Deal made for StorageTek site

Sun stays mum on price, buyer of 440-acre campus

Roger Fillion, Rocky Mountain News

Tuesday, October 2, 2007

Sun Microsystems Inc. has struck a deal to sell its vast 440-acre campus in Louisville that once was home to Storage Technology Corp.

Sun declined to name the buyer or the price tag for the property, prime land that's one of the last big parcels available along the busy U.S. 36 corridor.

Sun spokeswoman Kristi Rawlinson said in an e-mail the terms "are confidential and require that the buyer remain anonymous at this time." She did say the buyer plans to use the parcel for "phased" office development and other commercial uses.

One local real estate executive suggested a "ballpark" price of $70 million to $80 million. The acreage is roughly half that of the 900-acre Denver Tech Center.

"From a land perspective, it will always have enduring value," Chris Phenicie, senior vice president at CB Richard Ellis, said of the Sun parcel. "It's the last piece of the land puzzle up there."

He said office development made sense in today's tight market. Phenicie estimated office vacancy rates in the area were only 7 percent in the third quarter and would fall to 4 percent or 5 percent by year-end.

"Nothing new has been built up there for seven years," said Phenicie, noting the dearth of building after the Internet bubble closed many tech companies in the area.

Santa Clara, Calif.-based Sun, which bought StorageTek for $4.1 billion in 2005, put the property on sale last year. Sun has been moving employees from the Louisville campus to its main campus in Broomfield.

Rawlinson said Sun plans to relocate about 700 employees to the Broomfield site by December 2008. For more than a year, Sun also has been laying off hundreds of employees here and thousands elsewhere.

The company told Colorado labor regulators last week it was cutting about 130 Colorado employees, mainly at the Broomfield and Louisville sites. Sun employs about 4,200 people in Colorado, with about 3,150 in Broomfield.

The Louisville campus sits on hundreds of grassy acres along U.S. 36, across from the FlatIron Crossing mall. Wildlife can be seen in the area.

The vast tract served as the site of the StorageTek headquarters for more than three decades.

Most of the land sits inside the city of Louisville and is zoned for industrial use. About 80 acres of land inside the parcel sit in unincorporated Boulder County and are zoned agricultural.

Stew Mosko, the Fuller and Co. broker who is co-listing the property with Jones Lang La Salle, said more than 200 parties got information packages on the property.

"We had people from all over the country, as well as a number of people from overseas," Mosko said.

Louisville officials must sign off on new development. About 1.6 million square feet of existing industrial, manufacturing and research facilities occupy the site.

"We'd like to see it developed in a way that's good for the city of Louisville and good for the landowner," said Malcolm Fleming, Louisville's city manager.

Among other things, he said, the city would like to see a wildlife corridor that would link with existing open space adjacent to the land to the east, north and west.

Louisville Mayor Chuck Sisk favors commercial growth and the arrival of a Fortune 500-type company. He also wants a "significant amount" of open space preserved.

Sisk would oppose a large- scale residential development, fearing sprawl.

"Louisville really is a compact town," he said. "If we start spreading out residentially, that diminishes what is an important part of Louisville."

About four years ago, Storage-Tek proposed tearing down its obsolete manufacturing facilities and redeveloping the campus to include retail, offices, homes and possibly a venue such as a performing arts center.

The plan included 550,000 square feet of retail space and 1,080 dwelling units, either in multifamily residences or patio homes.

But the company ultimately was forced to withdraw the plan in the face of political opposition.

fillionr@RockyMountainNews.com or 303-954-2467. Staff writer John Rebchook contributed to this report.