DENVER | Main Development Thread #7

[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.

[gopokes21]

I would hate to see TakeFive or anyone banned. I'm actually pleasantly surprised by some of the vigorous discussions here.

I just don't care about AZ. Maybe that's a personal problem as someone who already fled TX. Like ew.

But this should really just be development news and discussion for the highest and bestest city in the nation.

[bunt_q]

Nevermind...

[TakeFive]

Reset - Refresh - Reinvest - Renew - Rinse - Repeat

https://www.bizjournals.com/denver/news/...uare-asana-partners-tennyson-street.html

Asana Partners, the North Carolina-based real estate firm that last year purchased Larimer Square for $92 million, is continuing to grow its Denver property holdings in another well-known retail district.

In early January, Asana paid $2.66 million for a single-story, 5,634-square-foot retail property at 3955 N. Tennyson St, according to property records.

Source

The company followed that purchase with the recent acquisition of the first-floor commercial unit of the Streetcar Lofts condominium building, located at 4144 N. Tennyson St., for $1.73 million, records show.

Photo courtesy Thomas Gounley - BusinessDen

In June 2019, Asana paid $1.8 million for the restaurant building at 4000 N. Tennyson St., home to Post Oak Barbecue

Source

In September 2019, the company purchased a building that includes two retail units at 3926 and 3930 N. Tennyson St. for $1.74 million.

Source

In early March 2020, the company acquired the property at 3963 N. Tennyson St. for $1.3 million.

Source

[SirLucasTheGreat]

.Denver City Council approves update to group living rules

https://www.9news.com/article/news/local.../73-d84d638b-8e59-424d-9aff-debb846376ea

[Robert.hampton]

Hey so can anyone riddle me how Denver's home prices are up 18% YoY alongside one of the highest unemployment rates in the country? Has covid made the unemployment numbers irrelevant since everyone moving to Denver is coming in from a white collar job in NYC and SF and thus aren't counted in Colorado's unemployment numbers? Whats going on?!!

[twister244]

Originally Posted by Robert.hampton

Hey so can anyone riddle me how Denver's home prices are up 18% YoY alongside one of the highest unemployment rates in the country? Has covid made the unemployment numbers irrelevant since everyone moving to Denver is coming in from a white collar job in NYC and SF and thus aren't counted in Colorado's unemployment numbers? Whats going on?!!

I think it might be a combination of several factors. Mortgage rates have been so low that folks are jumping on buying property if they have the means. It's interesting to note that rent in Denver hasn't gone up much at all over the last year, so maybe what's happening in addition to people moving here, is renters are graduating to buying homes now.

Supply..... We just aren't building housing fast enough here. This is anecdotal, in the Jefferson Park and Sloan's Lake area, but the amount of land available to build more "slot" homes and townhomes is quickly dwindling in these areas. My immediate neighborhood in Jefferson Park doesn't have much room left.... I suspect this is happening all over the city as we have built so much over the last 10 years. The other problem is there are large swaths of the city that never got upzoned last time around. I mentioned Jefferson Park and Sloan's lake (south of 20th, north of Colfax). As soon as you get north of 20th and west of Federal, nothing has changed as those houses can't be touched.


You combine this with (as you mentioned) folks moving in from more expensive coastal locations, and well, you have what's going on now. This is why I advocated for massive upzoning in Denver to help get the ball rolling on allowing more construction in other areas.

Oh, and it doesn't help that Denver's immediate neighbor to the west (Lakewood) now imposes a cap on new housing construction in a bid to become the next Golden and Boulder. Some of that pressure to buy new construction has probably spilled over into western Denver now.

[gopokes21]

High unemployment in Denver is the accumulated effect of consistently erring on the side of Covid caution for a whole year now. I think our Covid depression has been worse than others, although exactly like everyone said it's only relevant for the service sector and barely even touches our professional sector. Before the pandemic Denver actually ranked first nationally with work-from-home employees and I can't imagine that would change much.

CO ranks 1st among states, Denver 1st among MSAs, for remote working according to the Census
https://www.bizjournals.com/denver/news/...ads-the-nation-in-working-from-home.html

That said I expect Denver, having consistently had lower Covid numbers, to have an earlier and stronger recovery than other places with more lingering case volume.

Originally Posted by twister244

I think it might be a combination of several factors. Mortgage rates have been so low that folks are jumping on buying property if they have the means. It's interesting to note that rent in Denver hasn't gone up much at all over the last year, so maybe what's happening in addition to people moving here, is renters are graduating to buying homes now.

Supply..... We just aren't building housing fast enough here. This is anecdotal, in the Jefferson Park and Sloan's Lake area, but the amount of land available to build more "slot" homes and townhomes is quickly dwindling in these areas. My immediate neighborhood in Jefferson Park doesn't have much room left.... I suspect this is happening all over the city as we have built so much over the last 10 years. The other problem is there are large swaths of the city that never got upzoned last time around. I mentioned Jefferson Park and Sloan's lake (south of 20th, north of Colfax). As soon as you get north of 20th and west of Federal, nothing has changed as those houses can't be touched.

What's interesting is for-sale product keeps appreciating at a skyrocketing (alarming?) rate, but rents have actually been down by almost 10% across the city. Rental and for-sale product are exhibiting completely opposite trends. Further, the for-sale market places a significant premium on a Denver address; the rental market did the same until recently except now Denver rents have dropped more than suburbs.

The long-term money still wants to be in Denver whereas more mobile people are vacilating between downtown and burbs, which makes sense as 2020 life is definitely better in the burbs and most of Denver's selling points have been temporarily reduced.

The market is behaving like 2020 will be a fluke. In my neck of the woods, Cheesman/Congress Park - we're still being overran with scrape-and-build homes (huge awful shame IMO) on every block and the commercial corridors are all either a construction mess or a predevelopment mess. I think East Central (Santa Fe to Monaco-ish?) grows by at least another 25,000 people this next decade (the market area has already gone from 125,000 to 150,000 over the last 10 years).

We need citywide upzoning, more deliberate historic preservation targeting, affordable housing to mitigate displacement, better planning to enable more growth, and (not to beat a dead horse, but...) more infrastructure. The answer is more of everything not just any one thing.