DENVER | Main Development Thread #7

[TakeFive]

Turning the Page

This is interesting even if a bit depressing.

https://www.bizjournals.com/denver/n...sing-2021.html

The past year has seen many occupiers hold off on making long-term real estate decisions as they await more certainty regarding the pandemic. Office leasing activity has taken a severe hit as a result, down 45.1% year over year for 2020, according to CBRE.

How bad is it out there?

Meanwhile, available sublease space has reached levels not seen in at least 20 years, and 2.4 million square feet of speculative office space remained under construction in the metro as of the fourth quarter of 2020.

Surely it's not nearly as depressing as Denver got in the late 1980's when downtown looked like a ghost town with all its see-through office towers - especially at night and on weekends.

There's still plenty of optimism surrounding the long-term prospects of the Denver office market, fueled in part by the metro's diverse range of industries and the continuing stream of out-of-state companies announcing relocations to the area.

But expect more sublease space to continue hitting the market as the effects of the pandemic play out, experts say. Sublease availability has already grown to 4.7 million square feet as of the fourth quarter of 2020, an 86.1% increase from the first quarter of that year, according to CBRE.

Afaik, Block 162 is yet to report a lease. OTOH, McGregor Square is doing nicely, all things considered.

New Tenants Announced for McGregor Square
November 23, 2020 - Mile High CRE

Anticipated to open in the first quarter of 2021, McGregor Square announced several new tenants this week, including a flagship store and the official bank for the Colorado Rockies, Bank of Colorado. Rock Fitness powered by Inward Fitness, a Starbucks, and the new location for the beloved Tattered Cover will also call McGregor Square home.

What about office space?

Law firm leases top 2 floors of McGregor Square office building
Dec 23, 2020 By James Rodriguez – Reporter, Denver Business Journal

Law firm Lewis Roca Rothgerber Christie LLP has signed a lease for the top two floors of the McGregor Square office building across from Coors Field, the firm announced Tuesday evening. Rick Schuham, vice chairman and central region lead for Savills, and Tiffany Winne, vice chairman and director of the Savills Phoenix office, represented Lewis Roca Rothgerber Christie in the deal.

Lewis Roca Rothgerber Christie joins several other recently announced tenants at McGregor Square. Cybersecurity firm Red Canary has leased two stories, or about 40,000 square feet, while Boulder-based advertising agency CPB has leased 20,000 square feet.

I'm assuming that McGregor Square's early success is attributable to its mixed-use profile with interior courtyard amenities, its LoDo location and convenient access off 20th St and access to I-25.

[TakeFive]

My curiosity got the best of me

Originally Posted by gopokes21

Why should Seattle, Austin, Pittsburgh and other peer cities and/or lower tier cities have subway but not Denver? Even my home town of Dallas (ew) has 1-2 mile sections of subway.

Pittsburgh
I wasn't very familiar with Pittsburgh. I was aware that their most recent transit project was a Bus Rapid Transit line. https://nextpittsburgh.com/city-desi...n-and-oakland/

Port Authority of Allegheny County has secured a $99.95 million U.S. Department of Transportation grant to connect Downtown to Oakland through rapid transit electric buses. The agency met Monday with federal officials for the first time since President Donald Trump announced the grant on Twitter last week.

Port Authority announced the $230 million Bus Rapid Transit, or BRT, system in 2017 to connect major city hubs with electric buses in dedicated lanes. Last year, it requested nearly $100 million in federal funding to support the effort.

Having read PLANSIT's comment above it's obvious Denver is following the same strategy as Pittsburgh.

Pittsburgh has a subway you say? Yes, yes they do with an interesting history. https://en.wikipedia.org/wiki/Pittsb...n%20Pittsburgh.

The modern subway in downtown Pittsburgh between Steel Plaza and First Avenue stations uses the Pittsburgh & Steubenville Extension Railroad Tunnel, which began construction in 1863.[6] Rail lines (trolleys) had been a staple of the city and region since the late 19th century, the idea of a downtown to Oakland or East Liberty subway had been considered since at least the 1910s. A public referendum was passed to fund such a subway with an initial investment of $6 million on July 8, 1919, another $5.5 million subway plan was finalized at City Hall in meetings on March 28, 1932, and the public/private Allegheny Conference presented detailed plans and funding for a subway system on June 4, 1947.

If only Denver has started building a subway in the early 1900's. Obviously a missed opportunity.

Dallas
https://stateimpact.npr.org/texas/20...-have-subways/

Dallas' DART system is the only urban rail system in the Southwest that can claim a subway station. A three and a half mile section of rail runs underneath the North Central Expressway, in order to avoid the right of way conflicts that would come with going through existing neighborhoods. Nov 21, 2012

Not very interesting or density oriented.

Two Dallas subway stations -- one at Knox Street and another downtown -- never made it off the drawing board.
Jun 25, 2018 By Steve Brown - DMN

The DART train doesn't stop at the Knox Street Station. It never did. The unbuilt Knox Street Station is one of two underground train depots in Dallas that were abandoned.

Austin
I'm generally familiar with Project Connect. Their 1st priority will be to build the Orange Line light rail. It's comparable to RTD's SE corridor in that it will be 21 miles with 22 Stations. The next priority will be building the 15-mile Blue Line to the airport. It will be interesting to see if they can get FTA funding for this?

It will easily be a decade from now before any light rail lines are finished.

Project Connect's other high priority will be better bus service. https://www.capmetro.org/project-con...ial-investment

• MetroRapid
  4 new MetroRapid routes provides frequent service with a limited number of stops.
• MetroExpress
  3 new MetroExpress commuter routes. Providing limited-stop service for commuters:

A decade from now Austin may revisit the feasibility of their downtown subway, maybe sooner, who knows but I wouldn't hold my breath on this one.

How about some legit peer city subways?

Seattle is legit.

[laniroj]

Originally Posted by Agent Orange

The last two decades have been the slowest years for growth in this region in the postwar era, excepting the 80s when the oil crash happened (even then, the growth rate was only discounted by 25% compared to the Teens).

EXACTLY. I have been saying this for 4 years: Denver/Colorado aren't growing faster, we've just restricted all of our zoning so that we can't build housing. We don't have a growth problem, we have a housing and land use problem. The 2010's should be the fourth or fifth slowest decade of growth in Colorado's history.

[The Dirt]

It's unfortunate that the zoning code update from 10 years ago effectively downzoned many parts of the city and it's taking city council years to get their shit together and even consider allowing common sense things like ADUs and group living. Allowing duplexes, triplexes, and quads everywhere today would have a huge impact on affordability. Too bad we're only in year 0 of a 5 year process to consider doing this. It's sad to see single story homes in very desirable neighborhoods being torn down just to be replaces with 3 story single family McMansions.

[MovinOnUp]

I've been wondering that's going on at Cherry creek mall (for the longest time). Looks like we might be getting a big fancy Apple upgrade. Hope it follows in the footsteps of their new stores (illuminated ceiling, large trees, etc).

As a sidenote, I feel like apple's city stores have become a bragging right - pipe dream would be a star-chitect-designed downtown flagship, but this could be an upgrade regardless.



Pretty sure the logo is hiding behind here:

[laniroj]

I love all the back and forth around public transit, but let's tie it back to development. If anyone on this thread believes Denver can support a subway, you are a dreamer (admirable). We can't even support existing light rail (not even close) and ridership among our suburban commuter focused regional bus system is abysmal. To make public transportation MORE attractive for the Center City of Denver only, four major changes must occur and all will take decades. I am writing off anything outside the center City (call it I25 south, I 70 north, Wadsworth to Quebec) except RidgeGate because there's not hope for our second and third tier suburbs.

First - Denver doesn't have near enough residential density to support a robust public transportation system so we need much MUCH more of it. That doesn't mean we can't invest in public transportation (we've been doing this for 30 years now) but it's a long term bleed that we are seeing with RTD now where they are hamstrung by O&M with no operating revenue to sustain existing or grow new service. To get the density that would support robust public transportation, we need modest upzones City-wide or aggressive upzones within 3 blocks of every major road (7 stories) and modest upzones (3 stories) within one block of every arterial road.

Second - we need the City to step up and end parking minimums. People don't utilize public transportation until driving becomes a worse alternative. If you're all about saving the world and the green new deal, you have to live with some major near term traffic/parking pain. I'm not in that category, but if we continue to allow cars and traffic isn't too terrible, people will continue driving cars - especially the new Denver residents who are well off and can afford one or more vehicles.

Third - we need better City planning to accommodate a wider range of household make-ups, economically and socially. To do this, we need zoning that is less regionalized (as it has been since 1946) and more localized (<6 blocks) with a focus on more parks, not bigger parks that are isolated. Denver has done a TERRIBLE job of center city localized park development. They're great at the big stuff, but they miss the pocket park opportunities that make neighborhoods livable for a broader spectrum of people.

Fourth - we need a string of strong one-term Council leaders who refuse to listen to scared, rich, white homeowners who decry any and all change who are willing to take on #s 1 and 2 above. This is the most difficult task and I don't see millennials taking up this style of leadership because they're all focused on social justice which, ironically, seems aligned with the reeeech white naysayers. It's a confusing world we live in.


Anyway, transportation wet dreams don't happen until we plan our City differently - that's my two cents.

[mhays]

Lots of great points, laniroj.

I'd couch the parking-minimums point a little differently. We're probably saying the same thing.

First, the typical resident of a no/low-parking building doesn't have a car. These buildings are typically in areas with good transit and walkability, units are typically small, and residents self-select. (Some will have cars, and I acknowledge some effect on free on-street spaces.)

Second, the opportunity of a home without parking can be an incentive to simply choose not to have a car for a person who would otherwise have one. If rent is $200 cheaper (or whatever), a lot more people will take the leap. Said differently, a lot of people choose to keep/have cars in part because parking is automatic and "free," but would make the opposite choices if the costs were separated out.

[gopokes21]

TakeFive - Dallas DART goes below ground to get across major freeway interchanges in/out of downtown even if it isn't "subway" per se. The underground stretch on the DART Red Line for the first mile or two between downtown and City Place (which is a subway station) is actually fairly significant. The point being that other peer cities are tunneling where it makes sense while we are still incredibly scared of going below ground. "Anti-tunnel vision" if you will.

Originally Posted by laniroj

People don't utilize public transportation until driving becomes a worse alternative. If you're all about saving the world and the green new deal, you have to live with some major near term traffic/parking pain. I'm not in that category, but if we continue to allow cars and traffic isn't too terrible, people will continue driving cars - especially the new Denver residents who are well off and can afford one or more vehicles.

You hit the nail on the head several times in your post, including the alignment of social justice/equity planning and rich white NIMBY factions, our strong big-picture planning to the detriment of smaller details, and why transit here isn't working ($7 billion later).

The above and especially bolded is why nothing we are already doing is going to help. We will just build more LRT and BRT and car dependency will continue to grow and we'll scratch our heads at this disconnect, but hey at least it will employ a lot of people and generate economic development and more auto-centric "TOD".

That's why Denver needs to do something different. Subway would offer people the ability to get from Civic Center to the middle of Cap Hill in 1 minute. Civic Center to Cherry Creek in 5 minutes, without hunting for parking. Everyone would use that. That would transform Denver and get people out of their cars.

Or we can spend another $7 billion on LRT and BRT that nobody will use as long as driving is marginally more convenient.

I'm with you in hoping for some strong leadership with a bold vision. We seem to be going in the other direction since Albus Brooks got primaried by CdeBaca and others hell-bent on destroying Mike Hancock, another such strong leader.

[BG918]

The problem we have in Denver is lack of any visionary leadership. That’s where projects like DIA, the convention center, Fastrax and Union Station came from that literally transformed this city. The boldest plan being discussed is River Mile and it’s being led by private interests! If you’re proposing a subway you should include River Mile as well: River Mile - Union Station - 17th & California - Civic Center - Capitol Hill - Cherry Creek

[gopokes21]

Originally Posted by BG918

The problem we have in Denver is lack of any visionary leadership. That’s where projects like DIA, the convention center, Fastrax and Union Station came from that literally transformed this city. The boldest plan being discussed is River Mile and it’s being led by private interests! If you’re proposing a subway you should include River Mile as well: River Mile - Union Station - 17th & California - Civic Center - Capitol Hill - Cherry Creek

You're absolutely right, but the environment is just so vexing and full of pitfalls in a post-boom city versus a post-bust city where people were affirmatively seeking transformation. I'm cautiously optimistic that bold leadership will reappear when it's safe to do so.

Also it's really interesting how, to be clear, Hancock never ran as a transformative leader but has grown more supportive of big projects throughout his three terms in office. He has gradually morphed into what he ran against originally, but with an emphasis on incorporating equity and social justice concerns while accomplishing big projects at the same time. It's very unique to strike that balance, and of course neither side will ever appreciate you.

Jamie Giellis ended up embodying anything she could get to stick, including a bunch of strange alliances with disparate (opposing) special interests - just anyone who didn't like Hancock. Definitely not a "bold" alternative, and her "big idea" was streetcars for intracity transit which is an even worse idea than more LRT or BRT.

Political leadership is a great big question but what's not in question, whether leadership likes it or not, is that people will continue flocking to Denver and developers will seek to deliver projects that serve the city's needs. Growth and development will only become a bigger issue because it's not going away. The vision put in place by past mayors (especially Pena and Hick) is still strong today and Denver kind of sells itself, like it or not.

[Robert.hampton]

Originally Posted by gopokes21

You're absolutely right, but the environment is just so vexing and full of pitfalls in a post-boom city versus a post-bust city where people were affirmatively seeking transformation. I'm cautiously optimistic that bold leadership will reappear when it's safe to do so.

Also it's really interesting how, to be clear, Hancock never ran as a transformative leader but has grown more supportive of big projects throughout his three terms in office. He has gradually morphed into what he ran against originally, but with an emphasis on incorporating equity and social justice concerns while accomplishing big projects at the same time. It's very unique to strike that balance, and of course neither side will ever appreciate you.

Jamie Giellis ended up embodying anything she could get to stick, including a bunch of strange alliances with disparate (opposing) special interests - just anyone who didn't like Hancock. Definitely not a "bold" alternative, and her "big idea" was streetcars for intracity transit which is an even worse idea than more LRT or BRT.

Political leadership is a great big question but what's not in question, whether leadership likes it or not, is that people will continue flocking to Denver and developers will seek to deliver projects that serve the city's needs. Growth and development will only become a bigger issue because it's not going away. The vision put in place by past mayors (especially Pena and Hick) is still strong today and Denver kind of sells itself, like it or not.

We definitely lack and leadership or any vision in this city right now. I really have no idea what Hancock is for, other than development and trying to climb political ladders. While there have been a few visionary ideas from the convention center, to stock show to airport, every infrastructure project under his leadership has been a complete boondoggle. As you note Gielles was a complete dud as well, essentially an empty vessel hand-selected by Zeppelin. She had trouble articulating a complete sentence, let alone a direction for Denver. And City Council is largely a bunch of NIMBYs focused on complaining and opposing Hancock, but offering no real solutions or vision for the direction the city should be going. And I certainly don't see the current crop of councilpeople as a breeding ground for future political leadership. And the RTD board, omg don't get me started on the RTD board.

For 30 years this city was able to count on bold, forward looking leadership not afraid to invest in the future. Now that those investments are paying off, its ironic that we now have such a vacuum of leadership or any semblance of political talent in this city.

[laniroj]

Originally Posted by gopokes21

That's why Denver needs to do something different. Subway would offer people the ability to get from Civic Center to the middle of Cap Hill in 1 minute. Civic Center to Cherry Creek in 5 minutes, without hunting for parking. Everyone would use that. That would transform Denver and get people out of their cars.

Think of public transportation expansion like the retail development expression - retail follows rooftops - not vice versa. We have essentially tried this "induced public transportation demand" with trex and fastracks. It's fairly well proven it doesn't work from a self sustaining financial perspective. Did we get light rail? Yes. Can we afford to operate and maintain it without significant operating subsidies that hamstring the rest of our transportation efforts? NO.

We HAVE to accept higher density prior to embarking on additional major public transportation initiatives though that doesnt mean we will. We can vote to raise new dollars to pay for this new shiny stuff, but we won't be able to afford it over the long term unless we have many more people than we currently have planned for contributing ridership revenue to it.

[laniroj]

Originally Posted by Robert.hampton

We definitely lack and leadership or any vision in this city right now. I really have no idea what Hancock is for, other than development and trying to climb political ladders. While there have been a few visionary ideas from the convention center, to stock show to airport, every infrastructure project under his leadership has been a complete boondoggle.

Stock show and aerotropolis are pretty significant visionary accomplishments for any Mayor. Those are all huge 10-figure deals that will have enormous economic impacts long term. Short term boon-doggling? Yes. I would also mention that housing became an issue under Hancock's leadership though not necessarily because of him. Form based rezoning was a Hickenlooper thing and it came to fruition under Hancock. He has done a commendable job prioritizing affordable housing and serving the tiny margins that world affects but a much less admirable a job prioritizing or leading on zoning/planning standards that created a housing affordability issue in the first place. He has also brought to the surface a bunch of good work/analysis surrounding equity especially as it pertains to parks access and he's instituted the large development review process which gives communities a better voice for meaningful and highly impactful projects. All good things, but he hasn't addressed the elephant in the room - planning/zoning shortfalls.

[gopokes21]

Originally Posted by laniroj

Think of public transportation expansion like the retail development expression - retail follows rooftops - not vice versa. We have essentially tried this "induced public transportation demand" with trex and fastracks. It's fairly well proven it doesn't work from a self sustaining financial perspective. Did we get light rail? Yes. Can we afford to operate and maintain it without significant operating subsidies that hamstring the rest of our transportation efforts? NO.

You're trying to say that we can't serve areas of the city where density does exist because it didn't go so well when we spent $6-7 billion on LRT serving almost entirely industrial warehouse sections of Denver.

I'm not sure I follow that logic. Why don't we actually follow rooftops then?

So what do you want, more density, and more rooftops? Because it's on the way (and given how much more supply we need, we know that will be the case for a long time). Now we need to mitigate this cycle of increasing car-dependency along with density as a result of higher-income new residents - that shit aint sustainable. Overbuilding parking is also a HUGE part of our (un)affordability situation, and I think most of us also share the concerns about local cost escalations.

[The Dirt]

Quick note on parking. It's not enough to eliminate parking minimums. We have to instate parking maximums, because lenders will demand a certain amount of parking based on what they think makes a project profitable. If parking is made illegal, developers are no longer held to those standards.

[SirLucasTheGreat]

Completely on board with the parking maximum idea. Without it, lenders are going to favor developments with overabundant parking because lenders believe that they will be more attractive to tenants than other residential developments. If the zoning capped the parking, then the parking inventory would not be driven as much by that particular market force.

In addition, I doubt that parking maximums would meaningfully affect the demand for housing in Denver. People don't move here for overabundant parking and, even with parking maximums, Denver is a long way off from being impractical for drivers like NYC or SF. I would be open to hear counter arguments though.

[coolmandan03]

Originally Posted by The Dirt

because lenders will demand a certain amount of parking based on what they think makes a project profitable. If parking is made illegal, developers are no longer held to those standards.

Or they just wont develop because it's too risky. Seems like a good way to stifle construction.

[wong21fr]

Originally Posted by coolmandan03

Or they just wont develop because it's too risky. Seems like a good way to stifle construction.

Or developers will still try and develop but their access to financing is constricted thus restricting development. Which could be offset by raising the sales/lease price to move further up the luxury tier.

[TakeFive]

So be careful what you ask for?

Originally Posted by coolmandan03

Or they just wont develop because it's too risky. Seems like a good way to stifle construction.

Originally Posted by wong21fr

Or developers will still try and develop but their access to financing is constricted thus restricting development.

[TakeFive]

Pre-pandemic review; it's a simple math problem
(but it get's complex)

The SW Corridor light rail - opened for service in July 17, 2000
TV News coverage showed the parking at Mineral Station lot (1227 spaces) full and overflowing into the neighborhoods by 7:00 A.M. https://www.rtd-denver.com/reports-a...ight-rail-line

Ridership has exceeded the projected forecast of 8,400 riders per weekday and averaged 17,900 riders, in April 2002, at the five stations (113 percent over projections). Total light rail system ridership was projected at 22,400 and reached a high of 41,690 average weekday boardings in September 2006.

Overnight every mayor of every (suburban) city wanted their slice of heaven. The SW Corridor light rail was built for a song meaning mostly from federal grants. It's important to understand this 'in real time' picture for critical context.

Then T-REX happened. It's 19 miles of light rail. Two of the busiest stations outside of the city center in the whole system remain at Lincoln Station and Nine Mile Station (along with the original Mineral Station).

Fast Forward

Despite modest ridership generally, seven light rail corridors carried Half as much ridership as 142 bus routes in 2019.

Problem One
Light rail is (mostly) a suburb to city (downtown) system. Downtown has the highest density of employment and it's still growing. That said, downtown has (only) ~10% of the total metro employment.

Problem Two
FasTracks was a "visionary" plan. It's intent was to direct future development density patterns to along light rail lines. Essentially, they were thinking of future development in the suburbs since in the early 2000's that where most of the development was.

Life is what happens while you're making other plans
Nobody predicted the glorious surge of development downtown but it happened.

The wisdom of FasTracks

The way the lines merge coming into downtown there's essentially five corridors into downtown. There are ongoing plans for millions of $'s of TOD adding up to billions of $'s of TOD at city-center light/commuter rail stations. Sure, it will take a couple of decades but FasTracks will prove a development density bonanza for the city center.

I happened to have walked around DUS and the DUS neighborhood. That single area along with the Trains to the Planes justifies the FasTracks investment just by itself.

Today's myopic hysteria?