Posted: December 01, 2009
Who Owns Colorado: Progress and Futility
U.S. 36 corridor -- stuck between Boulder and a hard placeDavid Lewis
Anybody who has been around the Front Range awhile will recall the days when the landscape from U.S. 36 from Denver to Boulder was where the fruited plain met the purple mountains majesty.
It was "one of the most beautiful interurban roads in the United States," former Gov. Dick Lamm told Rocky Mountain News reporter Guy Kelly in 1993. "It wasn't a drive, it was a religious experience.... The soul would soar when you'd drive to Boulder."
All that changed, starting in the early 1990s with Superior, Colo.'s Rock Creek, the 1,570-acre residential development that turned the town from a hamlet with a gas station and general store into a bedroom community. A few years later came Interlocken in Broomfield, then FlatIron Crossing mall, also in Broomfield, and Westminster Promenade, an entertainment district. In Louisville, mostly tucked behind a hill, was StorageTek and later Sun Microsystems. The acreage since has been razed by ConocoPhillips Co. in order to be morphed by 2013 into a 432-acre corporate learning and global technology center.
Even before all this construction, Lamm was not pleased. "It's not only environmentally obnoxious but economically stupid to fill up this beautiful roadway," he said.
True, not everybody loves what has become of the U.S. 36 corridor. But what haunts the thousands of residents and hundreds of businesses along the highway today is not so much lost vistas as the sputtering of the economic engine that drove development there in the first place. (U.S. 36 stretches from Estes Park to Champaign, Ill., but for the purpose of this article we'll focus on the Westminster-Broomfield-Louisville area.)
The fault lies not in the northwest metro area, but in ... everything.
"The market is incredibly slow overall," says Mary Sullivan, Denver-based senior vice president with CB Richard Ellis' Investment Properties Institutional Group. "There are no sales."
How about leasing? "The northwest corridor has overall vacancies of about 26 percent. They have direct vacancy rates of about 16 percent, but they also have a 285,000-square-foot building under construction, and with the sublease space there you've got about 1.857 million square feet that is available," Sullivan adds. "And you don't have positive absorption for the year. It's not as bad as the southeast market, but ... "
But here's the kicker. Despite the nasty numbers, despite the credit crunch, despite the anxiety, northwest corridor developers and officials are resolutely positive, almost buoyant, about their prospects.
Not that Sullivan's view is incorrect. Property sales are zilch. But other forms of real estate life - leasing, construction, planning - go on, haltingly.
"Activity actually continues. The leasing demand on the corridor has stayed fairly consistent," says Andrew Freeman, president of Niwot-based commercial real estate agency Freeman Myre, which specializes in the U.S. 36 corridor. "There really have not been any dramatic job losses probably with the exception of Sun, based on their acquisition by Oracle. If it gets approved, my guess is there will probably be some layoffs there, but in Boulder and the entire corridor the vacancy rates have stayed fairly stable throughout this last year to two years."
Probably the most sluggish sector is development, Freeman says. "There are multiple plans that have been approved or are in the process from hotels to retail to industrial, but no one can get financing yet. And lease rates are still hovering a little bit below where they need to be to justify new construction for office and industrial."
Some significant current construction is transit-oriented, presumably laying the groundwork for the scads of employees who will travel U.S. 36 once the slump ends.
That's what the Westin Westminster hotel, which recently completed a $9 million renovation, is counting on. The project included revamping public spaces and adding new beds, flat screen TVs, lighting and paint to its 369 guest rooms. The hotel, whose primary owner is Denver's Amstar Group, is managed by Sage Hospitality.
Although the hotel does business on the weekends from weddings and couples retreats, its core market comes from business travel and corporate meetings, Sage CEO Walter Isenberg said.
"The northwest corridor is really growing and continues to see good growth. We anticipate that through this next up-cycle that corridor is actually going to see very, very strong growth," Isenberg said, citing the arrival of ConocoPhillips and the existing bioscience and high-tech companies along U.S. 36. "When the recovery comes, those elements of the economy are going to grow so we see good upside there in the long term."
In Westminster a number of projects along the corridor are in late planning stages or under way. Centex Homes is building 100 of what will likely be among the city's last detached single-family home developments in Westminster at 95th Avenue and Westminster Boulevard. At the northwest corner of 108th Avenue and Westminster Boulevard, Urban Pacific Builders has proposed building Northwest Business Park. And Westminster Gateway, a mixed-use development at U.S. 36 and Church Ranch Boulevard that would include retail and office space and two hotels, continues in the proposal stage.
Under construction in Broomfield is a transit station with a bridge linking the Arista Events Center and Broomfield, to "facilitate regional buses to slip off the highway and drop passengers off at that location and continue on to either Boulder or Denver. So it creates a new transit hub at those locations," says Broomfield transportation manager Debra Baskett. Construction of a pedestrian bridge is starting, too.
Projects hover in various states of progress or futility around FlatIron Crossing. To the northeast of Interlocken Loop lie Parkway Circle and the Broomfield Business Center, two properties totaling about 155 acres.
"The 75-acre piece, Broomfield Business Center, an Etkin Johnson Group project - nothing has happened with this. They have utilities and so forth, but they haven't been able to break ground. The one immediately south of that, Parkway Circle, includes some condo residential units, two separate apartment projects, and a Hyatt Summerfield Suites hotel now under construction," says Don Dunshee, president and CEO of the Broomfield Economic Development Corp.
Broomfield's cup is at least half full, Dunshee says.
"Interlocken office vacancy rates are under 7 percent, and vacancy rates there never got very high," he says. "If you look at Broomfield's total office vacancies, we're at about 13 percent vacancy, while the metro area is between 18 percent and 19 percent." Retail vacancies there are at 6 percent vs. 9 percent for the metro area.
Meantime, "We've got several parties that are looking at different space in the Interlocken and ‘outer-Locken' area, the property south of highway 128," Dunshee adds. "We've probably got 10 to 15 office or light-industrial users that we're working with."
Louisville proudly wears the twin crowns of ConocoPhillips and designation as Money magazine's No. 1 among the "Best Places to Live," PR that gives the town an eco-devo advantage.
"Construction projects are limited right now, with (the lack of) bank financing," concedes Louisville economic development director Bonnie Star. "But there are new businesses moving to Louisville. I get calls almost every day. I have a hot list of six or seven right now that are serious lookers."
LOCATION: 96th Street near Louisville's northern border
DEVELOPER: Takoda Properties Inc.
TELEPHONE: (720) 524-3620
SIZE: 61 acres
PROJECT TYPE: residential and commercial
COMMERCIAL SQUARE FOOTAGE: five acres containing up to 70,000 square feet
GROUNDBREAKING: first-quarter 2010
Takoda's residential product mix is to consist of: 49 units, either townhomes, row homes or small-lot cottages; 123 single-family detached homes; and 178 multi-family condos on about 10 acres. Vital to Takoda, Brew says, is its proximity to U.S. 36 and to the jobs growth promised by the development of the ConocoPhillips global technology center.
CONOCOPHILLIPS GLOBAL TECHNOLOGY CENTER
LOCATION: just east of U.S. 36 near the McCaslin Boulevard exit
SIZE: 432 acres
PROJECT TYPE: office
ConocoPhillips plans to build a "best-in-class training facility for its worldwide employees as well as a global technology center for research and development of new-energy technologies." The campus will include up to 2.5 million square feet of facilities constructed in three phases: 1.6 million square feet by 2013, another 0.15 million square feet by 2018, and the final 0.75 million square feet by 2032. The initial phase will include: office space, 472,647 square feet; research center, 502,617 square feet; learning center, 34,967 square feet; and a 120-room hotel for corporate visitors. The development will occupy about 120 acres of ConocoPhillips' 432-acre site. Undeveloped acreage will become "restored prairie,"aka a "prairie garden." The project's traffic-impact study projects that the development will generate about 10,500 trips per day, according to Louisville economic development director Bonnie Star.
LOCATION: along U.S. 36 south of 120th Avenue
DEVELOPER: Wiens Capital Management
TELEPHONE: (303) 460-8800
SIZE: 200 acres
PROJECT TYPE: mixed-use
COMMERCIAL SQUARE FOOTAGE: n/a
GROUNDBREAKING: November 2005
Arista calls itself a "transmodal" development due to its proximity to an RTD park-n-Ride and a pedestrian bridge over U.S. 36, now under construction. The development is anchored by the 6,000-square-foot Broomfield Events Center, which opened November 2006. Also: six parks; 1,500 to 1,800 housing units; 3,000-plus residents; a 1,500-space parking facility developed with RTD that provides shared-use parking for offices, retail event parking and transit parking. Housing divides into three categories: for rent, for sale, and a live-work loft concept with the entrepreneur's business on the main floor, with residential space on the top two floors. Also: 190,000 rentable square feet of mixed-use development within Arista. The development's pedestrian mall, Arista Place, features the events center on one side and the new Aloft hotel. The project's phase two will commence in 2010 with the construction of 112,000 square feet of office space and 2,200 square feet of retail.
CENTRAL PARK TOWER
LOCATION: 385 Interlocken Crescent, Interlocken Advanced Technology Environment, Broomfield
DEVELOPER: Prime West Cos.
TELEPHONE: (303) 741-0700
SIZE: 14.4 acres
PROJECT TYPE: office
COMMERCIAL SQUARE FOOTAGE: 300,000 square feet, 11 stories
GROUNDBREAKING: December 2008
Central Park Tower is a LEED Gold pre-certified, Class AA office tower slated to have a fitness center, collaborative work areas, social areas, parking for bicycles as well as cars, special areas for alternative-energy vehicles, an underground parking garage, and a café with indoor and outdoor seating. It will have 297,682 rentable square feet of space, with floor plates on stories three to 10 of about 27,913 square feet. It will be the tallest office structure in Interlocken. Prime West previously developed six other office towers in Interlocken.
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