RedT Homes CEO Nathan Adams says projects like his at 2650 S. Delaware St. in Denver have been negatively affected by Xcel servicing delays. (BusinessDen file)
A local homebuilder is preparing to ask the Colorado Public Utilities Commission to investigate Xcel Energy over delays in servicing new residential projects — and hopes to show strength in numbers.
Nathan Adams, owner and CEO of Denver-based RedT Homes, says the unreasonably long time the Minneapolis-based utility firm takes to provide service has pushed some of RedT’s townhome projects into foreclosure, forced the company to alter sales strategy and is costing it millions.
The company has asked other developers to share how they’ve been negatively impacted, to be included with RedT’s forthcoming complaint to the PUC.
Adams said Xcel delays are why a lender called Indicate Capital has initiated foreclosure proceedings on two RedT projects, at 2650 S. Delaware St. in Overland and at 1642 Lafayette St. in City Park West.
Under normal circumstances, RedT takes out a construction loan, builds a project, sells the individual homes and pays off the loan with the proceeds. But that process breaks down when Xcel doesn’t hook up a site when expected or provide notice of when it will, Adams said.
“We calculated 309 days of delays that were exclusively at the hands of Xcel on Delaware,” he said, adding that the loans for both sites had been delinquent for months when service was ultimately provided.
No one will buy a townhome without utilities set up. And buyers want to have a certain closing date, which RedT can’t provide if it doesn’t know when Xcel will show up, Adams said. That has hampered pre-sales for company projects.
As a result, Adams said, he had to take units at both spots off the market. They’re back now, but instead of selling units individually, he’s “selling them in one big tranche,” presumably to an investor who will rent the units.
Adams said he expects the aggregate buyer will pay about $150,000 less per unit than individual buyers would have. The Overland project has 19 units, while the one at City Park West has 15.
Adams is fed up with the situation and said he’s heard similar stories from other developers. One he declined to identify had a pending $16 million sale contract fall apart due to Xcel a couple years ago and is still holding the asset, he said.
The development sector wants to see change, but “most of us run scared,” Adams said. People worry that complaining might result in future projects being pushed to the back of the line by Xcel, or worse.
“A lot of them have expressed they’re unwilling to go on their own, but they’re willing to go with others,” he said of fellow developers.Â
Xcel, Adams noted, has a monopoly. Developers can’t just go with an alternative provider.
A draft of his letter provided to BusinessDen asks the PUC to investigate Xcel’s residential service timelines, require standardized response time commitments and evaluate or establish “penalties or financial remedies for unreasonable delays caused by utility inaction.”
In a statement to BusinessDen, Xcel said “we work hard to deliver results by customer timelines and have a track record of doing so.”
“We don’t comment publicly about the details of individual customer projects,” the company said. “However, it’s important to note we completed this customer’s projects while accommodating unique and changing designs, plans and timelines. Our team is committed to working with all our customers in order to complete projects safely and on time.”
RedT’s call for an investigation won’t be the first sign of industry discontent with the utility.
In February, Texas-based Brightland Homes sued Xcel, saying the utility “failed to diligently, reasonably, and adequately satisfy its obligations to timely provide gas and electric service” to the 314-home Dillon Pointe project in Broomfield.”
For example, Brightland said, it paid Xcel in April 2020 in connection with planned streetlights, but Xcel didn’t obtain permits for the work from Broomfield until March 2023. Xcel then ordered the wrong equipment and let the permits expire without doing the work. In resubmitting for permits, according to Brightland, Xcel encountered delays because its proposal conflicted with its own high-pressure gas line.
A judge had yet to rule on Xcel’s request that the Dillon Pointe case be dismissed as of Friday morning.
As for RedT, Xcel isn’t the only thing bothering the firm lately. The company sued Denver earlier this month over a rejected rezoning for a site it was poised to buy in the Athmar Park neighborhood. In addition to Denver, the company does projects in surrounding municipalities such as Arvada and Aurora, and as far as Leadville, Adams said.
RedT Homes CEO Nathan Adams says projects like his at 2650 S. Delaware St. in Denver have been negatively affected by Xcel servicing delays. (BusinessDen file)
A local homebuilder is preparing to ask the Colorado Public Utilities Commission to investigate Xcel Energy over delays in servicing new residential projects — and hopes to show strength in numbers.
Nathan Adams, owner and CEO of Denver-based RedT Homes, says the unreasonably long time the Minneapolis-based utility firm takes to provide service has pushed some of RedT’s townhome projects into foreclosure, forced the company to alter sales strategy and is costing it millions.
The company has asked other developers to share how they’ve been negatively impacted, to be included with RedT’s forthcoming complaint to the PUC.
Adams said Xcel delays are why a lender called Indicate Capital has initiated foreclosure proceedings on two RedT projects, at 2650 S. Delaware St. in Overland and at 1642 Lafayette St. in City Park West.
Under normal circumstances, RedT takes out a construction loan, builds a project, sells the individual homes and pays off the loan with the proceeds. But that process breaks down when Xcel doesn’t hook up a site when expected or provide notice of when it will, Adams said.
“We calculated 309 days of delays that were exclusively at the hands of Xcel on Delaware,” he said, adding that the loans for both sites had been delinquent for months when service was ultimately provided.
No one will buy a townhome without utilities set up. And buyers want to have a certain closing date, which RedT can’t provide if it doesn’t know when Xcel will show up, Adams said. That has hampered pre-sales for company projects.
As a result, Adams said, he had to take units at both spots off the market. They’re back now, but instead of selling units individually, he’s “selling them in one big tranche,” presumably to an investor who will rent the units.
Adams said he expects the aggregate buyer will pay about $150,000 less per unit than individual buyers would have. The Overland project has 19 units, while the one at City Park West has 15.
Adams is fed up with the situation and said he’s heard similar stories from other developers. One he declined to identify had a pending $16 million sale contract fall apart due to Xcel a couple years ago and is still holding the asset, he said.
The development sector wants to see change, but “most of us run scared,” Adams said. People worry that complaining might result in future projects being pushed to the back of the line by Xcel, or worse.
“A lot of them have expressed they’re unwilling to go on their own, but they’re willing to go with others,” he said of fellow developers.Â
Xcel, Adams noted, has a monopoly. Developers can’t just go with an alternative provider.
A draft of his letter provided to BusinessDen asks the PUC to investigate Xcel’s residential service timelines, require standardized response time commitments and evaluate or establish “penalties or financial remedies for unreasonable delays caused by utility inaction.”
In a statement to BusinessDen, Xcel said “we work hard to deliver results by customer timelines and have a track record of doing so.”
“We don’t comment publicly about the details of individual customer projects,” the company said. “However, it’s important to note we completed this customer’s projects while accommodating unique and changing designs, plans and timelines. Our team is committed to working with all our customers in order to complete projects safely and on time.”
RedT’s call for an investigation won’t be the first sign of industry discontent with the utility.
In February, Texas-based Brightland Homes sued Xcel, saying the utility “failed to diligently, reasonably, and adequately satisfy its obligations to timely provide gas and electric service” to the 314-home Dillon Pointe project in Broomfield.”
For example, Brightland said, it paid Xcel in April 2020 in connection with planned streetlights, but Xcel didn’t obtain permits for the work from Broomfield until March 2023. Xcel then ordered the wrong equipment and let the permits expire without doing the work. In resubmitting for permits, according to Brightland, Xcel encountered delays because its proposal conflicted with its own high-pressure gas line.
A judge had yet to rule on Xcel’s request that the Dillon Pointe case be dismissed as of Friday morning.
As for RedT, Xcel isn’t the only thing bothering the firm lately. The company sued Denver earlier this month over a rejected rezoning for a site it was poised to buy in the Athmar Park neighborhood. In addition to Denver, the company does projects in surrounding municipalities such as Arvada and Aurora, and as far as Leadville, Adams said.
