Fort Collins URA Considers Keeping Albertsons Property Under Ground Lease, Not Sell to Developers
The Fort Collins Urban Renewal Authority is considering an unconventional approach to redeveloping the former Albertsons property at 1636 North College Avenue, proposing to retain long-term ownership through ground leases rather than selling the 4.6-acre site to developers.
Acting Executive Director Josh Birks presented the strategy shift to the URA board on September 25, explaining that ground lease arrangements would allow varying rental terms based on intended use. Community centers or affordable housing projects could pay nominal or zero ground rent, while market-rate developments would face market-rate lease terms.
The approach represents a departure from traditional urban renewal practices in Fort Collins, where authorities typically acquire properties, select development partners, and transfer ownership through fee simple sales after negotiating community benefit agreements.
"A ground lease shows up in the financials of a project very differently than land acquisition," Birks told board members. "By owning the land over the long term, we can basically pass on that affordability without it having an impact in terms of being something that needs to be funded by construction financing."
Under the proposed ground lease structure, developers would pay property taxes only on buildings and improvements, not on the underlying land that would remain publicly owned. Colorado law requires property assessment at fee simple estate levels for most long-term ground leases, according to state assessment guidelines, meaning the full property value would typically still generate tax revenue for Larimer County and local taxing districts.
The URA purchased the former Albertsons building for $6.75 million earlier this year as part of blight remediation efforts in the North College corridor. The property has been stabilized with professional management while the authority develops redevelopment plans.
Ground leases are explicitly authorized under Colorado's Urban Renewal Law, which allows authorities to dispose of property "as it deems in the public interest," including retaining long-term ownership arrangements. The approach enables ongoing revenue streams through lease payments while preserving public control over future land uses.
Board member Kelly Ohlson expressed support for maintaining public oversight but emphasized the importance of formally appointed officials making decisions involving public land and investments. "I'm real into formally appointed and elected people making those decisions when it involves public land and public investments," Ohlson said.
The authority is also proposing to create a joint governance entity that would coordinate redevelopment planning while allowing community participation in decision-making. This entity would include URA board representation, community members, and potentially other public partners like Larimer County.
Commissioner Emily Francis raised concerns about ensuring the community center remains central to the project vision, noting that community engagement sessions previously identified a community hub as the primary objective rather than affordable housing development.
"From the engagement, the residents really wanted a community benefit, not to bring in more residents necessarily," Francis said.
The staff presentation revealed growing interest from adjacent property owners in coordinated development efforts. Several nearby parcels, including vacant land and the property at 1630 and 1642 North College, could potentially join a larger master-planned redevelopment.
Andy, the URA's development coordinator, noted that multiple affordable housing developers are exploring Low Income Housing Tax Credit projects in the area, partly due to its designation as a qualified census tract that provides enhanced financing benefits.
The authority plans to issue a Request for Qualifications to identify experienced partners who could manage the joint governance entity and coordinate multi-property redevelopment planning. This general manager role would provide expertise in complex development projects while maintaining neutrality among various stakeholders.
Ground lease terms would be structured to allow the URA to recoup upfront planning and governance investments through future lease arrangements, similar to how private master-planned developments recover soft costs through lot sales or leases.
Vice Chair Kristin Stephens supported ensuring communication between the URA board and any new governance entity, suggesting cross-representation to maintain institutional knowledge and community voice in decision-making.
The URA also discussed tactical urbanism initiatives to activate the site temporarily while longer-term planning proceeds. Working with local design firm Russell Mills, the authority is developing gathering spaces and programming for temporary events, though legal counsel noted uncertainties about using URA funds directly for event programming.
Public commenter Joe Rowan praised the staff's research and community engagement, noting that ground lease structures help lower development costs while maintaining partial property tax benefits and public control.
The board provided consensus support for pursuing the ground lease approach and joint governance model. Staff indicated the RFQ process for identifying governance expertise would be the first major step, as it represents the critical path for organizing broader redevelopment coordination.
The URA subsequently voted to enter executive session to discuss potential acquisition of additional properties at 1220 North College, including possible use of eminent domain authority.
The meeting concluded with the executive session, after which the board automatically adjourned without reconvening in public.