopment, militarybase reuse, provision of low-cost and affordablehousing, and asset management strategies, amongother matters. A wide variety of public, private,and nonprofit organizations have contracted forULI’s Advisory Services.

Each panel team is composed of highly qualifiedprofessionals who volunteer their time to ULI.They are chosen for their knowledge of the paneltopic and screened to ensure their objectivity. ULIpanel teams are interdisciplinary and are devel-oped based on the specific scope of the assignment.ULI teams provide a holistic look at developmentproblems. Each panel is chaired by a respectedULI member with previous panel experience.

The agenda for a panel assignment is intensive. Itincludes an in-depth briefing composed of a tourof the site and meetings with sponsor representa-tives; interviews of key people within the commu-nity; and a day of formulating recommendations.On the final day on site, the panel makes an oralpresentation of its findings and conclusions to thesponsor. At the request of the sponsor, a writtenreport is prepared and published.

Because the sponsoring entities are responsiblefor significant preparation before the panel’s visit,including sending extensive briefing materials toeach member and arranging for the panel to meetwith key local community members and stake-holders in the project under consideration, partic-ipants in ULI’s panel assignments are able tomake accurate assessments of a sponsor’s issuesand to provide recommendations in a compressedamount of time.

A major strength of the program is ULI’s uniqueability to draw on the knowledge and expertise ofits members, including land developers and own-ers, public officials, academicians, representativesof financial institutions, and others. In fulfillmentof the mission of the Urban Land Institute, thisAdvisory Services program report is intended toprovide objective advice that will promote the re-sponsible use of land to enhance the environment.

ULI Program StaffRachelle L. LevittExecutive Vice President, Policy and Practice

Mary Beth CorriganVice President, Advisory Services and Policy Programs

Nancy Zivitz SussmanSenior Associate, Advisory Services

Nicholas GabelAssociate, Advisory Services

Jason BellPanel Coordinator, Advisory Services

Yvonne StantonAdministrative Assistant

Nancy H. StewartDirector, Book Program

Duke JohnsManuscript Editor

Betsy VanBuskirkArt Director

Martha LoomisDesktop Publishing Specialist/Graphics

Diann Stanley-AustinDirector, Publishing Operations

About ULI Advisory Services

An Advisory Services Program Report4 An Advisory Services Program Report4

The ULI panel would like to thank the Colo-rado State Land Board for inviting it to as-sist in its planning for development of theLowry Range. The panel believes this to be

an exciting project and was pleased to be a partof it. The panel extends special thanks to LandBoard Commissioner Patrick Teegarden, whospent considerable time with the panel and sharedhis knowledge of the site and the state’s processfor developing its lands. The panel would also liketo thank the Land Board staff, especially Direc-tor Britt I. Weygandt and Deputy Director John

Brejcha. The panel is especially appreciative ofthe efforts of Danna Ortiz of Civil Resources, LLC,consultants to the State Land Board, for hertireless efforts to meet requests for additionalinformation.

The panel would also like to acknowledge theefforts and time of the more than 20 people it metwith during its time in Colorado. This grouphelped the panel understand the intricacies in-volved with developing this special property.

Acknowledgments


Introduction 6

Intrduction 7

Overview and Summary of Recommendations 12

Strategy Development 14

Preparing for Success 17

Issues to Be Resolved 19

Conclusions 26

About the Panel 28

Contents


ULI Project DirectorMary Beth CorriganVice PresidentAdvisory Services and Policy Programs

Panel ChairAnthony (Tony) J. TrellaPresident and Chief Executive OfficerMeranth CompanyDeerfield Beach, Florida

Panel MembersTed R. BrownAttorney-at-LawAkerman, Senterfitt & EidsonOrlando, Florida

Robert HewgleyDirector of Real EstateAsset Management DivisionTexas General Land OfficeAustin, Texas

Derek C. ThomasVice Chairman and Chief Operating OfficerNewland CommunitiesLa Jolla, California

ULI Panel and Project Staff

7

The Lowry Range is a 40-square-mile prop-erty east of Denver, Colorado. It is possiblythe nation’s largest single-site developmentopportunity near a major metropolitan area.

It is closer to Denver International Airport, theDenver Tech Center, and Fitzsimons (home to theUniversity of Colorado’s Hospital and Health Sci-ences Center and to the affiliated 160-acre Col-orado Bioscience Park) than to downtown Den-ver. The Colorado State Land Board owns andmanages this property, which contains 12 linearmiles of riparian corridors, rolling hills, and short-grass prairie.

The Colorado State Land Board (SLB) was formedwhen Colorado became a state in 1876. At that time,the federal government gave nearly every section16 and section 36 parcel in the state to the SLB.The SLB is charged with managing the assets en-trusted to their care for their beneficiaries (pri-marily Colorado children in kindergarten throughtwelfth grades) by producing a reasonable andconsistent income within the long-term protectionof economic values, while also providing responsi-ble environmental stewardship to ensure the con-servation of natural resources.

Approximately 10 percent of the SLB’s holdings,including the Lowry Range, are included in itsStewardship Trust. These properties were nomi-nated based on their exceptional qualities and re-ceive an additional level of scrutiny. The ColoradoConstitution requires the SLB to manage theseproperties to “protect and enhance the beauty,natural values, open space and wildlife habitat forthis and future generations.”

The Lowry Range was originally part of a 59,000-acre (100-square-mile) parcel that the federal gov-ernment used during World War II and the Koreanand Vietnam wars for artillery training. The SLBacquired the site in three transactions from theDepartment of Defense: In 1964, it traded SchoolTrust lands near Fort Carson and the Pueblo Army

Lowry Range, Colorado, June 1–4, 2004

Introduction

Depot for 12,700 acres of the Lowry Range parcel.In 1966, it traded additional land near Fort Carsonfor 11,244 acres. In 1991, it exchanged holdingsnear Falcon Air Force Base for 3,500 acres.

In total, the SLB acquired 27,500 total contiguousacres, of which approximately 1,500 acres have beensold. The U.S. Army Corps of Engineers is cur-rently cleaning up the ordnance on the property.The Corps estimates that approximately 5,000acres contain areas of concern and that it will taketen to 20 years to clear the remaining 75 percentof this environmentally hazardous segment (about3,750 acres). An environmental survey of the sitewill more accurately determine how much safeland is available.

Today the property is leased for a variety of uses,including agricultural operations, two model air-plane clubs, a horseback riding club, sand extrac-tion, flight training for the Army National Guard,and oil and gas production.

Work Done to DateThe state has commissioned or participated in sev-eral land use studies and processes over the pastfew years. These are summarized below.

University of Colorado Real Estate PanelIn July 2000, the University of Colorado hosteda real estate panel to evaluate potential develop-ment opportunities for the property. The panelfound that “failure to immediately develop ade-quate resources and attention to the Lowry Rangecould significantly decrease the value of the prop-erty by limiting near-term options open to theBoard.” As a result, the SLB assembled the Low-ry Working Group, composed of entities repre-senting a variety of interests, including the SLB,the Rangeview Metropolitan District (Rangeviewleases the water under the Lowry Range and hasa contract with the SLB to serve the projected100,000 people who will ultimately reside on the


site), the Cherry Creek School District (represent-ing the three school districts that have jurisdictionover the property), the Governor’s Office of Poli-cies and Initiatives, the Colorado Department ofNatural Resources (which contains the SLB), Ara-pahoe County, the city of Aurora, and the Trustfor Public Lands (a national nonprofit organizationwith expertise in open-space conservation). Thesestakeholders worked from July 2000 through May2003 to devise goals for both the planning processand the development of the property and to defineopportunities and constraints. The Working Groupstated that “the land is special, allowing for a newparadigm of planning and new models of develop-ment that balance economic development inter-ests with environmental and sustainability mod-els.” This group provided the foundation for theinitial design charrette.

Vision Process for the Lowry Range (RNL Design, Spring 2000)RNL Design, in conjunction with the WorkingGroup, facilitated a preliminary design charretteconducted by a team of experts in May 2000. Thenine-member panel included experts in land uselaw, governance, transportation, market and eco-nomic analysis, land use planning and design, landdevelopment, public affairs, education, and conser-vation planning.

The panel developed a conceptual developmentplan for the property and set forth the followinggoals and objectives:

• Future land use should positively impact theregion.

• Connections with regional trails, open space,recreation opportunities, and adjacent jurisdic-tions should be identified and defined.

• Foster a sense of value and place.

• Serve as a model for social, environmental, andeconomic sustainability for the region.

• Land use should enhance the site’s natural andcultural attributes.

• Development should apply open-space and con-servation principals that exhibit responsible,sensitive development and planning.

• Devise an institutional and management frame-work and governance strategy that assures ef-fective and timely implementation.

• Future land use should result in a meaningfuland visible connection between people and theenvironment.

Lowry Range Property Development Study (RNL Design, Summer 2003)In August 2003, RNL analyzed the conceptualdevelopment plan created during the design char-rette to determine what densities and type of de-velopment (i.e., trend development, planned com-munity, or compact development) would be mostappropriate for the property. This study con-cluded that a planned density of eight to 12 unitsper acre would be appropriate for the site. The re-port divided the property into several develop-ment zones:

• a compact series of villages located on the least-sensitive portion of property (essentially northof Quincy Road);

• an opportunity for planned recreational uses ad-jacent to Aurora Reservoir (near the west prop-erty boundary);

• a flexible conservation zone that could be devel-oped over time or preserved, based on commu-

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nity interests (roughly the central portion of thesite); and

• a significant portion to be designated as an un-developed short-grass prairie reserve (espe-cially along Box Elder Creek or the east por-tion of the site).

The report also included two other studies:

• Advancing the Disposition of the Lowry Range:Economic and Business Considerations (JeanTownsend, Coley/Forrest, Inc., July 2003) rec-ommended that SLB partner with a master de-veloper to entitle the land and develop an over-all theme for the property.

• Lowry Land Range Ecological Issues Brief(ERO, July 2003) provided a brief overviewof several ecological issues (such as declininghabitat and threats to biodiversity) and recom-mended tasks that should be completed to helpmaintain the site’s natural diversity and ecologi-cal integrity.

Development Process Overview and Timing (THK& Associates, Fall 2003)THK evaluated several possible entitlement al-ternatives and defined a “critical path” for thedevelopment process. The report recommendedthat SLB (1) select a venture partner; (2) develop/process an overall conceptual master plan and phaseI development plan through Arapahoe County; (3)issue a second RFP to select the developer; (4) whenfour to five years’ worth of developable land re-mained, reevaluate the master plan and process.The SLB followed these recommendations and is-sued a board order to proceed accordingly in Octo-ber 2003.

Technical TeamAt the time the ULI panel convened, a numberof consultants were working with the SLB to re-search progressive development opportunitiesand create guiding principles that could be incor-porated into the request for qualifications (RFQ)and the request for proposals (RFP). These con-sultants working on the project included the fol-lowing groups and individuals.

Rocky Mountain InstituteThe Rocky Mountain Institute (RMI) has re-searched green development opportunities in areassuch as energy, water, and resource efficiency,human well-being, ecological diversity, transpor-tation, and education. Its report, Benchmarkingand Guidelines for a Sustainable Community, ex-plores how the Lowry Range can serve as an ex-ample of effective land stewardship where limiteddevelopment can actually help enhance both theland and its value.

The Natural Learning InitiativeThe Natural Learning Initiative (NLI) has de-veloped a vision for the Lowry Range based onthe concepts of sustainable development; educa-tion as a community-based process covering infor-mal and formal domains; and the integration of ed-ucation for all ages. The NLI reviewed literatureand research pertaining to community building,cultural animation, community education, pedes-trian environments, active living, and other envi-ronmental systems influencing child developmentand the lifestyles of children and families.

NLI devised a list of guiding principles it recom-mended for the Lowry Range, including:

• compact, moderate-density neighborhood devel-opment;

• interlinked hierarchical pedestrian pathwaynetworks;

• a variety of small neighborhood public openspaces with management treatments rangingfrom manicured to wild;

• naturalized child-care and school grounds;

• indoor-outdoor architecture;

• childcare centers located in residential ormixed-use neighborhoods;

• safe, narrow streets;

• and school/community centers in all public vil-lage spaces.

NLI’s draft report also included evaluation crite-ria and recommendations for the Lowry Range inthe long term.


Jeff CushingAuthor Jeff Cushing chronicled the history of thesite, including Native American uses of the land,Spanish exploration and subsequent Europeansettlement, ranching and farming uses, 1938 saleof the property to the War Department, use from1942 to 1963 as a bombing and gunnery range, andits use for former Titan missile silos.

ERO Environmental ConsultantsERO will be conducting a vegetation and wildlifeinventory of the site in several phases. This studywill map the location, extent, and composition ofhigh-quality native plant communities and key hab-itat for migratory birds and species targeted forconservation. To date, ERO has inventoried over14,000 acres and has made recommendations con-cerning grazing and weed management practicesand gravel mining and reclamation techniques.

CommunityVizCommunityViz has conducted a demographicanalysis of real estate demand and the develop-ment of assumptions concerning future residentsand employment. GIS-based software will be usedto educate stakeholders and the public about thecomplexity of issues being addressed. It enablesthe public to visualize the impact of their choicesand will help quantify in economic terms the val-ue of social, visual, and environmental impacts. Avalue system based on “importance as rated byparticipants” can be used to assess the tradeoffsassociated with complex social, economic, environ-mental, and visual planning.

After the technical team has completed all itsresearch, members of the team will facilitate aworkshop with stakeholders and potential part-ners to discuss the findings and to confirm themission, goals, and objectives of Lowry Rangedevelopment.

The ULI ProcessIn June 2004, the SLB asked ULI to convene apanel to provide additional advice on developmentstrategies for the Lowry Range. The panel wasasked to provide input on the process the stateshould use to ensure that it makes the most of itsvaluable asset. In particular, the SLB asked foradvice on choosing a development partner, the

The Trust for Public LandThe Trust for Public Land researched variousfunding mechanisms and revenue-generatingopen-space opportunities for the Lowry Range.

Catalytix, Inc.Catalytix, Inc., helped shape the vision for theLowry Range as a future place of social, cultural,economic, and commercial diversity. It recom-mended that the development of the Lowry Rangebe guided by principles of smart growth, creative-sector economy, natural capitalism, sustainableenvironment, and new urbanism. It also recom-mended that Lowry Range’s development shouldbe both market-driving as well as market-drivento attract individual, institutional, and commercialoccupants from a national and global marketplace.

In order to create “buzz” for the development andto build on the development process overview andtiming guidelines prepared by THK, Catalytixrecommended the following next steps:

• Expand the vision.

• Develop a fleshed-out preliminary strategicmaster plan.

• Develop a preliminary public information andcommunications plan.

• Hold an educational competition to design com-ponents of the Lowry Range development.

• Solicit the partnering participation of pioneer-ing businesses and institutions.

• Coordinate with local governments.

Don UngerDon Unger, the former superintendent of thePoudre School District in Fort Collins, Colorado,is working with the team to investigate the poten-tial of forming a new school district for the LowryRange. He helped draft the vision and developguiding principles for Lowry’s education system.He also teamed with the Research and Develop-ment Center for the Advancement of StudentLearning to review best practices leading to ex-cellence in education and to begin defining a modelfor school district development.


steps necessary for readying the land for develop-ment, and ways to ensure that the site’s land useis maximized for the state.

Prior to visiting the Denver area, each of the pan-elists received and reviewed extensive briefingmaterials prepared by the SLB staff and consul-tants. The panel also received briefings by SLBstaff and a board member. The panel memberstoured the site partially from the air. The panelthen met with community leaders and business

owners, whose knowledge of and passion for thesite were both inspirational and informative. Thisinput, as well as the panelists’ best professionaljudgment, helped the panel to prepare its findingsand recommendations.

This report provides a summary of the panel’sfindings and recommendations, and outlines keyissues that should be addressed before the stateconsiders development of this property.


Since World War II, the state of Colorado,and in particular the metropolitan area ofDenver, has experienced substantial eco-nomic and population growth. Although the

rate of growth has been erratic at times, the re-sults to date have established Denver as one of thepremier metropolitan regions in the United States.

As Denver looks to the future, it is confrontedwith many of the growth problems facing almostall metropolitan regions throughout the nation. Agrowing population demanding a better quality oflife is stressing the major components of the infra-structure needed to support and accommodate lifeservices. It has become painfully clear that the de-velopment paradigm that served previous growthwill no longer be capable of serving growth on ago-forward basis. The sprawling developmentstypically built to provide housing and commercialopportunities over the past half century cannot berepeated in the future. Poor transportation infra-structure, limited quantities of water, degradingair quality, dynamic changes to household demo-graphics, overextended utilities, underfunded ed-ucational systems, and shortfalls of public fundsare just a few of the barriers that prevent busi-ness as usual.

Denver does differ from other metropolitan areasin that there is not a shortage of nearby land to ac-commodate future growth. The problems lie in thelocations and deficiencies of the undeveloped land.Much of the undeveloped areas lack adequate water,are not serviced by road or public transportationand other basic infrastructure, are far from cen-ters of employment, lack school capacity, and thusare poorly suited for sustainable development.Other lands lie within jurisdictions that are notprepared to process the intensive planning and en-titlements necessary to address the needs of newgrowth in the region.

Planning for future development throughout theDenver region will require master plans that fol-

low the principles of smart growth and incorpo-rate clearly defined, sustainable practices. Mixed-use buildings, higher densities, public open space,a strong sense of community, preservation ofsensitive ecological features, and balanced com-ponents of live/work/play must be integrated intoeach new master plan. Development must beplanned and carried out by highly qualified public-and private-sector professionals working togetherto achieve the common goal of quality sustainabledevelopment.

The Lowry Range offers the Denver region an op-portunity to establish a new paradigm for masterplanning. It is located at the outer edge of thegrowth path. It is in a raw state, with no previousdevelopment to fix or redevelop. It thus providesan unusual opportunity to plan and design for“suburban smart growth,” based on thorough re-search that will guide the future needs and bestuses of the land.

The most critical environmental features shouldbe preserved and at the same time positioned formaximum sharing with the people who will live,work, play, and learn in the planned community.Design criteria for architectural themes should beestablished. A matrix of housing types should beidentified to accommodate various needs accord-ing to affordability, livability, and lifestyle. Areasfor housing, schools, recreation, parks, walkingpaths, local and regional shopping, places of em-ployment, restaurants, and mixed-use facilitiesshould be clearly delineated.

The Lowry Range can become the prototype ofmaster planning for the Denver region and po-tentially for the intermountain West and beyond.The master plan for 26,000 acres should contem-plate its functioning as a new “Edge City.” Beforecompleting the design and creation of the masterplan, however, a number of fundamental issuesmust first be addressed. They are outlined in thisreport.

Overview and Summary ofRecommendations

13

The panel notes that many studies have alreadybeen completed, and a multiple number of recom-mendations have resulted from them. Such rec-ommendations may or may not be of value tothe ultimate strategic plan. Some may pro-vide usable data, while others may be discardedat the end. In other words, some of these studiesare not yet relevant to the overall master plan-ning and ultimate development of this site. Thepanel believes that some of the studies may onlybe of value to the master developer when it car-ries out the master plan in the future. The timingof some of these studies has thus been out of se-quence with the normal planning flow for master-planned communities. The panel therefore recom-mends that most of the current consulting workbe put on hold until the fundamental issues aredealt with and a broad vision and strategic planfor the site is established. The exceptions to thissuspension should be the necessary continuationof all environmental baseline studies regardingthe condition of the soil, animal and plant species,unexploded ordnance, and the like.

With a truly aggressive strategic plan and by lev-eraging its huge water supply, the Lowry Rangecould move to the top of the long list of new master-planned developments in the Denver region. Theexpertise and experience to manage and guidesuch cutting-edge master planning, however, doesnot currently exist within the SLB. The necessaryfundamental changes required within the SLB arediscussed in this report.

The panel also recommends that the use of thenames “Lowry Range” or “Lowry BombingRange” cease immediately. These names have

negative connotations based on unfound factsabout the quality of the land. Many Denver resi-dents think of this land as “the old bombing range”and therefore as a site that is polluted, contami-nated, or otherwise undesirable. A temporaryname should be used during the design and imple-mentation of the strategic plan. Later, a more per-manent name should be established for permanentbranding and marketing purposes.

The panel’s recommendations are organized intothree sections. The first deals with strategy devel-opment: determining a vision for the site after re-solving issues such as the appropriate actions thatcan and should be taken by the SLB. The secondsection addresses specific SLB organizational is-sues that will help it move toward successful de-velopment of the Lowry Range. The third ad-dresses the environmental issues that need to beresolved before moving forward with a plan forthis land and recommends a structure for select-ing a development partner.

While this report may appear to raise questionsmore than it provides answers, it is the panel’s be-lief that the resolution of these questions—whichcan only be resolved by the SLB and its represen-tatives—will mean the difference between an-other “suburban sprawl” project and a cutting-edge sustainable community. Many strategicissues need to be resolved in order to facilitate thesuccessful development of the Lowry Range into adistinctive community that can set the standardfor future master-planned projects well into the21st century.



The Colorado State Land Board issued anorder in October 2003 to initiate a processfor the orderly development of the LowryRange property. This process included a

two-step request-for-proposals (RFP) process forthe selection of one master developer/venturepartner for the site’s overall conceptualization andplanning, and the selection of a second developer/venture partner for the actual development of thefirst identified phase. This RFP process would berepeated for subsequent development phases andis discussed in more detail in the next section ofthis report.

The panel questions whether the first step of thistwo-step process will be sufficiently attractive toqualified master developers if their participationin the ultimate long-term development of theproperty is not reasonably assured. More impor-tant, however, although SLB staff and the LowryRange Working Group have devoted considerabletime and effort to identifying and evaluating thedevelopment alternatives, the panel believes thatthe SLB does not yet have a clearly defined strat-egy for the property, nor has it yet answered somefundamental questions that will be of primary im-portance in unlocking the maximum value of theproperty.

Before selecting a course of action for the devel-opment of the property, the SLB needs a clearlydefined strategy that resolves the apparent con-flicts between the SLB’s stewardship and revenuemandates, establishes an appropriate long-rangevision, sets clear and unambiguous goals and ob-jectives, is politically and publicly defendable, andis achievable.

Fundamental QuestionsBefore committing the substantial amounts of cap-ital required to acquire, to entitle, and to developany portion of the property, a qualified developer

will need reasonable certainty with regard to fun-damental questions that will affect the project’s fi-nancial feasibility. These questions address bothinternal and external influences on the future de-velopment framework. Master developers willwant the following issues to be addressed:

• Will the site be part of Aurora, of ArapahoeCounty, or its own entity? The panel recom-mends that it becomes its own entity so that itcan control the rules and the destiny of the proj-ect from the beginning.

• The long-term commitment of the SLB to thedevelopment strategy for the property, bind-ing on both future boards of trustees and otherColorado state agencies, needs to be clearlyarticulated.

• If the property has a nobler purpose than purelymarket-driven development, the SLB’s commit-ment and ability to subsidize the outcome willneed to be clearly articulated. For example, itis possible that the SLB would like this devel-opment to be a model for smart growth and ademonstration of how fringe development canbe carried out in an environmentally sensitivemanner that promotes community development.Since these goals would be attempted within anuntested market, the SLB may need to be readyto help subsidize this type of development.

• The legal rights of the SLB to sell the propertyfor development in a timely manner need to bedetermined and made known to those inter-ested in developing the property.

• The availability and cost of water and waste-water services, and the relationships with thoseservice providers, need to be resolved.

• Which jurisdiction (Arapahoe County, the cityof Aurora, another city, or a new municipality)will provide the development entitlements tothe project?


Strategy Development

15

• Certification and accurate assessment of the re-moval of unexploded ordnance on or adjacent tothe property will be critical to its development.This assessment must be part of a complete en-vironmental survey of all of the property, notjust of the initial 5,000 acres.

• Identification of environmental constraints(species, habitat, and so on) must be completed.

• The ability of the SLB to control or mitigate theimpacts of on-site and adjacent land uses (activelandfill and Superfund sites, explosives factory,youth detention facility, military overflight,sand mining, and so on) needs to be determined.

• The availability of appropriate infrastructure fi-nancing must be thoroughly investigated.

• The feasibility of creating a new school districtshould be determined.

• The amount of political support for creating al-ternative energy sources must be gauged.

ApproachThe panel found no compelling urgency—nothingdriving the Lowry Range property to market today—and therefore the SLB has the time and opportu-nity to get it right. The panel believes that the SLBshould carefully work through the following stepsand answer the fundamental questions that under-line any large-scale master-planned community.

Formulate a Mission StatementThe success of this project will depend, in part,upon a successful mission statement that reflectsthe beliefs, attitudes, and guidelines for how theplan will be designed and implemented. It is im-portant to solicit buy-in for the mission statementfrom the stakeholders and the community at largeearly in the process and to conduct a proactive cam-paign to positively establish the property and thestrategy in the minds of voters and stakeholders.

Set GoalsWith a site this large, it is critical to have clear de-velopment objectives. A project this big cannot beleft to chance, in hopes that it will turn out okay.The panel recommends that the SLB review andanswer the following questions:

• What are the goals of the various stakeholders?

• Which goals can be reasonably met by SLB andwhich will need to be met by the private sector?

• How will success be measured financially, so-cially, and politically?

• What is the target rate of return?

• What are the desired time frames for complet-ing the various phases of the project?

• What role does the SLB want to play: active orpassive, land bank or partner?

Establish ObjectivesThe SLB will need to establish short-term, mea-surable objectives in order to answer questionssuch as “What is the target rate of return? Whatneeds to be achieved in 2005? In 2006?” Concrete,measurable objectives and benchmarks will becritical to measuring the success of a project anddetermining when and how the process may needto be reevaluated or modified.

Plan the StrategyOnce the goals and objectives are established, it is important to map out how they will be achieved.This process should include the following compo-nents:

• Review the objectives to identify and define in-ternal and external influences that may affectthe SLB’s ability to implement them. Identifywhat legal, political, institutional, and organiza-tional obstacles may exist and develop actionplans to overcome them, item by item.

• Isolate each objective and define the specific ac-tion steps, resources needed, and responsibleparties for each one.

• Review the action steps and group the activitiesto identify overlaps and opportunities for effi-cient implementation.

• Prioritize these actions, allocate the needed re-sources, and assign responsibility for comple-tion of the steps according to a timeline.

Plan the Legal and Organizational StructureThe organizational structure and support of aproject this large is as important as the plan and



the vision for the site. Without sufficient resourcesto carry out the vision, all the planning would befor naught. The panel recommends that the fol-lowing steps be taken to address the project’slegal and organizational structure. These aresuggestions based on the panel’s experience withmaster-planned communities of similar scale andcomplexity.

• Create a regional development body or othermanagement subdivision of the SLB specificallyto manage the Lowry Range project.

• Create a senior staff position for this projectthat will guide the creation of the strategy, man-age its implementation, recruit and coordinateconsultants as required, and oversee the perfor-mance of the ultimate developer(s). This point isdescribed in more detail later in the report.

The SLB also needs to identify the form of devel-opment entity that will best meet the project’s de-velopment objectives.

Provide PersonnelThe panel believes that the SLB needs to recruitan experienced, senior professional with extensivemaster-planned community development expertiseto oversee the development of this site. One of thisperson’s key jobs would be to implement the RFQ/RFP process to select the best qualified develop-er(s) to meet the objectives and to fulfill the long-range vision for the property.

Provide CapitalA project of this size will need sustained fundingat all phases. The SLB needs to be prepared tofund a strategic planning and public communica-tions effort for several years while the hurdles todevelopment are being cleared. To help pay for

these and other efforts, it also needs to be pre-pared to form development and tax incrementfinancing districts and to provide tax incentivesand enhancements for funding of on- and off-siteinfrastructure.

Set StandardsThe SLB needs to be the project’s guiding entityand therefore should set the standards for devel-opment. This responsibility includes establishingmeasurable benchmarks for performance by staffand the private developer(s), as well as definingthe quality required for the project. Only by artic-ulating and communicating achievable objectivescan the progress of the project can be measuredand adjusted as necessary.

AccountabilityThe SLB needs to design appropriate reportingrequirements so that it will be adequately in-formed of the status of the plan and the financialperformance of the property and the private de-veloper(s). The process must constantly maintaintransparency and accountability to preserve pub-lic support over the extended development timeframe.

Compensation StructureThe SLB should create an appropriate incentivestructure for staff responsible for the implemen-tation of the plan, as well as provide for indus-try-reasonable profits for private developer(s) asan incentive to meeting SLB’s long-term objec-tives. Such incentives and compensation mecha-nisms will help move the project toward the ulti-mate goals.

Financing OptionsThe panel prepared some financing assumptions(above) to demonstrate how, if land were bankedand master planned, the realized revenue from de-veloping the site would be much greater than sim-ply selling the property as is.

This demonstrates that if the SLB sells the landas is and loses control of the site it can lead to sub-urban sprawl. If strategically master planned, theresult will most likely be smart growth and sus-tainability. This result will also help maximize therevenues for the state and the school fund.


Financing Options

Assuming land sale starting in 2009

Assuming development of 10,000 acres over the next 30 years1

Option I: Sell “as is” $5,000/acre = $50,000,0002

Option II: Land bank a master plan 50,000 units @ $20,000/unit = $1,000,0002

1 For demonstration purposes only—not a panel recommendation.2 Does not include retail or other revenue such as water.

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This section discusses the structure of theSLB and how it can more effectively man-age not only the Lowry site but also itsother assets. The panel believes that the

SLB has a truly rare opportunity both to createan outstanding project at the Lowry Range and to manage all its assets in ways that will greatlyfurther its missions of stewardship and revenuegeneration.

A state constitutional amendment passed in 1996that related to the mission of the governing bodyof the SLB contained several provisions further-ing a balanced approach to managing its assets.The implementation of these provisions will re-quire policy decisions regarding the balance be-tween generating income and preserving naturalresources for future generations. Tangentially, op-portunities for both income generation and assetprotection may have direct or indirect benefits toColorado’s schools and schoolchildren.

The amendment changed the SLB’s managementstructure to a volunteer board of five members,four of whom must meet specific qualifications, de-fined in the amendment as one member with expe-rience in each of the following areas:

• production agriculture;

• public primary or secondary education;

• local government and land use planning; and

• natural resource conservation.

The amendment also provided that the boardshould act as prudent managers in conducting ac-tivities related to the land in order to produce rea-sonable and consistent income over time. Byvirtue of the language in the amendment, theboard has the legitimate authority to pursue bothasset preservation and development of assets togenerate revenue.

ObservationsCuriously, the criteria for board membership didnot include a requirement for a person with expe-rience in prudent management of land related togenerating reasonable and consistent income overtime. The board and staff, however, seem commit-ted to pursuing proactive management of thoseassets that have the potential to generate rev-enues for the school fund. This pursuit would ap-propriately place resources toward maximizingthe potential for revenue by using a variety of ap-proaches, such as:

• securing entitlements prior to contracting thesale or lease of land;

• entering into contracts that provide benefits be-yond those derived from a cash sale of land; and

• establishing land development arrangementsthat meet multiple objectives regarding bothrevenue generation and asset preservation.

Based on the briefing it was given while on site,the panel believes that the SLB staff has a cleardesire to achieve additional objectives that relateneither to revenue generation nor to asset preser-vation. While the panel agrees with these objec-tives, it may be valuable for the SLB to furtherexplore how they integrate with the board’s coremission. Examples of such objectives include thefollowing:

• establishing specific programming links for theproject based on results in recent educationaland behavioral research, which could include in-tegrating education into many aspects of the de-velopment, such as virtual learning centers, ed-ucational displays, and so on, and requiringsenior living centers and daycare centers to beclose to each other and to border open spaces;

• requiring sustainable development; and


Preparing for Success


• increasing the regional job supply.

These objectives, if adopted, should have a posi-tive impact on the SLB process, financial return,and asset preservation.

RecommendationsThe following are the panel’s management recom-mendations for the SLB to consider as it movesforward with the development of the LowryRange site.

Revenue-Generating PropertiesFor all those SLB assets that provide the oppor-tunity to generate income, the board should, on anasset-by-asset basis, establish minimum financialreturn objectives. These return objectives shouldbe measured by means both accepted in the indus-try and appropriate to the particular asset. Factorsthat should be included in establishing these ob-jectives include direct and indirect costs of man-agement, effects of inflation, asset depreciation, as-set appreciation, the time value of money, and so on.

For the Lowry Range in particular, the panel rec-ommends that the board establish the amount ofrevenue or percentage of asset value that it wantsto generate from disposition and management ofthe land. Setting this target will determine wherethe planning program needs to go with respect torevenue for the acreage under development bytype (i.e., how many acres should be allocated forcommercial retail and office, how many should beallocated for single-family residential, multifamilyresidential, and so on).

Lands to Be PreservedFor those assets that the board determines shouldbe preserved, the board should, on an asset-by-asset basis, establish detailed use and manage-ment plans. In cases where decisions to preserveare final and absolute, deed restrictions, conserva-tion easements, and other similar legal approaches

should be considered to overcome public skepti-cism regarding the finality of such determinations.

For the Lowry Range in particular, the panel rec-ommends that the board establish the amount andthe locations of the land that will not be includedin the disposition component of the project. Fur-ther, the board should establish use and manage-ment plans for these properties, including esti-mates of revenue generated from these activities,and document these decisions in appropriate legalfilings. Finally, the board should determine the netimpact to revenue generation as a result of settingaside a specific amount of land not to be developed.

Alternative Management PlanningFor all assets under asset management, the boardshould, on an asset-by-asset basis, determine theextent to which alternative management ap-proaches will be considered and implemented. Theboard can develop measures of benefit to justifythese approaches. For example, an educational liv-ing laboratory could deliver benefits to the school-children of Colorado.

For the Lowry Range in particular, the panel rec-ommends that the board establish the extent towhich it will apply sustainability, land use criteria,and other alternative approach requirements tothis site and to its development process. Further,the board should determine and quantify the im-pacts (both negative and positive) of adoptingsuch requirements, and, when feasible, make cor-responding adjustments to the targeted finan-cial return.


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Irrespective of whether or not the SLB electsto undertake the fundamental restructuringdiscussed previously, the panel believes thatthree critical environmental issues must be ad-

dressed before presenting the property to mar-ket. They are (1) on-site contamination; (2) theavailability of water; and (3) the characteristics ofthe on-site ecology and the constraints and op-portunities they present.

On-Site ContaminationThe Lowry Range property consists of approxi-mately 26,000 acres, of which approximately 1,500acres have been previously sold. The balance re-mains in inventory and is owned by the SLB. His-torically, this land was part of a training area forthe testing of bombs and artillery. Current esti-mates put the amount of land still in need of reme-diation or cleanup at approximately 3,000 noncon-tiguous acres. Until the environmental survey andremediation are completed, however, this is justan estimate and may change. This acreage is hasbeen mapped in a preliminary way, and it would,based on all that is known now, affect any poten-tial development of the property.

The documents by which the SLB acquired theLowry Range property have not been examinedto determine whether and to what extent the fed-eral government agreed to clean up the site, butall stakeholders report that it is the responsibilityof the federal government, and in particular of theU.S. Department of Defense, to clean up theLowry Range property.

At present, the U.S. Army Corps of Engineers ishandling the cleanup, but not much is known aboutwhat it has done to date, the quality of what hasbeen done, or when it will be completed. The pres-ent status of the cleanup effort thus leaves muchunknown, and the panel believes there is a press-ing need to bring immediate clarity to this issue.

Some stakeholders seem quite satisfied with whathas been done to date and the promise for the fu-ture, while others seem equally concerned aboutpast efforts and possible future risks.

Because any end user of the Lowry Range prop-erty, whether as a result of outright sale or as aresult of a future partnership, will require that thesite be certified as clean, a failure to address thisissue materially and significantly would compro-mise the value of the property. Because the defini-tion of how clean is clean will ultimately be deter-mined by the ability of the project to access thecapital markets, any protracted delay in resolvingthis issue would only serve to depress the value ofthe property now and into the future.

Equally important is the market impact of theunexploded ordnance or contamination issue. Thepanel’s research makes it clear that the generalpublic perception in the greater Denver area isthat the Lowry Range contains hazardous waste.What is less clear is whether that perception re-lates to the Lowry Range property under re-view here or to two other facilities, both bearingthe name Lowry and known to have contamina-tion problems.

Accordingly, the panel believes that, in additionto dealing with the physical characteristics of thesite and its remediation, the SLB must developa strategy for differentiating the Lowry Rangeproperty under review here from other Lowryproperties in the same market. This will best beaccomplished not only by eliminating all physicalcontamination but also by communicating thatcleanup success to the market and to the generalpublic. Consideration should be given to droppingthe name “Lowry” from this undertaking. No ef-fort should be made to permanently rename theproperty from a project perspective, as it is pre-mature to do so, but the panel recommends adopt-ing a new temporary name as an essential part ofthe effort to begin to reposition the property.


Issues to Be Resolved


The panel suggests that the SLB acquire the ser-vices of an environmental remediation consultingfirm to assist it with the following activities:

• conducting a review of all studies and reportsrelative to the efforts to date to clean up theproperty;

• developing a plan to complete the cleanup, including a time line and budget to complete the task;

• preparing an ancillary strategy with the assis-tance of a qualified public relations firm to beginthe process of repositioning the property anddifferentiating it from the other Lowry projectsin the Denver market; and

• implementing the repositioning strategy, con-sistent with the results from the remediationeffort.

The timely initiation and completion of these tasksare essential to ensuring that any subsequent part-ners or purchasers will be certain that what theyare investing in is safe and clean. It will also en-sure that the market understands that what youare selling is safe and clean.

Finally, an ancillary benefit of this process is thepositioning of the SLB to negotiate with the fed-eral government regarding both the level of envi-ronmental safety to be achieved and the comple-tion date. This approach will also allow for moredetailed planning of the building envelopes andpermit the targeted cleanup of areas prioritizedfor development if the environmental remediationprocess suggests that it is necessary or desirable.Perhaps more important, the SLB can determineearly in the process if there is any significant dis-agreement about either the scope or timing of thecleanup and adjust its planning accordingly.

The panel has not reviewed any of the legal docu-mentation regarding the respective obligations ofthe federal government and the SLB, and it is be-yond the scope of this analysis to do so. However,by undertaking the recommendations outlinedhere in the near term, the SLB can bring clarityto the issue and develop an effective strategy fordealing with the cleanup. Experience has demon-strated that if there are differences in opinion re-

garding what is to be cleaned and to what level, itis always best to grapple with such disagreementswell before placing a property on the market foreither a partner or a buyer.

In all events, the panel believes that environ-mental remediation is a touchstone issue for theLowry Range that needs immediate attentionand resolution.

Water ManagementWater supply and access will be critical to theability to plan and implement development on theLowry Range property. The availability of wateris generally viewed as a given, and all reports sug-gest there are sufficient quantities of water avail-able on the property to support the anticipatedlevels of development. The ability to access water,however, is controlled by an agreement with theRangeview Metropolitan District; accordingly, atouchstone inquiry requires confirmation thatRangeview has the financial capacity and man-agement ability to deliver water infrastructure ontime and on budget to the Lowry Range property.

Rangeview is a special district authorized underColorado law to enter into contractual undertak-ings with client customers to design, permit, con-struct, and operate water utility systems. Thepanel understands that the Lowry Range has a100-year lease that will expire in 2080. Under theterms and conditions of the lease, Rangeview is toprovide water service to the Lowry Range prop-erty contemporaneously with development. Range-view has, among other authority, the right to issuebonds to raise capital for the performance of itsobligations. It can then impose and charge user feesor tap fees to recover the costs associated with thedevelopment of water service infrastructure.

The panel sees some element of risk in this ar-rangement, both by reason of its longevity andbecause of uncertainty about the adequacy ofRangeview’s present organization and manage-ment to perform under the lease. It is importantto note that the panel has no knowledge of anyfacts or circumstances that would suggest an in-ability to perform as the SLB contemplates. Butthat very absence of information and the inabilityto review the contractual undertakings them-


21

selves suggest that this relationship is an impor-tant aspect needing further review. Because wateris the single most important element determiningthe suitability of the Lowry Range property fordevelopment, any ambiguity regarding the abilityto have water systems developed on time and onbudget suggests a need to bring the matter intofocus and to resolve all relevant issues.

A termination of the agreement between Range-view and SLB by agreement or otherwise wouldchange the dynamics of the development programin a material way. Add to this the right of Range-view to export on an annual basis approximately30 percent of the available water capacity to otherusers and to pay the SLB a royalty for the same,and the need to further review the implications ofthe existing agreement seems self-evident.

Again, the panel has not examined the contractualagreements between the SLB and Rangeview, andwe are not offering a legal opinion concerning thesame or possible performance under it. However,our clear impression is that there is some ambi-guity about the relationship, and gaining furtherclarity about the relationship with Rangeviewshould be viewed as an important near-term ob-jective. If the relationship can be structured or re-structured to reassure the SLB that it will be ableto obtain the benefits contemplated for infrastruc-ture delivery, then such adjustments should bemade. If the arrangement presently in place is notviewed as workable, then immediate steps shouldbe taken to ensure that what is acknowledged tobe available to the Lowry Range site is in fact ac-cessible and affordable when development isready to commence.

Environmental ConstraintsThe SLB has already commenced a preliminaryanalysis of the property’s ecological features, butit is inadequate in its present form. Accordingly,the panel recommends that the SLB undertake acomprehensive inventory of the property’s envi-ronmental characteristics, using a biologist orecologist to complete this analysis. Determiningbefore development planning what the environ-mental constraints and opportunities are will facil-itate the land use analysis and provide a frame-

work early in the entitlement process for planningrequired mitigation for impacts likely to occurwithin the project’s building envelope.

The SLB should also take all appropriate steps torecover the property from the “stewardship” clas-sification under which the panel understands it ispresently classified. It is essential that the SLBpreserve flexibility in dealing with the develop-ment envelope, as well as with the size and loca-tion of any preserve area that subsequent plan-ning might identify.

Earlier studies have endeavored to pinpoint theseareas, but the more iterative process suggestedin this report may result in adjustments to theseboundaries. The SLB should retain the ability toconsider all options as the project is prepared fordevelopment planning.

Once the SLB has settled on a land use plan, thepanel believes it would then be appropriate tolaunch the preparation of an environmental man-agement plan (EMP). An EMP would specify or-ganizational and operational protocols for themanagement of the ecological assets both withinthe target building envelope as well as any areasto be set aside for conservation or preservation.This undertaking will only be possible after com-pletion of the preliminary environmental studiessuggested here and will be integral to the LowryRange’s long-term land management.

The panel views this process as consistent withthe SLB’s conservation mandate, and it has theadded advantage of highlighting any environmen-tal issues that might serve to compromise the effi-ciency of the entitlement process. It is importantto understand that the EMP as envisioned herewould incorporate all permits obtained or to beobtained from all local, state, or federal agencies,so that the local, state, and federal regulatoryprocesses will be the controlling paradigms andset the minimum standards by which the prop-erty’s ecological assets will be managed into thefuture. The EMP itself should, where possible andconsistent with the overall economic goals of thestrategic plan, provide additional managementprotocols designed to create surplus credits withinthe conservation/preservation areas.



The SLB must be able to claim credit for both set-ting the land aside and for developing the manage-ment protocols to ensure its in-perpetuity care andmaintenance. This achievement will, the panel be-lieves, facilitate the obtaining of other develop-ment entitlements. Additionally, it will enable theSLB to maintain significant control over the landit desires to develop.

Comments on RFQ/RFP StrategiesBecause the fundamental charge given to the panelconcerned the development of an RFQ and RFPfor the selection of a development partner, thepanel offers some general observations regardingareas of focus to be examined when it is appropri-ate to proceed with issuing an RFQ or RFP. Thepanel believes, however, that it is premature tomove forward with an RFQ/RFP until most orall of the issues highlighted in this report are re-solved or on a predictable timeline to resolution.Until these key concerns are addressed, the SLBwill not be in a position to negotiate the best possi-ble partnership arrangement or sale.

Similarly, the panel offers some observations onthe nature of public/private partnerships. Thesecomments are far from an exhaustive treatmentof the subject, and they are intended only to sug-gest some areas of focus to be explored when theSLB has readied itself for the task.

The RFQ process logically precedes the RFP andis designed to define and select a group of candi-dates who will be ask to respond to the RFP. Forthe RFP to be fully successful, it must carefullyestablish and document the review criteria for thedeveloper partner. This group or groups will belong-term partners, and so the SLB should care-fully delineate all those factors that will be impor-tant in developing the property.

Price is not the only consideration. Experienceand financial stability may be far more important.Creativity is also important, particularly on along-term project, although creativity and how itcan be measured are difficult to define clearly. Itwill be critical that each applicant believes that hisor her firm has been evaluated according to a uni-form set of criteria; anything that compromises

that impression will expose the selection processto potential challenge.

Perhaps as important any characteristic to be eval-uated is the applicant’s reputation for honest andfair dealing. It has been said that the ability toanticipate the future is always constrained by thelimits of our cumulative experience. The SLB cananticipate that, notwithstanding its best efforts toanticipate all that will follow, including the nego-tiation of the ultimate partnership agreement,there will be times when the parties will need toaddress unforeseen issues. It is at such times thatthe developer’s reputation for honest and fairdealing will be critical to sustaining the project’smomentum. Indeed, it will be critical over the lifeof the project.

Before issuing an RFQ, the SLB should first iden-tify the companies that it would like to respond.This may require the retention of a disinterestedconsultant, particularly if the SLB elects to pro-ceed without the restructuring suggested by thisreport. The fact that identified recipients will re-ceive an invitation to participate does not lessenthe need for an open bidding process, and there-fore a mechanism for advising all potential biddersmust also be developed and implemented.

The SLB must develop its selection and reviewcriteria. The importance of giving careful consid-eration to both of these parameters cannot beoveremphasized. If they are poorly conceived oradministered, the process will not produce thequality of applicants that the SLB seeks and theproject deserves.

The SLB and the Lowry Range project managershould be prepared to hold meetings with appli-cants to respond to questions and, of course, to usethat time to further promote the project. This lat-ter point is important, because even if the SLBhas short-listed a group of potential candidates,there is no assurance that they will follow throughand pursue a relationship with the SLB and theproject. It is not uncommon for developers to seekto preserve their “place at the table” by respond-ing to an RFQ only to decide when the RFP sur-faces that other priorities of more certain outcomeshould take precedence. Continuing to promotethe project throughout the RFQ process is impor-


23

tant to attracting a good group of qualified compa-nies that may respond to the RFP.

Just as a consultant can assist in structuring theRFQ, the SLB may want to consider using a thirdparty during the evaluation phase. Experience hasshown this procedure to be particularly attractiveto a board like the SLB, since it provides some levelof political cover and assurance that the processwill be conducted fairly and openly. It is critical,however, that the SLB have significant input re-garding the final list of candidates, because ulti-mately it is the SLB that will have to live with theselected developer(s) over a protracted period.

When the SLB has a short list of developers—and it should be no more than five and no less thanthree, assuming an adequate selection of applicantsin the RFQ phase—then it can proceed with theRFP. There should not be a significant gap be-tween the conclusion of the first phase and thestart of the next, since all who participate will bedoing so in anticipation of the RFP and winningthe right to participate. This highlights again theneed to maintain public enthusiasm for the projectto ensure comprehensive, high-quality submis-sions throughout the RFQ/RFP process.

The key goal in the RFP process will be to obtaina group of submissions that promise to achieveand honor the SLB’s fundamental developmentgoals without stifling the creativity of the respon-dents. The SLB should expect its ideas to be chal-lenged at more than the edge, because it will wantto take advantage of the expertise of its potentialpartners. However, part of the challenge for therespondents will be to apply their creativity andexpertise to the criteria established by the SLBso that the project’s core values can be preservedand even enhanced. How well they take their ex-pertise and tailor it to meet the SLB’s goals forthe property will be in no small measure the basison which to decide among various choices.

The structure of the RFP must allow for an “apples-to-apples” comparison, so care must be taken toensure that there is maximum clarity in the RFP.Implicit in this point, however, is the concurrentneed to tap the applicants’ “outside-of-the-box”thinking. This is a balance that only careful draft-ing based on a crystal-clear understanding of the

project and its potential, both economic and aes-thetic, will allow. That requirement highlights theneed to fully resolve the issues suggested by thisreport before either the RFQ or the RFPprocesses are initiated.

Only when the SLB understands its goals withprecision and depth can it craft a RFP that willclearly define the expectations for the privatepartner, the selection process and evaluation cri-teria by which the it will select that partner, andthe other information that is essential to a mean-ingful and comprehensive application. The pro-cess must be perceived as fair at all costs if theSLB is to attract a full complement of qualifiedbidders. The RFP must set forth how the SLBwill assist the successful applicant in the imple-mentation process: what will it contribute, eitherfinancially or otherwise, to the task? This delin-eation of options and responsibilities will drive therisk/reward component of the bid, which in turnwill drive the various economic outcomes pro-posed by the applicants.

The SLB has a right to expect and should requirethat the responding developers identify all of theirteam members, their credentials, and what theywill contribute to the overall project. Similarly,each developer should be asked to articulate his orher vision for the project, so that the SLB can as-sess how it meshes with, conflicts with, improves,or does a disservice to the goals for the propertyoutlined in the RFP.

Each developer should provide a detailed budgetand outline a plan for raising the capital necessaryto fund the budget. Applications should identifywhether the developer will be looking for any fi-nancial aid from the SLB and if so, how much, inwhat form, and when. The SLB should state in theRFP what limitations it has or will impose on itsfinancial contributions, including any nonnego-tiable constraints that all who apply must accept.The SLB should also define any nonmarket objec-tives to be adhered to by the developer and spec-ify the governance structure proposed for thepostdevelopment operation. Each developershould provide a proposal that has enough detailso that the SLB can ascertain in a comparativefashion any discrepancies between respondents.



The foregoing suggestions are skeletal, but theyshould serve to highlight the importance of get-ting the strategic plan in place before the devel-opment process is initiated. The panel suggeststhat until that occurs, the SLB will not be in a po-sition to meaningfully specify the level of detail re-quired to structure an RFQ/RFP, and that any at-tempt to do so prematurely will not generate theresults that the SLB seeks. When a sponsoringgovernmental entity has not completed its ownanalysis to determine the nature and the extentof the development opportunity that presents it-self, the private-sector participants will not be aseager to participate and the likelihood of attract-ing the highest level of expertise to the projectwill be compromised.

When an RFQ/RFP is not structured properly, italmost uniformly will result in a longer time toprocess and review, and the respondents will won-der whether or not they have fully understood theproject and the constraints within which they arebeing asked to operate. When the process containssuch uncertainties, it will be viewed in the marketas involving too much risk, time, and investmentand will not attract the level of candidates soughtby the sponsor.

Ultimately, the goal is to select one entity or per-haps multiple entities to partner with the SLB inthe development of the property. The panel offersthe following additional observations on the na-ture of these relationships.

Public/Private Partnerships (P/PPs)First and foremost, care must be taken to ensurethat private interests in the P/PP do not becomea vehicle to short-circuit public policy. All P/PPsinvolve a governmental entity by definition andthus, legal constraints aside, the rules going in areas different as the rules coming out.

The mere fact that the public has, or will have, ex-pectations about the Lowry Range developmentand its prospects will change the dynamics of therelationship between the public and the privatepartners and between the SLB and its constitu-ents. The panel believes strongly that heretoforethe SLB and its operations have largely escapedclose public scrutiny and accordingly lack the kind

of internal management protocols that are wellsuited to managing a complex process that willhave a high degree of public interest and scrutiny.Proceeding with the Lowry Range project willchange the nature of the SLB’s operational char-acteristics in ways not yet anticipated, as it movesfrom a passive, holding stewardship of land to aproactive development posture.

The SLB thus should seek a partner that not onlyhas the expertise to accomplish the task but also iscomfortable operating in the public eye and withinthe constraints that such operations involve. Tostructure the relationship as a true partnershipboth sides must try to anticipate all contingenciesand address them at the front end, so that therewill be minimal need for further interpretationdownstream. The SLB and its partner must de-fine with care how decisions will be made and howconflicts in the decision-making process will be re-solved. In no small measure the resolution of theseissues will be a function of how much control theSLB wishes to preserve versus how much controlthe partner is willing to renounce. To a large ex-tent that decision will also be based on how thecosts and revenues of the project are shared.There must be a careful balance among the part-ners of both benefits and costs, and this result canbest be accomplished through maintaining a com-pletely open and transparent financial and man-agement structure from beginning to end.

Two factors influence how each partner will viewits own success: (1) the contractual allocation ofcosts, risks, responsibilities, and returns, and (2)the enforcement of these contractual arrange-ments during the life of the project. These arematters that must be dealt with in the P/PP.

It must be recognized that the roles and expecta-tions of the public and private partners will be dif-ferent. The relationship therefore cannot be effec-tively evaluated by only private criteria but mustalso take into account the characteristics of thepublic entity. A public entity such as the SLB hasdifferent goals than private partner and will havedifferent measuring standards by which successand failure might be determined. Care should begiven to defining those standards so that unrealis-tic expectations are not built into the process at


25

the front end and later compromise the partner-ship at the back door.

Tasks and duties should be ascribed to each part-ner with minimal asymmetry, so that neither sideobtains an advantage that is inappropriate. A care-fully balanced partnership can help resolve theSLB’s seemingly conflicting mandate to both pro-vide a recurring income stream to the state boardof education while at the same time providing en-vironmental stewardship. The Lowry Range P/PPwill have multiple mandates that must be honoredand thus will require crafting more creative mea-surement standards.

To be successful a P/PP must include the follow-ing elements:

• public-sector support for the partnershipapproach;

• well-defined objectives and a methodology formeasuring them;

• well-defined roles and responsibilities;

• active participation by all partners; and

• a methodology for accountability and trans-parency to the general public.

As already noted, the private-sector partner mustbe able to operate with the attendant delays thatwill necessarily flow from public participation andtransparency. The successful candidate will havesignificant experience not only in the tasks associ-ated with the project but also in the dynamics ofworking with a public-sector entity.

The startup analysis for the Lowry Range mustrecognize that there are environmental, political,and economic goals to be set and that all must befeasible. If one goal is met and not the others, thenthe prospects for success will be compromised.The SLB should not be saddled with either a proj-ect that is otherwise economically feasible and

cannot be approved or with an approved projectthat is economically infeasible and cannot be fi-nanced. All goals must be clearly defined andshould be periodically reviewed to be sure thatboth sides remain on the same page.

Experience suggests that government, while pro-fessing a desire for P/PPs, is frequently reluctantto make the ultimate decision to sign on. This isparticularly true when the sponsoring entity isnew to the process or unsure abut the depth of po-litical commitment to the project. Getting such is-sues resolved at the front end of the process willbe critical to the ability to attract the right privatepartner. Similarly, a failure to deliver the rightlevel of commitment and stick with it will almostcertainly assure that the undertaking will notmeet its expectations or, worse, will fail. These re-alities further reinforce the necessity for moreanalysis before the land board is ready to take theproject to market and to seek a partner.

Finally, the SLB should consider carefully the po-tential for a default by its development partner orother changed circumstances and should provideappropriate exit strategies aimed to protect exist-ing values and provide stability for the remainderof the undeveloped land. This is one of the mostdifficult tasks, but its importance cannot beoveremphasized, particularly where, as here, theSLB has a clear fiduciary duty to preserve and en-hance the income from its holdings.

In conclusion, it is clear that there are candidatesin the market now who would line up to buy landat the Lowry Range. The difficulty is that the landis not yet ready to be marketed, if the goal is tomaximize revenue from that sale.



The panel believes that there is enormous po-tential in the Lowry Range site. However,the SLB must realize that development ofthis site will be an unusually long-term

process that will require significant preparation,resources, and time.

The panel also believes that the patience appliedto the process will be well worth the wait. This re-port may pose more questions than answers, butthe panel believes that without a thorough investi-gation and analysis of these questions and issues,the result would be a mediocre development atbest and an unmitigated disaster at worst. The fol-lowing summary outlines the issues that need tobe resolved before moving forward, so that the de-velopment of the Lowry Range will benefit notonly the developer but also the SLB and its con-stituents.

Status of the Land as It Relates toDevelopment• The Lowry Range must be subject to a com-

plete environmental review. Work done to datemust be verified and accepted when appropri-ate. All undone or unfinished environmentalstudies must be completed as soon as possible.This should provide the SLB with a fuller as-sessment of the environmental situation, includ-ing determination of responsibility for any re-maining cleanup.

• The SLB must prepare a vision and strategicplan for the site, including a determination ofwhether the entire site should be master plannedin one overall development plan or partitionedinto three to five independent villages of 1,500to 2,500 acres each. The strategic plan must iden-tify the amount and location of land to be devel-oped, along with realistic timelines and objectives.

• The environmental cleanup must be certified atthe highest levels in order to satisfy the capital

markets and insurance industry. All unfoundedor misplaced perceptions must be removed fromthe public’s mind.

• The governance of the land must be clarified.Should it be incorporated on its own, be part ofunincorporated Arapahoe County, or annexedinto Aurora? The benefits and drawbacks ofeach possibility should be carefully evaluated.

SLB Organizational Issues• SLB must be able to provide certainty to the

capital markets and the development industry.Its commitments and obligations must be bind-ing on future trustees, political administrations,and legislative bodies.

• The extent and appropriateness of the SLB’sabilities to swap land or trade off ground assetswith other landowners for strategic purposesshould be determined. Such flexibility wouldhelp where the Lowry Range land is checker-boarded or fragmented.

• The extent and appropriateness of the SLB’sabilities to fund activities that make its landmore marketable and developable should bedetermined. Such expenses may include envi-ronmental studies, market research, conceptualland planning and design, proactive communi-cations with stakeholders and the populationat large, and so on. In other words, is the SLBprepared to spend money to make money?

• The SLB must be empowered to structure pri-vate/public development partnerships, particu-larly where it can bank land for future projects.It should also be prepared to form developmentdistricts, tax increment financing, and other in-centives and enhancements for funding on- andoff-site infrastructure.

Conclusion

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• When a win-win strategic plan is completed forthe SLB and its land assets, it must conduct aproactive campaign to positively establish itselfin the minds of the region’s voters and stake-holders. Champions and cheerleaders must befound to help the SLB in the public arena. Schoolboards would be likely allies.

• The SLB’s trust fund should be made availableto support the board’s expanded activities.

• The SLB must not be concerned that it appearsto be in competition with the development in-dustry. In reality, the development industryshould welcome the opportunities and advan-tages of being in partnership with the SLB. Sim-ilarly, the SLB should not be concerned that it isnow “going into business.” Its constitutional man-date has already required it to be in business.

• Until professional management is in place, al-most all consulting work should cease. This willeliminate the proliferation of unnecessary andpoorly timed studies and recommendations, andat the same time preserve the SLB’s operatingfunds for appropriate needs in the future.

• RFQs and RFPs should not be contemplated un-til the new SLB structure is in place and a stra-tegic plan for the Lowry Range is completedand approved by the SLB commissioners.

Key StepsThe panel believes the following are the key stepsfor the SLB to take in fulfilling the developmentpotential of the Lowry Range. If these steps arefollowed, the Lowry Range can become a nationalmodel for future fringe development.

• Form an SLB Lowry Range operations divi-sion, headed by a general manager or a tem-porary executive professional, to coordinateand facilitate the day-to-day activities related tothe site’s development.

• Complete the study of all environmental issuesto achieve complete certainty.

• Form an SLB ad hoc advisory committee ofstakeholders to oversee the activities on thesite.

• Create and implement a strategic plan.

• Launch a public disclosure and promotion of thestrategic plan.

• Issue the RFQ/RFP for development partner(s).

• Undertake design of the master plan.



Anthony J. (Tony) TrellaPanel ChairDeerfield Beach, Florida

Anthony J. Trella is president and chief executiveofficer of the Meranth Company, a developmentand investment management company. He also of-fers his executive, marketing, and financial man-agement skills and vision as a consultant to majorcorporations and investment bankers across thenation. His expertise is widely recognized by de-velopers, builders, real estate agents, architects,planners, designers, attorneys, investment bank-ers, financial advisers, bankers, and managementexecutives.

Trella has served as president/CEO or seniorexecutive of companies such as MarkboroughCommunities, Inc., Pulte Home Corporation, andAmerican Capital Corporation. He has been re-sponsible for the development of over 20,000 acresof land, private and public golf courses, and retailand office centers. He has also built over 5,000residential units, including more than 15 master-planned communities with both primary and sec-ondary housing. He has been responsible for over3,000 employees, and his achievements have re-sulted in more than $1 billion in sales and over$300 million in profits.

He holds a bachelor’s degree in business admin-istration and accounting from Pace Universityand has completed graduate studies at AdelphiUniversity.

Ted R. BrownOrlando, Florida

Ted R. Brown began practicing law in 1968 in Or-lando, Florida. Today his practice centers on therepresentation of developers and companies activein land acquisition and development. From 1988

until 1996, he served as vice president and generalcounsel of Arvida Company, a firm engaged in thedevelopment of master-planned residential, re-sort, and business communities in various marketsacross the United States. In that capacity, he wasresponsible for managing the company’s legal af-fairs and, in particular, the land entitlement andenvironmental permitting processes. After leav-ing Arvida, Brown became a private managementconsultant assisting companies in the developmentof strategic plans to ensure environmental andregulatory compliance. In September 1996, hejoined the law firm of Akerman, Senterfitt & Eid-son, where he continues his environmental, landuse, and real estate practice today. He is rated AVby Martindale-Hubbell and listed by Chambers &Partners among the nation’s leading lawyers forbusiness.

Brown is a full member of the Urban Land Insti-tute and has served as a member of its NationalPolicy Council, Environmental Council, and SeniorHousing Council; he is currently a member of theCommunity Development Council. He was ap-pointed by former Florida Governor LawtonChiles to serve on the Private Property RightsStudy Commission II, tasked with the responsi-bility of analyzing the interface of regulatory tak-ings and private property.

Brown has served as president of the Founda-tion for Environmental and Economic Progress, acoalition of 15 companies with land holdings in 44states that are seeking to make the Section 404wetlands program’s and the Endangered SpeciesAct’s operational protocols more balanced. In thatcapacity, he has testified before the Water Re-sources Subcommittee of the U.S. House of Rep-resentatives and the Environment and PublicWorks Committee of the U.S. Senate on the re-authorization of both the Clean Water Act and theEndangered Species Act. He also served as vicechair of the American Bar Association’s Endan-

About the Panel

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gered Species Act Study Committee and is amember of the Environmental Law Institute. Heis a frequent lecturer and author for conferencesand symposiums on the issues surrounding devel-opment and environmental permitting.

Brown obtained his bachelor’s degree from theUniversity of Florida and his JD from Ohio StateUniversity.

Robert HewgleyAustin, Texas

Robert Hewgley is director of real estate with theTexas General Land Office’s Asset ManagementDivision, located in Austin. This division is respon-sible for generating nontax revenue from the saleor lease of state real property assets that are un-used or underused. Since late 2001, the divisionhas shifted its emphasis to acquiring real propertyfor the Permanent School Fund.

Since 1987, when the state of Texas first beganmaximizing returns from surplus state land, Hew-gley has managed a number of projects that re-sulted in public/private development agreementscovering everything from zoning and other enti-tlements to performance-based lease and sale con-tracts. Through these ground-breaking projects,he has gained extensive experience in structuringand implementing successful public/private landdevelopment transactions.

Hewgley’s expertise includes evaluating the ex-isting and needed authorities needed for publicentities to engage in land-related projects, estab-lishing deal structures that are acceptable to de-velopers and investors, and performing strategicanalyses of fundamental issues and concepts in amultidisciplinary environment.

Hewgley earned a BA from Duke University anda master’s degree in community planning from theUniversity of Arkansas. Prior to joining the TexasGeneral Land Office, he worked as a planner forthe city of Austin and for the Indian Nations Coun-cil of Governments (Tulsa area) in Oklahoma.

Derek C. ThomasLa Jolla, California

Derek C. Thomas is vice chairman and chief op-erating officer of Newland Communities, respon-sible for acquiring new real estate projects, secur-ing equity financing, and investor relations. Healso oversees Newland’s residential and commer-cial development activities throughout the UnitedStates.

For 23 years prior to joining Newland in 1995,Thomas was a consultant and accountant specializ-ing in the real estate industry. From 1985 to 1994,he served in the Chicago and San Diego offices ofKenneth Leventhal & Company, becoming part-ner-in-charge of real estate consulting in 1991. Heprovided advice on business strategies and finan-cial transactions to real estate developers, owners,lenders, and financial institutions.

A certified public accountant, he has served onnumerous boards and committees, including theBuilding Industry Association of San Diego, and isa member of the Urban Land Institute, LambdaAlpha, and the Pension Real Estate Association.

He holds an MBA in real estate finance from DePaul University in Chicago.


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