Real estate report: The many lives of Larimer

Once slated for demolition, historic block recaptures past prominence

In the 50 years since preservationist Dana Crawford revealed her vision for one of Denver’s most beloved shopping and dining destinations, the retail on historic Larimer Square has come full circle.

It started with locally owned businesses, but Crawford soon discovered that she needed national credit tenants to make the popular destination profitable. She landed Ann Taylor, Laura Ashley, Talbot’s and Williams-Sonoma.

“We realized we needed to get big national tenants that weren’t in Denver,” Crawford says. “Our original philosophy was local tenants, but we had to grow up and get some triple A tenants to make it work financially.”

One of Crawford’s original tenants still occupies 595 square feet on the block. Gusterman’s Silversmiths has seen its rent rise, but remains on the block because moving a business can zap its momentum, says Mary Gusterman, owner of the shop.

“You work really hard to get a business going and have clients built up,” Gusterman says. “I like the historic buildings. Besides giving it a nice comfortable air of establishment and solidity, Larimer Square came into being at a time when urban renewal wasn’t that big of a deal. It paved the way, and I got to watch it happen.”

With an estimated 2 million pedestrians visiting the street annually, it’s no wonder that retailers and restaurant owners like the location. David Prebble, owner of Victoriana Antique & Fine Jewelry, spent 13 years on Larimer Square before relocating to Writer Square after then-owner TrizecHahn changed the terms of a lease he’d signed just two days before. By the time his lease on Writer Square came up, Larimer had new owners — Larimer Associates, controlled by Jeff Hermanson.

Writer Square’s new owners had jacked up the lease rates, so Prebble started talking with Larimer Associates, ultimately getting a deal that reduced his rate by $20,000 annually. Moving back to the block also has proven to be good for Prebble’s business. So far this year, his sales are up 42 percent.

“Larimer Associates has always done a great job of marketing the local ownership, and they take care of the tenants,” Prebble says.

Though its look and feel is far different from a mall, Larimer Square operates in much the same way, says John Imbergamo, an independent restaurant consultant who has several clients on the block. Larimer Square takes a percentage of sales from most of its tenants at a rate that is in keeping with that of shopping centers. The common area maintenance (CAM) fees are a bit higher than the typical rates in Lower Downtown, but they are in line with what shopping centers command. The CAM charges — $8 to $10 a square foot — pay for things like security and the seasonal decorations that Larimer Square is known for.

“Essentially what you sign there is a shopping center lease,” Imbergamo says. “They have the advantage of owning everything on the block. It’s very difficult for people to curate retail space like that if they don’t own the block. Larimer Associates can do what they want within the confines of historic preservation and city code.”

Larimer Square’s 17 food licenses are proof that restaurants gravitate to the block because of its ability to attract enough traffic to make the high per-square-foot lease rate worth it.

“I don’t know if anybody has killed it in retail in Larimer Square, but restaurants kill it on a per-square-foot basis,” Imbergamo says.

Historic block

Larimer Square has a storied past. It was home to Denver’s first bank, as well as its first bookstore, dry goods store and photographer. The City and County Building stood on the grassy corner of 14th and Larimer but was torn down in the 1940s. Today the property is owned by Denver developer Buzz Geller, who has struggled for years to get his proposed 34-story residential project off the ground.

After spending several years quietly buying property in the one-block area on Larimer Street between 14th and 15th streets, Crawford and a group of investors called a press conference to announce the creation of Larimer Square. It was a fight to save the block, which was slated for demolition under the city’s Skyline Urban Renewal Project that flattened most of Denver’s historic center in favor of new buildings. Crawford, who had no experience in real estate development, recognized the importance of the block.

“This is where Denver started,” says Crawford, a Kansas native who had relocated from Boston to Denver. “I fell madly in love with Boston. There was an enormous amount of inventory here that reminded me of the buildings in Boston. I became obsessed and possessed with the idea of saving it. The moment of truth had arrived because it was slated to be torn away and nobody seemed to give a damn. I knew an important part of the city’s future was to maintain its past.”

Crawford sold the property to TrizecHahn, a real estate investment trust (REIT) that owned the Tivoli building on the Auraria Campus, in 1986. The REIT thought the two properties had synergies that would bind the campus to the historic block. While that hasn’t really happened, the company did invest heavily in Larimer Square.

“Corporately, they were geared to open gigantic shopping centers,” said Hermanson, who bought the property from TrizecHahn in 1993. “They owned 50 regional malls, and these properties were the only anomaly in their portfolio.”

When Hermanson bought the property, he already owned several restaurants on the block, including the Mexicali Cafe, Cadillac Ranch, Champion Brewing Co. and Josephina’s. It was also around that time that lifestyle centers became popular and attracted many of the same national tenants Crawford first lured to Larimer Square

“When Dana attracted those national retailers, they all started out with one per market,” Hermanson says. “But with the proliferation of lifestyle malls, all of a sudden Larimer Square was not unique. We’ve retooled the property and curated a tenant mix that is locally or regionally exclusive. It’s taken quite a while to do it, and it continues on.”

Stepping toward the future

Hermanson’s next move is a major investment to transform Larimer Square’s alleys into safer, more active spaces. He’s planning to improve drainage, lighting and art, as well as create storefronts for tenants.

“Larimer Square is always evolving, and that’s how it maintains its charm,” Hermanson says. “We’re in a constant state of improving, tweaking, retooling and making it an even better destination. During our tenures, we have considered ourselves stewards of this valuable property. The horizon is multigenerational, so decisions aren’t made for the short term.”

Categories: Real Estate