January 27, 2012
In the last 10 years, “transit-oriented development (TOD)” has gone from a new buzz phrase to reality for Denverites.
The mixed-use developments, which are next to bus and/or light-rail stations, are springing up along the Regional Transportation District’s light and commuter rail lines.
There’s likely a TOD coming soon to a neighborhood near you.
Now that Denver appears to be on the other end of the recession, several stalled TODs are moving forward.
“The good news here is I think people are starting to realize the new normal in the real estate world and the development world,” said Marilee Utter, executive vice president for Colorado Urban Land Institute’s district councils and TOD expert. “All the trends support TODs more than they’ve ever supported them here before. Demand from the consumer is high. Understanding from the regulatory and financial institutions are high — higher than it’s ever been.”
A closer look at two TODs, in different stages of development, reveals the challenges and benefits of having retail, office and residential developments near public transportation.
Belleview Station
Development on the 51-acre “donut hole” of a site near Interstate 25 and Belleview Avenue in Denver was set to start in 2008, before the economy imploded.
“The construction crew was literally on site when Lehman Brothers collapsed,” said Louis “Dutch” Bansbach III, president of Front Range Land and Development Co. “It probably delayed our development four years.”
The Bansbach family has owned land along the I-25 corridor since the late 1880s.
The Belleview Station development area used to house the Paradise Valley Country Club, which later became the public Mountain View Golf Course. It’s affectionately known as the “donut hole” because the Denver Tech Center grew up around it, on much of the land that Bansbach sold.
Development now is starting in earnest, following the advent of RTD’s Belleview light-rail station.
Also, Denver in 2002 approved a new zone to accommodate denser, multi-use development.
And a tax increment financing (TIF) district, the Madre Metropolitan District, was formed to finance infrastructure improvements.
“It’s a stronger market for them now, and a simpler deal,” Utter said.
The first construction project is a five-story, 352-apartment/retail complex on the west side of the development area near Newport Street and Belleview Avenue. Holland Partners Group is building the complex and plans to break ground in coming months.
A company official said of the area, “Belleview Station will certainly be the premier mixed-use community for the Denver Tech Center and all of south Denver.”
Plans call for the residential developments to be on that west side and office buildings to be located closer to the interstate, where they can climb up to 22 stories — though the market likely will sustain only 12 to 15 stories, Bansbach said.
There’ll also likely be a hotel, to go with the retail component. In all, there could be up to 5 million square feet of vertical development, Bansbach said.
“We’ve got very attractive zones there that will allow for a higher density ... much denser than anything you could build in the suburbs,” Bansbach said. “We can build anywhere on this piece at any time.
“And the uses? We’re not limited to just one or two. We can adjust as the market adjusts ... Since we envision this taking 20 to 25 years, that flexibility is very helpful. What’s hot today might not be in demand in 10 years.”
As master developers, the Bansbachs can be patient because they own the land and have no debt against it.
“We know every project affects the other piece,” Bansbach said. “We’re not in this to sell the land as quick as we can. We must sell to people who will add value.”
Lakewood Federal Center
The City of Lakewood, RTD and the U.S. General Services Administration have a 65-acre site, a light-rail station coming soon and an opportunity to create a TOD from the ground up.
The site is south of Sixth Avenue, between Union Boulevard and Routt Street. To the east is the Federal Center, where almost 1,000 people work. The new St. Anthony West Hospital campus is to the south, and there’s already an RTD park-and-ride bus station at Second Place and Routt Street. The light-rail station there is expected to be open in 2013.
City officials have set the stage for a TOD by changing the zoning there to allow for mixed-use development.
“This type of development, with multimodel transportation, is more the future of development,” said Travis Parker, Lakewood’s planning director. “Right now we’ve got a lot of office parks, residential and retail areas. The transit areas are going to be more holistically designed, not big swaths of land dedicated to a single use. The uses will be integrated.”
That zoning change is key to prime the area for growth.
“One of the things we did early on was have a lot of public involvement in the development plans, then moving forward to implement the zoning,” said Roger Wadnal, Lakewood’s comprehensive planning manager. “We resolved a lot of issues out front and now that’s something the developer will not have to do.”
Parker said, “It’s flexible and developer-friendly. It allows for more density and encourages a pedestrian-friendly environment.”
But there are still challenges to overcome before development can begin:
• City officials are mulling whether to form a TIF district.
• The city must choose a master developer.
• The federal land there still needs to go through a “federal disposition process” before it can be sold or developed.
“There are big infrastructure costs that are not paid for yet,” Utter said, adding Lakewood has “great vision, but implementation is going to be the hard part.”
A master developer might be harder to find, but that’s not all bad, Utter said.
“More developers are in the TOD business ... and the local guys are smaller and it will allow for people who are more specialized to projects — they don’t have to be a mixed-use expert, and it brings more people into play,” she said.
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