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COLORADO SPRINGS-Executives from locally based Brownfields Capital on Wednesday said they plan to use a "patented financing solution" to remediate and redevelop Gold Hill Mesa, a 210-acre former gold mine in Colorado Springs that has been closed for the past 57 years. It will be redeveloped into a mixed-use development.
The land is the former site of the Golden Cycle Mill, a gold and silver mill that began operations in 1906. It closed in 1949, leaving behind a mesa comprised of 14 million tons of soil infused with gold tailings. Throughout the past three decades, attempts to reprocess the tailings or redevelop the site have failed.
"Before Brownfields Capital, financing the redevelopment of a brownfield site could be even more difficult than the clean-up itself," says Robert Hadley, a principal of Gold Hill Mesa Partners, LLC, owner of the property. "As an owner of a brownfield trying to develop in accordance with our approved Voluntary Clean-Up Plan, we were challenged from every angle. Traditional bank construction capital simply wasn't available."
Brownfields Capital provided Gold Hill Mesa Partners a $19 million Brownfields Value Contract with an expected term of 3.25 years. The BVC provides revolving debt financing for the complete remediation and development of the site. Through the 100% project financing commitment from Brownfields Capital, Gold Hill Mesa Partners, LLC has started clean-up and development of the site. Company execs envision a mixed-use development, drawing on the influences of New Urbanism: a dense commercial and residential core anchored by a community center with parks and residences.
A total of 877 residential units are being developed, consisting of condos, townhomes, and single-family detached units of various sizes. John Laing Homes, a prominent national builder with a strong presence in Colorado Springs, has committed to purchase more than 40% of the available lots once finished. The development is currently under way with revenues expected to begin in the summer of 2006, and the community center expected to open in the fall of 2006.
Brownfields Capital, which created a non-profit company to clean the Dahlia Square site in Denver, says this will be the first of many deals to open the brownfield sites. "Through the process, distressed, immobilized owners of contaminated real estate can now be converted into willing sellers, unlocking access to some of the most desirable inventory of urban development in the country," says Eugene Mercy, Jr., chairman of Brownfields Capital and a retired senior director of Goldman Sachs and Co.
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