DENVER | Main Development Thread #6

[Brainpathology]

Originally Posted by mr1138

The argument that anybody who supports density MUST clearly be getting paid off by developers is one that seems to be rampant these days. It is nothing more than an unsubstantiated slur, but one that the "aesthetic environmentalists" have spread around to the point that I think a lot of people now accept it as self-evident, even though there is absolutely NO evidence that this is going on. It really is infuriating. Everybody knows that density is inherently "ugly," and nobody could possibly support it if they don't have a direct financial interest... right? But I have to say that this rhetoric is 500% worse in Boulder than it is in the comments on the DP. A lot of people now say the word "developers" the way they have talked about "Wall Street Bankers" since the recession. And it's based purely on unexamined assertions and populist hatred(/jealousy) of "monied interests" like people who happen to own valuable land.

Wait... you guys aren't getting your checks in the mail for posting pro development stuff on here? I say you stop posting until you do! Everyone knows that every opinion in this country is paid for by someone, somewhere. No way I support infill or development in Denver or anywhere else without my monthly stipend courtesy of "the developers!"

[Stonemans_rowJ]

Originally Posted by DownhomeDenver

Why do you think that's the case?

A lot of people look to sell within a period of 2-5 years, many at around 2. If you buy a new build townhome for $500,000 lets say, that in 2 years it would need to sell for $525,000-$530,000 just to break even with realtor fees.

I feel that with the frenzy of development, there will be a lot of similar resale units and potentially brand new units at the same price point in a couple years. There are tons of lots already under contract and sold in Jefferson Park in the pipeline for more townhomes once the current stock is sufficiently sold off. If the market softens at all, damn, watch out

I was merely offering my analysis to suggest to renters that even though they may be paying through the nose, its not all bad. The mortgage interest deduction can certainly lower your tax bill but that's probably more a big savings for high earners with big mortgages.

[TakeFive]

Originally Posted by Stonemans_rowJ

Cherry Creek may be luxury but it doesn't have the hip factor with younger people.

In my opinion Cherry Creek apartment inventory and downtown inventory may have some crossover but not much more than that. I just don't know many millennials who would want to live in Cherry Creek, but every one of them would like to live downtown, union station, riverfront, or lohi. Lohi is still arguably the hottest neighborhood in town and has been for awhile, both for rentals and for sale product.

Good feedback. Nothing like being there on the ground.

I guess I shouldn't be surprised with your take on Cherry Creek. For one reason or another it's always been like that by and large.

I didn't realize that LoHi was so hot though. Given it geography and some good neighborhood bones it's not so surprising other than maybe how quickly this has happened (to me).

Just curious, are there clear boundaries for LoHi or what would be the general boundaries?

[TakeFive]

Originally Posted by Stonemans_rowJ

First off, we have a long long way to go before we have a "lack of parking." Look at the prices of parking downtown. It's (relatively) cheap. That means there is still a huge oversupply.

There was also this gem, "It's time to take our city back"

http://www.denverpost.com/guestcommentary/ci_27610607/guest-commentary-its-time-take-our-city-back

To be fair what's "cheap" to you may be viewed differently by others. Not that I'd agree with them but I can have empathy for those who find the accelerated development of downtown unsettling to what they are used to. They'll adjust though.

Originally Posted by seventwenty

Wasn't he the lead plaintiff's attorney for the Lowry infill lawsuit?

ETA: Yuuppppppp.

Yeah, good catch seventwenty.

His commentary is ridiculous but then his arguments in that lawsuit were not rational so it doesn't surprise.

He sets up his rant on density with this:

The No. 1 complaint among Denver residents I know is that the city is choking in traffic and congestion, and getting worse every year. Denver quickly is becoming another Los Angeles, Phoenix or Atlanta — clogged with too many cars and too many people

I LMAO, what a hoot. Those three cities (or MSA's) follow the sprawl model and suffer from a lack of density. What an idiot.

I did previously suggest that the Crestmoor site would be good for townhomes but Greg utilizes a lot of false propaganda. Maybe he should go into politics.

[TakeFive]

Originally Posted by Scottk

Article today in the Denver post about how downtown Denver's development boom has created a "lack" of parking downtown. Features quotes from our beloved Ken, AKA Denverinfill.

http://www.denverpost.com/business/ci_27...ent-boom-adds-vibrancy-subtracts-parking

some of the comments bitching about "rampant overdevelopment" are pretty funny.

Thanks for the link. I saw the summary in the DBJ but busy day and forgot about it. Gonna segue to a different point though.

Mike Sunnucks who does a great job writing for the PBJ has some very good coverage of the changing use of office space HERE.

"Workplaces keep on shrinking — even for the status driven"
Mar 2, 2015, Mike Sunnucks, Senior Reporter- Phoenix Business Journal

It's not your imagination.

That annoying coworker whos chomps on potato chips at their desk, enjoys kimchi for lunch and talks on their Bluetooth all day is getting closer and closer to you.

The average U.S. office workplace now sizes up at 150 square feet per worker, according to real estate firm CoreNet Global. That number used to be above 300 square feet per worker but has shrunk as businesses tightened their financial belts.

The whole article is quote worthy. But specific to law office type tenants:

The trend is also showing up in well heeled and status driven businesses such as law firms, said Blaine Black, senior director and a commercial real estate broker for Cushman & Wakefield Inc.

Law firms have traditionally had bigger office footprints than other industries. Law firms offices used to average as much as 800 square feet per attorney. That is down to 600 square feet per lawyer, according to industry studies. He said that could hit the 500 per square foot mark soon.

A lot of space saving isn't about employee crowding:

Like in other industries, technology is driving some of the shrinkage. Law libraries and document storage rooms are a thing of the past as information is moved online.

Not sure what this all means relative to parking needs downtown or in downtown versus burbs competition but it bears watching. Presumably developers have included enough parking. Good chance that Denver's growing transit system will become more desired, even necessary as the years pass.

[mhays]

Those numbers are all over the map. Around 20 years ago the rule of thumb was 250 sf per person, including hallways, common areas, etc. Today it might be closer to 200 for a typical office. Some uses like call centers get down to 100 or even lower. Some attorneys are close to 250-300 if you average their whole staff (they also have fewer admin people dragging the average down). If someone is claiming a 50% drop it sounds like apples and oranges.

[RyanD]

Originally Posted by TakeFive

He sets up his rant on density with this:

I LMAO, what a hoot. Those three cities (or MSA's) follow the sprawl model and suffer from a lack of density. What an idiot.

And then there's this...

A New Index to Measure Sprawl Gives High Marks to Los Angeles
L.A. is the least sprawling metro area in the country, according to this analysis, besting New York and San Francisco.

There is perhaps no more vexing issue for urban policy makers than sprawl. And yet, there’s little consensus on how best to accurately measure it. It’s one thing to impugn the phenomenon for contributing to everything from long commutes, congested highways and worsening air pollution to growing segregation, poverty, obesity and mounting health problems. But it’s another to actually gauge the connection between sprawl and that daunting list of social and economic ills.

A new study by Thomas Laidley, a sociology doctoral student at NYU (where I also hold a research appointment), uses satellite images to develop a new and improved “Sprawl Index,” which he links to a wide range of outcome measures. Laidley uses these aerial images (see above) to estimate sprawl at the Census block level, the smallest level available, estimating the share of metro population in those blocks below three key thresholds: 3,500, 8,500, and 20,000 persons per square mile. His index is based on the average of these three values, with higher scores reflecting higher levels of sprawl.





Full Article

[Denver Dweller]

http://www.bizjournals.com/denver/mornin...bqOBYu5F%2FO7W7Amf&t=1425404261&page=all

[TakeFive]

Originally Posted by Denver Dweller

http://www.bizjournals.com/denver/mornin...bqOBYu5F%2FO7W7Amf&t=1425404261&page=all

Just more politicking.

I'm more interested in the appeals process. As wong suggested because this involves a TABOR issue it needs to be fully adjudicated. It could have other (unpleasant) ramifications although the uniqueness of this deal may limit that potential.

I'm not sure the state should move to renege on a promise made for a Marriott project. Don't think it sends the best message. I assume that Marriott has a full agenda for expansion with their other brands so they probably are unconcerned about this specific project. Obviously if they wanted to expand Gaylord there's no shortage of much friendlier places to go.

[TakeFive]

Originally Posted by RyanD

And then there's this...

A New Index to Measure Sprawl Gives High Marks to Los Angeles
L.A. is the least sprawling metro area in the country, according to this analysis, besting New York and San Francisco.

Interesting presentation. Richard Florida does a lot of good pieces.

While I get the lack of low density in L.A. it's still hard to figure. Guessing there's an additional explanation if you understood the mechanics of the analysis.

The other two most prominent things are the migration from the Rustbelt to the Sunbelt which Richard refers to as the "deindustrialization" of long time Rustbelt anchors. The 2nd is the great appeal to live along the Left Coast and it's gateway status.

[Denver Dweller]

http://www.bizjournals.com/denver/blog/c...bqOBYu5F%2FO7W7Amf&t=1425421232&page=all

[TakeFive]

Originally Posted by Denver Dweller

http://www.bizjournals.com/denver/blog/c...bqOBYu5F%2FO7W7Amf&t=1425421232&page=all

LOL, I just happened to read this gem (so I'll bite). From the linked article:

Both Nordberg and Guzman acknowledged that they are not sure what the next step would be after such an audit, though, and whether any legislative action could undo the funding or require the EDC to reconsider it — a request that a Denver County District Court judge already has rejected.

Then there's this which is also raised by Stapleton:

Nordberg, however, said he would like the audit to examine particularly whether it is permissible for an RTA project to continue to get funding if it switches developers.

So does Colorado wish to send the message to corporate decision makers that if you do business with the State of Colorado you better think twice about selling your company or merging or changing a partner (developer) that would be best for stockholders? Or is the message that corporate decision makers should think twice about doing business with Colorado?

Does the growing influence and clout of the City of Denver mean they wish to now serve as the metro area's Overlords?

Sorry, but regardless of political party or jurisdiction, I'm not in favor of over-regulation (hello construction defects) or anti-competitive or business unfriendly policies. Here I thought the goal was just the opposite.

[Denver]

Originally Posted by TakeFive

So does Colorado wish to send the message to corporate decision makers that if you do business with the State of Colorado you better think twice about selling your company or merging or changing a partner (developer) that would be best for stockholders? Or is the message that corporate decision makers should think twice about doing business with Colorado?

I think you are blowing this out of context. This applies to one specific government program, the Regional Tourism Act. The benefits of this Act are set to expire after the next round of funding. The Act requires that local governments provide reliable economic data demonstrating that, in the absence of State Sales Tax Increment Revenue, the project is not reasonably anticipated to be developed within the foreseeable future. The issue with the project is whether it complies with the law. This is not a business issue as you are trying to portray but rather a legal issue. The state government has to comply with state law regardless of the potential negative impact of doing so (and I know a district court drug has already ruled on this but that is on appeal so there is not point in diving into that issue right now).

[TakeFive]

Originally Posted by Denver

I think you are blowing this out of context. This applies to one specific government program, the Regional Tourism Act. The benefits of this Act are set to expire after the next round of funding. The Act requires that local governments provide reliable economic data demonstrating that, in the absence of State Sales Tax Increment Revenue, the project is not reasonably anticipated to be developed within the foreseeable future. The issue with the project is whether it complies with the law. This is not a business issue as you are trying to portray but rather a legal issue. The state government has to comply with state law regardless of the potential negative impact of doing so (and I know a district court drug has already ruled on this but that is on appeal so there is not point in diving into that issue right now).

Probably or maybe not.

When politicians want to muddy the water they can always come up with "reasons." Honorable sounding reasons at that, even if their motivation and intent is anything but. What's honorable is to stick to your word; honor your commitments.

When Arizona (or Texas) negotiates an undisclosed incentive deal with Apple for their $2 billion flagship "Command and Control Center" I might have other questions but I wouldn't question the message sent loud and clear that "This state is open for business."

How is "the issue" (as you put it) determined and decided. I think there was a process for this and the vote was 7-2 that the project qualified and merited the incentive. Who are these Johnny-Come-Latelies that seem so clueless?

As much as I liked the Pueblo project I'm not sure how much tourism it will really bring. I can't think of a better project idea that has come up that fits the whole purpose of the RTA as well as Gaylord does. With the delays and presumed construction cost escalation as a result I'd think the incentive is even more justified today than when it was approved.

[Denver]

Originally Posted by TakeFive

As much as I liked the Pueblo project I'm not sure how much tourism it will really bring. I can't think of a better project idea that has come up that fits the whole purpose of the RTA as well as Gaylord does. With the delays and presumed construction cost escalation as a result I'd think the incentive is even more justified today than when it was approved.

Do not forget, politicians came up with this program. And I agree with you on Pueblo. I think the stock show and the Olympic Committee Museum (not sure the official name) fir the whole purpose of the RTA better than Gaylord. And with regards to Gaylord, one of the main defenses of the project is that it is going to create 2,500 jobs. The purpose of the RTA is not to create jobs (at least not directly). The purpose of the RTA is to increase tourism. And while Gaylord will attract some new visitors to Colorado, it will also lure conventions that otherwise would have gone to Denver to Aurora. The RTA should not be used to create competition among cities but rather to improve state wide tourism as a whole. This is not to say that Denver should have an exclusive right to the Colorado convention business but rather that the State should not have been involved in creating competition between cities and between established businesses and the new proposed one.

[TakeFive]

Originally Posted by Denver

Do not forget, politicians came up with this program. And I agree with you on Pueblo. I think the stock show and the Olympic Committee Museum (not sure the official name) fir the whole purpose of the RTA better than Gaylord. And with regards to Gaylord, one of the main defenses of the project is that it is going to create 2,500 jobs. The purpose of the RTA is not to create jobs (at least not directly). The purpose of the RTA is to increase tourism. And while Gaylord will attract some new visitors to Colorado, it will also lure conventions that otherwise would have gone to Denver to Aurora. The RTA should not be used to create competition among cities but rather to improve state wide tourism as a whole. This is not to say that Denver should have an exclusive right to the Colorado convention business but rather that the State should not have been involved in creating competition between cities and between established businesses and the new proposed one.

The RTA was the brainchild of Governor Hickenloop as he wanted to promote increased tourism in the State and along the Front Range. I support the concept 1000%.

While worthy of debate we'll agree to disagree. Arizona which has managed to grow their tourism pie to $19 billion in annual revenues didn't accomplish that by putting up walls to competition. They've supported tourism growth and by golly that is what has happened. Imagine.

The unique thing about Gaylord is that they have their own clientele and customers. Those who want the Gaylord experience can choose between Gaylord Opryland in Nashville, Gaylord Palms in Kissimme FL, Gaylord Texan or Gaylord National Harbor in Washington D.C. If they desire the Gaylord experience why would they choose downtown Denver rather than one of these other sites? The vast majority of Gaylord business would bring in visitors that otherwise wouldn't come to Colorado. They'd go somewhere else.

Same reasoning why downtown Denver can't compete with the Phoenix/Scottsdale resort hotel spas with golf courses. Those customers are not looking for a downtown experience; they are wanting a resort experience.

To think that there is not room left to grow Colorado's convention tourism is folly. Anyway, we've beat this horse enough.

[TakeFive]

The benefits of being "Business Friendly."

Metro Phoenix has landed yet another significant data center. This one by Microsoft is more pedestrian occupying about 575,000 Sq Ft which is considerably less than Apple's 1.3 million Sq. Ft. Add to this Tempe's announcement of Chicago based Northern Trust's planned 450,000 Sq. Ft. regional operations center employing 1,000 people and the 280,000 Sq. Ft. Japanese manufacturing facility and the year seems to be off to a good start.

Meanwhile Colorado's liberals and even some Republicans can't see the need or benefit for any data center incentives.

[mojiferous]

Originally Posted by TakeFive

The unique thing about Gaylord is that they have their own clientele and customers. Those who want the Gaylord experience can choose between Gaylord Opryland in Nashville, Gaylord Palms in Kissimme FL, Gaylord Texan or Gaylord National Harbor in Washington D.C.

And this is exactly why no one except Aurora wants to fund it — because Gaylord's marketing is focused and Aurora currently has next to nothing that is remotely attractive to their customer base. Unless of course the funding vote for the Stock Show fails and Aurora can swoop in and say "but we already have a funded resort hotel built by a company that specializes in the all-American Cowboy market!"

Originally Posted by TakeFive

The benefits of being "Business Friendly."

So… If we follow Arizona's example will our economy be as strong as theirs? And our downtown as vibrant and developed as Phoenix?

[trubador]

Originally Posted by TakeFive

The benefits of being "Business Friendly."

Metro Phoenix has landed yet another significant data center. This one by Microsoft is more pedestrian occupying about 575,000 Sq Ft which is considerably less than Apple's 1.3 million Sq. Ft. Add to this Tempe's announcement of Chicago based Northern Trust's planned 450,000 Sq. Ft. regional operations center employing 1,000 people and the 280,000 Sq. Ft. Japanese manufacturing facility and the year seems to be off to a good start.

Meanwhile Colorado's liberals and even some Republicans can't see the need or benefit for any data center incentives.

Those numbers don't seem right for data center employment. They usually don't employ large amounts of people.

[ski82]

The whole “business friendly” climate – with states, counties, or cities paying off private companies is a scam. It’s largely zero-sum on a national level and creates distortions and bubbles in the economy. States and cities will pay for the breaks they offer when these agreements siphon off tax revenue and require the government spend more on services. Proponents of these deals argue the local governments are better off due to increased economic activity and the associated tax revenues being collected with that activity (more sales tax, property tax, etc). The problem with that is that it assumes those other taxes being collected and the services those taxes provide for results in a surplus. That probably isn’t the case. The result is the need for ever increasing growth to cover the ever increasing funding gaps. Hello bubble.

True business friendly environment would be city and state leaders telling businesses something like, “We are going do what we must to keep your tax burden low while providing solid schools, infrastructure, and a decent place to raise your employees’ families. All these things are critical to the long term success of your business. This also means treating businesses fairly and without special deals that will precipitate a race to the bottom. So while I’m sorry I cannot offer you any handouts, I hope you will appreciate our truly business friendly environment and appreciate the city we are trying to create for everyone who lives here”

To which, the business leader replies, “Sounds great, Mayor, but I’ve gotta run. I have a Q1 results call with Wall Street in 5. Oh, by the way, we’re moving to Texas. They are giving us a ton of money.”

The country would be better off if the incentives didn’t exist at all. It should be time for leaders to actually address our problems instead of chasing JOBS!!! headlines that undermine the entire system. But don’t blame your local leaders for being a part of this prisoner’s dilemma. We should be pressuring the US Congress to address it…that’s the only level it gets fixed. So don't expect much.