Steve Mimnaugh, Olympic Partners founder, along with his former partners, formed a joint venture (JV) with the landowners who owned about 126 acres in Broomfield, Colorado, near the highway 36 freeway.
Steve Mimnaugh and his former partners negotiated a development agreement with the City and County of Broomfield which, among other items, allowed for the use of tax increment financing on the site. The JV then purchased another 30 acres which was contiguous with the site, thereby increasing the size of the site to 156 acres.
Steve Mimnaugh and his former partners formed a metropolitan district, a Colorado quasi-governmental entity. Steve Mimnaugh was the President of the District. The District then issued three separate bond tranches which totaled about $56 million in tax increment financing. With the bond financing funds, the District constructed the infrastructure (streets, curb, gutter, storm, sewer and water systems, etc.) that was required to support the completed development. Steve Mimnaugh and his former partners completed a number of office and retail buildings and lease and purchase transactions with tenants and purchasers, including with the following companies: WalMart (a Super WalMart), Marriott Town Place Hotel, Marriott Renaissance Hotel, Wells Fargo Bank, Bennigan’s Restaurant, LePeep’s Restaurant, Christy Sports, Qudoba, CB & Potts Restaurant, Jasons Restaurant, DSW Shoes, Lakeshore Athletic Club, AMLI Apartments (500 units), Walgreens, Chick-fil-A, etc.
Tribecca Plaza had been the subject of certain litigation between the prior owner and the lender on Tribecca Plaza. Following a foreclosure action by the lender and a court appointed receiver being selected, it took the lender nearly six years to obtain the title to Tribecca Plaza. The lender’s loan balance had been paid down to approximately $32 million. After obtaining title, the lender then entered into a series of successive contracts with three different qualified buyers, first at $30 million, then $27 million and finally at $25 million. None of the purchase contracts closed.
Steve Mimnaugh, along with his former partners, bought Tribecca Plaza from the lender for $21.7 million. On the surface, this appears to be a terrific acquisition because the purchase price was substantially below the lender’s loan balance. However, the reason the purchase price was so low was because there were a myriad of problems and challenges with the property, all of which had to be corrected in order to re-position this asset and sell it at a price sufficient to meet the exit IRR goal, including the following challenges and problems:
|TRIBECCA PLAZA CHALLENGES & PROBLEMS|
|For 6 years, brokers had ignored this asset – there was no money for tenant improvements & commissions (foreclosure and receivership – off the radar screen).||Challenge of redeveloping an asset in a sufficiently dramatic manner that would grab the attention of the marketplace, both brokers and tenants.|
|High vacancy & low cash flow.||Complete the redevelopment in a manner which would avoid lawsuits from the existing tenant base.|
|Remaining tenants were mostly month-to month.||Release all of the vacant space in the project.|
|Leaking roofs.||Construct ADA improvements.|
|Leaking exterior facade||Complete the renovation on time & on budget in order to achieve IRR goal.|
|Mold due to leaking roof and façade.||Complete all of the above on time and on budget.|
|Unrepaired earthquake damage.|
The project was completed on-time and on budget and the IRR goals was achieved.
Steve Mimnaugh was the leasing agent on the City Center office complex located in downtown Denver, Colorado. The complex was comprised of four buildings totaling about 3,200,000 square feet. This large 4 building office complex was then owned by Prudential Life and a local partnership. Sherman & Howard, a major Denver law firm, was a tenant in 633 17th Street, one of the four buildings in the complex.
Sherman & Howard was being solicited by the owners of Republic Plaza to relocate from the above-shown 633 17th Street to Republic Plaza, even though Sherman & Howard’s lease term was not about to expire. Steve Mimnaugh negotiated a new lease restructure by which Sherman & Howard agreed to enter into a new long-term 15 year lease with the owners of the City Center complex. Instrumental in retaining this valuable tenant was a creative redesign of the penthouse floors located at the top of 633 17th Street. Sherman & Howard remains a tenant in this building to this day.