A large Coke bottling plant near Denver International Airport, expected to create hundreds of jobs, was beset by missed deadlines and communication problems and ultimately fell through after Xcel Energy failed to supply electricity to the site, according to city documents and a Denver City Council member.
This setback adds to mounting frustrations from developers about Xcel’s ability to deliver power to proposed metro area projects, although the utility insists that wasn’t the case with the bottling plant.
City Council member Stacie Gilmore, who represents Denver’s Far Northeast District 11, along with several other members of the council, approved a $270.7 million, 75-year ground lease agreement with Utah-based manufacturer and distributor Swire Coca-Cola in April 2023.
Gilmore said Swire planned to automate the plant and put 250 trucks on the road to transport their products.
Last month Swire canceled its plan to construct a 570,000-square-foot bottling plant at the northeast corner of Tower Road and Peña Boulevard near DIA for “unforeseen delays” and “ongoing timeline instability.”
“Xcel Energy and Denver International Airport could not figure out a time-efficient manner to get Coca-Cola power to build out there, and then they all started pointing fingers at each other,” Gilmore said.
She said as development near the DIA has evolved over the past few years, the Far Northeast Area Plan, adopted in 2019, was adjusted specifically so that Pepsi Cola could bring its international headquarters there.
In 2022, City Council adopted an amendment to the plan, focusing on revising land uses and mobility in a small part of the DIA statistical area encompassed by Tower Road, Himalaya Road and 72nd and 70th streets.
“It’s a big deal, and I take my vote very seriously. That’s like my solemn vow to the community that what I’m getting behind is going to be good for you, she said.
“The only thing I can tell them at this point is Xcel Energy and Denver International Airport, and ultimately — the city and county — couldn’t get it worked out for a multi-billion dollar international corporation to locate in Denver.”
Swire spokesperson Allison Barrett told The Post last month that even though they are no longer moving forward with the originally proposed site for the plant, the company still intends to make a substantial regional investment in a new production facility, at a different location. But that has yet to be revealed.
Construction at the facility was expected to begin in the third quarter of this year, with a planned grand opening in 2027, according to the project’s website. Swire had initially planned to create 200 jobs at the plant.
Swire board raises concerns
A legal notice of termination sent by Swire CEO Andrea Kendell to DIA’s CEO Phillip Washington on July 16, obtained through a public records request, said the company ended the lease because “uncertainty regarding cost and timing of critical project infrastructure has delayed and prevented Swire from being able to seek the outstanding approvals in good faith.”
The notice continued that it was “evident” that the outstanding approvals would not be available in the extended development approval period and would not align with Swire’s strategic objectives and immediate growth needs.
Denver International Airport CEO Phil Washington poses for a portrait outside the airport on Tuesday, June 29, 2021.
An April 2 letter from Washington to Xcel president Robert Kenney said, “Swire is concerned that Xcel has not met verbal commitments regarding the service application design process, and that Xcel’s inability to confirm when temporary and permanent power will be available to their site is affecting the feasibility of their project.”
Swire’s service application was submitted on Feb. 29, 2024.
Xcel estimated the design and approval process would take 17 to 20 weeks, but was then revised to Dec. 2, 2024, and then again to the first quarter of this year.
“With uncertainty as to when power can be delivered to the site, Swire’s board is questioning approval of the project,” Washington added.
Washington estimated the loss of the project could cost DIA $252 million in lease revenue.
Nine days later, Kenney responded and said multiple meetings were held to guide Swire throughout the process.
Swire sent the final required documents in late September 2024, and in November Xcel expedited an ongoing capacity check to help finalize the project’s design and cost estimates.
Given the complexity of installing a new feeder spanning over 5 miles, along with associated easement and permitting challenges, Xcel decided to prioritize securing the right-of-way first.
“This approach allowed us to identify the most viable route and avoid potential delays that could require a complete redesign,” Kenney wrote.
“In other words, we deviated from our normal procedures to keep this project on track.”
He wrote much of the land required for easements is undeveloped and unplotted, which creates uncertainty around timing and costs.
Kenney added Xcel had invested more than $500,000 in the project and pre-ordered equipment, all ahead of receiving any signed agreements or funding from Swire.
“This level of financial risk is atypical for us. In other words, we deviated from our normal procedures to keep this project on track,” he wrote.
When The Post reached out to DIA regarding the Swire deal, a spokesperson said the airport was not a party to the agreement between Xcel and Swire.
“As landlord, DEN worked to ensure the needs of our tenant were being met and the information required by Xcel was being provided,” a DIA spokesperson wrote in an email to The Post.
“DEN also negotiated with Swire Coca Cola on participating in the cost of infrastructure and committed to funding a large portion of the utility infrastructure required by the tenant.”
To reduce risk in the future on developing airport land, the spokesperson said DIA plans to enlist private sector resources to help build infrastructure, such as water and sewer lines, electrical, roads and fiber optic cable.
“Xcel Energy long maintained and assured Swire CC that we could meet their energy needs,” said Xcel spokesperson Michelle Aguayo.
Aguayo said Xcel is committed to the economic development of Colorado and that any large project requires collaboration and communication from both the developing business, government agencies and those providing vital services.
“Incomplete or inaccurate information delays the process, and in this case, we were left waiting for information at key junctures throughout this process,” she said.
“We absolutely would have been able to meet Swire CC’s temporary power timeframe and deviated from our procedures and processes to keep this project moving forward, with the anticipation of fully serving Swire CC’s energy needs.”
‘We don’t have the ability to go elsewhere’
Colorado-based real estate developer redT Homes has also recently filed a complaint with the Colorado Public Utilities Commission, calling for an investigation into Xcel Energy’s handling of new residential service requests.
The complaint details nearly 5,000 days of cumulative project delays and more than $18 million in direct losses due to what redT calls “chronic inefficiencies” and “internal errors” at Xcel.
“After years of trying to resolve these issues directly with Xcel, including meetings with their executive leadership, we are left with no choice but to seek state intervention,” said Nathan Adams, redT’s CEO, in a news release last month.
Adams said two of his projects, a 19-unit at 2650 S. Delaware St. in Denver and a 15-unit on the 1600 block of Lafayette, have been negatively affected by Xcel servicing delays.
He said they went through loan extensions and were placed into foreclosure on both properties before they got power.
“They ruined those two projects. They damn near put us out of business.”
Adams said they refinanced the 15-unit out of foreclosure, and while he said they will complete the 19-unit project, the ongoing challenges are causing “some grief.”
Because of this situation, redT Homes laid off 65% of its staff in early July.
“A lot of people think developers are an endless source of capital, and that’s just not factual,” he said.
More than 10 developers, including representatives from Denver Construction Management, Weins Development Group, Prisma International and SC&P LLC, are backing redT Homes.
Executives from these companies have submitted letters in support of redT Homes, urging the PUC to take formal action to address service delays caused by Xcel.
“Like redT, we too have experienced extended delays, miscommunication, and design changes from Xcel Energy that have negatively affected our project schedules, financial projections, and delivery timelines,” several letters stated.
The issue also came up during PUC hearings this week on Xcel’s plan for providing power to customers in the future as coal plants are phased out and new data centers are expected to take a considerable about of electricity out of the grid.
“There’s already a strain on being able to develop. Projects have been delayed” waiting for electricity or natural gas service, said Chris Fellows, a developer and member of the East Metro Area Business Coalition, during the hearings.
Adams said he would like the PUC to consider penalties to the utility if deadlines for power and gas installations are missed.
“It’s the only way to really, truly get them to be accountable, because they don’t have to worry about losing business to somebody else,” Adams said.
“We don’t have the ability to go elsewhere. They have a monopoly.”
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