Real estate: Trains and buses and bikes, oh my!
The redevelopment of downtown Denver has seen several landmark projects that draw crowds: Coors Field, 16th Street Mall, Larimer Square, Riverfront Park and even the new county jail. But the most significant project yet is finally under way.
The reconstruction of Union Station will bring that building and the surrounding area full circle from its original status as the heart of transportation in Denver and carry it beyond to a centerpiece of not just transportation, but business, entertainment, architecture and public spaces.
“It’s going to have an enormous impact, not only on downtown Denver and the imediate neighborhood, but the entire region,” said Frank Cannon, president of The Union Station Neighborhood Association. “With FasTracks fully developed, there will be more than 200,000 transit trips a day. It becomes a new front door and gateway to our downtown.”
Putting that number into perspective, Coors Field holds about 51,000 people, so expectations for Union Station are four times the pedestrian activity of a sold-out Coors Field every day. It is difficult to overstate the magnitude of the Union Station redevelopment. City officials, architects, developers and concerned citizens have been massaging plans for its rehabilitation for more than 20 years, with FasTracks and its multi-billion dollar price tag as the spark that ignited the discussion.
The master developer of the project is the Union Station Neighborhood Association. It is an evenly divided venture between uber developers East West Partners and Continuum Partners. They submitted their substantial credentials to the city in 2005 and were awarded the lucrative deal in 2006. They created the overall configuration of the transit portion of the project and how it interacts with the rest of the 19-acre site. They now coordinate the construction of the transit portion of the project, along with how this will interact with the rest of the development. They also have the right to buy several prime parcels of real estate surrounding the station, of which the proceeds go toward financing the infrastructure. More about this later.
“There are so many different projects advancing by different developers,” Cannon said. “There are at least four or five projects on the undeveloped land west of the station (from 15th Street to 20th Street). “I think it goes to show the importance of this project in this community, that there are so many people directly and indirectly involved who are passionate about developing our transportation future and downtown.”
In the last 25 years, the historic station has been woefully underutilized with small crowds wandering the 100,000-square-foot building waiting for a late Amtrak train or parking in the adjacent lot. The new station will have far more to offer than just unpredictable Amtrak service. Along with the obvious duty of combining a dozen different modes of transportation, plans also call for office space, public art, restaurants, and public performance and congregation areas and underground parking, all filling the 19.5-acre site. Perhaps most interesting is the disposition of the landmark train building and how the historic structure would be used. Cannon’s team had its own ideas but another group of development top-guns presented the case for a luxury boutique hotel that would encompass most, if not all, of the building.
The Union Station Alliance is headed by an impressive team of visionaries, architects and builders including Dana Crawford who, in the late 1960s, was the lever that lifted Larimer square from skid row to an upscale focal point of entertainment and shopping. She also pioneered Denver’s loft rehabilitation rage in the 1990s and has gone on to successfully tackle some of the most difficult remodeling projects in downtown Denver. She is also a founder of the Oxford Hotel.
Other members of Union Station Alliance include Walter Isenberg of Sage Hospitality, which owns 63 hotels around the country – including the Oxford – and Ferd Belz, who developed the $320 million Tabor Center. Their concept involves converting the 100,000-square-foot station into a boutique hotel with a lobby on the second floor, retail on the first floor and hotel rooms on the second and third floors that will be operated by the Oxford Hotel management team. The Oxford was recently voted the No. 1 hotel in Colorado and No. 47 in the United States by Condé Nast Traveler magazine. The group hopes to be equally successful with the Union Station hotel.
“I have been working on Union Station since 1982, so it’s a really big thrill,” Dana Crawford said. “I think for the Lower Downtown district this is kind of the major piece of the puzzle that’s been waiting to be placed, and it’s going to create a lot of jobs.”
Crawford said repurposing and remodeling the historic train building has a budget of $48 million and will bring 350 jobs created directly from construction and, later, hotel operations. This does not include jobs created by other businesses directly related to the hotel.
“It’s an economic engine, there’s no question about that,” Crawford said.
Considering the 24-7 nature of the businesses that will operate in the compact Union Station Neighborhood, this will be the not-so-little engine that could. Along with the hotel creating a resort atmosphere, the multi-modal transportation facility will continue to grow in conjunction with FasTracks and virtually guarantee that businesses in this area of downtown grow with it.
“People think about FasTracks as a regional transportation program. Union Station is thought of as a multi-modal transportation hub. We think about Denver Union Station as a city (landmark) building. It had to be as much about downtown as the transportation needs. It has to be transportation first but not transportation only. It’s about people, it’s about the city, it’s public spaces and the city all coming together,” Cannon said.
There will also be a sizable office component in the north wing of the project headed by IMA Financial Group and built by the partnership of Rob Cohen, CEO of IMA Financial, and Ed Haselden of Haselden Construction, and designed by Anderson Mason Dale Architects. The five-story, 108,000-square-foot building single-handedly doubles the size of the current building with more than 200 people working in the building for IMA alone.
Cohen said the $32 million project will be owned by himself and Haselden, along with a few key investors, then leased to his company. Cohen organized a similar situation with his current headquarters in the Millennium Financial Center. Cohen built that project in 2001, and it was fully leased almost immediately. With nearly perfect timing, he sold the building in 2008 and has leased back his space since that time. Once again, it’s hard to argue with Cohen’s timing as he breaks ground on his new office at the bottom of the market in what will easily be the hottest piece of real estate in all of Denver. In addition, it will be built to LEED Gold standards.
“It’s one of my larger personal investments and it’s a large investment for IMA,” Cohen said. “There’s obviously cost associated with a new building as opposed to renting, but it’s a big part of who we are. We like to make a difference in the community. It’s a high-profile project for the company and has a lot to do with our image and morale.”
Cohen’s company will occupy 65,000 square feet of the building with retail and public spaces occupying the first floor – a requirement of all developments in the Union Station neighborhood. A tenant for the rest of the building has not yet been found, but most companies won’t sign on until bricks and mortar are out of the ground.
Everyone involved with Union Station’s resurrection said it ranks high on their list of complex undertakings, but paying for the $500 million worth of public infrastructure is “a Rube Goldberg set of sources,” said Diane Barrett, chief projects officer for the City and County of Denver.
An entire magazine could be filled with the intricacies of organizing all the colorful squares that generated the awesome sum needed to finance the core purpose of Union Station. But in brief, the capital needed to finance loans comes from federal and state grants totaling $180 million and another $28 million from the Obama stimulus fund. There are $27 million in proceeds from the sale of five development parcels within the 19-acre site. Master developer Union Station Alliance is under contract to buy all five of the parcels over a period of time and has already closed on three of them for $7 million, with the final two worth $20 million. Other property sales generated another $10 million, and $11.4 million came from the City of Denver. The final $300 million comes from loans to be repaid by taxes generated from increased revenue at Union Station and money pledged by RTD.
With the diverse combination of inflated personalities and egos, and equally huge amounts of money, bureaucracy and statewide importance attached to it, the Union Station rehabilitation project will be historic on many levels. History is being made as this is written with the first phase of the transportation aspect of the project under way and IMA’s office building set to break ground in April.