Here's a condo story right next to Union Station:
The final act in Union Station's rebirth is going to be a big one: a 19-story, 342-unit condominium tower offering up the first and only new for-sale housing in the booming neighborhood.
Denver's East West Partners and Amstar Advisers are joining forces to develop the project on the final open parcel near the bustling transportation hub, a narrow 1-acre block at 1750 Wewatta St., between the train platform and the Whole Foods-anchored Pivot Denver apartment complex now under construction.
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Bucking the trend of recent projects, the $200 million Coloradan will also be the first downtown condo development since 2009 to include an on-site affordable housing component under the city's Inclusionary Housing Ordinance. The rule was revised in 2014to give developers more incentive and flexibility to include marked-down units in their projects.
In The Coloradan — a high-rise with everything from studio "crash pads" to luxury penthouses and prices ranging from $250,000 to $3 million — 10 percent of the units will be income-restricted and sold at below-market rate, East West managing partner Chris Frampton said.
"We worked really hard under the new ordinance with the Office of Economic Development to figure out how to get those homes built in there," Frampton said. "We're pretty psyched that we will have them available."
"Downtown is for everybody," he said.
Mayor Michael Hancock, who has pledged to step up Denver's affordable housing efforts in his second term, said he hopes The Coloradan can become a model for future projects.
"It can be done and you can find a way to have affordable housing within the modeling of your project," Hancock said. "When you look at East West Partners and Amstar, you're looking at two very credible, forward thinking, bold, courageous developers. It doesn't surprise me at all that they've found a way to make this work."
The Inclusionary Housing Ordinance, first approved in 2002 and revised last year, requires all new for-sale housing developments in Denver with 30 or more units to set aside 10 percent of them for income-qualified buyers.
Developers have a few options for compliance, though. They can follow the letter of the law; work with the city to devise an alternative plan to provide affordable units; or make a cash-in-lieu payment, equivalent of up to 70 percent of the affordable sales price per unit.
For those who include affordable homes on site, the city provides incentives of up to $25,000 per unit, depending on the neighborhood.
In recent years, however, nearly all downtown projects have elected to make cash-in-lieu payments, including the One Lincoln Park, Four Seasons and Spire high rises. Together, the three projects paid the city $4.45 million rather than provide 77 affordable units, according to an October report from the Denver Office of Economic Development.
The last project in the downtown area to offer marked-down units on site was Grant Park in 2009, with the Uptown project providing 11 condos. Before that, the Jack Kerouac Lofts behind Coors Field provided six units in 2005.
Based on current plans, The Coloradan could easily double the number of affordable homes built downtown under the ordinance over the last 10 years.
In the Union Station area, where luxury apartments, retail and office buildings have risen at a dizzying pace, demand is there for condos, Amstar managing director Kim Sperry said.
"While there is a fundamental shift in rental trends, we believe the dream of home ownership is still alive," Sperry said in an e-mail. "An incredibly diverse group of people want to live in this vibrant, urban environment."
Development of condos has all but dried up in metro Denver, though, with builders blaming the state's construction-defect law for creating an environment so fraught with legal liability that projects aren't worth it.
Frampton said East West and Amstar are confident they can make condos work at Union Station.
"We've spent a lot of time analyzing the issue and trying to figure out how to manage it correctly," Frampton said.
An experienced condo developer, East West was the driving force behind the development of 900 units in Riverfront Park, as well as multiple projects in the Vail Valley and Summit County.
East West is also the master developer of the Union Station neighborhood, charged with overseeing the development of the entire 14-block area in conjunction with Continuum Partners.
"The key for us is, (a) to build a great team to build a great project, and (b) to fix the things that are broken and have a great process in place when there are gray areas so we can deliver on the promise to homeowners and protect the value of their homes," Frampton said.
They will be watching Denver's efforts to address the defect issue on a local level, too, he said.
The Denver City Council could vote Nov. 23 on an ordinance that would make it more difficult for homeowners to sue condo builders for construction flaws.
If approved, Denver would join Lakewood and a number of other suburban communities in taking local action after years of waiting for state lawmakers to approve reforms.
"I think we're pretty comfortable with where we are, but we are eager to see what they do," Frampton said.
GBD Architects of Portland, Ore., is designing The Coloradan building, with construction projected to start next summer and finish in 2018.
Proposed amenities include 19,000 square feet of ground-floor retail, a 452-stall parking garage, rooftop pool deck and club room, fitness room and residents' garden.
Hancock said it's the affordable housing component that is truly the project's "golden nugget."
"It's critical that we have access to this kind of diversity of housing in the area," the mayor said. "That's the hallmark of every neighborhood, every great neighborhood, whether you're in Denver or L.A."
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