Arvada

Olde Town apartment plan sparks controversy

Officials see benefit in development that spurs some residents to object

Posted 6/27/17

To Dave Chandler and his activist group, a proposed six-story building with 256 apartments and 40,000 square feet of retail shops that would rise from the ground next to the Gold Line station in Arvada is an egregious mistake that should be …

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Arvada

Olde Town apartment plan sparks controversy

Officials see benefit in development that spurs some residents to object

Posted

To Dave Chandler and his activist group, a proposed six-story building with 256 apartments and 40,000 square feet of retail shops that would rise from the ground next to the Gold Line station in Arvada is an egregious mistake that should be stopped.

To Arvada city officials, the project is the result of a thoughtful eight-year process to create vibrant transit-oriented development and revitalize a blighted section of its historic and booming Olde Town.

The controversy stems from the city’s decision to sell the 8.25-acre site, valued at $4.4 million, to developer Trammell Crow Co. for $30 and provide it with $13 million in tax incentives.

Arvada officials contend the project is a well-planned and long-term investment that will not only bring new life to the area, but also pour revenue far exceeding the land’s value into city coffers over the years. Chandler, founding member of Arvada for all the People, which describes itself as a government watchdog organization, calls the transaction “a bribe” and worries about the development obstructing views andcreating congestion.

Experts in municipal planning say the city has done nothing wrong.

“I understand the skepticism and I think it’s useful and healthy,” said Stephan Weiler, director of Colorado State University’s Regional Economic Development Institute, which researches and analyzes economic development strategies throughout the state“The tradeoff has to be that this is something they see as a vision for the city. People living, shopping and recreating in same area — that has a lot of value.”

The $70 million mixed-use development, which still needs Arvada Planning Commission and City Council approval, is part of the Olde Town Station Urban Renewal Plan approved by Arvada City Council in 2009.

Coupling the project with the eventual opening of the RTD Gold Line, which connects the suburb to Denver, is key to creating a vibrant downtown neighborhood that also prevents sprawl and reduces vehicle traffic, said Maureen Phair, director of the ArvadaUrban Renewal Authority (AURA).

Said Arvada Mayor Marc Williams, who also sits on the AURA board of directors: “This has been a long-term goal of both Urban Renewal and City Council to have a transit-oriented development” on the site.

Land vs. development

Arvada for all the People, however, believes urban renewal authorities, in general, should not be dictating the type of development to be built or offering tax incentives.

“I think what makes this so stark for Arvada right now is the proposal to raise sales tax to fix and maintain streets last November,” Chandler said. “But then you look at the tax rebates and the land giveaways to developers. No matter what they say, it’s a drain on the city treasury to give away this tax revenue.”

The proposed development would be built in phases from 2018 to 2020 on the three parcels, bounded by Vance Street and Wadsworth Boulevard on the west and east, and between West 56th and Grandview avenues. A Regional Transportation District parking lot takes up about half of the site; a 35-foot hill rises from a large portion along Grandview Avenue.

The land is owned by three entities — RTD, City of Arvada and AURA — and was appraised in 2015 at $4.4 million. In December of that year, AURA signed a development and disposition agreement with Trammell Crow Co. to sell the land for $30. In return, the developer must build the high-density and retail project that the city wants. The Urban Renewal area expires in 2034 — 25 years from the 2009 approval of the Olde Town Station Urban Renewal Plan.

The $30 land exchange, Phair said, helps offset Trammell Crow’s investment of building a $13 million parking garage into the side of the hill, an AURA requirement that the authority knew would drive up cost for developers, Phair said.

Leaving the hill as it is would significantly reduce the developable land, allowing only for an inline shopping center or a three-story walk-up with surface parking, Phair said.

“We said we want this — we required it,” Phair said. “When you get down to looking at the financials, we had to discount the land to get this development.”

Bill Mosher, senior managing director at Trammell Crow Co., emphasized that Trammell Crow can only develop the land if the company builds what the city wants.

“It makes a good headline to say ‘$30 land buy,’ but the city has a lot of expectations that we’re trying to meet,” Mosher said. “If the city wants that kind of a project, they need to help make it happen. It causes both parties to work together.”

Debate over revenue


Chandler and other residents speaking out about the deal believe the city should have sold the property at market value.

But Phair called that approach “immediate gratification.” AURA, she said, looks at the long-term revenue generated for the city.

In the 15 years before the urban renewal area expires in 2034, the property is expected to generate $35 million in sales tax revenue and an additional $8.6 million in property taxes, Phair said.

During those 15 years, AURA estimates the state of Colorado will get $12.7 million, RTD will receive $4.4 million, Jeffco Open Space will get $2.2 million, the Arvada Police Department will receive $2 million and the Scientific and Cultural Facilities District will get $439,000. AURA will get $13 million, which it will give to Trammell Crow to help offset building costs.

“When we turn this over in 2034, the city is estimated to be getting $1 million a year (in tax revenue) off of this,” Phair said. “If you built something that fit without our help, then it’s not going to get this kind of revenue.”

Kevin Bommer, deputy director of the Colorado Municipal League, said it’s important to look at the entire scope of the project to make a fair assessment.

“There are unique factors to each plan and each project that sometimes require creative solutions,” Bommer said. “And had there not been a discount on the sale of the land, they would have had to come up with something else. Otherwise, that land remains a parking lot.”

Concerns about view, growth

Chandler and his group also worry about the view being blocked and the influx of people that another high-density housing project will bring to the area.

“Grandview is named because it has the grand view,” Chandler said of the road that runs along the hill. “This project won’t disturb the view of the mountains, but it will block the Clear Creek and Platte Valley panorama. It would be significant.”

Phair said the city and the developer are working together to preserve the most important view — the mountains.

“One of the things that makes Olde Town special is that Grandview Avenue opens up this beautiful view to see the mountains, valley and downtown,” Phair said. “It’s important we maintain that view because it adds to the charm of Olde Town.”

To help preserve that vista, the City of Arvada purchased and demolished a building that was previously blocking the view in the center of Grandview Avenue, in front of where the transit hub and Olde Town Gold Line station now sit.

Because the city opened up the view on the main part of the street, Phair said it makes sense to build on the far east side where some of the view will be obstructed. Because of the design and grade of the ground, the six-story building would rise just three stories above the grade of Grandview Avenue, plans show.

“The view corridor to the north of the proposed project was never a high priority,” Williams said. “And the existing tree line is actually in some spots higher then the buildings.”

But that doesn’t satisfy Chandler, who also worries about the congestion and other related issues that an influx of new residents could create.

“We’re talking about a huge increase in local traffic down there,” Chandler said. “The train isn’t even running yet. I’m not sure what the big hurry is to push the high density.”

The Olde Town vicinity already has three apartment buildings. The most recent addition, Solana Olde Town Station on West 56th Avenue, has 352 units. Solana also was an AURA project.

Williams points out that “experts in the field have long said you should have higher density around transit hubs to reduce traffic” — if people live in walking distance to public transit and a developed area, they will walk more.

“I think there’s a case for having high-density housing plus retail,” said Weiler, the CSU professor who has worked extensively in Denver. “Part of the success of LoDo is that it’s not just a bunch of shops, but it’s the combination of having young people with spending ability living in the area. The long-term survival of a community comes from residents not visitors.”

The proposed Trammell apartments will be market-rate. Currently, the lowest market price for a one-bedroom apartment among the three existing apartment complexes in Olde Town is $1,290, with two-bedrooms between $1,700 and $1,900. Solana offers three-bedroom apartments at a monthly rent of $2,405.

“From a perspective of marketing, they aren’t going to have any trouble selling these units,” said Darrin Duber-Smith, Arvada resident and professor of marketing and consumer behavior at Metropolitan State University of Denver. “Downtown Denver is maxing out with density, so it circles out. Arvada is a rural town in an urban area. It’s a very unique personality and I think it resonates very well with millennials.”

Millennials — referring to those ages 18 to 35 — are changing the game by postponing home purchases, Duber-Smith said. They are the optimal market for apartments with walkability.

But Duber-Smith cautioned about the social impact of adding hundreds of 20-somethings to the Olde Town area, which he said could require more police presence. Based on a number of consumer studies, he said, rental units attract people with lower incomes, which leads to more crime.

Final stages

The development, however, still requires final approval before breaking ground.

The city has reviewed preliminary plans and returned them to Trammell with notes. Mosher expects to submit a revised plan for review in the next few weeks. From there, the plans will be reviewed at a planning commission meeting with opportunity for public comment. If approved by the planning commission, the plans then go to City Council for a public hearing and final approval. Those meetings have not yet been scheduled.

But Chandler and his activist group want Arvada City Council members to denounce the project now and bring it back to the drawing board. They want developers to decide what should go there and buy the land at the assessed price tag.

That is unlikely to happen: As an urban renewal plan site, AURA gets to dictate what kind of structure is built there.

“Free markets don’t like being told what to do,” Weiler said. “So, if you’re looking for high-density housing, the tradeoff is that you’re giving up the $4 million that the free market would have given. There’s no right or wrong here. It’s just a question of understanding the tradeoff.”

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John Kiljan

Excellent writeup, Shanna! Apart from preserving Grandview views, the real issue here is whether or not we have higher density development near commuter rail stations -- not how urban renewal provides incentives to do that. I'm for transit-oriented development. I think it is good for Arvada and good for Olde Town. It's what bringing in the Gold Line was intended to promote.

The alternative development scenario with a strip mall and 3-story walk-up apartments with large open-area parking lots are much less appealing to me. A bigger concern should be whether or not retail and restaurants and a grocery store are viable options for the south half the Nine Acre Site below 56th Avenue. The developer seems to have put that part of the project on hold because no one wants to build there. The problems seem to be a storm sewer which limits building size and the lack of an anchor store willing to locate there -- preferably a much-needed grocery store. Well that and RTD not planning to move off that parking lot until well into 2018. I hope for Arvada's sake we can find a solution to these problems.

Sunday, July 2