Colorado Commercial Capital owners John Cook (center). Left: daughter Dominique G. Cook, her husband Mark Rycroft and his brother Travis Rycroft. Right: Jon’s business partner Scott Farmer and son Steven E. Cook. (Photo by Mark Manger)
There was once a toxic concrete monolith on the southern fringes of Denver proper, the leftovers of the Shattuck Chemical Co. It was the very definition of the worst kind of brownfield — an environmentally compromised piece of real estate.
A century ago during the medical radium fad, Shattuck refined the radioactive metal here, leaving an environmental legacy that outlived the company. In the early 1990s, a record of decision and a consent decree allowed for the mixing of the radioactive soils with cement, thus the big monolith that restricted future land use but contained the radioactivity.
Only it wasn’t too good at the latter. The monolith failed in the midst of its semi-residential, semi-industrial neighborhood, and the mess was named one of the most polluted sites in urban America, if not the most polluted. After the monolith was shown to be faulty, the U.S. Environmental Protection Agency decided to take a different approach at Shattuck, then part of the Denver Radium Superfund site.
For the better part of a decade, laborers in protective suits worked three shifts tearing the monolith asunder with jackhammers under a movable mining structure. The radioactive rubble was then loaded into railcars and whisked northwest to Mountain Home, Idaho.
Nearly $60 million worth of remediation later, the monolith is gone. The oversized shed that sheathed the monolith for close to a decade came down in 2006. Today the Shattuck site is a vacant lot covered in knee-high grass, the light rail rising between the site and Santa Fe Drive and the Platte River.
But there is a vision. And the visionary is Jon Cook, a self-described cowboy real-estate agent and car dealer who has quietly acquired 15 acres — including the Shattuck site’s six acres — over the course of the last decade.
Now owner of Colorado Commercial Capital, Cook got his start in commercial real estate by buying a South Broadway car lot in the early 1970s and has risen to become a real estate titan in the South Denver-Englewood area. But the Shattuck site is his biggest gamble yet.
Cook would like to build an apartment tower to Leadership in Energy and Environmental Design (LEED) specifications, but the zoning could limit him to four stories if efforts to get the area rezoned to high-density don’t pan out. He aims to break ground in 2011, after the city completes a major makeover of the South Broadway streetscape.
“We have an assemblage in that area, in total about 15 acres,” says Cook, who says he’s been buying properties in the Shattuck area since 1998. “We are internally calling it the Lumberyards development area. We bought the Kroonenberg Lumberyards from the Kroonenberg brothers, Art and Clarence. Their father started in the neighborhood in the early 1900s with lumber and the home delivery of coal from a railroad spur there.”
Cook says his daughter and business partner, Dominique, got him interested in sustainable development on compromised properties. He’s behind a LEED-rated multi-use building at 2700 South Broadway in Englewood slated for ribbon-cutting in February.
“That was a former gas station, where the tanks had to be removed and the land remediated,” Cook says. “Now we’re building a gold LEED-rated building. We have a great restaurant going in on the ground level.”
Cook sees his Broadway project as a small example of what he envisions at the Lumberyards. “We really are dedicated to this. It’s going to be LEED-certified, an unbelievable change from the monolith. We plan on developing it ourselves, and it is a long-term family hold.”
City officials have been working with consultants and focus groups to formulate a redevelopment plan for the nearby Evans light rail station.
“We are not seeing the density we would like to have seen,” Cook says. “Look at European station stops — I don’t think people are completely getting it here yet.”
He believes the Lumberyards site represents a perfect storm for a high-density, pedestrian-friendly, and eco-friendly transformation, if zoning permits.
Nearly every observer agrees the area is on the way up, especially considering its sordid past.
John Cook aims to turn this Shattuck land into high-density housing.
“Shattuck was one operable unit of the larger Denver Radium Superfund site, which included some streets in Denver where radioactive waste was used as a road base,” says Mike Holmes, project manager of the Environmental Protection Agency in Denver. “Through our five-year review process, we found there were still impacts to the groundwater from the site. There was a huge concern from the neighborhood and the city of Denver that it was not acceptable to leave the radioactive waste onsite.”
While the site is now clean, there is still a bit of a stigma associated with the last symptoms associated with the property’s past.
“There is a plume of contaminated groundwater,” Holmes says. “It’s coming off the site and going to the northwest toward the Platte River. It’s not considered an ecological or human-health threat. There are no restrictions on the development of the land.”
The EPA’s Superfund, signed into legislation in 1980 and amended in 1986, was originally staked by “taxation on the petroleum and chemical industry,” Holmes says. “That taxation went away in the early 1990s and has not been reinstated … so Superfund competes for money and resources along with the rest of the federal budget.”
Holmes says the best-case post-cleanup scenario is redevelopment. “In general, the EPA and the state support redevelopment of Superfund sites — that way there’s a steward on the property. For years there’s been discussions going back and forth with third parties going in to clean up properties. They’re very concerned with liability and who’s responsible for long-term monitoring and maintenance.”
Jesse Silverstein, executive director of the Littleton-based Colorado Brownfields Foundation (CBF), says Shattuck’s potential is tremendous, noting that the site’s six acres borders six additional acres occupied by a cement plant, which could be relocated, and another six acres of vacant lots.
“I think it has tremendous potential for a mixed-use development there. One of the things that’s missing on our transit line is affordable housing,” she says. “(The CBF’s) mission is to help communities overcome environmental obstacles to economic and community development. We find ourselves doing a lot of public-private partnerships, or facilitating them.”
The benefits of rehabilitating brownfields include “recovery of parks and open space; there’s housing potential, job-creation potential,” Silverstein says. “By reusing these sites, we’re enabling infill redevelopment, which helps prevent sprawl, conserve taxpayer dollars and revitalize neighborhoods.”
Silverstein defines a brownfield as “any site where the reuse of that site is impaired by environmental conditions, real or perceived. It’s as simple as that.”
As in marketing and many other endeavors, image is everything. The mere connotation of contamination can be a scarlet letter for a suspect property, impeding its sale or redevelopment. “There are sites that may not qualify for Superfund but may have some issues,” she says. “It may just be a perception issue.”
Making it on the EPA’s National Priority List can be something of a scarlet letter for a landowner. “A site could get on the NPL because the neighbor next door reports fertilizers and pesticides, potential DDT,” Silverstein says. “So a simple phone call, and you’re on the list.”
State and federal legislation support remediation, Silverstein says. Since 1994, Colorado has had a nonregulatory program to support private-sector transactions involving brownfields, which Silverstein commends as “a very good voluntary cleanup program.” The program was the first of its kind in the country.
And in 2002, the Small Business Liability Relief and Brownfields Revitalization Act, better known as simply the “brownfields act,” became law and offered funding and support for environmental assessment, cleanup and reuse of brownfields across the country. Essentially, if a buyer does due diligence but environmental issues emerge later, the law protects them from liability.
However, good public policy doesn’t necessarily make for profitable, smooth-sailing business. “The big holdup on brownfield sites hasn’t been the EPA, it’s been the banking industry,” Silverstein says. “If they foreclose on (a brownfield property), they become owners of a site that is difficult to market, so they become very conservative.” And with Wall Street’s fiscal nightmare dominating the headlines, don’t expect the banks to get less hesitant anytime soon.
In many cases, a lack of information inhibits the market. “We need to get some facts on the table and maybe clear some of these sites,” Silverstein says. “Let’s remove some of the environmental stigma to allow transactions to proceed.” In the worst cases, the estimated costs of remediation make for a negative market value. “Cleanup costs can oftentimes make the site upside-down financially pretty quickly.”
A Colorado Brownfields Foundation survey of real-estate brokers and professionals found that 20 percent of respondents would drop out of a possible deal at the first hint of environmental issue, and three-quarters of those remaining would not be interested in cleaning it up if tests showed the property to indeed be contaminated. Just the rumor of possible contamination made for a 20 percent hit in valuation.
Jon Cook labels it a “high-risk” business. “We measure our risk when we buy properties, and we have to buy them at the condition they are in. No one does the cleanup for you.” And measuring risk is not an exact science, he adds. “It’s a little bit of gun-slinging, like the old days. It gets measured when the product gets delivered.”
“It is the buyer’s responsibility to do due diligence,” Silverstein says. “If it’s going to cost them money to do it, there’s that much less incentive for them to get involved in the deal. Not only does the market shrink, but it starts moving from a market value — where you have lots of buyers and lots of sellers — to an investment value, where you have a much smaller pool of buyers and they carry much more market power.”
Stacey Eriksen, an EPA staffer on loan to the city of Denver as brownfields coordinator since 2005, worked on the Rocky Mountain Arsenal, Rocky Flats and other sites in her tenure with the EPA. With the city, Eriksen works with developers to help find resources for problem sites. “There are some sites that are a little marginal or upside-down, where the cleanup costs exceed the value of the land, so we try to help fill the gaps,” she says.
Brownfields “are actually a big opportunity” in Denver, Eriksen says. “Denver tends not to have as many — we don’t have as big of an industrial core as some of the East Coast cities and Rust Belt cities. So there are not as many hurdles to their redevelopment. And sometimes there is just a perception issue. There are some people out there who don’t want to touch contaminated property, but it’s moving to the point where people are going to say it’s just part of the development process, one more thing to deal with.”
Nonetheless, Eriksen says, “Finding money is really hard. Huge sums are not available. It has a lot to do with real estate prices and the market forces that drive redevelopment. A lot of rural communities have more problems with it because their real estate values just aren’t high enough. We have pretty good real estate prices in Denver, so that helps a lot.”
But cleaning up brownfields typically turns out to be a pretty good business, Eriksen says. “EPA has found that for every acre of brownfield that is redeveloped, you basically keep four or five acres of greenfields, of undeveloped land, from being developed.”
That’s not unlike Jon Cook’s vision of a high-density area anchored by eco-friendly apartment towers at the former Shattuck site, an idea Eriksen likes for the “very clean” property. “In an infill redevelopment, you tend to build taller,” she says.