In 1984, GTL Development, a Southern California real estate company that was looking to diversify its portfolio, bought 2,600 acres in the middle of nowhere northeast of Colorado Springs – and promptly sat on the property for almost two decades.
Buy-and-hold strategies aren’t new, and they don’t always work out.
In GTL’s case, though, patience seems to have paid off.
In 2003, the first homes began to spring up in Meridian Ranch, a master-planned community of 3,850 homes that GTL developed on the land it had purchased.
While a few high-profile projects in the Pikes Peak region either developed in fits and starts or fell into bankruptcy, Meridian Ranch now has 1,400 homes, a golf course, recreation center, parks, trails and schools on the site, which is part of the fast-growing Falcon area in unincorporated El Paso County.
More recently, GTL has started preparing 15 acres on the southwest corner of the development – at Meridian Road and Stapleton Drive – for a 60,000-square-foot retail center. The long-planned project will house restaurants, stores and the like.
But development of Meridian Ranch has been about more than just good timing, said some members of the local real estate and planning community. Mixing amenities with aesthetics, knowing when to modify its strategies in the face of downturns and working with builders have been key for GTL as it’s developed Meridian Ranch, they say.
“They’re willing to step up and do things in a very impressive way,” said Randy Deming, CEO of Springs-based Campbell Homes and a Meridian Ranch builder. “They don’t cut corners.”
Other developers have had strategies, too, but they didn’t guarantee success; the previous owners of the Banning Lewis Ranch filed for bankruptcy, while some smaller developers fell into foreclosure on their properties.
GTL founder Paul Tchang, who died last year, started as a homebuilder on the East Coast in the 1950s, moved to the West Coast and settled in San Diego, said his daughter, Jenny Tchang Frost. He began to develop land while continuing to build homes.
When Tchang sought to broaden his company beyond Southern California, he bought the land that would eventually become Meridian Ranch because Fort Carson to the south and the Pike National Forest to the west were barriers that would drive grow to the north and east, Frost said.
A barrier of a different kind also helped propel Meridian Ranch. The Banning Lewis Ranch, which makes up the eastern one-third of Colorado Springs, went through a series of owners and years of inactivity after its 1988 annexation by the city. As a result, homeowners who wanted to get away from traffic and other city headaches looked past Banning Lewis to Meridian Ranch, Woodmen Hills, Falcon Hills and other nearby projects being developed northeast of the Springs.
Like those other projects, Meridian Ranch attracted homebuyers because its housing prices – initially $190,000 to $300,000 – were less expensive than some Springs neighborhoods. Meridian Ranch homes now range from the mid-$200,000s to $500,000, Frost said.
But GTL’s plan wasn’t just to entice homeowners with more affordable prices, she said. The company promised several amenities and began delivering them as the first homes went up. They included a 30,000-square-foot recreation center, with a fitness center and outdoor pool, that opened in 2004. It was followed by the Antler Creek golf course and clubhouse, which includes the CreekView Grill restaurant.
Having amenities in place as the project took shape helped GTL draw homeowners to an area that’s about 30 minutes northeast of downtown Colorado Springs, Frost said. GTL also helped form a special district that widened Woodmen Road to four lanes to accommodate growing numbers of residents in the Falcon area.
“We figured that the amenities up front would help,” she said. “I think people have been burned in the past by developers promising things and not coming through with their promises or having delays on building the amenities.”
GTL told homeowners the recreation center would be expanded when 1,200 homes were built in Meridian Ranch. Frost said. The company now is targeting fall 2015 to complete a 16,410-square-foot addition that will include an indoor pool, whirlpool spa and other water features; a party room; and multipurpose rooms.
In addition to amenities, Meridian Ranch’s landscaping and design were intended to appeal to a wide variety of homeowners and Falcon residents, said Tim Seibert, owner of N.E.S. Inc., the Springs land planning firm that has worked with GTL on the project.
Large “Meridian Ranch” monument signs were put in place at the project’s main entrances, many homes were set back from Meridian Road and residents drive over a bridge on Londonderry Drive before they reach some of the project’s first houses – features designed to give the area a sense of “grand arrival,” Seibert said.
Such touches are nice to look at but don’t mean much if homes aren’t being built. Because of its experience as a builder, GTL was open to working with local homebuilders during lean economic times, said Deming, of Campbell Cos.
When the pace of home construction nosedived to nearly 20-year lows during the recession, GTL lowered home site prices and relaxed schedules that required builders to take possession of lots they had contracted to buy, Deming said.
“They adjusted pricing and worked with us, instead of putting us in a situation where we had to perform,” Deming said. “It was a situation that could literally take down a builder.”
GTL had its own issues as a result of the recession, Frost said. About five years ago, it sold only 25 home sites in Meridian Ranch; with not as much money coming in, the company delayed public improvements.
“Because our company has been through so many cycles, we know to put some money away for a rainy day,” she said. “We were able to weather the storm.”
GTL doesn’t plan other Springs-area projects; it has its hands full with Meridian Ranch, which has another 10 to 15 years of development left, depending on the economy, Frost said.
A commercial project on Meridian Ranch’s southwest corner was part of the project’s master plan, but GTL waited for more rooftops before moving ahead with it, said Jim Justus, president of Olive Real Estate Group of Colorado Springs, which is marketing the site.
The Shops at Meridian Ranch, as the project will be called, will include the types of retailers and services found in larger, anchored shopping centers, such as coffee and sandwich shops, a convenience store, pizza place and dry cleaners, among others, Justus said. It was originally envisioned as 30 acres with a big-box store but was scaled back to 15 acres, he said.
Although unincorporated Falcon has shopping centers anchored by a Safeway grocery and a Wal-Mart Supercenter, there’s a pent-up demand among residents in Meridian Ranch, Woodmen Hills and Falcon Hills who want stores and restaurants a few minutes closer, Justus said. They don’t necessarily want to drive farther south and fight traffic at the intersection of Meridian and Woodmen roads, he said.
“If you think about it,” Justus said, “there is no other retail anywhere near there . without going to the intersection of Woodmen and Meridian Road.”
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