DENVER | Main Development Thread #7

[laniroj]

Originally Posted by bunt_q

You know how we know you haven't set foot in Denver in years? Defending DOTI. I am not sure even DOTI defends DOTI these days.

Spot on. Really, truly, honestly, I don't think there is a single fan of the DOTI institution. That includes city workers, citizens, developers and yes, even DOTI employees. The institution is immobile, unable to keep up with the pace Denver is on, and has turned into a static organization unable to make any decisions - they can't even agree on stuff internally. It's profoundly affecting the built environment in Denver.

Let me say it another way. There's a plethora of rules and regs which, if translated and applied to each site by empowered employees could work ok enough - give a little take a little. Unfortunately, the worker bees are not empowered and so they try to force everything into a manual of written words which can't possibly foresee every condition. So every project comes through and no single project fits the conditions, then DOTI clams up, wastes time, and sits on decisions until they get escalated to the top two or three people at DOTI who are reluctantly forced to make a decision or push you off into variance land (aka kill project).

[rds70]

Here are renderings of two of the projects planned along Lincoln Street:

700 Lincoln (18 stories, 325 units, 3,400 sf of retail, 205 ft tall):




800 Lincoln (18 stories, 332 units, 8,000 sf of retail, 205 ft tall):



Here is a massing study showing many of the buildings planned for the area:

[SirLucasTheGreat]

rds70 always delivers

[TakeFive]

The Sky is Falling

The question for Denver: "Is it in the form of snow?"

Apartment Investment Sales Grind To A Halt As Capital Costs And Vacancies Rise
November 1, 2022 By Dees Stribling, Bisnow National

Sales of U.S. multifamily assets essentially collapsed during the third quarter of 2022, according to the National Multifamily Housing Council Quarterly Survey of Apartment Market Conditions.

NMHC Chief Economist Mark Obrinsky cited the higher cost of debt and equity, along with generalized economic uncertainty, as the drivers of the slowdown. The survey also reported higher vacancies and slower rent growth compared with the second quarter.

Essentially, Buyers are now wanting better rates of return and Sellers aren't (yet) friendly to discounting their projects.

Cap Rate Anxiety Dragging Down Multifamily Market
October 30, 2022 Jarred Schenke, Bisnow Atlanta

Essentially, investors who normally like new construction have lost their appetite for investing in new projects primarily due the lack of visibility for interest rates and rates of return for new projects.

With respect to Denver

Despite a gazillion units supposedly under construction there has been a limited number of new units reaching completion and becoming available. As a result Denver's rents and vacancy are still solid.

A guess that Denver could still see specific projects break ground especially from longer term holders. I wouldn't be surprised to see new projects in some suburban markets like in Boulder County or Douglas County where they still suffer from not enough apartment units.

[TakeFive]

Originally Posted by laniroj

Spot on. Really, truly, honestly, I don't think there is a single fan of the DOTI institution. That includes city workers, citizens, developers and yes, even DOTI employees. The institution is immobile, unable to keep up with the pace Denver is on, and has turned into a static organization unable to make any decisions - they can't even agree on stuff internally. It's profoundly affecting the built environment in Denver.

I don't doubt there's cause for frustration and I assume every new project has questions come up, has glitches as they try to move forward.

Never in my memory has DOTI (or its previous equivalent) had such a large package of new projects dumped on them by the City and its voters. The Elevate Denver Bonds included nearly 500 project and the RISE Denver Bonds included an additional 80 project including offbeat stuff for the homeless etc. If they appear to be overloaded it's because they are.

Additionally every project currently under consideration or in the early phases of construction are dealing with nasty cost increases.

Just like President Biden or Mayor Hancock (or DOTI) everybody expects they should have some kind of magic wand they can wave.

[TakeFive]

Good Stuff

Originally Posted by rds70

Here are renderings of two of the projects planned along Lincoln Street:

700 Lincoln (18 stories, 325 units, 3,400 sf of retail, 205 ft tall):

800 Lincoln (18 stories, 332 units, 8,000 sf of retail, 205 ft tall):

----------------------------

Hotel rooms planned for upper floors of Evans School in Denver’s Golden Triangle neighborhood
November 1, 2022 By Thomas Gounley - BusinessDen via The Denver Post

1115 Acoma St


Image via Loopnet.com

Hotel rooms are planned for the upper floors of the historic Evans School in the Golden Triangle. An application submitted to Denver’s Landmark Preservation Commission, which will consider aspects of the project on Tuesday, specifies the planned use.

“An event space on the second level will host large gatherings,” the document states. “The remainder of the upper floors will house hotel rooms and hotel amenity spaces.”

The three-story former elementary school at 1115 Acoma St. was purchased in 2019 for $11 million by Denver-based development firms City Street Investors and Columbia Group. The city landmark built in 1904 has sat underutilized for decades, with sporadic use as office and event space.

The owners had debated between doing office space or hotel rooms on the upper floors. Guess they decided to proceed with the hotel concept.

[SirLucasTheGreat]

It's amazing how averse Golden Triangle developers are to new office construction. Oh well, hopefully a few more projects will break ground in the next few months. I can think of at least five multifamily projects currently under construction in Golden Triangle and two to three that seem on the precipice.

[laniroj]

Originally Posted by TakeFive

I don't doubt there's cause for frustration and I assume every new project has questions come up, has glitches as they try to move forward...

Don't need a magic wand, just a functioning government. It's not that they are frustrating for projects, it's that their process is entirely broken for all projects, including the plethora of their own that you spoke of. They need drastic change in that department. Not to mention they are still trying to plan infrastructure for a 1970's city when it's the 2020's and things have clearly changed.

[laniroj]

Originally Posted by TakeFive

The Sky is Falling

The question for Denver: "Is it in the form of snow?"

Apartment Investment Sales Grind To A Halt As Capital Costs And Vacancies Rise
November 1, 2022 By Dees Stribling, Bisnow National

Essentially, Buyers are now wanting better rates of return and Sellers aren't (yet) friendly to discounting their projects...

I propose a friendly wager on this topic for the forum. What's the over/under for how many projects break ground from the pre-affordable housing fee concept plan rush this summer? Anyone interested? Maybe RyanD or RDS70 can help us track it?

I'll peg my guess at 20% in the next 2 years.

[bunt_q]

Originally Posted by laniroj

I propose a friendly wager on this topic for the forum. What's the over/under for how many projects break ground from the pre-affordable housing fee concept plan rush this summer? Anyone interested? Maybe RyanD or RDS70 can help us track it?

I'll peg my guess at 20% in the next 2 years.

Is this wager based upon market demand, or DOTI and CPD's ability to process the deluge of applications? I am not sure they can process 20% in two years, no matter what is happening with underlying fundamentals or any attributes of the projects themselves.

My bet is under 5 projects total in real terms break ground within 2 years (from that batch, obviously not overall).

[wong21fr]

Originally Posted by bunt_q

Is this wager based upon market demand, or DOTI and CPD's ability to process the deluge of applications? I am not sure they can process 20% in two years, no matter what is happening with underlying fundamentals or any attributes of the projects themselves.

My bet is under 5 projects total in real terms break ground within 2 years (from that batch, obviously not overall).

Ugh. That might be a worse approval timeline than any of the interconnection queues in the United States.


On DOTI and CDP's project backlog- has there been any serious consideration for outsourcing as much of the planning as possible to clear out the back log? Or is the entrenchment of the rent-seekers too great to make that realistic?

[TakeFive]

So far as processing goes I'd guess it will be more about how many projects even push ahead with the process; it may boil down to whether they want to spend the money or not.

Two years is a pretty big window. While many proposals likely die on the vine, I'll guess maybe half of the projects will move forward; how many actually break ground may be different.

[RyanD]

Originally Posted by wong21fr

Ugh. That might be a worse approval timeline than any of the interconnection queues in the United States.


On DOTI and CDP's project backlog- has there been any serious consideration for outsourcing as much of the planning as possible to clear out the back log? Or is the entrenchment of the rent-seekers too great to make that realistic?

Initial review for major residential projects is over 15 weeks at the moment.

From DenverGov:

https://www.denvergov.org/Government/Age...anning-and-Development/Plan-Review-Times

Current Delays

Please be aware that plan reviews are currently taking much longer than usual to complete. Permit application volumes are higher today than they were before the pandemic while at the same time the city, like many employers, has been impacted by considerable staffing and hiring challenges this year.

What's Being Done

We are pushing forward with aggressive hiring and recruitment efforts to get teams fully staffed and trained.

We have hired and are now using third-party plan review services to assist with the backlog of applications. The immediate focus is on residential plan reviews.

We have shifted administrative resources to field the high volume of status inquiries from customers so that plan reviewers have as much time as possible to complete plan reviews.

In addition to these immediate efforts, the city is exploring process improvements to reduce resubmittals and limit the impact on customers of staff vacations or turnover. To that end, projects are reviewed in the order they were received by the next available staff member -- instead of being placed in a particular reviewer's "queue." This means e-permits will no longer list a specific reviewer for your project until one is available and the project has been officially picked up for review by that individual.

[Robert.hampton]

https://gazette.com/denver-gazette/sidew...ca0-5a13-11ed-953c-5bf1629fc1a1.amp.html

Pretty spot-on op-Ed from councilman Flynn on how half baked the sidewalk fee proposal is.

[UrbanT]

Originally Posted by Robert.hampton

https://gazette.com/denver-gazette/sidew...ca0-5a13-11ed-953c-5bf1629fc1a1.amp.html

Pretty spot-on op-Ed from councilman Flynn on how half baked the sidewalk fee proposal is.

Denver gazette is trash. I voted yes. It’s not perfect but we will never get sidewalks if we keep waiting for perfect. We need sidewalks.

[wwmiv]

Originally Posted by UrbanT

Denver gazette is trash. I voted yes. It’s not perfect but we will never get sidewalks if we keep waiting for perfect. We need sidewalks.

Amen.

I personally won’t be listening to city leaders here. They have an incentive to not support this, as they will be forced into action. They’d rather be focusing on other projects (their pet issues), not this, and so of course they are opposed.

[DenverInfill]

I agree as well. The city has had decades to do something about sidewalks. The same people who have been doing nothing on this issue are now the ones complaining that it isn't perfect.

This is a great example of the citizens doing their homework--the Denver Streets Partnership and others researched this issue for years to identify the best (but not perfect) approach, and got the signatures to put it on the ballot.

YES on 307 so we can bring dignity, safety, convenience, and equity to the most basic form of human transportation. After all, the city's official plans and policies now place the pedestrian at the top of the priority pyramid for the use of the public right of way. This puts funding and action behind those promises.

[TakeFive]

Originally Posted by UrbanT

Denver gazette is trash. I voted yes. It’s not perfect but we will never get sidewalks if we keep waiting for perfect. We need sidewalks.

What's with the "Guilt by Association?"

AFAIK, The Denver Gazette is the ONLY non-liberal source of news in Denver. As an aside, the CU (medical) community holds a Schnitt-ton of gratitude for the owner of the Gazette. Its called the "University of Colorado Anschutz Medical Campus." I'd say it holds a close 2nd the the Mayo Clinic - Phoenix which is also relatively new.

It was Kevin Flynn who wrote that critique that was carried by the Gazette. Kevin is a Denver City Council member for SW Denver. It is well reasoned and factual as far as I could tell. That said, one could still choose to be in favor of passing the sidewalk initiative.

Originally Posted by wwmiv

Amen.

I personally won’t be listening to city leaders here. They have an incentive to not support this, as they will be forced into action. They’d rather be focusing on other projects (their pet issues), not this, and so of course they are opposed.

I'll bet the farm that DOTI's assessment will be closer to reality.
Note: It's a toy farm but I'd still hate to lose it.

I would favor the initiative passing for one simple reason. Otherwise, I'd be afraid bunt could end up in a catatonic state which I don't want to have to envision.

[laniroj]

Originally Posted by bunt_q

Is this wager based upon market demand, or DOTI and CPD's ability to process the deluge of applications? I am not sure they can process 20% in two years, no matter what is happening with underlying fundamentals or any attributes of the projects themselves.

My bet is under 5 projects total in real terms break ground within 2 years (from that batch, obviously not overall).

I put that qualification in the tiny writing at the bottom of my post. You can't see it? Tough luck!

[laniroj]

Originally Posted by TakeFive

So far as processing goes I'd guess it will be more about how many projects even push ahead with the process; it may boil down to whether they want to spend the money or not.

Two years is a pretty big window. While many proposals likely die on the vine, I'll guess maybe half of the projects will move forward; how many actually break ground may be different.

A project that doesn't ground break is a dead project - at least technically in the City's system. They either move forward at a point in time or they are dead. They can be reinvigorated at a later date, but different codes, different design will apply.

Also, 2 years is a very short time in the development world. Come to think of it, I can't recall a single project that only took 2 years on the development side - not even a damn renovation project.