El Paso County completed its $25 million purchase Thursday of several buildings and a parking garage on the former Intel Corp. complex on Garden of the Gods Road that will trigger a series of moves involving county agencies.
The 290,000-square-foot office building at 1675 Garden of the Gods Road, an attached 1,060-space parking garage and an adjacent 20,000-square-foot warehouse building were acquired by the El Paso County Facilities Corp., which will lease them to the county after building the interior walls of the unfinished second floor and remodeling the other two floors, said DeAnne McCann, the county’s economic development manager.
The purchase price was reduced by $2.9 million because of work the county must complete to convert the sophisticated electrical system for the complex for use by multiple tenants as well as repairing the roof of the office building.
The facilities corporation bought the buildings from a partnership controlled by Industrial Realty Group, a Los Angeles-based real estate investment firm that paid $15.1 million for the 1.5 million-square-foot Intel complex last year and made some improvements.
“The real estate and financing on this deal are both phenomenal opportunities for the county that were too good to pass up and come at a time when the county had critical facilities needs,” said Jim DiBiase of Olive Real Estate Group, who along with Stan Kensinger, also of Olive, represented the county in the transaction. “The county will be getting the building, as well as the furniture, fixtures and equipment inside, for 40 percent of replacement cost.”
The facilities corporation, a nonprofit created by the county, issued $56 million in securities to pay for the purchase, the work on the Intel office building and additional remodeling work on four other county buildings involved in the moves.
Nearly 85 percent of those securities were Build America Bonds, a type of bond created by last year’s stimulus legislation in which the federal government subsidizes 35 percent of the interest costs.
The securities carry an average interest rate after the federal subsidies of 3.62 percent and will be repaid over 26 years with annual payments averaging $3.1 million, McCann said. The bulk of the annual payment will come from lease payments the county will receive from the agencies that will move to the Intel complex, savings on leased space the county will give up and energy savings from renovations to Intel and other buildings, she said.
Monnie Gore, the county’s assistant administrator, said the county plans to spend $6 million to $8 million on the interior finish and renovation work, which will be completed late this year.
The building will house the Clerk and Recorder’s Office, the Treasurer’s Office, the Assessor’s Office, the Department of Human Services, the Department of Health and Environment and the Pikes Peak Workforce Center.
The county will then move its administrative offices from the County Office Building, 27 E. Vermijo St., to Centennial Hall, 200 S. Cascade Ave. The Sheriff’s Office will move from leased space at 101 W. Costilla St. to the County Office Building and Coroner’s Office will move its administrative offices into space at 2739 E. Las Vegas St. being vacated by the Sheriff’s Training Academy. The 4th Judicial District Attorney’s Office also will move into space vacated by other county offices at 105 E. Vermijo St.
“The best part of all of this is we will be able to discontinue use of the health department building,” said county spokesman Dave Rose. The county had earmarked $500,000 for repairs to the building but has spent only $100,000.
The county will sell the two buildings in that complex along with two other buildings after the moves.
The deal has drawn criticism from Tom Mowle, the county’s Public Trustee and who is running as a Democrat for Clerk and Recorder.
“They are spending too much to buy the wrong building in the wrong location,” Mowle said. “They are consolidating human service functions too far away from the people who need them and bus lines. There were and still are buildings along Academy Boulevard or Platte Avenue for much less money in a more reasonable location. They also are dismantling an industrial building that could have been used to attract industry and instead filling it with government employees.”
The deal fills all but the 710,000-square-foot former semiconductor manufacturing plant and a 40,000-square-foot warehouse on the 69-acre site, a business park Industrial Realty Group renamed Corporate Ridge, said Michael Palmer of Grubb & Ellis/Quantum, who represented the sellers and is listing the remaining space for sale or lease. He said the former manufacturing plant is being marketed for use as a data center and is attracting “serious interest.”
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