DENVER | Main Development Thread #7

[TakeFive]

Source

Housing & Construction Costs; ADU's; Politics & Free Markets

Not familiar with Desiree Mathurin/Denverite but she has a well-written piece and update on the state of ADU's in Denver.

https://denverite.com/2021/09/03/denver-adus-how-much-do-they-cost-and-other-questions/

For example, Eric Dahm, a 53-year-old Globeville resident whose home was built in 1911, wants to build an ADU for his 83-year-old father. Dahm said later in life, he could see himself renting it out at an affordable rate or giving the space to his now 22-year-old son.

Extra space for relatives? Check. A possible source of additional income? Check.

Should be an economically-friendly way to create housing, No?

“The pandemic has increased the cost of materials,” Senderhauf said. Dahm, who’s working with Senderhauf on his ADU, said he was initially quoted around $280,000. After he received the permits, that cost went up to $350,000.

Consider that when building an ADU there's no need to purchase any land.

Trumpism & MAGA - Just making observations here

It's no secret (in hindsight) that largely b/c Dems tend to obsess over skin color, this made it easy for Trump to appeal to rural and evangelical white voters and non-voters. Non-voters are NOT considered likely voters by pollsters. Except Trump turned non-voters into voters. Maybe some day skin color won't matter? That's my dream.

MAGA impact on housing costs

In order to fulfill campaign promises Trump instituted a bunch of stupid (IMO) tariffs which appealed to the blue-collar home team crowd. Biden is in a bind. He can't remove tariffs for fear of having no chance with the blue-collar - Union Crowd. BTW, the conservative Tax Foundation was NOT in favor of these tariffs.

No more free lunch from free markets

Thinking especially of costs for steel, aluminum and lumber, between tariffs and the Pandemic supply disruptions costs have gone crazy. So it now costs $350,000 to build a plain vanilla with nice appliances ADU? Tariffs and Union-imposed costs of labor may make for good politics; it's hard for me to complain about the costs from hard-hat labor whether at steel mills or at a new home site but it's also fair to say We All pay a share of higher costs and they can add up fast.

Is the current cost of a house in Denver all that different from the cost of replacement, considering the increasing costs for materials and labor?

Land costs, desirability and zoning

Take a look at prices for new construction in the metro area to appreciate the value of land and desirability differences between say central & SE Denver and Commerce City - North Aurora. Zoning is virtually irrelevant. The key component is desirability since desirability also impacts land costs. Maybe consider turning central Denver into a toxic waste dump? That would impact desirability.

[Ndj]

Happy to see Evolve Towers is moving forward but I have a feeling value engineering is not going to be kind to that concept.

[Robert.hampton]

https://denver.cbslocal.com/2021/09/07/denver-shut-down-civic-center-park-safety-sanitation/

City shutting down civic center because it has become a literal shit hole.

I have mentioned before that it would be incredible to have a vision to turn civic center into Denver's version of millennium park -- and would really do a lot for the city by enhancing the experience at the intersection of the 16th street mall, the capitol, and the art museum/library/golden triangle. Civic Center should be the cultural lifeblood of Denver where business, arts, and politics all converge. Instead its the shittiest part of town that people try to circumnavigate getting from one location to the next (I understand millennium park was similar before its renovation in Chicago).

I would venture to guess the bond package would be far more likely to pass if it included $190 million to transform civic center instead of $190 million towards the national western complex that no one seems to want. Too bad between the mayors office and city council we have a bunch of visionless chumps who can't agree on whether or not we should actually clean up poop and needles off the sidewalk or not. RTD also has a fair share of the blame here for their awful Civic Center renovation that continues to leave that vacant hell strip along Colfax/Broadway (and their successful efforts to implode the bid for the medal of honor museum).

[RyanD]

Originally Posted by Ndj

Happy to see Evolve Towers is moving forward but I have a feeling value engineering is not going to be kind to that concept.

Hard to change it when it has to go through design review.

[Ndj]

Originally Posted by RyanD

Hard to change it when it has to go through design review.

Yeah but the new renders are already a significant downgrade to my eyes. With renders tending to be the most charitable version of reality, I don't have super high hopes for the final outcome.

[laniroj]

Originally Posted by Arapahoe

When banks don't require giant sums of cash equity upfront it makes it easier, not harder, for developments to move forward. Just think back to the financial crisis of 2008....

In theory you are correct. In reality, the fact someone is getting (or thinks they will get) 95% financing for a luxury multifamily rental is worrisome because either 1) they are getting it and it's a sure sign we're all going belly up very soon or 2) they are so inexperienced a developer that they felt making that public statement was a good idea which doesn't lend much credibility to this project moving forward (at least with this sponsor/developer). Hell, let's just bring back stated income loans for unemployed folks if we're handing out 95% financing to developers!

[Arapahoe]

Originally Posted by Ndj

Yeah but the new renders are already a significant downgrade to my eyes. With renders tending to be the most charitable version of reality, I don't have super high hopes for the final outcome.

I think this is really a confusion on viewing angles. The new render that Ryan posted on DenverInfill is a vantage looking northeast, whereas, the original render was a vantage looking northwest. Here they are for reference in the approved site development plan:

Orignal render from Northwest (still the current design!)


New render from Northeast (same building!)

[Ndj]

Ah that very well could be it.

[bunt_q]

Originally Posted by TakeFive

The key component is desirability since desirability also impacts land costs. Maybe consider turning central Denver into a toxic waste dump? That would impact desirability.

Originally Posted by Robert.hampton

https://denver.cbslocal.com/2021/09/07/denver-shut-down-civic-center-park-safety-sanitation/

City shutting down civic center because it has become a literal shit hole.

The City working hard to make TakeFive seem downright prescient.

I just assume we are on our way to some Denver-sanctioned version of the Purge. This just gives them time to install the livestream media infrastructure we'll need, since I assume Civic Center will serve as a sort of center stage for the action.

[bunt_q]

Originally Posted by Robert.hampton

I would venture to guess the bond package would be far more likely to pass if it included $190 million to transform civic center instead of $190 million towards the national western complex that no one seems to want.

I'm not sure I agree. I am not sure that a majority of Denver residents care if we abandon core Downtown permanently, in favor of a slightly less urban lifestyle on the fringes of Downtown (Highlands, RiNo, South Broadway, all fit the bill - that's where the action is). Especially in a remote-work post-COVID world, is there any need for Civic Center anymore, or is its best function to contain that scene? On the other hand, central (but not too central) playgrounds, like what the National Western Center could become, are exactly what a future City might need. We did a lot of that crap in the 60s, 70s, and 80s - self-contained, not-at-all-organic, entertainment districts - and they worked just fine. If you believe we are moving into a different phase of urban development in America - a phase of live-work in an environment that is dense enough to support neighborhood-feeling amenities, allow you to drive, and still be in contact with your fellow man, albeit in a fairly controlled environment (think LoHi), then I think National Western Center might be a good step in the direction Denver (and the Denver metro more broadly) are heading.

If you believe Downtown as we knew it is dead. Not saying I do. But I am saying I do not think Civic Center could get any more votes citywide than the National Western Center will. If it was that important to people, closing it for two months wouldn't be some passing headline.

[TakeFive]

Circle September 23rd, 5:30 - 7:00 PM on your calendar

Originally Posted by Robert.hampton

I have mentioned before that it would be incredible to have a vision to turn civic center into Denver's version of millennium park -- and would really do a lot for the city by enhancing the experience at the intersection of the 16th street mall, the capitol, and the art museum/library/golden triangle. Civic Center should be the cultural lifeblood of Denver where business, arts, and politics all converge. Instead its the shittiest part of town that people try to circumnavigate getting from one location to the next (I understand millennium park was similar before its renovation in Chicago).

https://denvergov.org/Government/Agencie...lanning-Development/The-Outdoor-Downtown

Public Workshop 3 | Sept. 23, 2021

Please join the final public workshop where you can review the preferred concept designs and provide feedback.

The workshop flyer is HERE.
HERE is a review of Workshop 2.

The Good News
is that lots of civic-minded people put their heads together toward the neglected needs of the Civic Center and as a result many projects were planned and paid for through the Better Denver Bond passed in 2007.

http://coloradopreservation.org/programs...gered-places-archives/civic-center-park/

In 2009, the city began a $9 million dollar rehabilitation project with funding from the “Better Denver Bond Program”, which followed the 2005 Civic Center Master Plan and supplemental 2009 design guidelines approved by the Denver Landmark Preservation Commission.

Restoration projects included re-establishing original walks, paths, and red oak grovs, rehabilitating the Greek Theater, Voorhies Memorial and Broadway terrace, and restoring Bennett’s original granite balustrade. The results are nothing short of remarkable

DenverInfill also followed many of these projects.


Source

[Robert.hampton]

Originally Posted by bunt_q

I'm not sure I agree. I am not sure that a majority of Denver residents care if we abandon core Downtown permanently, in favor of a slightly less urban lifestyle on the fringes of Downtown (Highlands, RiNo, South Broadway, all fit the bill - that's where the action is). Especially in a remote-work post-COVID world, is there any need for Civic Center anymore, or is its best function to contain that scene? On the other hand, central (but not too central) playgrounds, like what the National Western Center could become, are exactly what a future City might need. We did a lot of that crap in the 60s, 70s, and 80s - self-contained, not-at-all-organic, entertainment districts - and they worked just fine. If you believe we are moving into a different phase of urban development in America - a phase of live-work in an environment that is dense enough to support neighborhood-feeling amenities, allow you to drive, and still be in contact with your fellow man, albeit in a fairly controlled environment (think LoHi), then I think National Western Center might be a good step in the direction Denver (and the Denver metro more broadly) are heading.

If you believe Downtown as we knew it is dead. Not saying I do. But I am saying I do not think Civic Center could get any more votes citywide than the National Western Center will. If it was that important to people, closing it for two months wouldn't be some passing headline.

I think your average voter sees national western as a solution to a problem/opportunity that doesn’t exist. The mayor says ‘hey don’t you really need a place to serve the role that the Denver coliseum played for 50 years?!’ And nearly everyone roles their eyes and says ‘no I don’t need to go watch monster truck shows and I can still do that at the Denver coliseum’. I mean the pitch for national western really, really sucks.

Civic center park by contrast everyone is a problem that I think most people believe needs to be fixed if Denver wants to be a world class city. It’s hard to take pride on your city with the capital/civic center/library in its current condition. And if you tell everyone ‘we’re going to turn this place into the next Millenium park and make it a destination just like we did with union station’ anyone who has ever been to Millenium park or union station would say ‘shit yeah I would love that in Denver, especially replacing that rat hole’.

[wong21fr]

Originally Posted by Robert.hampton

Civic center park by contrast everyone is a problem that I think most people believe needs to be fixed if Denver wants to be a world class city. It’s hard to take pride on your city with the capital/civic center/library in its current condition. And if you tell everyone ‘we’re going to turn this place into the next Millenium park and make it a destination just like we did with union station’ anyone who has ever been to Millenium park or union station would say ‘shit yeah I would love that in Denver, especially replacing that rat hole’.

Yeah. Don’t see the current batch of woke council members pushing that vision it’s just like the Stock Show- a ploy for the evil developers to destroy old Denver (or some crap logic).

In all seriousness, Civic Center doesn’t need $100M in upgrades (though some additional public restrooms and retail spots would be nice) it needs 24/7 security and dedicated STAR teams. Make the place inhospitable to long term transient presence and their supporting cast of drug dealers and you can fill the remaining gap with event programming. Which is still probably too much for the woke crowd.

[TakeFive]

Originally Posted by bunt_q

I'm not sure I agree. I am not sure that a majority of Denver residents care if we abandon core Downtown permanently, in favor of a slightly less urban lifestyle on the fringes of Downtown (Highlands, RiNo, South Broadway, all fit the bill - that's where the action is). Especially in a remote-work post-COVID world, is there any need for Civic Center anymore, or is its best function to contain that scene? On the other hand, central (but not too central) playgrounds, like what the National Western Center could become, are exactly what a future City might need. We did a lot of that crap in the 60s, 70s, and 80s - self-contained, not-at-all-organic, entertainment districts - and they worked just fine. If you believe we are moving into a different phase of urban development in America - a phase of live-work in an environment that is dense enough to support neighborhood-feeling amenities, allow you to drive, and still be in contact with your fellow man...

This triggered a thought I had couple of week ago when I was doing some random searches.

It turns out that last year Scottsdale reversed the trend of apartments getting ever smaller. In2020, the average size of a new apartments in Scottsdale increased by over 200 square feet to 1140 square feet. Some of this would be attributable to new high end apartments but the presumption also is that they're thinking of those who need space to work from home.

It got me to wondering if pieces of Denver like Broadway Station or anywhere might look at this strategy for new apartments.

Originally Posted by Robert.hampton

I think your average voter sees national western as a solution to a problem/opportunity that doesn’t exist.

Civic center park by contrast everyone is a problem that I think most people believe needs to be fixed if Denver wants to be a world class city.

While there's clearly some focused opposition to the arena I wouldn't impute that to the average voter. My guess is that the average city-wide voter isn't even aware of or hasn't thought about the bond vote, yet. I'm anticipating a positive campaign ahead and how much of an impact that might have is hard to say.

It will be interesting to see if having 'Park Rangers' around the clock will make a big impact on the (non-green) seedy nature of things at Civic Park.

[Arapahoe]

Originally Posted by Robert.hampton

I think your average voter sees national western as a solution to a problem/opportunity that doesn’t exist. The mayor says ‘hey don’t you really need a place to serve the role that the Denver coliseum played for 50 years?!’ And nearly everyone roles their eyes and says ‘no I don’t need to go watch monster truck shows and I can still do that at the Denver coliseum’. I mean the pitch for national western really, really sucks.

Civic center park by contrast everyone is a problem that I think most people believe needs to be fixed if Denver wants to be a world class city. It’s hard to take pride on your city with the capital/civic center/library in its current condition. And if you tell everyone ‘we’re going to turn this place into the next Millenium park and make it a destination just like we did with union station’ anyone who has ever been to Millenium park or union station would say ‘shit yeah I would love that in Denver, especially replacing that rat hole’.

I totally agree with your perspective! I'm sure all the tech companies moving into the city, especially downtown, and thus driving our economy into the future do not relocate here because of a yearly cattle show or another arena for middle-aged rock stars. We need beautiful parks, safe streets and 5280 loop plus other resident infrastructure to stay competitive.

[Denver]

Originally Posted by laniroj

In theory you are correct. In reality, the fact someone is getting (or thinks they will get) 95% financing for a luxury multifamily rental is worrisome because either 1) they are getting it and it's a sure sign we're all going belly up very soon or 2) they are so inexperienced a developer that they felt making that public statement was a good idea which doesn't lend much credibility to this project moving forward (at least with this sponsor/developer). Hell, let's just bring back stated income loans for unemployed folks if we're handing out 95% financing to developers!

Zero percent chance they got a 95% LTC mortgage. I recently did a 100% preleased project with a credit tenant on a 15 year term and couldn’t get above 80% LTC. 95% does not exist. Especially in a class AA multifamily building in a B location (sorry stop Arapahoe square has too many issues to be class A).

[TakeFive]

Originally Posted by Arapahoe

We need beautiful parks, safe streets and 5280 loop plus other resident infrastructure to stay competitive.

Are you familiar with the specific projects on the 2021 RISE General Obligation Bond Program Project List? All the things you mention on on the list so I at least hope you'll vote for those.

Nobody loves parks more than I do and I've enjoyed most of Denver's parks over the years. Parks and Rec are always a BIG beneficiary whenever there's a bond proposal. Are you aware that Denver voters passed a dedicated .25% sales tax in November of 2018 specifically for parks? Most of the parks and places worth visiting according to Tripadvisor are outside of downtown Denver.

With respect to Civic Center Park, over the years it has hosted various annual events. It's the only space (that I can think of) on the edge of downtown that can accommodate setting up booths and thousands of people. That said if they want to make additional improvements that might be nice. They are currently looking into doing this but it's not on this year's ballot.

Denver doesn't need a new arena to have a music scene but are you familiar with SXSW? It's the magnet that brought Apple to Austin (1992) followed by Google, Facebook and others. SXSW while anchored by their music scene also includes other creative arts.

Denver does have several advantages. Many companies learn that Denver is an easy place to recruit employees from out of state. I'm not sure any of Denver's appeal goes to specific parks etc; it's more about the mountains and perhaps a Mile High vibe and (believe it or not) the the light rail system.

[Arapahoe]

Originally Posted by Denver

Zero percent chance they got a 95% LTC mortgage. I recently did a 100% preleased project with a credit tenant on a 15 year term and couldn’t get above 80% LTC. 95% does not exist. Especially in a class AA multifamily building in a B location (sorry stop Arapahoe square has too many issues to be class A).

I guess they could be making false statements to the media, but this is a quote from the developer:

“We have people literally coming out of the woodwork offering debt financing, up to 95% financing for debt for construction, which is unheard of. I mean, last year we would have been lucky to get 55% debt financing. We're looking anywhere between 75% to, like I said, we had one group approach us with 95% financing. So I think this is a whole different landscape than it was last year.”

[Arapahoe]

Originally Posted by TakeFive

Denver doesn't need a new arena to have a music scene but are you familiar with SXSW? It's the magnet that brought Apple to Austin (1992) followed by Google, Facebook and others.

Not sure what point you are trying to make. Are you aware Facebook & Amazon have offices in downtown Denver and Google is in Boulder? Denver just nabbed the HQ for Palantir among several other tech companies adding HQ2s in downtown Denver.

SXSW requires hotels, restaurants, convention center, performance theaters and many smaller venues. We have this downtown, not way over in the NWC.

While the mountains are the big headline attraction when people think of Denver, its quality of life and relative affordability that really counts for companies & people deciding to relocate. Denver area has fantastic cultural, sports, and academic institutions. We need to work on keeping our streets clean and will support all measures on the ballot that do so.

[bunt_q]

Originally Posted by Arapahoe

SXSW requires hotels, restaurants, convention center, performance theaters and many smaller venues. We have this downtown, not way over in the NWC. .

This is incorrect - there have been plenty of discussions about how to attract (or more likely, create) a SXSW like event in Denver. Downtown can’t support it - the venues aren’t right. The NWC campus, if fully built out, could (not just in the big arena - there are something like 10 different smaller arenas and event spaces on the campus at buildout). Hosting major events other than the stock show was always specifically part of the plan for the campus. And the proximity to Mission Ballroom and other budding venues in RiNo makes that all the more likely to occur up there. Downtown is not where this sort of event ends up in today’s (or tomorrow’s) Denver) Quote all the tech companies you want - there are only 3x major events booking companies out there anymore, they know their business, and they are all more interested in that part of town than downtown.

Not suggesting we do not need to keep the streets clean. Only suggesting you have an incorrect vision of what the NWC is supposed to be. (Which isn’t surprising because the City couldn’t possibly do a worse job of explaining “why” this bond package than they have.)