DENVER | Main Development Thread #7

[TakeFive]

Originally Posted by wong21fr

Because you're next to CA, but you're not in CA. AZ is CA's Mexico: cheap labor, lower cost of living, a lighter regulatory load, and well within easy transportation distance.

Exactly! Thanks for confirming much of what I was saying. (And it has nothing to do with me being a 'boomer.')

Yes, I agree the proximity to SoCal is beneficial. Could have gone to Nevada; could have gone to Tijuana or Mexicali, Baja or Nogales, Sanora too. Phoenix does have a lot of people so that was also relevant. The question is why the difference is so great between Denver and Phoenix.

[wong21fr]

Originally Posted by TakeFive

Exactly! Thanks for confirming much of what I was saying. (And it has nothing to do with me being a 'boomer.')

Yes, I agree the proximity to SoCal is beneficial. Could have gone to Nevada; could have gone to Tijuana or Mexicali, Baja or Nogales, Sanora too. Phoenix does have a lot of people so that was also relevant. The question is why the difference is so great between Denver and Phoenix.

I thought you were trying to paint a picture of why Ball Corp would put a can manufacturing facility in Phoenix instead of Denver?

Population within 400 miles of Phoenix: ~35 million
Population within 400 miles of Denver: Cows

Both can serve as regional hubs, but the surrounding population density is vastly different. Which affects the kind of operations will find the areas attractive.

Phoenix is better situated for consumer/service based industries given the large population in the geographic area. It also has the benefit of investing in certain industries such as chip fabrication. It has more of a modern industrial base than Denver.

[The Dirt]

TakeFive, here's a lesson in brevity. There is no balance. The housing market is severely under supplied.

Originally Posted by EngiNerd

[gopokes21]

Originally Posted by TakeFive

Denver one of worst cities for construction job loss, association says
Posted: Feb 2, 2021 by: Dan Daru - KDVR

This suggests that Denver was seen (last year) as being near equilibrium by developers. There was, at least in the central city, a lot of projects under construction; many that were in the 'finishing' phase and fewer projects coming out of the ground.

I wonder if some of these construction jobs are being automated or if Davis Bacon requirements are just putting the work out of reach for many subs. Here's an article effectively refuting the above, stating that Denver actually bucked the trend with significant growth in construction starts.

https://www.bizjournals.com/denver/news/...ial-multifamily-housing-starts-2020.html

I think when you get these counterbalancing viewpoints and articles the best way to settle these things is to take a drive and look around. There is nothing but construction everywhere you look around Denver.

[EngiNerd]

Originally Posted by gopokes21

I wonder if some of these construction jobs are being automated or if Davis Bacon requirements are just putting the work out of reach for many subs. Here's an article effectively refuting the above, stating that Denver actually bucked the trend with significant growth in construction starts.

https://www.bizjournals.com/denver/news/...ial-multifamily-housing-starts-2020.html

I think when you get these counterbalancing viewpoints and articles the best way to settle these things is to take a drive and look around. There is nothing but construction everywhere you look around Denver.

Anecdotal, but I am in the construction industry and work for a top CO structural and civil engineering firm...we are as busy as ever, and so are most of the contractors I talk to. I keep being surprised by these articles about construction job losses in Denver.

It's possible like you say that a lot of projects went on temporary hold in March/April (they did) but most have since kicked back off again. The job loss article appears to be only looking at March/April in their report, but it's difficult to tell.

[bunt_q]

Originally Posted by gopokes21

Seattle.

3.15 miles for $1.9 billion, of which half came from FTA. Doable.

Well, Sound Transit built that, and their service area has a population of 3 million. Not 750,000.

But I'll concede, 3 miles we could do. (I'll also ignore that there aren't a ton of $800 million FFGAs out there, but fine, assume we could get FTA to chip in.) We could do one of those.

3 miles doesn't change a damn thing transportation-wise anywhere you put it in Denver. But yes, we could afford a downtown transit tunnel. That's about it, and you'd still have to connect into it with something. Show us where you'd do your $2 billion tunnel that would transform transportation for central Denver as you have been describing.

I'd love to see this $2 billion game-changer for Denver drawn on a map. I'll give you a deal - if you can revolutionize Denver transportation with $2 billion, I'll make it happen for you. Not just on this forum; in the real world.

Originally Posted by gopokes21

But I guess it's more fun to choke on the thought of one funding source and the world's worst public financing plan.

What are you referring to?

Originally Posted by gopokes21

Meanwhile I guarantee you a billion here and a billion there will be put toward something that isn't even on the radar today.

Locally? How many billion dollar projects can you name in Colorado? I am pretty sure there have been two. I did one, and my partner did the other, so...

[TakeFive]

Originally Posted by EngiNerd

Anecdotal, but I am in the construction industry and work for a top CO structural and civil engineering firm...we are as busy as ever, and so are most of the contractors I talk to. I keep being surprised by these articles about construction job losses in Denver.

It's possible like you say that a lot of projects went on temporary hold in March/April (they did) but most have since kicked back off again. The job loss article appears to be only looking at March/April in their report, but it's difficult to tell.

Good points.

I was also wondering if how each accounts for starts etc might be a thing - but the Negative report not following along through whole year makes lots of sense to me.

Originally Posted by gopokes21

I wonder if some of these construction jobs are being automated or if Davis Bacon requirements are just putting the work out of reach for many subs. Here's an article effectively refuting the above, stating that Denver actually bucked the trend with significant growth in construction starts.

Good post.

With respect to Davis Bacon requirements, that applies to Federally funded projects. Additionally, I think the "local prevailing wage" applies as well. It has a complicated history according Wikipedia.

[bunt_q]

Originally Posted by gopokes21

When I have heartburn over how little Denver has to show for $7 billion in FasTracks, which should have resulted in less cars not more cars, at least we haven't flushed as much money down the drain as DART.

Catching up, been a busy week.

This I agree with!

Originally Posted by gopokes21

Not exactly true. New bond issuances have been delayed due to instability in the bond market. Pricing makes a huge difference so they're actually very smart to delay things and try to hit the most favorable bond market timing.

Who has delayed a bond issuance? Nobody locally. If anything, everybody is accelerating before the revenue dips of 2020 start to show up. Delaying is idiotic. If you can hit the market now, pricing is GREAT; money is free.

The ONLY credits that are delaying are hotel (and similar) taxes. (I even have one hotel that'll close this year.) The bond market is bonkers. Pay-go capital projects are nearly completely gone.

Originally Posted by gopokes21

That last point was a bit of a red herring but the overall point is that money isn't a problem in the big picture, and that it's difficult to define due to all of the various revenue streams, bond issuances, PPPs, let alone what is and isn't included in the city budget.

It's not difficult to define at all if you know what you are doing. (The City has exactly zero PPPs, and few and very easily tracked bond issuances.)

[bunt_q]

Originally Posted by EngiNerd

Anecdotal, but I am in the construction industry and work for a top CO structural and civil engineering firm...we are as busy as ever, and so are most of the contractors I talk to. I keep being surprised by these articles about construction job losses in Denver.

It's possible like you say that a lot of projects went on temporary hold in March/April (they did) but most have since kicked back off again. The job loss article appears to be only looking at March/April in their report, but it's difficult to tell.

My take: Public projects are slowing; more lag, but without a federal infusion, next couple years could be bleak. Private is as robust as ever.

[TakeFive]

Originally Posted by bunt_q

Locally? How many billion dollar projects can you name in Colorado? I am pretty sure there have been two. I did one, and my partner did the other, so...

You have a partner in crime? Oh my.

Originally Posted by The Dirt

TakeFive, here's a lesson in brevity. There is no balance. The housing market is severely under supplied.

That's like a poll. You know how accurate the political polls were?

The more important question is Why? That is what I tried to address/explain.

Originally Posted by wong21fr

I thought you were trying to paint a picture of why Ball Corp would put a can manufacturing facility in Phoenix instead of Denver?

Yes and no, but your POV is totally valid from a "strategic" POV.

My point and your point are not mutually exclusive. But my point went more to why Phoenix has affordable housing and Denver's housing is so scarce in general and devoid of 'affordable' housing in particular.

Found these interesting numbers:

According to the Denver Post, the Denver MSA grew by 36,000 people last year.

As of July 1, the estimated population of the Denver-Aurora-Lakewood metropolitan statistical area was 2.97 million, up 1.2% in the prior year.

Including Boulder County the growth was also 36,000. (not sure how that worked out like that but that's my calculation)

The more commonly known seven-county metro area — Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas and Jefferson counties — had an estimated population of 3.23 million, up 1.1% in the prior year.

Maricopa County which is most of the Phoenix metro area grew last year by 83,011 people. So even though Phoenix added over 2.5X as many people as Denver metro it remains affordable - although prices did appreciate ~8%.

Back to watching Ozark on Netflix.

[EngiNerd]

Originally Posted by bunt_q

My take: Public projects are slowing; more lag, but without a federal infusion, next couple years could be bleak. Private is as robust as ever.

Agree on the public projects, will mean more companies fighting or fewer public jobs. As long as the private market holds out we (construction industry) will ride through this OK, but it's really tough to tell right now.

[TakeFive]

Source

Originally Posted by EngiNerd

Agree on the public projects, will mean more companies fighting or fewer public jobs. As long as the private market holds out we (construction industry) will ride through this OK, but it's really tough to tell right now.

Who knows the poker hand they're playing but it appears that Biden/Dems intend to take their $1.9 Trillion Stimulus Package through reconciliation. That means NO infrastructure bill this year - and next year is an 'election year' when things are even harder to pass.

Biden's a NE guy as are many Dem special interests. A lot of the Stimulus is designed for the benefit of Blue state's 'fondest desires' (especially in the NE). Even if the money get's spread around, what could possibly go wrong when the government starts dropping that much money from helicopters. Money would be better spent on infrastructure; that's a multi-decade investment and infrastructure is what growing states and cities need the most.

Originally Posted by gopokes21

I wonder if some of these construction jobs are being automated...

I've read about it but so far there hasn't been much, at least on-site.

Politico has an interesting piece about automation though.

[bunt_q]

Originally Posted by TakeFive

. Even if the money get's spread around, what could possibly go wrong when the government starts dropping that much money from helicopters. Money would be better spent on infrastructure; that's a multi-decade investment and infrastructure is what growing states and cities need the most.

There's plenty of scope for spending a billion or two dollars on completely worthless infrastructure too. (Boulder rail comes to mind. I am sure every state has one or two of those and presto, you've got a $1 trillion "green" infra package in no time.)

[bunt_q]

Originally Posted by gopokes21

I wonder if some of these construction jobs are being automated or if Davis Bacon requirements are just putting the work out of reach for many subs.

Local minimum wage in Denver is crossing over now and is higher than Davis-Bacon wage (or getting real close to flipping) in many cases.

[gopokes21]

Thus the issue with Davis Bacon is more regulatory compliance than financial hardship.

Originally Posted by bunt_q

Who has delayed a bond issuance? Nobody locally. If anything, everybody is accelerating before the revenue dips of 2020 start to show up. Delaying is idiotic. If you can hit the market now, pricing is GREAT; money is free.

The ONLY credits that are delaying are hotel (and similar) taxes. (I even have one hotel that'll close this year.) The bond market is bonkers. Pay-go capital projects are nearly completely gone.



It's not difficult to define at all if you know what you are doing. (The City has exactly zero PPPs, and few and very easily tracked bond issuances.)

A delayed bond issuance:
https://www.bizjournals.com/denver/news/...western-center-bonds-delayed-denver.html

And we have tons of P3s. FasTracks was a P3. National Western. DIA. CDOT toll lanes. River Mile (we will be paying $100s of millions for the low-water dams on the South Platte). And on and on.

It seems like a lot of you have these weirdly narrow ideas of what is happening and accuse anyone with a broader perspective of lying.

[wong21fr]

Originally Posted by gopokes21

A delayed bond issuance:
https://www.bizjournals.com/denver/news/...western-center-bonds-delayed-denver.html

And we have tons of P3s. FasTracks was a P3. National Western. DIA. CDOT toll lanes. River Mile (we will be paying $100s of millions for the low-water dams on the South Platte). And on and on.

It seems like a lot of you have these weirdly narrow ideas of what is happening and accuse anyone with a broader perspective of lying.

Oooooh..... this should be good.

[TakeFive]

Waste Not, Want Not

Originally Posted by bunt_q

There's plenty of scope for spending a billion or two dollars on completely worthless infrastructure too. (Boulder rail comes to mind. I am sure every state has one or two of those and presto, you've got a $1 trillion "green" infra package in no time.)

There are also creatively good ways of handling helicopter money.

Voila
https://www.fox10phoenix.com/news/congressional-dems-ask-ducey-to-explain-use-of-covid-19-cash1

[Governor] Ducey used more than 20% of the $1.86 billion the state received in federal CARES Act relief to backfill agency budgets, allowing them to return cash to the general fund.

The strategy contributed to a major state budget surplus that the governor now wants to use to cut income taxes by $600 million a year. He also plans to use $134 million in remaining federal cash to boost the state unemployment insurance fund, allowing businesses to avoid a small increase in the rate they pay to the program.

Off topic - but company required payments for the unemployment insurance fund is where Arizona has a Big competitive advantage over Colorado. AZ is rated 13th (Texas is rated 18th) most favorable to businesses while Colorado is rated 40th. See cool map HERE.

BTW, I recently drove AZ's new Diverging Diamond Interchange. I see where CDOT built one of these in the metro area with the McCaslin Bridge over U.S. 36 at the Louisville-Superior exit. It was really weird at first. As I drove the interchange from all directions I began to get a feel and why it made sense, why they build these gems.

[TakeFive]

Begs for clarification, eh?

Originally Posted by wong21fr

Oooooh..... this should be good.

Look at it his way: At least gopokes21 is in the ballpark which means he knows more than most people - although a little knowledge can also be a dangerous thing.

Originally Posted by gopokes21

A delayed bond issuance:
https://www.bizjournals.com/denver/news/...western-center-bonds-delayed-denver.html

Fair enough - but as the article points out this was specific to that one project.

Every bond issuance legally requires a risk assessment analysis. The National Western Center bonding does/would rely on Denver city tourism taxes to make payments. Given that tourism taxes fell like a rock last year raises red flags. Given that there are other (prior) city bonded projects that also rely on tourism taxes, they would (presumably) have a priority position over any new issue for payback. It was obviously wise for the city to postpone the next bond issuance so they wouldn't get caught not having the funds to meet bond obligations.

Originally Posted by gopokes21

FasTracks was a P3.

Not exactly.

The W Line, the R Line, the N Line and the B Line are NOT P3's. Only the A Line and the G Line are a P3. bunt (or wong) can better explain 'The Whys' for creating a P3.

EDIT: The B Line became an Add-On to the design-build-manage portion of the P3 contract. RTD funded the B Line from a separate account.

[gopokes21]

Oh my god. This is why you don't engage on internet forums.

Someone says "We have never delayed a bond issuance locally." I provide evidence that the city literally did just that and now you say "that was specific to one project."

You say we don't have any P3's. Then I say FasTracks was a P3 and then you say "well actually only the A, G, and B lines."

I'm not even sure what the point is any more. Are you all playing poor or do you now realize that there's a lot of resources, and MUCH more than just local dollars, flowing and routinely available for these types of projects?

I also never thought it would be so controversial to suggest that Denver's infrastructure needs to catch up to the pace of development, but holy crap I guess I should take that back or else I'll be subjected to more posts about small scale freeway exit projects or warehouse farms and whatnot in Phoenix? I for one am glad that Colorado is not competing for low-cost economic development but rather higher-value stuff and social equity stuff.

edit: I didn't mean the above as a personal attack or even a dig on AZ but just my honest response to so much about AZ in this thread from one poster, which others have called out back when I just lurked here.

[The Dirt]

TakeFive just likes to insert himself into every discussion because he's under the impression that this is he personal blog page. Unfortunately, he's not annoying enough to be banned, so here's hoping that he develops carpel tunnel or cataracts or something.