November 19, 2014 News » Cover Story

Building an empire 

From City for Champions to Banning-Lewis Ranch, David Jenkins has his hands in everything

Weekdays around noon, David Jenkins gets on his bicycle and pedals all over the city. During those rides, totaling 10,000 miles a year, the 72-year-old can't help but cruise past land he owns or has developed.

In some ways, Jenkins' love of cycling is symbolic of his 40-year career. To make progress, you have to constantly push, push, push. You also have to dodge hazards, compete for position, and set a pace for the long haul. That's the way Jenkins has built a portfolio that tops 21,000 acres, with a value of roughly $258 million, and extends from Manitou Springs to Colorado Springs' eastern limit, from Interquest Parkway to Mesa Ridge.

From his early years selling men's suits in a downtown store, Jenkins found a path into real estate. He invested, and navigated such bumps in the road as the savings and loan crisis of the late 1980s. His success stems partly from manipulating good deals and his ability to create subdivisions and commercial districts from scratch.

But there are those who say he hasn't always kept the community's best interests in mind, that his business savvy has allowed him to shirk responsibilities for stormwater infrastructure or bend city governance to his whim. Yet Jenkins also donates to nonprofits and to his church. He's helping to establish a public market east of downtown, and recently donated land for a downtown Olympic Museum and Hall of Fame.

Obsessively private (he refused an interview and didn't respond to written questions for this story), Jenkins commands respect in the Springs and wields significant influence. In 2010, he nearly single-handedly funded a campaign that changed the city's form of government — and in the process, some say, made it friendlier to developers. Now, he's pushing to adjust the way city-owned Colorado Springs Utilities is run.

More than that, though, he wants to re-shape another one-sixth of the city, on its east side, with his acquisition last week of the 18,500-acre Banning Lewis Ranch. Having bought it from Ultra Resources, a Texas oil company, for $28 million, Jenkins could be positioned to make another fortune — and have his biggest opportunity yet to leave a lasting legacy, in the form of thousands of acres of open space.

It'd be a great place for a bike ride.

The Jenkins family has a long history in Colorado. David's grandparents Leonard and Emma Jenkins settled in the state's southwest corner, in Bayfield, where his father, Delmar David Jenkins, was born in 1916. His mother, Frances, was born in Fort Collins five days later.

Delmar served in the Navy and worked at Hewlett-Packard in Colorado Springs. Frances taught math at Palmer High School for a few years before transferring to Wasson when it opened in 1959. She later worked in District 11 administration, and two years after retiring in 1983, she began an eight-year run on the school board. She died in 1998. A year later, Frances L. Jenkins Middle School opened in a Nor'wood subdivision, one of David's developments in northeast Colorado Springs.

One of four children, David wore horn-rimmed glasses as a teen and was known as "a total nerd like me, not part of the cliques," reports Rick Wehner, a local retired businessman who attended Wasson with Jenkins. But he was a standout wrestler, competing at the state level his senior year. Asked to name his primary interest for the yearbook, Jenkins said "ministry."

After graduating, he earned a business degree from Colorado State University and returned to the Springs to work at Lee's Clothing on Tejon Street, not far from where Steve Schuck, another developer who would make a fortune in real estate, did the same, at Kaufman's.

In time, Jenkins shifted gears and went into real estate, buying and developing pieces of what would become the Nor'wood subdivision. He ran into problems in the late 1980s, like other developers, when the savings and loan crisis unfolded. But Jenkins emerged stronger than ever after suing American Federal Savings and Loan in 1990.

In that suit, Jenkins alleged a pattern of racketeering activity by the bank used to hide bad loans in what it called "swirls," says a source familiar with the litigation who spoke on condition of anonymity. Under this scheme, the S&L would threaten to call in all the loans of existing borrowers, like Jenkins, which would bankrupt the borrowers unless they participated in sham transactions in which the borrowers took over failing projects of other borrowers in an attempt to hide the bad loans and keep the S&L's losses off its books.

When the federal government's Resolution Trust Corp. took over the S&Ls, it replaced American Federal as the defendant in Jenkins' case. After three years of contentious litigation, it ended in a settlement that was "very favorable" for Jenkins, the source says. The settlement's terms have never been disclosed.

Then, with the S&L debacle still fresh, Jenkins snatched up property at bargain prices.

"David survived cycles where others did not," says Rocky Scott, former CEO of the Colorado Springs Economic Development Corporation, who now lives in Fort Collins. "In order to have survived all that, he had to be very careful and very shrewd."

Says Schuck, his competitor and contemporary, via email: "His success is not just a result of luck or good fortune. He has earned it the old fashioned way."

A partial list of Jenkins' projects and properties, many of which fall under his Nor'wood Development Group umbrella, includes Nor'wood and Wolf Ranch; Plaza of the Rockies, an eight-story downtown office building he bought in the mid-1990s, to which he added a 13-story south tower in 1999; the Alamo Corporate Center, immediately across Tejon from the Plaza building; First & Main Town Center, a thriving commercial district along Powers; Interquest Marketplace, an upscale shopping district in north Colorado Springs; and Powers Auto Park. His family also owns at least a dozen acres in the Southwest Downtown Urban Renewal Area where the Olympic Museum and, possibly, a sports stadium will be built as part of City for Champions. He's already donated 1.7 acres for the museum.

Assessor's Office records show that Jenkins, his wife Susie, and their sons Chris, Marc and Chad own — through at least two dozen entities — about $260 million worth of land and improvements in El Paso County, most in the city. That includes his and his wife's $3.6 million condominium overlooking a Broadmoor golf course.

In May, Jenkins received the University of Colorado at Colorado Springs' College of Business 2014 Lifetime Entrepreneurship Award. States the program: "His fingerprints are on almost every corner of the city."

A past president of the Pikes Peak Association of Realtors (and Realtor of the Year in 1984), Jenkins helped create the Economic Development Corporation, now the Regional Business Alliance, and is a long-time member of the East Colorado Springs Rotary Club and the Pikes Peak Range Riders, for which he has served as president.

"I don't know of anybody who doesn't admire and like him," says fellow Range Rider and former County Commissioner Chuck Brown.

Jenkins' philanthropy could have something to do with that. The Nor'wood Foundation, to which he donates through his companies, Development Management Inc. and First & Main LLC, has given nearly $7 million in the last nine years to civic organizations, health agencies, youth groups, education, the arts, and religious groups, according to IRS filings. Though Nor'wood has given to national-level organizations such as the Mayo Clinic and the International Justice Mission of Washington, D.C. (which works against human trafficking), much of his philanthropy is local.

By far the biggest recipient is First Presbyterian Church, which received nearly $1.8 million from 2010 to 2013. Over the same period, the foundation gave $506,288 to Springs-based Compassion International, and $37,500 to YoungLife, a youth ministry headquartered here. (Jenkins' faith is reflected in a large depiction of the Ten Commandments in the lobby of his office, along with a Bible and a bronze statue of Jesus.)

Other contributions amounting to six figures have gone to the Pikes Peak chapter of the American Red Cross ($150,000), the University of Colorado Foundation ($113,000), Pikes Peak Hospice and Palliative Care ($107,160) and Pikes Peak United Way ($100,000). Smaller contributions have helped organizations as diverse as the Cheyenne Mountain Zoological Society, The Home Front Cares, Silver Key Senior Services and Friends of El Paso County Nature Centers.

Jenkins' entities also have supported the Give! campaign, an Independent initiative that's fiscally sponsored by the Pikes Peak Community Foundation, having donated at least $3,999 annually since 2010. Chris Jenkins recently gave another $5,000 to fund half of the Indy's inaugural Lottie Prize money, divided among three young professionals in the nonprofit realm, as described in an Indy cover story two weeks ago.

As Schuck puts it, "He has been a very responsible citizen, both through his developments and his philanthropy."

That "responsible" characterization is echoed by others familiar with Jenkins and his operation, which is often led by his top vice presidents, lawyer Ralph Braden and former vice president of the Springs EDC Fred Veitch. (Neither would comment for this story.)

"They do business in an honest and straightforward way," says Kevin Walker, who worked for Jenkins from 2004 to 2010, chiefly on the Mesa Ridge development north of Fountain. Walker, owner of the Walker Strategies consulting firm, also ran the Mayor Project ballot measure campaign in 2010. Jenkins and company follow to a T the age-old principles in the development industry, Walker says: Pay the right price for land and be cautious about debt.

Jenkins "soaks in information," Walker continues. "He's a hard bargainer and a very good businessman, very strong, confident. He knows what he wants to do, and if it doesn't work for him, he doesn't do the deal."

The Jenkinses' 450-plus tracts include office, commercial, retail, and warehouse properties and vacant land. They even own hay meadows on the city's north and northeast sides, where development surely will creep, but for now that's classified as agricultural land, and the tax bills are tiny. For example, a 20-acre tract that lies squarely in the path of growth west of Powers and south of Woodmen is valued at less than $2,000 on the tax rolls, and has a tax bill of $48.

County Assessor Mark Lowderman, who sets property values for tax purposes, says his appraisers sometimes verify that a parcel's use is accurate, because of the effect on its taxable value. One day, they took a drive to verify that Jenkins' hay-meadow parcels were, in fact, growing hay. Sure enough, Lowderman says, they found crews harvesting a crop.

Over the years, Jenkins, who pays nearly $5 million a year in El Paso County property taxes, has contested the values of his property only a handful of times, Lowderman says.

But pushing back became Jenkins' trademark when dealing with city planning and engineering, according to three former city officials.

Robin Kidder, assistant city engineer in Mesa, Arizona, worked in Colorado Springs' engineering department from 1988 to 2011, the last two years as city engineer. Here's how he remembers dealing with Jenkins: "At every turn, it seems like we were up against this idea where he could successfully pass off or transfer costs that, by rights, should have been developer costs. But he was able to attack city standards, to the point where it would fall to the taxpayers."

Kidder reports that Jenkins resisted building stormwater facilities to protect against 100-year storms. He named Cottonwood Creek as an example, but declined to elaborate. The city has spent millions of dollars in recent years on flood control for the creek.

"It seems like we were always up against his guys claiming it was over-regulation and that we were all a bunch of bureaucrats," Kidder says.

When Jenkins disagreed with the city's position, he'd hire his own consultant, Kidder says. "It was very, very frustrating," he notes. "I don't remember any project where he exceeded any standards. Here we're trying to be the last line of defense, to see that this infrastructure gets built properly and doesn't become a burden to the taxpayer, and it didn't always work out, let's put it that way."

In what appears to be an isolated instance, the owners of a home in the Dakota Ridge Subdivision in northeast Colorado Springs sued two Jenkins companies, Nor'wood Development and Development Management Inc., in 2003. They alleged the home flooded three times in two years "resulting from the failure of Nor'wood and DMI to construct a swale/channel in accordance with the approved drainage plan."

The case was dismissed about a year later and involved a negotiated settlement, the terms of which weren't revealed. Land records show the homeowners sold the house to Nor'wood and a homebuilder in April 2004 for about the same price they paid for it in 2000. Nor'wood sold the home three months later for about $24,000 more than it paid the homeowners. Regional Building Department records show no building permits issued for the property besides the original construction permit, although an RBD spokesman says re-grading a lot can be done without a permit.

Another former city engineer, Gary Haynes, says disputes with Jenkins might have occurred more frequently than with others simply because he did more projects. But he adds the disagreements were typical for developers.

"They would be trying to do the most economical project for them," says Haynes, city engineer from 1983 to 2005, "and I was trying to get the most economical project for the city of Colorado Springs and the taxpayers."

Haynes, too, recalls Jenkins frequently offered his consultant's alternative to satisfy city requirements, but he notes there's always more than one solution to an engineering problem.

At least Jenkins wasn't a sore loser, Haynes recalls. "Some stomped out if they didn't like my decisions," he says. "He never did that."

Jim Mullen, who served as city manager from 1996 to 2002, also has some harsh words for Jenkins, the only developer with whom he didn't get along well, he says.

"There was nobody who did more to destroy the city's ability to do good planning. Nobody," Mullen says. "He fought every aspect of staff recommendations, consultant recommendations and council initiatives to adopt the type of planning that would result in developments that would make residents feel the kind of pride you find in many Colorado Front Range communities, but not in Colorado Springs."

When asked specifically about Mullen's allegations, as an example of criticisms from city officials, Jenkins declined to comment.

Mullen says he was called to a Wells Fargo Building office in the late 1990s where he met with "all the big-shot developers," including Jenkins. They complained the city's requirements were too strict, Mullen says. "David Jenkins particularly was saying how much money he was having to spend because of the planning requirements."

Asked by the group to lead a campaign to relax the city's rules, "I declined," Mullen says. "In ensuing weeks, I was told later that I was not pleasing 'the boys' [who] were very upset and wanted me to take a different tack and were leaning towards no longer supporting me."

In another meeting at Jenkins' business office, then located on Sinton Road, Jenkins asked Mullen to support a tax break for First & Main Town Center on Powers, Mullen says. He argued it was warranted, Mullen says, "because of the risk [Jenkins was] taking in building this development and the fact it's going to bring more retail to Colorado Springs."

Mullen says he told Jenkins the decision was City Council's, not his, and he couldn't support it unless it were equally applied to all developments. The tax break didn't happen during his tenure, Mullen says, and hasn't since.

As time passed, Jenkins phased himself out of dealings with the city, Haynes and Kidder say, replacing himself with what Kidder calls "his second lieutenants," Braden and Veitch, and his son Chris.

Despite his withdrawal, however, Jenkins "left nothing to chance" when it came to Council actions on his developments, says Scott Hente, who served on Council from 2003 to 2013, the last two years as president.

"Even if a very, very mundane, trivial housekeeping item was on the consent calendar, they'd be in the audience," Hente says of Jenkins' staff. "They were going to be there to answer a question. They came prepared. They had it together. It was always professional. They knew what they wanted. The goal was to get it done."

But it was the hurdles of city regulation, Kidder thinks, that led Jenkins to pump nearly $1 million into the strong-mayor ballot measure campaign, which he says ultimately swept into office a mayor who's "sympathetic to developers."

"I'd say it worked out pretty slick for old Dave," Kidder says. He also notes that Jenkins donated money — $25,000 — to the 1B stormwater measure, which was defeated by voters on Nov. 4. "I thought that was interesting," Kidder says. "I'm not surprised he's supporting taxpayers picking up the dime on drainage that's under-served in these [Jenkins'] neighborhoods."

Walker, however, says Jenkins' motive in supporting the strong-mayor change, which was brought to the ballot with a paid petition signature drive, is to foster a more prosperous future for Colorado Springs. "I think he felt strongly that was a better form of government for a growing community, and decided to see what the voters thought," Walker says. "He cares about Colorado Springs, he's invested, so he's obviously concerned about the future here. Everything he does is about building community. That's who he is."

Jenkins also hasn't shied away from negotiating with governments for what he considers a fair price for his land.

In 2003, his company Development Management Inc. sued the city, seeking reimbursement of $516,852 for land in excess of the 60-foot width of an Austin Bluffs Parkway extension through Nor'wood. The case was settled within a few months using drainage and park fee credits that gave Jenkins the equivalent of about $452,000, though it's unclear whether he ever got the money, because the credits program hasn't been fully funded by the city for years.

In another case that began in 2005, the city and state Department of Transportation sought land from Jenkins for a 54-inch water main and interchange improvements, respectively. The two governments initially paid Jenkins and his company, Bridle Pass LLC, $1.8 million — $1.5 million from the state, and $338,665 from the city, court records show. Three years later, the state paid another nearly $1.2 million, and the city, $736,335, for a total of $3.75 million, records show. The city's tab — $1,075,000 — bought a 5.2-acre permanent easement and 8.1 acres for a temporary easement that was used during the Utilities project.

CDOT spokesman Bob Wilson says the price went up after Jenkins subdivided the land, a move that can't happen without City Council approval, and started installing utility hookups, steps that made the land more valuable. The state also had to pay for environmental cleanup caused by a landfill to the east that "bled," Wilson says.

Jenkins' newest foray into the civic arena involves changing who oversees Springs Utilities. His son, Chris, is one of the funders of the newly formed group Colorado Springs Forward, which is composed of many nonprofit groups and wealthy locals who want to shape public policy.

In early September, the Colorado Springs Business Journal reported that Springs Forward had written a ballot measure to change the City Charter's mandate that City Council serve as Utilities Board.

The measure, which apparently was to be petitioned onto the April 2015 city ballot, called for Council to be replaced by nine people with corporate experience in utilities and related fields. Those nine would initially be appointed by the mayor and approved by Council; thereafter, members would appoint successors. They also would set their own pay. (Now, Council's $6,250 annual pay includes Utilities duties.)

The document, which angered some Council members, wasn't intended for public consumption, Springs Forward executive John Cassiani said later.

Cassiani and Braden attended the Sept. 17 Utilities Board meeting to urge that the enterprise's governance be studied yet again. Though five studies in the last 20 years have recommended a different governance model that would replace Council, no change has taken place.

Introducing himself as a vice president with Nor'wood Development Group, Braden said it might be time to look at installing an independent Utilities Board. "What we wanted to try to accomplish was to bring it forward for a community dialogue," he said, adding that Springs Forward would "take the lead" in engaging community input.

"What's broken?" several Utilities Board members repeatedly asked, noting rates are competitive, service is reliable and the utility consistently wins high marks for customer relations.

"I think the conclusion of the five studies is that perhaps there is a better way we can do it," Braden said.

Utilities Board member Val Snider pointedly asked Braden if someone had a bad experience with Utilities, "someone trying to develop a subdivision?"

Braden shot back, "Don't go there. That's not what it's about. It's not being driven by a bad experience with Utilities. Our experience with Utilities has been wonderful."

Braden also admonished the board not to question his motives. "People involved in this have been involved in this community and do a lot of good for the community," he said, adding it would be wrong to assume there was some "profit-driven motive, or evil motive."

"We want what is best for this community," he said.

The Utilities Board agreed to move forward with a community discussion about a new form of governance.

During the 26 years since the Banning Lewis Ranch was annexed into the city, the property has sat largely untouched, though roughly 600 homes have been built on the north end of the master-planned ranch — which could accommodate 75,000 homes.

When it was annexed, Arizona developer Frank Aries owned it. Amid the S&L crisis, he deeded it back to lenders, the Business Journal reported. The ranch then passed through the hands of Saudi billionaires before it was purchased in 2001 by Capital Pacific Holdings Inc. of California, which sold it in 2004 to a spin-off of Capital Pacific, according to the Gazette.

In 2010, the owners filed for bankruptcy, and the next year the property again changed hands. Ultra Petroleum of Houston bought 18,500 acres, hoping to drill for oil and gas; Oakwood Homes of Denver bought 2,600 acres. (About 40 others cumulatively own about 3,000 additional acres of the ranch.)

Ultra gave up hopes of drilling due to disappointing test wells, and decided to sell the ranch, though it remains in court, trying to get the city to undo the annexation agreement. Jenkins put the ranch under contract in June, and announced completion of the sale last week.

Many in the development community say Jenkins is the right person to take on the massive master-planned community.

"Just look at his track record," Walker says. "He's proven to be a good businessman and good investor, and I don't think you have to worry too much about something going badly. You couldn't have a better person owning that property, because he cares about Colorado Springs and he knows how to make projects successful ... unlike all the other people who have owned it."

Cassiani, former vice president of project operations for the previous BLR developer, Banning Lewis Ranch Management Company LLC, says developers have their work cut out for them when it comes to the ranch. He calls the annexation agreement onerous and far more demanding of developers than other agreements, and that's not fair, he says.

Problem is, Aries "agreed to just about anything the city wanted," he says, and that means land owners, with Jenkins being the biggest, face infrastructure expenses that top an estimated $900 million, "a monster number."

Among the requirements:

• $150 million to improve and enlarge the city's Las Vegas Street wastewater treatment plant.

• Donate land for fire stations and police stations, and build and equip the fire stations.

• Donate land for roads and build them, including a four-lane Banning Lewis Ranch Parkway that runs the length of the property. Annexors also must build a grade-separated interchange for BLR Parkway at Highway 24.

• Fund a drainage basin study of Jimmy Camp Creek Drainage Basin and a "restudy" of Sand Creek Drainage basin, and then build drainage facilities in those basins.

"Those are some big deterrents for any developer trying to make this property work," Cassiani says.

Councilor Andy Pico, whose district includes the ranch, sees the BLR Parkway requirement as "a significant problem." If development costs are too high, home sites become so expensive they're unmarketable, he notes, so he's willing to revisit the agreement.

Councilor Val Snider says an amendment is premature and should be delayed until a new chapter of the city's Comprehensive Plan is written addressing infill development — vacant land and redevelopment of older parts of the city. That could take a year.

Councilor Jan Martin says nothing should be done until the court case between the city and Ultra ends.

Meantime, the city needs 146.5 acres in the Banning Lewis Ranch for Colorado Springs Utilities' Southern Delivery System water pipeline project. Utilities spokeswoman Janet Rummel says the city has paid $117,500, the land's estimated worth, into an account pending a determination of value in a condemnation case involving Ultra. Now that Jenkins has bought Banning Lewis, he'll take Ultra's place in the case, she says, noting that Utilities hasn't had any contact with Nor'wood on the matter.

Ironically, the original reason for the pipeline was to serve Banning Lewis Ranch, although Utilities has since cited redundancy of the water system as a reason.

So the road ahead on Banning Lewis will bring more dealings with the city on multiple levels, but also poses a philanthropic opportunity on a grand scale.

"We see it as good news that someone is involved who has shown in the past a willingness to build parks in their development, to build bicycle infrastructure," Susan Davies, with the Trails and Open Space Coalition, said a few months ago. She also noted Jenkins possesses a vision for the property "that will serve the whole community, not just the developers."

That vision was articulated in the Jenkins family's news release in June, which listed, among the goals, promoting "responsible stewardship of the property's environmental resources," supporting "efficient public services and facilities infrastructure that ensures high quality, cost-effective city services," and supporting "a signature conservation effort that is locally and nationally significant" as well as "meaningful outdoor educational and recreational opportunities for our region's citizens."

"Should the property be purchased," the company said in that news release, "Nor'wood will engage the best local and national experts and organizations to partner with the community to develop a land use plan and ownership structures that incorporates the above guiding principles."

The Palmer Land Trust and the Trust for Public Land say they hope 12,000 of the 18,500 acres are set aside for trails, conservation and other public uses. One potential method of securing those acres into perpetuity, says Palmer Land Trust's executive director, Rebecca Jewett, is a conservation easement, which requires a landowner to sacrifice development rights in exchange for a tax credit that can be sold for cash, though certain restrictions apply.

It's unclear what impact Ultra's retaining mineral rights on the BLR property will have on preservation and future development.

At 72, Jenkins isn't likely to see the ranch built out in his lifetime. His son, Chris, president of Nor'wood Development Group, seems to be the logical person to carry on the Jenkins legacy. He's active in a long list of organizations that include the Regional Business Alliance and the Downtown Partnership, and he's deeply involved in City for Champions.

Like his father, he's an avid cyclist, and he didn't grant an interview for this story. But in a news release announcing the family's donation of land to the Olympic Museum, Chris was quoted like this:

"My family has lived here for over 100 years. This is our home and our city, in which we are fully rooted and our family and business philosophy directly deepen those roots. We will continue to leverage our assets and make intentional decisions, such as partnering with the one and only U.S. Olympic Museum and Hall of Fame, because I am confident that our community's best days are ahead."

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