Here’s Federal Transit Administration head honcho Peter Rogoff announcing that Denver’s FasTracks program will receive $300 million in loans for Denver Union Station and $1 billion in direct payments over several years for construction of the Gold and East commuter rail lines.
This is a great day for metro Denver!
Cheers! to Denver voters for coming in #3 on our Denver’s Top 10 Urbanism Achievements of the Aughts countdown. Frankly, Denver voters should probably come in #1 for not just this past decade, but for all 15 of Denver’s decades, considering their record of voting for civic projects of every kind.
The reasons for Denver’s enthusiasm for approving civic projects are complicated but discernible. Part of it has to do with Denver’s inferiority complex. Since our city’s founding (relatively late as big cities go—the late 1850s), we’ve tried to overcome our new-kid-on-the-block, dusty-outpost-in-the-middle-of-nowhere insecurities (the “cowtown syndrome”) by proving to the world that we can do all the stuff bigger and older cities do—and then bragging about it. When that fails to earn us the respect we believe we deserve, we try even harder. Next, Denver seems to draw people who are seeking a better place to live or who are looking to make a fresh start; so upon moving here, many newcomers are predisposed toward community improvement. Denverites are also known to be an optimistic bunch (due to the ubiquitous sunshine and stunning mountain vistas, no doubt), so one way people here express that optimism is through investing in their city. Finally, Denver has been fortunate over its history to have had a municipal government that has been relatively competent and corruption-free and that generally delivers civic projects as promised. Along with our strong-mayor system and the dynamic, effective leaders it has produced, a sense of trust exists between the citizens and the city that perpetuates an environment of collective civic ambition. That’s my take on it, anyway. Now, back to the voters:
The only Denver ballot item for a civic project that I could recall that failed during the decade was in November 2001 for the Denver Justice Center—then planned to be built at I-25 and 6th Avenue—which was controversial mostly due to the location and was approved a few years later after the switch to the Downtown site.
Denver’s legacy of supporting civic projects and investments in the city’s infrastructure continued to flourish this past decade, which is why I’m including it in our list of Denver’s Top 10 Urbanism Achievements of the Aughts.
For my first fancy post on the new DenverInfill, I thought I’d point out this press release I came across last month noting that the multi-housing wing of CB Richard Ellis Investors purchased The Metro apartment complex at 2121 Delgany for $55 million. The property located just a baseball’s throw from Coors Field, has won numerous urbanism awards for its development and site planning, including a ULI’s Pillars of the Industry award in 2004. View a Google map here.
The purchase was the largest multifamily investment sale in Denver in 2009 and had a significant impact on how the value of the overall multifamily market in Denver is determined, according to the Colorado Real Estate Journal. “Because there are so few sales, every sale is so important to determining value. The Metro’s sale represents where market value is today,” Cary Bruteig of Apartment Appraisers & Consultants told the publication.
It could also be an indicator of another trend: as investors begin emerging from the trenches in 2010, they’re going to be taking aim at Denver’s quality urban developments first.
Happy 2010 everyone! The time to reflect upon planning and development issues in Downtown Denver from the past year has arrived again. For a trip further back down memory lane, check out the retrospectives for 2008, 2007, 2006 and 2005.
It is no secret that 2009 was the year we experienced the full brunt of the 2008 economic meltdown. Proposed real estate developments all over the city, state, and country were cancelled (or, more optimistically, “temporarily postponed”). Projects of all types were cancelled because developers realized they had little hope of securing financing for their projects from banks or other lenders. Office projects were cancelled because job losses and corporate bankruptcies reduced the demand for office space. Residential projects were cancelled because people couldn’t find buyers for their existing homes to allow them to purchase new homes. Even in a booming market, perhaps half of all proposed real estate developments fail to get off the drawing board. In 2009, that statistic was closer to 100%. Usually in my retrospectives I list the projects for the year that were cancelled or that failed to get under construction. I’ll spare you the list this year, but let’s just say it is long.
Now the good news! Across the board, economists and real estate experts agree that Denver is at or near the top of the list of US cities that have generally survived the Great Recession with the least amount of damage, and that Denver is well positioned to lead the way into the recovery. The only question that no one really knows the answer to is: will the good times return in 2010? 2011? 2016?
I moved to Denver in 1985, the year of the infamous “oil bust” that tanked the local real estate market—sort of the 2008 of its time. The warning signs were there in 1984 (just like in 2007) and 1986 saw the completion of the last of the big Downtown projects that were too far along to cancel (just like in 2009). Back then, however, it took another four years before we started to see the first substantial upticks in the economy and another five years after that before we started to see significant new construction in the Downtown area. Since history tends to repeat itself, does that mean we will have to wait until 2014 before things start to improve and 2019 before new construction projects dot the Downtown landscape once again?
My guess: probably not. From my perspective, there are four important differences between the bust of the late 1980s and today. First, the ’80s recession hit Denver in particular very hard. People here lost a third to half of their property values. By comparison, this time around we’ve experienced only a relatively minor dip in property values. Second, Denver in the 1980s was over-reliant on a few industries (like oil) that, if suffering, caused Denver to suffer as well. Today, Denver’s economy is more diversified and we can look to many different business sectors to help us recover. Third, in the early 1980s, Denver substantially overbuilt, particularly in the office market. Denver’s tallest building, Republic Plaza, completed in 1984, alone contains more office square footage than 1900 16th Street, 1400 Wewatta, 1515 Wynkoop, 1755 Blake, and SugarCube combined, and Republic Plaza was just one of about twenty-five office towers built in Downtown from 1980 to 1985. No wonder it took us over twenty years to see any new office construction Downtown. Finally, in the 1980s, Denver and other big cities across the country were in their third consecutive decade of decline. Suburbanization was rampant, Denver was losing population and its infrastructure was in disrepair, and Downtown Denver had regressed from the vibrant mixed-use heart of the city into an overgrown office park that shut down at 6 PM. Today, the trend is exactly the opposite. Urban centers across the country are in high demand and viewed as the future of sustainable development. Denver’s population is growing and we’ve invested billions of dollars in civic facilities and infrastructure that have helped transform Downtown Denver back into the thriving hub of the city and region. For all these reasons, I believe we are poised for a shorter transition period than before; although, I think we’re still looking at another two years before private-sector development will resume to any significant degree. Of course, forces beyond Denver’s control such as war and terrorism, additional financial crises, or the pending Apocalypse of 2012 could delay the recovery. Let’s hope not.
Despite all the doom and gloom, there were a number of positive developments in Downtown Denver this past year. The Four Seasons, Spire, and 1800 Larimer projects topped off in 2009, altering our skyline that had remained largely unchanged for a generation, and projects like 1515 Wynkoop opened their doors and enhanced Downtown’s vibrancy and urban fabric. Throughout Downtown and its adjacent districts were a number of other infill projects that continued with construction or neared completion in 2009, such as the Embassy Suites project in Central Downtown, the Alexan project in Prospect, the Park Avenue Lofts and DHA’s Park Avenue Hope VI redevelopment in Uptown, the Cornerstone project in Curtis Park, Frontview 40 in Jefferson Park, and a smattering of smaller projects in Highland, Ballpark, City Park West, and elsewhere. A few new projects even managed to break ground in 2009, like Solera at 20th and Lawrence.
LoDo was all abuzz at the start of 2009 regarding Buzz Geller’s proposed Bell Tower project and the controversy over its height and perceived “thinness”. After a few ups and downs, the project received a final approval from the Landmark Preservation Commission in March. Now it is up to Mr. Geller (and the strength of the multi-million dollar condo market) as to when the project may become a reality.
Building renovations continued to be an important component of Downtown’s revitalization in 2009. 1800 Glenarm and Larimer Corporate Plaza, two frumpy-looking office buildings in need of a makeover, were successfully modernized this past year and are now looking great. There were a couple of historic renovations in Lower Downtown this past year as well. The Wazee Exchange Building restoration at 19th and Wazee is pretty much complete, while the Colorado Saddlery Building is just starting its restoration and conversion into a mixed-use development that will make the corner of 15th and Wynkoop one of LoDo’s finest when complete.
On the public sector side, Downtown development remained strong in 2009. The Denver Justice Center made steady progress throughout the year and is on pace for a 2010 opening. The state government launched construction of its new Colorado History Center in 2009 and work will begin later in 2010 on the state’s new Colorado Justice Center. Better Denver Bond projects like the Denver Police Department Crime Lab and the reconstruction of Boettcher Concert Hall should begin in 2010, along with several streetscape projects and the redo of 14th Street. The Auraria campus had a good 2009 with the construction of its new Science Building and design work continuing on two other proposed buildings.
And then there’s the big Union Station redevelopment. Despite the incredible complexity of the project, pressure from all sides to alter this or change that to the project’s design, and a several hundred million dollar funding gap, project planners persevered in 2009 and, assuming they close on their federal government loans as planned in a few days, construction of the massive project will begin this winter. For much of 2010, there’ll be one heckuva big hole in the ground as excavation takes place for the below-grade bus terminal, and in Fall 2010 the new light rail station should open. We may also see construction of the north “wing building” at 16th and Wynkoop get underway in 2010 as well. As projects go, the half-billion-dollar Union Station transit job will be big and messy and will take several years to complete—great entertainment for us construction junkies.
On the planning front, notable progress was made in 2009. The Downtown Pedestrian Priority Zone project (an action item from the Downtown Area Plan) and the Denver Living Streets initiative were success stories in 2009 that will shape how we perceive, design, and use our public rights-of-way from now on. In 2010, the big event of the year will be City Council’s adoption of the new Denver Zoning Code. A massive undertaking that has taken over four years to complete, the new code will finally align the city’s zoning regulations with Blueprint Denver to direct where and how Denver grows while preserving the character of the places in the city we treasure. The new zoning code isn’t perfect and undoubtedly there will be tweaks made to the map and code language as we learn through implementation which adjustments are necessary. But in my opinion, the new zoning code on Day 1 after adoption will be substantially better than the incoherent mess of a zoning code we have now.
For DenverInfill, 2009 was a good year as I finally converted the blog to WordPress and reoriented it for 2010 to include contributing bloggers and taking on urbanism in general throughout the Denver area as the blog’s focus. I hope you will stick with me in 2010 and stay engaged by adding your comments to the discussion, reposting and linking to DenverInfill from other online resources, and encouraging your friends to check out the blog and join the effort to improve our great city.
In conclusion, 2009 was definitely a challenging year. But Denver always survives these low points in the economy and comes out in the end a better, stronger, city—in part, because we take the opportunity during those difficult times to make great plans and invest heavily in our public infrastructure to prepare for (and facilitate) the next boom. In that light, 2010 should be a great year.
Or perhaps this blog title should be “Screeching Halt.” Can you image being a real estate developer these days and you don’t have your project financing secured? Good luck. I’m just happy a bunch of our big downtown tower projects managed to get their loans and get under construction before the floor dropped out on our financial markets.
I’ve heard recently that a number of infill projects around the downtown area have been shelved: Mestizo 31, the Spanos project in Jefferson Park, 1780 Downing, Old Market Lofts… I’m sure there are many more. The failure of any real estate project to get underway is not unusual. Regardless of how strong the economy is, some projects just don’t make it off the drawing board. Of course, these days we’re clearly dealing with a situation that’s not your run-of-the-mill real estate cycle. Yet a few new projects continue to be proposed, like Bryant 25, which hit my inbox just a few weeks ago.
As I mentioned in a recent blog, the one comfort we can take in all of this mess is that any slowdown in the pace of infilling Downtown is not an indication of the desirability of Downtown as a place to live, work, or invest. In fact, it is certainly possible that when the current financial crisis is resolved and banks return to some kind of “normal” lending environment, we may have a mini-boom of projects getting launched, considering the pent up demand. Very worthy projects that in any other circumstance would already be underway (like Two Tabor, for example) will finally get their financing and begin construction. Let’s hope that happens anyway.
The lack of blogs from me lately has also been influenced by the fact that I’m a HUGE political junkie. With our national elections just around the corner, I find myself glued to websites like FiveThirtyEight.com and similar resources, particularly if there are lots of colored electoral maps, charts, and graphs (that’s my inner geek coming out). Nevertheless, I’ll be happy once the campaigning is over. Hopefully, by the time we get into 2009, we’ll see something resembling normalcy on the horizon and we can refocus on getting rid of those nasty surface parking lots Downtown and improving the condition of Denver’s urban core.
Today the US Census Bureau released their July 1, 2007 population estimates for both Incorporated Places and Counties. The results are quite interesting…
In looking at Incorporated Places (i.e. cities and towns), here are the 18 municipalities in the state with a population increase from July 1, 2006 to July 1, 2007 of 1,000 persons or more:
Denver led the state with a gain of over 12,000 people for the year, topping our little buddy Aurora by just over 4,000. I’m a bit surprised at the relatively small increase for Colorado Springs. At this rate, it appears Denver’s title as the state’s largest city will not be in jeopardy for quite a long time.
At the county level, here’s how things stacked up for the same 12-month period (15 counties in the state with a population increase from July 1, 2006 to July 1, 2007 of 1,000 persons or more):
Even at the county level, Denver was first in the state in numerical population growth, topping Douglas County, the growth machine to our south that consistently has been one of the nation’s fastest-growing counties. What’s also interesting is that, according to the Census Bureau’s estimates, Denver County regained the claim of most-populous county in the state from El Paso County, which had passed Denver up the year before. However, Denver’s lead likely won’t last, as El Paso County covers 2,129 square miles and Denver County covers only 156 square miles, of which a third is Denver International Airport.
Anyway, I find it amazing that Denver could lead the state in both city and county categories for annual population gain. What a turn-around from just twenty years ago!
I thought I would discuss a topic with which most of us Denverites are all too familiar: our boom and bust real estate cycles, and if we’re destined to repeat history again this time—or not.
The surge of real estate development in Downtown Denver is quite evident. Currently, we have 45- and 41-story buildings under construction plus a bunch of mid-rise buildings in the 5 – 32 story range under construction too, and a couple more 40+ story buildings scheduled to break ground in 2008. Add in the dozens of lower-scale townhome and condo buildings in our Center City districts like Highland, Golden Triangle, and Curtis Park, and we’re definitely experiencing a Downtown boom like we haven’t seen since the 1980s. Is all of this development just leading us into another bust, where we’ll experience a decade or more of development inactivity?
The other day I was chatting with my buddy Joe about our current Downtown boom and he brought up a good point I’d like to expand upon. Denver is obviously feeling the impact of the current credit/financing crisis. Today, most of our Downtown infill projects are having a hard time getting financing. Even developers with strong reputations and relatively deep pockets are currently finding it difficult to obtain funding for their projects. Other cities like Las Vegas, Miami, San Diego, and Phoenix boomed when credit was easy to get. They built more units than was justified, and now they’re paying for it through declining values and huge unsold inventories. Just as our boom was, well, starting to really boom, the credit crunch hit and has stalled many projects. Perhaps we should be grateful.
Joe and I speculated that if the credit markets were generous right now, Denver would be going through an even bigger boom than we already are. Downtown Denver would probably be going crazy with high-rise condo and office construction, only to leave us a few years from now in a position of over-supply and severely declining values. That is our history, after all. Instead, the credit crises has weeded out weaker projects and kept in check the number of new projects under construction. Our current Downtown real estate boom has been moderated, which hopefully will result in what Denver has typically failed to do on its own: maintain a healthy but measured, sustainable pace of new development over a long period of time. Maybe it took an external force like the national credit crunch to save us from ourselves and to interrupt what would have been our next Denver boom and bust cycle.
