DENVER | Main Development Thread #6

[TakeFive]

Originally Posted by DenverInfill

http://denverinfill.com/blog/2014/12/new-central-downtown-project-le-meridienac-hotels.html

I remembered reading that but didn't double check what was stated. But that's how I remembered the separate entrances.

But today's announcement says 18 stories as apposed to 20. Your writeup also states 480 rooms as apposed to 11 more in the DBJ - not that this is very important. But how are the brands configured: side by side or one over the other?

[DenverInfill]

When we did our DI post on the project back in December, we reported the number of rooms they (White Lodging) were reporting on their website. It's certainly not unusual for those numbers to bounce around a bit while the design is being finalized.

Regarding the floor count: the rendering included in the DBJ and DP articles is the same as the one we had in December, which clearly shows 20 stories. So if it is 18 now, they haven't updated their renderings.

[wong21fr]

The Office of the State Architect completed a Master Plan for the State Capital Complex late last year. You can check it our here:

https://www.colorado.gov/osa/ccmp

The plan authors looked at the cost-feasibility of the state continuing to least the 700K or so of space that it currently does and determined that it was beneficial for the state to own the buildings outright. But due to the ramp up in CBD real estate prices, it's now more cost-effective for the state to build a new building than to buy the two existing ones, 1560 Broadway and the Denver Post building, where they currently have leases and which are closest to the Capital. So, the old proposal for a new State office building at the corner of Colfax and Lincoln seems to be back on the table.

[seventwenty]

Metro Denver struggles with a record low supply of homes for sale

Originally Posted by Denver Post

Just when the supply of homes available for sale in metro Denver seemed like it couldn't possibly go any lower, it has gone lower — a lot lower.

Metro Denver's inventory of homes for sale busted through new lows in December and January and could do it again in February, and that has left buyers frenzied, even desperate.

After slipping below 5,000 in December, the number of homes available for sale stood at only 4,171 at the end of January, according to the Denver Metro Association of Realtors, or DMAR, which uses a wider 11-county definition of the metro area.

So how low is 4,171? It is only one-eighth of the all-time high inventory of nearly 32,000 in the summer of 2006, during the housing bubble, and a quarter of the 12-year average of 16,717 homes available for sale at year-end.

For reference supply and sales since 2007:



Click to embiggen.

And from 2012:



Both from Inside Real Estate News

One final read on the challenges that a booming Denver economy has for us young assholes:

Originally Posted by Inside Real Estate News

Millennials also are shaping up to be the best educated generation in U.S. history.

But the education has come with a price. Literally.

Nationally, student loan is more than $1.1 trillion, more than tripling during the past decade, she said.

That makes it challenging for many Millennials to qualify to buy a home. That is one of the factors driving the apartment boom in Denver, she said.

Residential construction in the Denver area is finally back up to historically normal levels, however.

The big difference is that 50 percent of the building permits are for rental apartments, double the normal ratio of 25 percent, she said.

Not only are Millennials forced to rent because they can’t afford to buy a home, but there are few homes — for anyone — buy.

And one final PPT slide:

[TakeFive]

Heh bro... Really nice post. A few rambling thoughts.

This is the historical time of the year when listings start ramping up and can ramp up dramatically.

I still think the energy soft patch is coming but it's probably still six months or so ahead of us.

All the more reason for urgency in passing the the condo construction-defects changes. Come on Dems get it together.

Good incentive for builders to increase their inventory of homes under construction. Another reason to pass the the construction-defects bill so condos can become a part of TOD's and infill developments in Lakewood , Arvada, etc. Builders would also include them in their mix with new developments.

I hate to push buyers out to the suburbs and more sprawl but to an extent it will be needed and affordability beckons.

[enjo13]

Well...this exists.

http://denveroutfill.com

[Brainpathology]

Originally Posted by enjo13

Well...this exists.

http://denveroutfill.com

It's ok.. the posts could be a little more compact with more info per word maybe. The links to other parts of the site take a little while to find and navigate. On the plus side it's not crowded with too much information yet and there seems to be plenty of space for comments.

[Cirrus]

Originally Posted by enjo13

Well...this exists.

http://denveroutfill.com

There's a separate thread about this. Let's try to contain the discussion about it there.

Discussion about suburban developments themselves can still go here, if people want.

[enjo13]

Originally Posted by Brainpathology

It's ok.. the posts could be a little more compact with more info per word maybe. The links to other parts of the site take a little while to find and navigate. On the plus side it's not crowded with too much information yet and there seems to be plenty of space for comments.

[Denverite]

I've been fascinated by this debate. According to the news, Colorado's Construction Defects Law is looking to be debated once again and modified in favor of developers, but I got to ask the experts here, getting right down to it, what is the problem? Why shouldn't homeowners be able to easily sue builders for terrible work? Allowing a Contractor the "right to fix" does seem reasonable, but why should the liability and cost for shoddy work not land on the Contractors? Don't these projects come with some warranty? I'd like to see more high rises built too but is it *really* all about this law? Having worked in construction I can attest that contractors will often cut corners and hire workers who don't know what they're doing. That's a problem that transfers to the Owner and those who invest in their homes, and it shouldn't. At this point I continue to support the law. Someone change my mind.

[TakeFive]

Denverite... Coming down on both sides of the issue, I'll give it a stab. I'm all in favor of solid quality developments which doesn't have to mean expensive. It should mean not shoddy cheap.

bunt_q can speak to the development side better than I but when the biggest winners are the lawyers and the biggest losers are the builders then: Nobody gonna build. That's the current bottom line. Exception possible for high end stuff.

In theory at least enforcing building codes would be the best route to happiness but that model just has never been sufficient or worked very well. It would still be the best answer. An ounce of oversight and prevention... as they say.

In theory at least, Unions could be a key contributor by providing competent experienced workers. But that model has never worked (very well) either. It's always been an adversarial relationship rather than a "having the same goal" relationship. It ends up as more of a political squabble than meaningful quality and efficiency efforts.

Quality construction is a legitimate concern and worthwhile debate to have since today's shoddy construction will be tomorrow's ghetto housing. But any solution MUST be practical.

Downtown Denver is probably insulated for the most part as the regs and oversight are pretty good. What you want is institutional quality construction creating institutional quality investments. Again, this can still reflect different price points. From all appearances Denver is getting this.

The problems can arise when you go off-Broadway so to speak. In this day and age of speed and efficiency there will always be those whose objective is a quick profit with little regard to quality.

I'll put a wrap on this by saying unfettered free markets will end up in "Cowboy Capitalism" and create Great Recessions. Trying to create a liberal utopian system is just as stupid. A little common sense can go a long way and it makes no sense to so encumber builders that they just go elsewhere.

[bcp]

fair questions....

- right now, a suit can be brought very easily by an HOA, and without majority vote
- right now, developers / GCs dont have the right to TRY and fix the work first
- the cost of the shoddy work does not fall on the homeowner, it falls on the Dev / GC when they have a chance to fix it. if they don't fix it? i agree it should be a legal issue then.
- warranty is standard at 1-year in the industry, but lawsuits can go out 8 years
- changes to the current law don't really land everything on the developer's side...it just makes the system more reasonable, results in more fixing and less suing, yet still protects consumers.
- At the end of the day, the consumer will win as well because there will be more housing stock, more density, more walkability, and lower price options (when inventory raises enough).

hope that helps.

[bcp]

Originally Posted by TakeFive

Denverite...

I'll put a wrap on this by saying unfettered free markets will end up in "Cowboy Capitalism" and create Great Recessions. Trying to create a liberal utopian system is just as stupid. A little common sense can go a long way and it makes no sense to so encumber builders that they just go elsewhere.

Word!

[TakeFive]

The Denver Business Journal has their "Cover Story" on RiNo. Molly Armbrister has the (free) overview article HERE.

Business owners and residents in Denver's River North are busy determining the feasibility of three different specials districts that could help fund development in the neighborhood for years to come.

RiNo wants TO ORGANIZE. They're looking to establish Urban Renewal areas.

I'm sure it won't be long before "industrial grit" becomes Urban Chic and the next group of aspiring, starving artists will be looking for a new home. Will it be West Colfax or Wheat Ridge? Will they land on South Federal, West Alameda? Can Morrison Road be far behind?

[urbanAcheiver]

Originally Posted by TakeFive

The Denver Business Journal has their "Cover Story" on RiNo. Molly Armbrister has the (free) overview article HERE.

RiNo wants TO ORGANIZE. They're looking to establish Urban Renewal areas.

I'm sure it won't be long before "industrial grit" becomes Urban Chic and the next group of aspiring, starving artists will be looking for a new home. Will it be West Colfax or Wheat Ridge? Will they land on South Federal, West Alameda? Can Morrison Road be far behind?

Hopefully Wheat Ridge around 38th. West Colfax? No chance. Have you ever driven down that shanty town region? Nothing but used car dealership lots and pawn shops. There isn't even the infrastructure to get started if you're a starving artist.

It would be nice if some developers started building there. They could turn those sleazy motels into hostels. This would all be possible if it weren't for the public housing on 14th and Knox. Perhaps the adult book store up the road too.

[Denverite]

Originally Posted by bcp

- right now, a suit can be brought very easily by an HOA, and without majority vote

To me, this isn't a problem. Generally HOAs are out for their own community's best interests.

Originally Posted by bcp

- right now, developers / GCs dont have the right to TRY and fix the work first

To me , this is a problem. However, I question the GCs who state they were never given an opportunity to complete problems. I am willing to bet that the vast majority of defective construction issues involve the homeowner and/or HOA begging the GC to fix things but never getting a response - which is very common as GCs typically just hope things go away. Here's an example:

"After unsuccessfully negotiating with the general contractor to provide quality repairs, The Point filed a lawsuit in 2011."

http://www.westword.com/news/lawmakers-i...ce-construction-defects-lawsuits-6288212

That said, I am in favor of language that may involves a process to allow a GC to fix problems but that's assuming that the Developer/GC doesn't put a cheap band-aid over things. Typically, in my experience GCs actually do complete repairs (in the punch list phase) but if there's a fight over an issue there can often be an adversarial relationship. Frankly, GCs are often overly defensive about their own crappy work.

Third party inspection is key here, IMO.

Originally Posted by bcp

- the cost of the shoddy work does not fall on the homeowner, it falls on the Dev / GC when they have a chance to fix it. if they don't fix it? i agree it should be a legal issue then.

Seems to me that, really, the homeowner suffers the most in these construction defect issues and is likely to bear some cost whether it's in personal property loss, loss of work, insurance claims, and etc. let alone emotional stress.

Originally Posted by bcp

- warranty is standard at 1-year in the industry, but lawsuits can go out 8 years
- changes to the current law don't really land everything on the developer's side...it just makes the system more reasonable, results in more fixing and less suing, yet still protects consumers.

I'm on board with this.

Originally Posted by bcp

- At the end of the day, the consumer will win as well because there will be more housing stock, more density, more walkability, and lower price options (when inventory raises enough).
hope that helps.

I appreciate the feedback. I still call BS on this law as the reason for sluggish condo development. What about the hotels? Other private development?

And thank you too TakeFive. I think the best way to protect both the consumer and the GC is a qualified third party inspector.

[denconyny]

Originally Posted by Denverite

I think the best way to protect both the consumer and the GC is a qualified third party inspector.

Seems to be a good idea..... but.... sometimes these third party inspector folks can be bought off with big $$$$ that developers have.... and in one way or another, such will only add more costs.....

What the answer is to all of this.... I can't say that I know..... but I do agree that the homeowners have to have to advantage, since it's their hard earned income that profits the developers.

[Denverite]

Originally Posted by denconyny

Seems to be a good idea..... but.... sometimes these third party inspector folks can be bought off with big $$$$ that developers have.... and in one way or another, such will only add more costs.....

What the answer is to all of this.... I can't say that I know..... but I do agree that the homeowners have to have to advantage, since it's their hard earned income that profits the developers.

I suppose it's possible that an inspector may be "bought off" but that would obviously be highly unethical, if not illegal. As an engineer and former full-time construction inspector I've never witnessed anything like that myself. Particularly with these kinds of high-rise projects I doubt you'd come across this kind of collusion. Personally, I would be more concerned with things like just how qualified and/or intelligent is the inspector and the reputation of the company he/she works for. Also one inspector isn't able to see everything, though their duties typically require them to literally inspect EACH element of critical construction components and note their observations in writing as well as maintain a solid and fluent relationship with the GC. Usually the Developer is completely out of the picture at this level. It's all about the GC and their ability to do the work in a manner that is safe and sound.

[TakeFive]

Originally Posted by denconyny

Seems to be a good idea..... but.... sometimes these third party inspector folks can be bought off with big $$$$ that developers have.... and in one way or another, such will only add more costs.....

Or maybe just the opposite if you assume that a third party inspector represents the would-be homeowners. If a builder were to end up with a perfectionist, trying to build anything could become a fricken nightmare. No builder is going to subject himself to that kind of risk.

Denverite... Why would a condo construction defects law have any bearing on hotels or office etc. construction?

It's not that I don't have empathy for condo buyers; I do. But in the pursuit for perfection you'll end up with loopholes and vague language that can be contested. When it comes to things legal a word or two in one sentence can make all the difference pending the litigation of that language's outcome. Lawyers make their living off finding and exploiting these types of things.

Consider this. If Republicans attain majority (and I wouldn't blame them) you'll end up with something that allows builders to isolate the risk to one project and the assets of that one legal entity. The entity will be able to pay fees etc to an affiliated party with zero liability exposure. You'll end up with an empty pot to sue. Then what?

[Denverite]

Originally Posted by TakeFive

Or maybe just the opposite if you assume that a third party inspector represents the would-be homeowners. If a builder were to end up with a perfectionist, trying to build anything could become a fricken nightmare. No builder is going to subject himself to that kind of risk.

I'm not sure how it works in the high-rise world of things but a third party inspector typically has their own butts to protect every bit as much as their client who hires them. I don't discount that there is a good-ol-boy sort of collusion situation going on all over the place but I suspect that it's really not all that common and particularly rarer with projects of large magnitude like these. It's been my experience that inspectors are pretty much unbiased and unwilling to risk cooking the books.

Originally Posted by TakeFive

Denverite... Why would a condo construction defects law have any bearing on hotels or office etc. construction?

What I mean by that is say a new 60-story Hilton is built and has all sorts of construction defects like we're hearing from Penterra or One Lincoln Park. What is the difference between a development like that versus these condo projects? Do they have more, less, the same rights and the same protocol to recover their losses? Is it simply that the GC can be sued if one occupant of a condo project complains?

Originally Posted by TakeFive

It's not that I don't have empathy for condo buyers; I do. But in the pursuit for perfection you'll end up with loopholes and vague language that can be contested. When it comes to things legal a word or two in one sentence can make all the difference pending the litigation of that language's outcome. Lawyers make their living off finding and exploiting these types of things.

Nothing new here. Just look at what's going on with the ACA and the ridiculous lawsuits, repeals, and the Supreme Court fight over the Act's language. All too often litigation involves a plaintiff's own radical, ambiguous, and twisted interpretation on already well-defined language in the name of their own political bias and aspiration. Legal documents are filled with language that is implied within the context of the subject, but as long as we have lawyers we'll continue to have frivolous lawsuits.

Originally Posted by TakeFive

Consider this. If Republicans attain majority (and I wouldn't blame them) you'll end up with something that allows builders to isolate the risk to one project and the assets of that one legal entity. The entity will be able to pay fees etc to an affiliated party with zero liability exposure. You'll end up with an empty pot to sue. Then what?

Kind of sounds like Mitt Romney's MO. And I hope the Repubs don't gain the majority, for many, many reasons.

I still don't have a grip on understanding if the Colorado Defect Law is truly being abused and overused? Or is this a case of GC's not willing to step up and stand by their work because it costs them more money?