Barnes-Gelt: Development options at 9th and Colorado site. by Susan Barnes-Gelt
Opportunity knocked in February 2011, when a seven-year-old deal between Shea Properties and the university fell apart. Two months later (during a nasty mayoral campaign), the university signed a new contract with Florida-based Sembler Company.
Amid a chaotic political transition, Sembler proposed developing under the already approved urban-infill plan developed by Shea and enthusiastically endorsed by the community. Denver officials should have said, “No; start over.”
Shea’s plan included 1,200 residences plus 200,000 square feet of neighborhood retail and office. The plan, though dense, fit seamlessly into the adjacent neighborhoods.
Shea struggled for years to adapt its schedule and financing to the 2007 global financial collapse. Ultimately, the $35 million price tag and challenges securing tenants and financing led to its withdrawal in February 2011.
Sembler signed a contract with the university in April 2011 that presented an entirely different scheme. Its plan reflected the seismic shift in development and financing conditions post-2007.
The pivot from Shea to Sembler opened the door for renegotiation. Most every physical and financing element of the situation was different than the 2004 deal. The size and shape of the site changed with the exclusion of the old critical-care center in the northwest quadrant of the site. The Veterans Administration Hospital next door is moving to Fitzsimons. An unsubsidized Trader Joe’s market will occupy a 50,000-square-foot parcel at the southeast corner of Eighth Avenue and Colorado Boulevard.
To accommodate the new reality, the Sembler (now Fuqua) proposal includes big-box retail adjacent to suburban retail pad-style development (think Interstate 25 and South Colorado Boulevard), ample surface parking, abbreviated street grid, pedestrian access and green space. For development to work at $31.8 million, the project needs substantial retail sales to support the developer’s return on investment and tax-increment-financing, estimated at $15 million.
Stakeholders — i.e., the city, the developer and potential tenants, and the university — have options:
- Tired of the Speculation, Trader Joe’s Confirms (downmainstreet.com)
- Barnes-Gelt: Questions for Denver Mayor Michael Hancock (denverpost.com)
- Walmart pulls out of 9th and Colorado redevelopment project in Denver – The Denver Post (artstarzz.wordpress.com)
- Redevelopment Interruptus: Walmart Pulls Out of Fuqua Deal (downmainstreet.com)
- Developer revising 9th and Colorado, hopes demolition begins in spring (denverpost.com)
- Susman and Robb Green Light Walmart (downmainstreet.com)
- Dorm as W Hotel? (downmainstreet.com)
- With Walmart gone, what’s next for Denver project? (bizjournals.com)
- Who Won the Walmart War at 9th and Colorado? (downmainstreet.com)